final respondent

5/28/2018 Final Respondent

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-MEMORANDUM for theRESPONDENT-

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THE TABLE OF CONTENTS

CONTENTS PAGE

THE TABLE OF CONTENTS Page 1 of 32

THE INDEX OF AUTHORITIES Page 2 of 32

THE STATEMENT OF JURISDICTION Page 7 of 32

THE STATEMENT OF FACTS Page 8 of 32

THE STATEMENT OF ISSUES Page 10 of 32

THE SUMMARY OF ARGUMENTS Page 11 of 32

THE ARGUMENTS ADVANCED Page 13 of 32

THE PRAYER Page 32 of 32


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S No.

INDEX OF AUTHORITIES

TABLE OF INDIAN CASES

Name of Case Pg No.

1. Lt. Governor Of Delhi & Ors vs V.K. Sodhi & Ors 2007 AIR 2885 13

2. Prakash Rekhi v.Union of India & Anr., (1981)2 S.C.R. 111 13

3. B.S. Minhas v.Indian Statistical Institute & Ors(1983)4 S.C.C. 582 13

4. Manmohan Singh Jaitla v. Commissioner, Union Territory of Chandigarh

& Ors.(1984) Supp. S.C.C. 540

13

5. Workmen of Hindustan Steel Ltd. & Anr. v.Hindustan Steel Ltd. &

Ors.(1984) Supp. S.C.C. 554, 560

13

6. K. Ramachandra Iyer & Ors. v.Union of India & Ors.(1984) 2 S.C.R.

141

13

7. A.L. Kalra v. Project and Equipment Corporation of India Ltd., [1984] 3

S.C.R. 316

13

8. West Bengal State Electricity Board & Ors.v. Desh Bandhu Ghosh &

Ors.(1985) 3 S.C.C. 116

13

9 Praga Tools Corporation v. C.A. Imanual & Ors., (1969) 3 S.C.R 773 13

10. Sukhdev Singh & Ors. v.Bhagat Ram Sardar Singh Raghuvanchi &

Anr.,(1975) 3 S.C.R. 619

13

11. Ramana Dayaram Shetty v.The International Airport Authority of India

& Anr., (1979) 3 S.C.R. 1014

13,19,20,21

12 Managing Director, Uttar Pradesh Ware Housing Corporation & Anr. v.

Vinay Narain Vajpayee,(1980) 2 S.C.R. 773

13

13 Ajay Hasia etc. v.Khalid Mujib Sehravardi & Ors. etc., (1981) 2 S.C.R.

79;

13,20

14 Pradeep Kumar Biswas & Ors. v.Indian Institute of Chemical Biology &

Ors(2002) 5 SCC 111

13,20

15 Chander Mohan Khanna v.National Council Of Educational Research

And training And Ors1992 AIR 76, 1991 SCR Supl.

13

16 Integrated Rural Development Agency v.Ram Pyare Pandey1995 Supp.

(2) S.C.C. 495

30


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17 Smt. J. Tiwari v.Jawala Devi Vidya Mandir and Ors1979 (1) S.L.R.

(S.C.) 614

14

18 Executive Committee of Vaish Degree College, Shamli and Ors. v.

Lakshmi Narain and OrsAIR 1976 S.C. 888

14

19 R.D., Sharma v.St. John's High School and Ors2002 (3) R.S.J. Pb. & Hy.

398.

14

20 All India ITDC Workers Union & Ors.v.ITDC & others(2006) 10 SCC

66

14

21 G.Bassi Reddy v.International Corps Research Institute(2003) 4 SCC

255

14

22 Balco Employees Unionv.Union of India & Another(2002) 2 SCC 333 14

23 Agricultural Produce Market Committee vs. Ashok Harikunj &

Another(2000) 8 SCC 61

14

24 Zee Telefilms Ltdv Union of IndiaAIR 2005 SC 2677 14

25 Ujjam Baiv. Union of India(1963) l SCR 778 14

26 University Of Madras v. Southern BalAIR 1954 Madras 67 15

27 Krishna Gopalv.Punjab UniversityAIR 1966 Punjab 34 15

28 Carlsbad Mineral Water Mfg. Co. Ltd. v.Jagtiani. AIR 1952 Cat 315 15

29 C. M. Khanna v.NCERT AIR1992 SC 76 15

30 Workmen Of Pepsico India Holdings v.Deputy Labour Commissioner,

(2002)1 SCC 356

15

31 Kisan Sahkari Chini Mills Ltd. v.Rakesh Chandra Gangwar And

Ors(2004) 1 SCC 45

15

32 Purshottam Das Tandon v.Military Estate Officer AIR 2000 All 127 15

33 Smt. Biran Devi v.Sechu Lal, 2001 (4) AWC 2659 15

34 Gajendra Kumar Sharma v.General Manager,1999 (4) AWC 2.149

(NOC)

