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2010 DIGILAW 998 (CAL)

Pushan Majumdar v. UNION OF INDIA

2010-08-17

ANIRUDDHA BOSE

body2010
JUDGMENT 1. THE petitioners before me in this batch of writ petitions are all academic staff of the Indian Association for Cultivation of Science. This is a society registered under the provisions of Act XXI of 1860. I shall refer to the society in the later part of this judgment as the said society. 2. THE grievance of the petitioners is over certain disputes relating to service in the said institute. Appearing for the institute, Mr. Sengupta, learned Counsel has raised a preliminary objection on maintainability of these writ petitions on the ground that his client is not "State" or other authority within the meaning of Article 12 or Article 226 of the Constitution of India, and hence not amenable to the Constitutional Writ Jurisdiction of this Court. Relying on a decision of a Division Bench of this Court involving the same institute in the case of Director, Indian Association for the Cultivation of Science, Jadavpur and Ors. vs. Ashoke Kumar, reported in 1992(1)CLJ 319, he seeks dismissal of all these writ petitions on this ground. In this judgment, the status of this very organisation was tested by the Hon'ble Division Bench to ascertain whether it fulfilled the character of "State" or "other authority" or not and it was held: "In the result, we uphold the preliminary objection raised on behalf of the appellant that the Indian Association for the Cultivation of Science, Jadavpur is not an 'authority' within the meaning of Articles 12 and 226 of the Constitution and as such no writ lies against the appellant association. In view of our determination with regard to the preliminary point it is not necessary on our part to go into the merits of this case. Accordingly, the order of the learned Trial Judge dated 20th July, 1990 passed in C.R. No. 13063(W) of 1986 is set aside" The reason as to why the Hon'ble Division Bench came to such a conclusion appears from paragraphs 4 and 5 of the judgment in the said report, in which it has been held: "The composition of the Council is dominated by private persons and not by person appointed or nominated by the Central Government or State Government. The money required for running the said Institution is not provided by the Central Government or State Government, but from various other sources and the Council may or may not accept such grants given by the Government. There is no provision that the Society can accept money only with the approval of Central Government and Central Government had no manner of Control over the receipts and disbursement of the money by the society. The accounts of the society are not to be submitted by the Government for their scrutiny and or approval. Only in respect of grants received from the Central Government the account has to be audited by the Auditor and Comptroller General and Audit report has to be sent for information of the Government. There is no provision that the Society has to comply with all such directions are may be issued by the Central Government in this behalf. Reliance was placed to the decision of the Supreme Court in the case of (2) Ajay Hasia vs. Khalid Mujib, reported in AIR 1981 SC 487 , wherein the Supreme Court observed that "Where a Corporation is an instrumentality or agency of the Government it must be held to be an authority within the meaning of Article 12 and hence subject to the same basic obligation to obey the Fundamental Rights and the Government. It is immaterial for determining whether a Corporation is an authority whether the Corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The enquiry has to be not as to how the juristic person is born but why is has been brought into existence. The Corporation may be a statutory Corporation created by a statute or it may be Government company of a company formed under the companies act or it may be a society registered under the Societies Registration act or any other similar statute. Whatever be its genetical origin, it would be an authority within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. Whatever be its genetical origin, it would be an authority within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression 'authority' in Article 12. A Juristic entity which may be "State" for the purpose of parts III and IV would not be so for the purpose of part XIV or any other provision of the Supreme Court in the case of Chander Mohan Khanna vs. National Council of Educational Research and Training and Ors., reported in AIR 1992 SC 76 , wherein the Supreme Court observed that "There are only general principles but not exhaustive test to determine whether a body is an instrumentality or agency of the Government. Even in general principles there is no cut and dried formula which would provide correct division of bodies into those which are not. The powers, functions, finances and control of the Government are some of the indicating factors to answer the question whether a body is 'State' or not. Each case should be handled with care and caution. Where the financial assistance from the State is so much as to meet almost entire expenditure of the institution, or the share capital of the corporation is completely held by the government, it would afford some indication of the body being impregnated with government character. It may be a relevant factor if the institution or the corporation enjoys monopoly status which is State conferred or State projected. Existence of deep and pervasive State control may afford an indication. If the functions of the institution are of public importance and related to Governmental functions, it would also be a relevant factor. There are merely