ORDER : The petitioner – Nandi Rythu Samakhya, Nandyal prays for writ of mandamus declaring the action of 2nd respondent alienating its Sugar factory and appurtenant lands covered by different survey numbers of Ayyalur Village, Nandyal Mandal, Kurnool District to third parties without considering the interest of the petitioner association as illegal, arbitrary and for such other orders. 2. The petitioner‘s case succintly is thus: (a) Originally the Nandyal Cooperative Sugar Factory was established in the year 1973 under the A.P. Cooperative Societies Act, 1964 (for short 'APCS Act') at Nandyal by acquiring Ac.120.00 cents from various ryots. Several ryots, some of whom are the members of the petitioner society invested amount in the said Sugar Factory. The majority of the shares were held by the State Government. (b) The said factory was closed down during the crushing season 1990-1991 on account of non-availability of raw material, high cost of production and fall in sugar price. In 1994-1995 the factory was restarted and again closed in 1996-1997. Its accumulated losses rose above the paid-up capital and in May 2001 the Registrar of Cooperative Societies, A.P. exercising the power vested in him under Section 12-A(1) of the APCS Act advertised for the sale of Nandyal sugar. Ultimately the 2nd respondent became the highest bidder and a Sale Deed dated 27.09.2003 was executed in favour of 2nd respondent for running the sugar mill. The members of the petitioner association contributed Rs.60.00 lakhs at the time of establishment of the sugar factory. So also, the farmers of the surrounding villages also contributed about Rs.40.00 lakhs as nonrefundable deposit with the Nandyal Sugar Factory. However, the Registrar of Cooperative Societies sold away the Sugar factory to 2nd respondent behind the back of the shareholders and the ryots. Some ryots and third parties filed writ petitions questioning the sale. However, those writ petitions were dismissed by this Court. Several thousands of sugar crane growers surrounding the sugar factory were depending on the sugar factory and cultivating the sugarcane. (c) While so, due to recent escalation of the land value the 2nd respondent is not interested to run the sugar factory and trying to alienate the lands appurtenant to the sugar factory and making negotiations with private parties, in which case, the members of the petitioner association would suffer a lot. Hence, the writ petition. 3. (c) While so, due to recent escalation of the land value the 2nd respondent is not interested to run the sugar factory and trying to alienate the lands appurtenant to the sugar factory and making negotiations with private parties, in which case, the members of the petitioner association would suffer a lot. Hence, the writ petition. 3. The 2nd respondent filed counter contending as follows: (a) The 2nd respondent is a private entity i.e., a company registered under the Companies Act, 1956. Neither the State nor any of its instrumentalities have any share in the company. Therefore, the 2nd respondent will not fall within the definition of "State" under Article 12 of the Constitution of India. Hence, the writ petition seeking mandamus is not maintainable against 2nd respondent. (b) The petitioner has no locus standi to file the writ petition. The petitioner allegation that the petitioner association consists of shareholders of Nandyal Cooperative Sugar Factory and crane growers is denied. The petitioner has not produced any particulars in proof of the said allegation. In any case no shareholder and crane grower has any right or interest to the properties or assets of the 2nd respondent company. (c) The Nandyal Cooperative Sugar Factory was registered as a Cooperative Society under the A.P. Cooperative Societies Act, 1964. The majority shares to an extent of 92.97% were held by the State Government. The factory was commissioned in April 1981 with an installed capacity of 1250 TCD and it was closed down in crushing season of 1991 on account of non-availability of raw materials, high cost of production, fall in sugar prices. There was no crushing season in 1990- 1991, 1992-1993, 1993-1994 and from 1996-1997 till May 2001. The IFFCO to whom the assets were mortgaged operated the Unit briefly. As they accumulated losses shot of twice the share capital, the Registrar of Cooperative Societies issued advertisement for sale of assets of the sugar factory in May 2001. In the open bidding process the 2nd respondent was declared as successful bidder and consequently took over the assets of the sugar factory in June 2003. The registered sale deed was executed on 27.09.2003 and thereby the 2nd respondent became the full and absolute owner of all the assets of the sugar factory including the land. In the open bidding process the 2nd respondent was declared as successful bidder and consequently took over the assets of the sugar factory in June 2003. The registered sale deed was executed on 27.09.2003 and thereby the 2nd respondent became the full and absolute owner of all the assets of the sugar factory including the land. The 2nd respondent made substantial and considerable investments and expenditure and brought the sugar factory into operation during the crushing season in November 2003. The 2nd respondent obtained substantial credit facilities from the financial institutions as term loans and working capital loans on the primary security of the assets of the sugar factory and also on the collateral security by way of personal guarantees and mortgage of personal property of the Directors of the 2nd respondent and others. (d) The allegation of the petitioner association that they contributed Rs.60.00 lakhs at the time