15

35 Dr. Anand Kumar Gupta v.Rajghat Education Centre And Ors. on

(2002)5 SCC 56

15


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36 Bihari Lal Chauhan v.Director Of Factories (2003)(2)AWC 1069 15

37 Air Vice Marshal J.S. Kumar v. Governing Council Of Air Force And

Another (2006)3 SCC 678

15

38 The Management Of Sivananda v. Sivananda Steels Employees (2005)1SC 66

15

39 Devendrajeet Vadra v. State Of U.P. And Ors. (2003)(4)AWC 2900 15

40 Dr. A.K. Gupta v.Rajghat Education Centre, 2003 (1) AWC 503 15

41 General Manager, Modipon Fibre Co. v.Narendra Pal 2003 ALJ 980 15

42 Gopi Krishna Srivastava v.Deputy Housing (2002) (1) AWC 604 15

43 Estate Pvt. Ltd. v.N.D.M.C. (2005) (1) MLJ 453 15

44 Ravinder Singh v.Principal, Parker Inter College( 1998) (4) AWC 160 15

45 State Of U.P. And Ors.v. Labour Court And Ors (1997) 7 SCC 463 15

46 Simco Rubber Product (P.) Ltd. v.Bank Of India (2003) 51 SCL 272 All 15

47 Executive Committee of Vaish Degree College, Shamli and Others v.

Lakshmi Narain & Ors (1976)2 SCR 1006

15

48 Deepak Kumar Biswas v.Director of Public Instructions.1987 (2) SCC

252

15

49 VST Industries Ltd. v.Workers Union2001 (1) SCC. 298 16

50 Shri Andi Mukta Sadguru Trust v.V.R. Rudani 1989 AIR 1607 16

51 Jatya Pal Singh & Ors. v. Union Of India & OrsWPN.2652 of 2007 16

52 S.S. Rana v. Register Cooperative Societies2006 AIR SCW 3723 18

53 K. Vasudevan Nair v. Union of India1991 Supp.(2) SCC 134 18

54 Sindhi Education Society & Anr. v.Government (NCT of Delhi)(2010) 8

SCC 49

18

55 Binny Ltd. & Anr v.V. Sadasivan & Ors (2003) 4 SCC 255 21

56 Visva Bharati v.Smt. Rakhi Debnath And Ors.(1996) 1 CALLT 51 HC 21,29

57 P. Electricity Board v.Regional Provident Fund (2004) IILLJ 40 MP 21

58 Basu Distributors Pvt. Ltd. v.Income Tax Officer 2007 292 ITR 29 Delhi 21


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59 Gita Theatres And Anr. v.Municipal Corporation (1998) 3 GLR 2591 21