indicative indicia and are by no means conclusive or clinching in any case. Existence of deep and pervasive State control may afford an indication. If the functions of the institution are of public importance and related to Governmental functions, it would also be a relevant factor. There are merely indicative indicia and are by no means conclusive or clinching in any case. Article 12 should not be stretched so as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression 'State'. A wide enlargement of the meaning must be tempered by a wise limitation. It must not be lost sight of that in the modern concept of Welfare State, independent institution, corporation and agency are generally subject to State control. The State Control does not render such bodies as "State" under Article 12. The Control, however vast and pervasive, is not determinative. The combination of State and coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is "State". If the Government operates behind a corporate veil carrying out Governmental activity and governmental functions of vital public importance, there may be little difficulty in identifying the body as "State" within the meaning of Article 12 of the Constitution. [See (3) P. K. Ramchandra Iyer vs. Union of India, 1984(2) SCC 14; AIR 1984 SC 541 , (4) Central Inland Water Transport Corporation vs. Brojonath Ganguli, 1986(3) SCC 156 ; AIR 1986 SC 1571 ; and (5) Tekraj Vasandhi alias K. K. Basandhi vs. Union of India, 1988(2) SCR 260 ; AIR 1988 SC 469 . In that case it was further held that the National Council of Educational Research and Training (referred to as NCERT) was a society registered under the Societies Registration Act. Like all societies, it was a memorandum of Association. It has Rules for internal management. The Supreme Court considered the object of the NCERT and held that the affairs of the NCERT are conducted by the Executive Committee comprising of Government servants and educationists. The Executive Committee would enter into arrangements with Government. Public or private organisations or individuals in furtherance of the objectives for implementation of programmes. The funds of the said society consisted of (i) grants made by the Government, (ii) contribution from other sources, and (iii) income from its own assets. The Executive Committee would enter into arrangements with Government. Public or private organisations or individuals in furtherance of the objectives for implementation of programmes. The funds of the said society consisted of (i) grants made by the Government, (ii) contribution from other sources, and (iii) income from its own assets. It was free to apply its income and property towards the promotion of its objectives confined only to the proper utilization of the grant. It was held that the said society thus was largely an autonomous body." 3. MR. Sengupta, in support of his preliminary objection submitted that since there is a Bench Judgment of this very Court on this very point, the ratio of this judgment is binding on me and these writ petitions would not be maintainable. He relied on a Full Bench decision of this Court in the case of A. H. Sk. vs. State of West Bengal, reported in 2001(2) CHN 762 , in support of his submissions on this count. He further argued that since the judgment reported in 1992(1) CLJ 319 , was delivered, no fundamental change or alteration has taken place in composition or activities of the society which would have warranted reexamination of this issue. 4. APPEARING on behalf of the petitioners, Mr. Mitra, learned Senior Counsel submitted that the legal basis of this decision stands altered by a subsequent Constitution Bench judgment comprising of seven judges of the Hon'ble Supreme Court in the case of Pradeep Kumar Biswas and Ors. vs. Indian Institute of Chemical Biology, reported in 2002(5) SCC 111 . In this judgment, the Constitution Bench of the Supreme Court in substance confirmed the view taken by the Supreme Court in the judgment of Ajay Hasia vs. Khalid Mujib reported in AIR 1981 SC 487 , which had expanded the scope of writ jurisdiction of the High Courts by bringing under the scrutiny of the writ Court not only the State and Governmental agencies, but also the organisations over which the State had deep pervasive control. I have been taken through the Memorandum of Association and Regulations of the institute by Mr. I have been taken through the Memorandum of Association and Regulations of the institute by Mr. Mitra on the basis of which he sought to argue that in the Governing Council of the institute, which appears to be its highest decision making body, the Governmental agencies have substantial dominance and it was also contended, on the strength of Annual Report of the Council, that almost 99% of the financial assistance of the institute came from the Central Government. Mr. Mitra had relied on a decision of the Hon'ble Supreme Court in the case of Union of India vs. Amritlal Manchanda reported in 2004(5) SCC 75, to contend that the ratio of a decision ought not to be construed as statute and even one additional or different fact may lead to a contrary view if the same had the impact of altering the position on the basis of which a judgment is rendered. Mr. Mitra further brought to my notice the printout of a webpage downloaded from the website of the Department of Science and Technology of the Government of India in which the respondent society has been listed as an autonomous Science and Technology Institute. On behalf of the petitioners, a photograph was produced before this Court by the learned Counsel in which on the front grill of a car showed a board affixed to it with the initial of the society, i.e. IACS along with the inscription "Govt. of India". 