of establishment of sugar factory and also that they invested Rs.40.00 lakhs as non-refundable deposit is denied and contended that 2nd respondent is not at all responsible for any such deposits. It is further denied that the Registrar of the Cooperative Societies sold the Nandyal Cooperative Sugar Factory to 2nd respondent behind the back of the shareholders and ryots. (e) In 2001, one G.Thimma Reddy purporting to be the President of Nandyal Sugar Factory filed W.P.No.15218/2001 on behalf of the shareholders of the Sugar Factory questioning the bidding process and the sale of sugar factory. The said writ petition was dismissed by the Division Bench of this Court by an order dated 31.08.2006. Further, in 2004, an association calling itself Nandyal Cooperative Sugar Factory Collective Farm Cane Growers Association filed W.P.No.3266/2004 challenging the sale of the sugar factory. The said writ petition was also dismissed by a learned single Judge of this Court by an order dated 24.02.2004. The W.A.No.563/2004 was also dismissed by the Division Bench on 31.08.2006. In 2004, another W.P.No.2977/2004 was filed by six persons claiming to be the shareholders of the Sugar Factory questioning its sale. The said writ petition was dismissed on 19.02.2004 by a learned single Judge and the W.A.No.1933/2004 filed was also dismissed by an order dated 31.08.2006. (f) The allegation that the 2nd respondent is not interested to run the sugar factory is incorrect. The further allegation that if the sugar factory is sold, the petitioner association will suffer irreparable loss is denied. (f) The allegation that the 2nd respondent is not interested to run the sugar factory is incorrect. The further allegation that if the sugar factory is sold, the petitioner association will suffer irreparable loss is denied. The petitioner association has no rights whatsoever and hence, the question of suffering any loss does not arise. The 2nd respondent has right, power and title to transfer including by sale of any part of the land or other assets of the 2nd respondent company, subject to any mortgage or other security, interest created in any bank or financial institution and the petitioner association cannot question the same. Even though the petitioner has no locus standi to question and even though the 2nd respondent is not liable to give any reasons, however, the 2nd respondent explains the circumstances under which it is selling a mere Ac.13.00 cents of land appurtenant to sugar factory as below: (g) The 2nd respondent made substantial investments to bring the sugar factory to operation in November, 2003 and has been operating the sugar factory continuously since then. Upto 2009, the 2nd respondent was able to run the sugar factory by maintaining the financial balance. However, in 2010 the sugar price shot up from Rs.25/- to Rs.45/- per Kg for about two months. During the said period, on the demand of the farmers the price of the sugarcane was increased from Rs.1400/- to Rs.2000/- per MT. After two months, the sugar price plunged to Rs.26/- per Kg but the purchase price of sugarcane remained at high level of Rs.2000/- per Kg. At the same time the unprecedented rains in Krishna basin and floods resulted in damage of cane. Due to combination of several other factors, the sugar factory sustained huge losses. The loan accounts of the company with the bank became irregular. The bank has increased interest rates from 11% to 18%. The banks were pressing for regularization of the loan accounts so as to avoid the company being declared as NPA. Further, the company owed nearly Rs.4.00 Crores to the farmers which was to be cleared immediately. In those circumstances, the 2nd respondent obtained consent of the Syndicate Bank to whom the immoveable properties of the company was mortgaged to sell Ac.13.00 cents of the company‘s land appurtenant to the sugar factory. Further, the company owed nearly Rs.4.00 Crores to the farmers which was to be cleared immediately. In those circumstances, the 2nd respondent obtained consent of the Syndicate Bank to whom the immoveable properties of the company was mortgaged to sell Ac.13.00 cents of the company‘s land appurtenant to the sugar factory. The company entered into agreements for sale of plots in the aforesaid Ac.13.00 cents and it has to complete registration by 30.09.2009. Thus the sale of Ac.13.00 cents of the company land is an urgent necessity to save the company from the financial problems, to save the interest of the employees of the company and the cane growers and farmers. It is stated that the 2nd respondent company seriously intends to continue the operation of the sugar factory and the proposed sale of small portion is to meet the above end. The company requires the consent of only the Syndicate Bank but not others including State Government for sale of any part of the land of the company or any other assets of the company. (h) The 2nd respondent does not owe any public duty towards the writ petitioner or to any other person. Hence, the writ petition is not maintainable as it is wholly devoid of merits. Hence, the writ petition may be dismissed. 