60 A.B. Joglekar And Anr. v.Debts Recovery Tribunal And Anr. III (2004)

BC 41, 2002 (5) MPHT 187

21

61 Calcutta Municipal Corporation. v.M/S. Bala Bestos India Ltd(1998) 2

CALLT 249 HC, 1998 (1) CHN 492

21

62 Radhakrishna Agarwal v.State of Bihar(1977) 3 SCC 457 21

63 Poonam v.Sumit TanwarAIR 2010 SC 1384 22

64 P.V. Narsimha Rao . v.StateAIR 1998 SC 2120 22

65 Municipal Corporation Of Delhi v. R.P. Khaitan And Anr.1995 IVAD

Delhi 883, 1995 (35) DRJ 604

22

66 Dalco Engg. (P) Ltd. v.Satish Prabhakar Padhya(2010) 4 SCC 378 22

67 General Manager, Kisan Sahkar Chini Mills Limited, Sultanpur, UP v.

Satrughan Nishad and Ors.(2003) 8 SCC 639

22

68 Mrs. K. Naqvi v.State of Punjab and Ors2004 ILR 2 (Punjab and

Haryana) 11

22

69 DAV Managing Committee v. Surender Rana (2011) 192 SC 22

70 Sri Ramdas Motor Transport Ltd. v.Tadi Adhinarayana Reddy And Ors.

AIR 1997 SC 2189

22,27

71 Shyam Kishore and others v.Municipal Corporation of DelhiAIR 1991

Delhi 104

22

72 Dalco Engg. (P) Ltd. v.Satish Prabhakar Padhya(2010) 4 SCC 378 23

73 Sonia v Oriental Insurance Co. Ltd,Appeal (civil) 3521 of 2007 23

74 Narayana Rao and Anr. v. State of A.P. and AnrAIR 1987 AP 57 27

75 Indra Sawhneyetc. Vs. Union of India AIR 1993 SC 477 28

76 GRIDCO Ltd.V. Sadananda DoloiAIR 2012 SC 137 28

77 Triloki Nath and Anr. v. State of Jammu & Kashmir and Ors. (1969) 1

SCR 103

28

78 M. R. Balaji v. State of Mysore ((1963) Supp 1 SCR 439 29


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79 State of A. P. v. P. SagaAIR 1975 SC 563 29

80 State of Uttar Pradesh v. Pradip Tandon and Ors1985 SC1495 29

81 Kailash Chand Sharma v. State of Rajasthan, (2002) 6 SCC 562 29

82 New India Co-Op. Housing Society v.Municipal Corpn. of Greater

(2008) 9 SCC 694

22

INTERNATIONAL CASES

1 Davy v. Spelthone[1984]AC 262 17

2 R.V. East, Bershire Health Authority[1987] 2 All ER 909 17

3 R. v. Lewisham Union[1897] 1 Q.B. 498, 501 17

4 Reilly v.Mackman[1983] 2 AC 237 17

LIST OF BOOKS and ARTICLES

1.The Hindu, Public Private Partnership, Monday, Feb 18, 2002

16

2.

Mr. Detan "Why Administrators should be bound by their policies" (Vol.

17) 1997 Oxford Journal of Legal Studies,

28

3.

Article 12: Scope as expanded by judiciary www.legalservices.in

13

4. B. I. Hansaria Tripathi, Writ Jurisdiction under the Constitution

34(Universal, New Delhi, 2nd edn., 2008).

19

5 Mc. Clelland v.Northern Ireland General Health Services Boards[1957]

1 W.L.R. 594

17

6 Ridge v. Baldwin[1964]A.C. 40 17

7 Short v.Poole Corporation[1926] Ch. 66 17

8 Attorney- General v.St. Ives R.D.C[1961] 1 Q.B. 366 17

9. R. v. IRC, ex p Preston[1985] AC 835 30

10. Hughes vs. Department of Health and Social Security (HL)1985 AC 776

(788)

31


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STATEMENT OF JURISDICTION

THE PETITIONERS IN THE PRESENT CASE HAS BEEN EMPOWERED BY ARTICLE

32 AND ARTICLE 136 OF THE CONSTITUTION OF INDISTANTO INITIATE THE

PRESENT PROCEEDINGS IN THE HONBLE SUPREME COURT OF INDISTAN.

ARTICLE 32:RIGHT TO CONSTITUTIONAL REMEDIES

1) THE RIGHT TO MOVE THE SUPREME COURT BY APPROPRIATE PROCEEDINGSFOR THE ENFORCEMENT OF THE RIGHTS CONFERRED BY THIS PART IS

GUARANTEED.

2) THE SUPREME COURT SHALL HAVE POWER TO ISSUE DIRECTIONS OR ORDERSOR WRITS, INCLUDING WRITS IN THE NATURE OF HABEAS CORPUS,

MANDAMUS, PROHIBITION, QUO WARRANTO AND CERTIORARI, WHICHEVER

MAY BE APPROPRIATE, FOR THE ENFORCEMENT OF ANY OF THE RIGHTS

CONFERRED BY THIS PART.

ARTICLE 136 (1) NOTWITHSTANDING ANYTHING IN THIS CHAPTER, THE

SUPREME COURT MAY, IN ITS DISCRETION, GRANT SPECIAL LEAVE TO

APPEAL FROM ANY JUDGMENT, DECREE, DETERMINATION, SENTENCE OR

ORDER IN ANY CAUSE OR MATTER PASSED OR MADE BY ANY COURT OR

TRIBUNAL IN THE TERRITORY OF INDISTAN.

THE RESPONDENT MOST HUMBLY AND RESPECTFULLY SUBMIT TO THE

JURISDICTION OF THE HONBLE SUPREME COURT IN THE PRESENT MATTER.


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STATEMENT OF FACTS

I

The Republic of Indistan is an emerging welfare state inSouth Asia. Due to its economic

diversification it holds great potential for economic investments by developed nations.