5. THUS, the broad submission of the learned Counsel for the petitioners to bring the society within the purview of the Constitutional Writ Jurisdiction of this Court is the degree of dominance in its Council of members of Governmental agencies and the level of financial assistance the society enjoys from the Government of India. 6. ON the aspect of dominance in the Council, I find from the Regulations of the society that such Council is to comprise of the Chairman, who would be an eminent scientist to be nominated by the Department of Science and Technology, Government of India. President of the Society is to be an ex officio member of the Council. The President is elected by the members/ fellows of the Association. President of the Society is to be an ex officio member of the Council. The President is elected by the members/ fellows of the Association. The Secretary of the Department of Science and Technology, Government of India and Financial Advisor of the Department of Science and Technology, Government of India or their nominees are the other members originating from the Central Government in the Council. The Regulations further provide that two eminent scientists are also to be nominated by the Department of Science and Technology, Government of India. One representative of the Government of West Bengal is also required to be an ex officio member of the Council. Thus six members owe their origin in the Council directly to the State. There is dispute over the status of another member on the question as to whether he should be treated to be a nominee of the "State" or not. One "eminent scientist" is to be nominated by the National Science Academy as per the Regulations of the society. No clear evidence was produced before me as regards the status of the said Academy on this aspect as to whether it is a governmental organisation or not. I do not think in these circumstances, in a situation where the Academy is not before me, I can embark on an exercise to decide the question as to whether National Academy of Science fulfills the characteristic of "State" under Article 226 of the Constitution of India. The Council, as per the Regulations, is to comprise of fourteen members, and out of these fourteen, six members are direct nominees of the Government. Three members are to be elected by the academic staff, administrative and technical staff and research fellows, as representatives of these three segments of the Society. The rest of the members of the Council, are high officials of the Society itself or their nominees. The President and Director of the Society are the ex officio members and the Council itself has been conferred with the power to nominate two eminent scientists. 7. THE question of financial assistance has been held by the Hon'ble Division Bench not to be the determining factor for deciding the question as to whether the institute is State or not. In this regard, Mr. 7. THE question of financial assistance has been held by the Hon'ble Division Bench not to be the determining factor for deciding the question as to whether the institute is State or not. In this regard, Mr. Sengupta had submitted that receiving State grant or financial assistance was optional, and the Society could at any point of time decline to accept such grant. According to him, since choice was with the institute on the question of accepting grant or assistance the volume or quantum of money received by a society from the state cannot elevate itself to the status of "State" to bring its actions within the scope of judicial review under Article 226 of the Constitution of India. 8. AS regards composition of the Council, the Hon'ble Division Bench found that the composition of the Council was dominated by private persons. Mr. Sengupta, in course of submissions stressed on this fact also, that is direct nominees of the Central and the State Government were minority in the Council. On both these counts, thus, there is authority of an Hon'ble Division Bench of this Court involving the very same society which goes against the petitioners on the preliminary issue. Mr. Mitra, however, argued that the judgment of the Hon'ble Division Bench stands overruled by implication in view of the decision of the Hon'ble Supreme Court in the case of Pradeep Kumar Biswas (supra). In this judgment, the Council of Scientific and Industrial Research (CSIR) was held to be "State" within the meaning of Article 12 of the Constitution. A seven-Judge Bench of the Hon'ble Supreme Court answered this question in the affirmative reconfirming the proposition of law laid down in the case of Ajay Hasiu (supra). Reference was made in this judgment to an earlier authority of the Hon'ble Supreme Court in the case of Sukhdev Singh vs. Bhagatrarn Sardar Singh Raghuvanshi, 1975(1) SCC 421 . In Sukhdev Singh (supra), the Hon'ble Supreme Court examined the drastic change the concept of "State" in Article 12 was undergoing and the main test for identifying whether an organisation was "State" or not was framed as:- "The ultimate question which is relevant for our purpose is whether such a corporation is an agency or instrumentality of the Government for carrying on a business for the benefit of the public. In other words, the question is, for whose benefit was the corporation carrying on the business?" 