4. The petitioner filed reply affidavit denying the averments in the counter. It is pleaded that the lands were given to the sugar factory free of cost by various ryots with a fond hope that their economic status would change with the establishment of sugar factory. Thereafter, in view of the bad management tactics and changed policies of the Government, the ryots have lost every thing including their share capital. Now, the 2nd respondent is trying to defeat the purpose for which the sugar factory was established and selling away appurtenant lands belonging to the sugar factory to the third parties for personal gain ignoring the welfare of ryots. (a) It is further pleaded that the 2nd respondent along with bid documents submitted information regarding its experience in running sugar factories, financial position and further plans for development of the factory. The bid was only for running the sugar factory and on that basis only the sugar factory was sold and it was a condition precedent for the 2nd respondent to run it as a sugar factory. The bid was only for running the sugar factory and on that basis only the sugar factory was sold and it was a condition precedent for the 2nd respondent to run it as a sugar factory. Had it been a free sale without any conditions (1) there would not have been any bid offer asking for the conditions relating to the experience of the 2nd respondent and financial capacity in running the sugar factory, its future plans for development of sugar factory etc. (2) there would not have been a clause in the sale deed dated 29.07.2003 at paragraph No.6 mentioning "……the purchaser, to run the sugar mill it was decided that the sellers should sell the assets and business for the purchasers". 5. The petitioner denied that the 2nd respondent made substantial investments and incurred expenditure in bringing the sugar factory into operation during November 2003. On the other hand, the 2nd respondent borrowed amounts from Syndicate Bank, Nandyal for purchase of the sugar factory and for meeting the registration expenses. Part of the loan was obtained prior to the registration of the Sale Deed itself and balance loan was obtained after obtaining registered Sale Deed. The averments in the counter regarding the fluctuations in the sugarcane price and other financial terms were also denied. It is pleaded that the 2nd respondent company made huge money of Rs.30.00 Cr. every year and earned huge profits but not correctly reflected. It is also pleaded that having obtained orders in W.V.M.P.No.3630/2011, to sell Ac.13.01 cents, the 2nd respondent sold an extent of Ac.18.58 cents and thus violated the order of this Court. 6. The 2nd respondent filed additional counter traversing the allegations made in the reply affidavit of the petitioner. The 2nd respondent denied that the ryots from whom the lands were acquired are the members of the petitioner society and they made investment in the sugar factory. It is also denied that the ryots have given land free of cost. It is pleaded that none of them have any right or interest in the assets of the factory which was transferred to the 2nd respondent absolutely. (a) It is denied that the 2nd respondent mentioned in the bid document its experience in running the sugar factory. The bids were only for the sale of the assets of the sugar factory. It is pleaded that none of them have any right or interest in the assets of the factory which was transferred to the 2nd respondent absolutely. (a) It is denied that the 2nd respondent mentioned in the bid document its experience in running the sugar factory. The bids were only for the sale of the assets of the sugar factory. The assets were sold to the 2nd respondent unconditional and absolute without any fetter, encumbrance or obligation. The purported interpretation of the paragraph 6 of the Sale Deed dated 29.07.2003 made by the petitioner is refuted as misconceiving and misleading. That was only a recital with respect to the promotion of a Special Purpose Vehicle to whom the assets are to be transferred. The other allegations in the reply affidavit are also denied. 7. The petitioner filed rejoinder affidavit against the additional counter filed by the 2nd respondent. It is reiterated that though the registered Sale Deed dated 27.09.2003 is an outright sale, a condition was stipulated in Paragraph 6 to the effect that to run the sugar mill, it was decided that the seller to sell the assets and business to the purchaser. It is further pleaded that the Government could not run the sugar factory and incurred heavy losses and so with an intention to save the mill from closure and to help the local sugarcane growers, invited bids from the bidders having experience in the field to run the sugar mill and accordingly, sold the sugar mill to the 2nd respondent, with a condition precedent to run the sugar factory effectively. The 2nd respondent under the guise of interim order gifted Ac.5.09 cents to Ayyalur Gram Panchayat which is also an alienation and it amounts to alienating more than Ac.13.01 cents permitted by the Court. 8. The 1st respondent did not file any counter. 9. It should be noted that when the 2nd respondent was about to alienate Ac.13.01 cents of the land appurtenant to the sugar factory, this writ petition came to be filed by the petitioner. In W.P.M.P.No.30485/2011 dated 05.09.2011, a learned Judge of the High Court of A.P. initially injuncted the 2nd respondent from alienating any of its movable or immoveable properties which are forming part of the assets that have been transferred in its favour pursuant to the decision taken by the Government, without obtaining prior permission to do so from the Government. In W.P.M.P.No.30485/2011 dated 05.09.2011, a learned Judge of the High Court of A.P. initially injuncted the 2nd respondent from alienating any of its movable or immoveable properties which are forming part of the assets that have been transferred in its favour pursuant to the decision taken by the Government, without obtaining prior permission to do so from the Government. However, subsequently on the request of 2nd respondent, vide order dated 28.09.2011 in W.P.M.P.No.3630/2011, the earlier order in W.P.M.P.No.30485/2011 was modified to the extent of allowing the 2nd respondent to liquidate the land of an extent of Ac.13.01 cents only. It was ordained that the 2nd respondent shall not create any third-party interest, other than in favour of a nationalized bank and any other recognized financial institution, over the remaining land, other than Ac.13.01 cents permitted to be sold. (a) Thus, by virtue of the subsequent order, this Court gave permission to 2nd respondent to liquidate Ac.13.01 cents only out of the total assets purchased by it from the Government. It is pertinent to note that this permission to alienate is not a conditional one viz., the alienation is subject to the result of the writ petition. Pursuant to the aforesaid order, the 2nd respondent, it appears, liquidated the said extent of the land. Of course, the writ petitioner contends that the 2nd respondent has alienated more than the permitted extent. 10. Be that it may, what is germane for consideration here is, if the issue in the writ petition is only to the extent of 2nd respondent‘s right to alienate Ac.13.01 cents, that aspect has already been decided by this Court by virtue of the above two interim orders and ultimately the 2nd respondent was unconditionally permitted to alienate that extent of land and consequently no final orders need to be passed in the writ petition. However, it must be noted that the prayer in the writ petition has much wider amplitude than confining to question the 2nd respondent‘s right to alienate Ac.13.01 cents. The petitioner association, through this writ petition challenges the very right of the 2nd respondent in alienating the sugar factory as well as the appurtenant lands covered by different survey numbers. Precisely, the petitioner questions the right of the 2nd respondent to alienate any of the assets purchased under registered Sale Deed dated 27.09.2003 from the 1st respondent. The petitioner association, through this writ petition challenges the very right of the 2nd respondent in alienating the sugar factory as well as the appurtenant lands covered by different survey numbers. Precisely, the petitioner questions the right of the 2nd respondent to alienate any of the assets purchased under registered Sale Deed dated 27.09.2003 from the 1st respondent. This has necessitated this Court to pass the final orders. 11. Heard arguments of Sri M.Bala Subramanyam, learned counsel for petitioner, learned Government Pleader for Industries & Commerce representing the 1st respondent, and Sri K.Gopal Chowdary, learned counsel for 2nd respondent. 12. Counsel on either side reiterated their elaborate pleadings in their arguments. While it is the argument of learned counsel for petitioner that the sale of the sugar factory made in favour of 2nd respondent was only a conditional one to run the sugar factory but not to alienate any of its assets, in oppugnation, the contention of 2nd respondent is that the sale is an out and out transfer of assets for valuable consideration in favour of 2nd respondent without any hindrance and therefore, the petitioner cannot question its right to alienate the assets. 13. The points arise for consideration are (1) Whether sale of the Nandyal Cooperative Sugar Limited (NCSL) (Sugar factory) by its Managing Director in favour of 2nd respondent is only a conditional sale to run the sugar factory or was it an outright sale without any condition? (2) If the sale is held to be a conditional sale, whether restriction on the 2nd respondent from making future alienation is valid in the eye of law? (3) Whether the 2nd respondent comes within the purview of State as mentioned in Article 12 of the Constitution of India to entertain the writ petition? (4) To what relief? 14. Points 1 & 2: These points are intertwined and hence, taken up together. Admittedly, Nandyal Sugars was registered as a cooperative society under the APCS Act. The majority of its shares (92.97%) were held by the State Government. Its installed capacity was 1250 TCD and it had to be closed down during the crushing season 1990-1991 on account of non-availability of raw materials, high cost of production and fall in the sugar prices. After three years, the factory was restarted in 1994-1995 under the management of IFFCO, but was again closed in 1996-1997. Its installed capacity was 1250 TCD and it had to be closed down during the crushing season 1990-1991 on account of non-availability of raw materials, high cost of production and fall in the sugar prices. After three years, the factory was restarted in 1994-1995 under the management of IFFCO, but was again closed in 1996-1997. By 2000, the accumulated losses exceeded the paid up capital. Therefore, in May 2001, the Registrar of Cooperative Societies, AP issued advertisement for sale of the assets of the Nandyal Sugars. Ultimately, the bid of 2nd respondent for Rs.601.25 lakhs was accepted by the Competent Authority. The Sale Deed dated 27.09.2003 was executed by the Managing Director of Nandyal Cooperative Sugars Limited in favour of the 2nd respondent in respect of the assets of the said Sugar factory. As per para 9 of the Sale Deed, the land measuring about Ac.120.00 cents situated at Ayyalur Village, Nandyal Mandal, various buildings and other structures and plant & machinery and other equipment were collectively referred as "immoveable assets" and formed part of the Sale Deed. Now, the crucial question is whether the sale of above assets under the Sale Deed dated 27.09.2003 was only a conditional sale to enable the 2nd respondent to run the sugar factory or was it an outright sale without any condition. 