9. THE organisations involved in that case were the Oil and Natural Gas Commission, the Industrial Finance Commission and the Life Insurance Corporation. The Hon'ble Supreme Court broadly applied the same test in respect of CSIR. This organisation originated from a resolution passed by the Legislative Assembly in the pre-independence era for promoting industrial growth in India, as a result of which Board of Scientific and Industrial Research and the Industrial Research Utilisation Committee were set up. In the year 1942, the Government of India decided to set up the Council as a registered society for coordinating the activities of these two bodies. On this basis, CSIR was set up, and the Hon'ble Supreme Court observed in the case of Pradeep Kumar Biswas that CSIR was created by the Government to carry on in an organised manner what was being done earlier by the Department of Commerce through the said two research bodies. 10. IACS, however, was constituted as a society as it appears from the Memorandum of Association of the organisation. It thus did not owe its origin to the State or any of its organs. The argument of the petitioners is that over the years, the Governmental agencies have come to acquire deep and pervasive control over IACS. Because of this fundamental difference in origin of the two organisations being CSIR and IACS, I do not think I can hold that the judgment of the Hon'ble Division Bench in the case of Ashoke Kumar Roy (supra) stands overruled by implication in view of the later judgment of the Hon'ble Supreme Court in the case of Pradeep Kumar Biswas. It was also argued before me that since IACS was involved in scientific research, its activities had public character and it was discharging public duty. Relying on a decision of the Hon'ble Supreme Court in the case of Anadi Mukta Sadguru S.M.V.S.J.M.S. Trust vs. V. R. Rudani, AIR 1989 SC 1607 , it was submitted on behalf of the petitioners that the Writ of Mandamus could be issued against the IACS. But the Hon'ble Division Bench in the case of Ashoke Kumar Roy (supra) had examined the ratio of that judgment in coming to its finding. But the Hon'ble Division Bench in the case of Ashoke Kumar Roy (supra) had examined the ratio of that judgment in coming to its finding. This being the position, I do not think there is any scope for holding that the judgment of the Hon'ble Division Bench was delivered per incuriam, which I have been urged to hold by the learned counsel for the petitioners. If I do so, it would constitute breach of judicial propriety. Projection of the institute as a Governmental agency or part of it in the website of the department of science and technology, government of India or depiction of Government of India on the front grill of a vehicle of the society also cannot, in my opinion, change the legal status of the society. Such projected connection with the Central Government may enhance the importance of the institute in public perception, but on the basis of such projections alone, I cannot come to a conclusion that the society indeed is an instrumentality or agency of the State. 11. THE Hon'ble Division Bench in the case of Ashoke Kumar Roy (supra) primarily declined to invoke the Constitutional writ jurisdiction of this Court over IACS on two grounds. It was held that control of the State was not deep and pervasive over IACS as the composition of the Council was dominated by private persons and not by persons appointed or nominated by the Central Government. 12. SECONDLY, the Hon'ble Division Bench observed that the money required for running the said institute was not provided by the Central Government or the State Government alone, but from various other sources and the Council might or might not have had accepted such grant given by the Government. The Hon'ble Division Bench took notice of the fact that there was no provision that the society could accept money only with the approval of the Central Government and the Central Government had no manner of control over the receipts and disbursement of the money by the society. There was no necessity of having accounts of the society audited by the Auditor or Comptroller General or any other Governmental agency, except the grant received from the Central Government. There was no necessity of having accounts of the society audited by the Auditor or Comptroller General or any other Governmental agency, except the grant received from the Central Government. In the event it was not held by the Hon'ble Division Bench that the society is not State or other authority within the meaning of Article 12 of the Constitution of India, I would have had held that it was "other authority" within the meaning of Article 12. In my own opinion, it is not necessary that the State should provide the entire expenditure of a corporation or society to impregnate it with the Governmental character. It was observed in the case of Pradeep Kumar Biswas (supra) referring to an earlier judgment of the Hon'ble Supreme Court in the case of Raman Dayaram Shetty vs. International Airport Authority of India, reported in 1979(3) SCC 489 , and on considering certain other authorities on the same controversy:- "Ramana was noted and quoted with approval in extenso and the tests propounded for determining as to when a corporation can be said to be an instrumentality or agency of the Government therein were culled out and summarised as follows: (SCC p. 737, para 9) "(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with Governmental character. (SCC p. 508, para 15) (3) It may also be a relevant factor...whether the corporation enjoys monopoly status which is State-conferred or State-protected. (SCC p. 508, para 15) (4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (SCC p. 508, para 15) (5) If the functions of the corporation are of public importance and closely related to Governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. (SCC p. 509, para 16) (6) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government. (SCC p. 509, para 16) (6) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government. (SCC p. 510, para 18)" 13. THIS being the test, I think that in the event in a given point of time, the