15. Learned counsel for petitioner Sri M.Bala Subramanyam referring to the booklet "Information Memorandum and Bid documents" relating to privatization by way of sale of assets and business of M/s. Nandyal Cooperative Sugars Limited issued by the Government of A.P., Public Enterprises Department, Implementation Secretariat, would argue that the Government have decided to privatize the Nandyal Cooperative Sugars Limited with a view to achieve economic viability and lend credibility to the privatization programme. He argued that the Government intended that the bidders who intend to purchase the NCSL shall have the experience in that field. That is why in the evaluation process, apart from other parameters, the track record in sugar industry, previous experience, bidders plans for cane development and extension of services to farmers were also verified by the Evaluating Committee. He would argue that the bidding and evaluation process would clearly show that the sugar factory was sold with an intention that the purchaser should run the industry but not to dispose of. He would argue that the bidding and evaluation process would clearly show that the sugar factory was sold with an intention that the purchaser should run the industry but not to dispose of. Further, while confirming the bid of the 2nd respondent for Rs.601.25 lakhs being the highest bid, the transaction advisor of Implementation Secretariat addressed a letter wherein he clearly mentioned that the bid of 2nd respondent was approved as preferred bidder and accepted with certain conditions viz., (1) 25% of the bid amount is payable within one week from the date of communication of the acceptance of the bid (2) balance 75% is payable at the time of handing over of the assets (3) revival of the unit. Learned counsel argued that revival of the sugar factory was part of the prime consideration for the seller. That apart, he would argue, in para 6 of the Sale Deed, it was clearly mentioned that the assets were sold to run the factory. Learned counsel vehemently argued that the recitals in the Sale Deed would clearly depict that it was purely a conditional transfer in favour of 2nd respondent but there was no absolute right title or interest created. Therefore, the 2nd respondent has to fulfil the condition of running the sugar factory set out in the Sale Deed and it has no right to alienate either the appurtenant lands or other assets of the sugar factory. He placed reliance on Indu Kakkar v. Haryana State Industrial Development Corporation Limited & another, 1999 (2) SCC 37 : MANU/SC/0760/1998. (a) Learned counsel further argued that though the 2nd respondent is not a State by itself or an instrumentality of the State, still it is required to perform public function i.e., to run the sugar factory as per the mandate of the Sale Deed and therefore, this Court can exercise its plenary jurisdiction under Article 226 of the Constitution and issue writ of mandamus restraining it from alienating the assets and preserve the functional domain of the sugar factory. He relied upon Ramakrishna Mission & another v. Kago Kunya & another, 2019 (16) SCC 303 : MANU/SC/0413/2019, Uttar Pradesh Power Transmission Corporation Limited & another v. CG Power & Industrial Solutions Limited & another, 2021 (6) SCC 15 : MANU/SC/0349/2021. 16. He relied upon Ramakrishna Mission & another v. Kago Kunya & another, 2019 (16) SCC 303 : MANU/SC/0413/2019, Uttar Pradesh Power Transmission Corporation Limited & another v. CG Power & Industrial Solutions Limited & another, 2021 (6) SCC 15 : MANU/SC/0349/2021. 16. Per contra, learned counsel for 2nd respondent Sri K.Gopal Chowdary argued that the revival and operation of sugar factory by the successful bidder is only a wish or intendment of the Government while selling the sugar factory. However, that is not a condition precedent for alienating the assets of the sugar factory. That was why, no express term or condition was stipulated in the Sale Deed to the effect that the purchaser shall only run the sugar factory but under no circumstances should alienate partial or total assets of the sugar unit. Learned counsel would emphasize that no penal clause was imposed to the effect, should the purchaser violate the condition, the sale stand cancel and assets revert back to the vendor or any other consequence would ensue. On the other hand, the sale was an outright transfer of right, title and interest in the sugar factory assets in favour of 2nd respondent without any fetter, encumbrance or obligation. Referring to Para 6 of the Sale Deed, learned counsel vehemently argued that the employment of the words "to run the sugar mill" shall not be mistaken as a condition imposed by the seller that the vendor shall run the sugar factory or run eternally. He sought to explain that those words were used in the context of explaining that Sri Rayalaseema Sugar and Green Energy Limited, the original preferred bidder has promoted a Special Purpose Vehicle (SPV) in the name of Sree Rayalaaseema Sugar and Energy Limited, who is the purchaser to run the sugar mill and the seller decided to sell the assets and business of the sugar factory to the said purchaser free of encumbrances. Learned counsel would thus argue that in those circumstances, the terminology used as aforesaid was only an indicative of the purchaser‘s wish to run the sugar factory after sale process was over, but it does not reflect a condition precedent set out by the seller and therefore, the writ petitioner cannot take any advantage from the recitals in Para 6. Learned counsel would thus argue that in those circumstances, the terminology used as aforesaid was only an indicative of the purchaser‘s wish to run the sugar factory after sale process was over, but it does not reflect a condition precedent set out by the seller and therefore, the writ petitioner cannot take any advantage from the recitals in Para 6. Learned counsel further argued that even otherwise, the 2nd respondent had, to the best of its ability, operated the sugar unit from 2003 to 2010 and it was only because the unfavourable conditions beseized, it was constrained to sell Ac.13.01 cents of the land. Therefore, the petitioner cannot challenge the right of 2nd respondent to run, close or alienate the sugar unit. He finally argued that the sugar factory is a private entity and no public function is being undertaken by it and hence, the writ petition is not maintainable. 