State assistance goes beyond 90 per cent of the total receipt by a society and in near future or past also same level of financial assistance flows, I am of the view that such a society would become an instrumentality or agency of the State, and would have to bear the same Constitutional obligations including scrutiny of the Writ Court, as substantial amount of public money is utilised by the society. The mere fact that a society could accept fund from sources within the State ought not to shelter it from such scrutiny. The fact that the institute largely depends on State funding is apparent from the Annual Report of the society itself for the years 2008-2009, a copy of which was made available to this Court. In the chapter entitled "IACS Profile", it has been recorded: "The Department of Science and Technology (New Delhi) and Government of West Bengal are the principal fund-giving agencies supporting research in IACS. It also generates funding through various research projects from several funding agencies in India and abroad including projects supported by DST...." 14. SO far as the composition of Council is concerned, out of fourteen members, six are admittedly appointed or nominated the Central or the State Government. But rest of the Council, as it appears from the Regulations, are not purely private persons. The Director of the association is an ex officio members of the Council. Two eminent scientists are to be nominated by the Council itself. If these three members are not counted, then direct Governmental nominees become majority in the Governing Council. In any event, the Director of the society and the two scientists to be nominated by the Council would bear quasi-Governmental character, given the composition of the Council, as at the time of their nomination, the Governmental nominees would have been majority in the Council, and thus influence the nomination of the two scientists. In any event, the Director of the society and the two scientists to be nominated by the Council would bear quasi-Governmental character, given the composition of the Council, as at the time of their nomination, the Governmental nominees would have been majority in the Council, and thus influence the nomination of the two scientists. The appointment of Director is to be done after the names of the incumbents are forwarded to the Secretary, Department of Science and Technology by the Council. Thereafter, his appointment is to be processed in the same manner as required for appointment of Directors of Central Autonomous Organisations of the Government of India. However, since on these very two grounds the Hon'ble Division Bench has found that the society does not fulfill the character of "State", I do not think I can take a contrary view. 15. I would not have expressed my opinion on these two points as this observation runs in a way, contrary to the conclusion to the Hon'ble Division Bench of this Court in the case of Ashoke Kumar Roy (supra). But even in a precedent based judicial system. I think it is permissible on the part of the Court of first instance to express opinion which may not be consistent with the opinion of an appellant bench, provided of course, the Court of first instance follows the ratio of the appellate bench ultimately. There is sanction for such a course. In the case of Ahamad Hossain Sk. vs. State of West Bengal, 2001(2) CHN 762 , and the reason why such a course can be taken has been explained by a Full Bench of this Court: "May be, as contended on behalf of the State which found favour with the learned Single Judge the materials, the pleadings and arguments which ought to have been raised in the earlier matters, were not raised. The respondent-State is not precluded from raising the same. The learned Single Judge before whom the instant matter came up for hearing is also not precluded from considering the new pleas or materials in the case placed before him or submissions on questions of law urged before him. However, the learned Single Judge, in such circumstances, cannot treat the matter as if it was res-integra as was held in G. C. Gupta's case by the Apex Court (cited supra). However, the learned Single Judge, in such circumstances, cannot treat the matter as if it was res-integra as was held in G. C. Gupta's case by the Apex Court (cited supra). The learned Single Judge, in such circumstances can consider the pleadings and material on record and also express his opinion thereon but would, on the principles of judicial propriety, hold himself bound by the judgment and decision of the Larger Bench on the doctrine of stare devices. It would thereafter be open to the aggrieved party to appeal against the decision and test the correctness of the earlier Division Bench judgment before the Appellate Bench. If, in the opinion of, the later Division Bench the decision of the earlier Division Bench requires reconsideration, it can seek reconsideration of the same by a Larger Bench." 16. SINCE I have the sanction of a Full Bench to express my own views on an issue upon going through the issue in detail, which view may be different from the opinion of a Division Bench, but I do not have the jurisdiction to deliver judgment contrary to the ratio laid down by the Hon'ble Division Bench on the same issue, I dismiss this batch of writ petitions as being not maintainable in view of the decision of the Hon'ble Division Bench that IACS is not "State" within the meaning of Article 12 of the Constitution of India or its instrumentality or agency. The preliminary objection of Mr. Sengupta thus stands sustained. These writ petitions are accordingly dismissed. 17. URGENT photostat certified copy of this order, if applied for, be supplied to the parties as expeditiously as possible.