17. Perused the pleadings, documents and gave my anxious consideration to the above respective arguments. 18. I have meticulously gone through the booklet styled "Information Memorandum and Bid Documents" issued by the Public Enterprise Department of the Government of A.P. filed by the 2nd respondent. It contains the policy of the Government to achieve public enterprise reformation including privatization for overall economic development of the State. It is mentioned that the privatization which changes the ownership and control of enterprises from the public sector to private sector plays a key part in improving the management decisions and accountability and promote private investment. This booklet deals with the procedure for privatization of Nandyal Cooperative Sugar Limited. It is stated that the Government is committed to select a purchaser for the assets to optimize the sale proceeds, minimize governmental exposure to post-sale risks and liabilities, contribute to the credibility of the privatization programme and achieve sustainable economic activity. The booklet contains bid procedure. The evaluation criteria mentioned at clause 6.20 would show that the commercial and technical part of the bid would be evaluated looking inter alia the parameters like previous experience, track record in sugar industry, bidders plans for cane development and extension services to farmers etc. An overall scrutiny of the aforesaid booklet would no doubt depict that the Government intended to privatize the Nandyal Cooperative Sugar Limited for being operated. An overall scrutiny of the aforesaid booklet would no doubt depict that the Government intended to privatize the Nandyal Cooperative Sugar Limited for being operated. However, we do not find any express and assertive condition that the intended bidder must invariably run the sugar factory continuously after purchase. No penal clause is mentioned in this prospectus booklet that if the purchaser violates the intendment of the Government, some penal consequences would ensue. From this booklet, one can only conclude that the intended privatization was only with the hope that an experienced purchaser would run the sugar factory. (a) Then I perused the copy of the letter dated NIL addressed by Transaction Advisor of Implementation Secretariat to the 2nd respondent. The copy of the said letter is filed by the petitioner along with additional material papers. It is mentioned in the said letter that the bid offered by the 2nd respondent was the highest offer and the same has been approved as preferred bidder subject to the three terms, one of which is the revival of the Unit. From this term, it is argued by the petitioner‘s counsel that the sale is only a conditional one but not absolute. (b) It must be noted that to determine whether the sale in the instant case is a conditional or absolute, the cardinal principle is that the intention of the parties must be gathered from the substance but not the form recitals of the concerned document which they entered. Vide: (1) Board of Revenue v. A.M. Ansari, AIR 1976 SC 1813 : 1976 (3) SCR 661 : MANU/SC/0038/1976. The Hon‘ble Apex Court observed thus: “As to whether a particular transaction creates a lease or a licence is always a question of intention of the parties which is to be inferred from the circumstances of each case. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not to its form.” (2) Tarkeshwar Sio Thakur Jiu v. Dar Dass Dey, AIR 1979 SC 1669 : MANU/SC/0430/1979. The Apex Court observed thus: “24. For the purpose of deciding whether a particular grant amounts to a lease or a licence, it is essential, therefore, to look to the substance and essence of the agreement and not to its form.” (2) Tarkeshwar Sio Thakur Jiu v. Dar Dass Dey, AIR 1979 SC 1669 : MANU/SC/0430/1979. The Apex Court observed thus: “24. It is well-settled that in ascertaining the real character of a document, regard must be had to the substance of the transaction and not merely the words or the form in which it is dressed.” (3) Sohan Lal Naraindas v. Laxmidas Raghunath Gadit, 1971 (1) SCC 276 : MANU/SC/0593/1971. The Supreme Court observed thus: "8. Intention of the parties to an instrument must be gathered from the terms of the agreement examined in the light of the surrounding circumstances. The description given by the parties may be evidence of the intention but is not decisive. Mere use of the words appropriate to the creation of a lease will not preclude the agreement operating as a licence. A recital that the agreement does not create a tenancy is also not decisive. The crucial test in each case is whether the instrument is intended to create or not to create an interest in the property the subject matter of the agreement. If it is in fact intended to create an interest in the property it is a lease, if it does not, it is a licence. In determining whether the agreement creates a lease or a licence the test of exclusive possession, though not decisive, is of significance.” 19. Therefore, necessarily the sale deed dated 27.09.2003 executed by Managing Director of Nandyal Cooperative Sugars Limited in favour of 2nd respondent should be referred to gather the real intention of the parties. It is mentioned that Government of A.P. is the substantial shareholder and the seller and it has approved privatization/sale of assets of the seller as a part of public enterprises reform programme. Para 9 of the Sale Deed would show that free hold land admeasuring about Ac.120.00 cents situated in Ayyalur Village, various buildings and other structures and plant & machinery collectively referred to as "immoveable assets" forming integral part of the sale. Para 9 of the Sale Deed would show that free hold land admeasuring about Ac.120.00 cents situated in Ayyalur Village, various buildings and other structures and plant & machinery collectively referred to as "immoveable assets" forming integral part of the sale. Then, under the heading "This indenture witnesses and the parties hereto agree as follows" it is mentioned that upon receiving the sale price of Rs.3,52,35,000/- from the purchaser, the seller grants, sells, conveys, assigns and assures unto the buyer forever free from, mortgages, charges, encumbrances, liens, adverse claims, preemptive rights, attachments, restriction of any kind whatsoever in respect of immoveable assets. Thus, a holistic scrutiny of sale deed dated 27.09.2003 shows it was an outright sale deed executed after receiving valuable consideration from 2nd respondent by conveying clear and absolute right, title and possession. There is no express condition implying that the 2nd respondent after purchase, shall run the sugar factory eternally without the right of alienation. There is no default clause either showing that if the purchaser fails, the sale becomes void or purchaser will be penalized in some form. The petitioner banks upon clause 6 of the Sale Deed which reads thus: “6. LS invited bids on behalf of the registrar for the purchase of assets of the seller by public advertisement in may, 2001. Two bids were received which were found to be substantially responsive and were evalued against the criteria set in the published procedure. On receipt of the results of bid evaluation Govt. AP and Registrar approved Sree Rayalaseema Sugar and Green Energy Limited as the preferred bidder for the assets and business of the seller subsequently promoted Sree Rayalaseema Sugar and Energy Limited, the purchaser, to run the sugar mill it was decided that seller to sell the assets and business to the purchaser free of encumbrances subject to the terms and conditions agreed to between them". 20. The above clause contains the words "to run the sugar mill". As rightly argued by learned counsel for 2nd respondent, the above phrase cannot be treated as a condition imposed by the seller to the purchaser to run the sugar factory. 20. The above clause contains the words "to run the sugar mill". As rightly argued by learned counsel for 2nd respondent, the above phrase cannot be treated as a condition imposed by the seller to the purchaser to run the sugar factory. On the other hand, it would appear, the preferred bidder i.e., Sree Rayalaseema Sugar and Green Energy Limited has promoted a Special Purpose Vehicle (SPV) in the name of Sree Rayalaseema Sugar and Energy Limited, who is the purchaser, to run the sugar mill and the seller decided to sell the assets and business to the purchaser free of encumbrances. Therefore, the phrase "to run the sugar mill" cannot be treated as a condition imposed by the seller on the purchaser. Therefore, Point No.1 is concerned, the sale must be held to be an absolute sale without any condition or fetter on alienation or mode of enjoyment. (a) Point No.2 is concerned, even assuming that the seller while transferring the assets of the sugar factory imposes a condition of non-alienability or restricting the mode of enjoyment in a particular manner i.e., to run the sugar factory eternally by the purchaser, such a condition being repugnant to the absolute nature of transfer, is void and can be 22 ignored as per Section 10 & 11 of the Transfer of Property Act. These sections read: 10. Condition restraining alienation:— Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: Provided that property may be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein. 11. Restriction repugnant to interest created:—Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. Restriction repugnant to interest created:—Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction. [Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.] 21. In the case of Bhavani Amma Kanaka Devi & others v. C.S.I. Dekshina Kerala Maha Idavaka, AIR 2008 Kerala 38 : MANU/KE/0556/2007 the plaintiff therein filed the suit against the defendant seeking a decree for a direction to execute the Sale Deed and reconvey the property which the plaintiff earlier sold to the defendant on the ground that the defendant failed to fulfil the condition imposed in the Sale Deed to construct a private college in the property sold to him. The defendant resisted the suit contending that the said clause in the sale deed was repugnant to Section 10 of the Transfer of Property Act and hence, void ab initio. The High Court of Kerala dismissed the appeal filed by the plaintiff holding that the condition imposed in the sale deed was contrary to the spirit of Section 10 and 11 of the Transfer of Property Act. It observed thus: "The principal underlying the section is that a right of transfer is incidental to and inseparable from, the beneficial ownership of property. If an absolute estate is created and after the creation of such estate, a condition which brings a diminution of that absolute estate is imposed on the person in whose favour the absolute estate is created the said which was created is void and unenforceable. The principle is founded on the principle of public policy allowing free disposition of property. Section 11 of Transfer of property Act embodies principles of universal application that when the main object of transferor is to make an absolute transfer, an inconsistent provision therein cannot be given effect to.” 22. The principle is founded on the principle of public policy allowing free disposition of property. Section 11 of Transfer of property Act embodies principles of universal application that when the main object of transferor is to make an absolute transfer, an inconsistent provision therein cannot be given effect to.” 22. Therefore, in case of an absolute transfer as in the present case, no condition against alienation or restricting the mode of enjoyment can be imposed. The decision in Indu Kakkar‘s case (supra 1) cited by the petitioner can be distinguished on facts. In that case, the Haryana State Industrial Development Corporation Limited has allotted a plot to M/s. York Printers and registered under a Deed of conveyance with a condition that the allottee shall start on the site the construction of a building for setting up an industry within a period of six months and complete the construction within two years and commence the production within three years from the date of allotment of the plot, failing which the plot will be liable to be resumed by the Corporation. It appears, the said M/s. York Printers violated the aforesaid conditions and sold the plot to the third party. The matter went upto the Supreme Court. The Apex Court found that the original allottee has not taken any steps for implementation of the proposed industrial unit and so the petitioner before it who is only a transferee of the original allottee cannot claim any right. It appears, the petitioner pressed into service Section 11 of the Transfer of Property Act to contend that clause 7 in the Allotment Agreement imposing the resumption condition as illegal. Discarding such an argument, the Apex Court observed that for a transferee to claim benefit under Section 11 of the Transfer of Property Act, an absolute interest in favour of the transferee has been created. That was not the case because the agreement was entered into between the Corporation and the original allottee pursuant to the request made by the allottee to give him an industrial plot for the purpose of setting up an industry. He assured that he would start industry by constructing a building. Hence, the resumption was held to be valid. However, in our case, it was not a matter of allotment of the sick industry to the 2nd respondent for running the same. He assured that he would start industry by constructing a building. Hence, the resumption was held to be valid. However, in our case, it was not a matter of allotment of the sick industry to the 2nd respondent for running the same. On the other hand, it was, as observed supra, an outright sale. Therefore, the recitals in the sale deed do not contain any conditions either restricting the further alienation or restricting the mode of enjoyment to run the industry eternally. Even if such condition is sought to be introduced by the petitioner, the same shall be held to be void and ignorable by 2nd respondent. Thus, points 1 and 2 are held against the petitioner and in favour of the 2nd respondent. 23. Point No.3: It is contended that the 2nd respondent does not come within the meaning of the State as envisaged in Article 12 of the Constitution of India and therefore, writ petition is not maintainable. I find considerable force in the said argument. In Federal Bank Limited v. Sagar Thomas, 2003 (10) SCC 733 : MANU/SC/0769/2003 the Apex Court by analyzing its earlier judgments classified the entities against whom writ petition may be maintainable. “19. From the decisions referred to above, the position that emerges is that a writ petition under Article 226 of Constitution of India may be maintainable against (I) the State Government; (II) an authority; (III) a statutory body (IV) an instrumentality or agency of the State; (V) a company which is financed and owned by the State (VI) a private body run substantially on State funding; (VII) a private body discharging public duty or positive obligation of public nature (VIII) a person or a body under liability to discharge any function under any statute to compel it to perform such a statutory function” 24. In the instant case, the 2nd respondent does not fit into any of the classifications made above. It is not discharging any public duty rather than running a sugar factory on commercial basis. The public duty or function must be of a character that is closely related to the functions performed by the State in its sovereign capacity. Running the risk of pleonasm, it must be said the 2nd respondent is not even remotely discharging the sovereign functions. Hence, it is not a State within the ambit of Article 12 of Constitution of India. Running the risk of pleonasm, it must be said the 2nd respondent is not even remotely discharging the sovereign functions. Hence, it is not a State within the ambit of Article 12 of Constitution of India. Therefore, as rightly contended by the counsel for 2nd respondent, the writ petition is not maintainable. The decisions in Ramakrishna Mission & another (supra 2) and also Uttar Pradesh Power Transmission Corporation Limited (supra 3) by the petitioner do not improve its case. The point is answered accordingly. 25. In the result, the writ petition merits dismissal and accordingly, dismissed. No costs. As a sequel, interlocutory applications, if any, pending for consideration shall stand closed.