Constitution of Indistan lays down the framework defining fundamental political principles,

establishing the structure, procedures, powers and duties, of the government and spells out

the fundamental rights, directive principles and duties of citizens similar to the Republic of

India.

II

A new State run corporate entity namely Indistan International Communication Limited

(IICL) in year 1981 which had a kind of monopoly in respect of International Long

Distance Service i.e. ILDS and international telecommunication services was created by the

Govt. of Indistan in 1947.

III

In pursuance of New Economic Policy (NEP) 1993, which promoted Public- Private

Partnership (PPP), the republic of Indistan started disinvesting wide range of Public Sector

Units (PSU) which were promoted and controlled by State including IICL.

IV

In year 2000, the Govt. of Indistan divested itself of the shares of IICL in favour of a group ofcompanies floated by XYZ Corporation Pvt. Ltd. (a corporate entity of Indistan) after

following the due process according to its disinvestment policy. As part of disinvestment

package the new management the new management ha the custody of all the all the

infrastructural components. However, even after disinvestment, the Govt. of Indistan still

remains the largest single stakeholder as per the shareholding composition.


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VI

As per the share holding agreement and share purchase agreement the Government of

Indistan ensured that none of the employees should be retrenched for a period of 3 year from

the disinvestment and that the Govt. has a first right to refuse on future sell of shares by any

strategic partner wishes to sell off the stakes in IICL respectively.

VII

Thereafter in 2001 an Office Memorandum (OM) dated 13th August and another

recommendation dated 03rd May by the Government of Indistan ensured job security and

social security in case where the Public Sector Units and Govt. enterprises are being

disinvested.

VIII

The new Management of IICL namely XYZ Corp. Limited, in year 2009 terminated 20

managerial employees (who were selected by the Indistan Public Service Commission and

appointed by the President of Indistan) after paying 3 monthssalary in lieu of notice period

terming their employment as merely contractual. Majority of them belonged to backward

class of citizens.

IX

Writ petitions were filed by an association of employees namely XYZ ShoshitEmployees

Welfare Association before the High Court of Indistan alleging discrimination by the IICL &

XYZ Corp. Ltd and seeking reinstatement and specific enforcement of OM dated 13th

August 2001 against the Govt. of Indistan. But the Indistan High Court dismissed the writpetition under and termed the relationship as merely contractual in nature.

X

All Indistan Backward Class (affected by disinvestment) Employee Association has

approached the Supreme Court of Indistan seeking the specific enforcement of

recommendation dated 03rd May 2001 by way of a Writ Petition under Article 32 of the

Constitution.


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THE STATEMENT OF ISSUES

THE FOLLOWING ISSUES FOR CONSIDERATION HAVE COME UP BEFORE THE

HOBBLE SUPREME COURT OF INDISTAN.

I. WHETHER THE RESPONDENT COMPANY IS AMENABLE TO WRITJURISDICTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDISTAN?

A. WHETHER IICL & ITS NEW MANAGEMENT IS STATE UNDER ARTICLE 12OF THE CONSTITUTION OF INDISTAN?

B. WHETHER IICL & ITS NEW MANAGEMENT IS PERFORMING PUBLIC-FUNCTION?

II. WHETHER TERMINATION OF EMPLOYEES WAS JUSTIFIED AND THERECOMMENDATIONS OF MINISTRY OF SOCIAL JUSTICE AND

EMPOWERMENT COULD BE SPECIFICALLY ENFORCED?

A. WHETHER THE TERMINATION OF EMPLOYEES WAS ARBITRARY ANDOPPOSED TO RULES OF NATURAL JUSTICE?

B. WHETHER THE ENFORCEMENT OF CONSTITUTIONAL RIGHTS IN TERMSOF AFFIRMATIVE ACTION IS A LEGITIMATE EXPECTATION AND THE

RECOMMENDATION BY THE MINISTRY OF SOCIAL JUSTICE AND

EMPOWERMENT SHOULD BE SPECIFICALLY ENFORCED?


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SUMMARY OF ARGUMENTS

I. WHETHER IICL & ITS NEW MANAGEMENT XYZ CORP. LTD. ISAMENABLE TO WRIT JURISDICTION?

A. IICL & Its New Management is not amenable to writ jurisdiction because afterdisinvestment the respondent company has become a private entity and the actions of the

State or an instrumentality of the State which do not properly belong to the field of publiclaw but belong to the field of private law are not liable to be subjected to judicial review.

B. Since the year 2000, Government of Indistan holds only 31 % shares of IICL. Therefore,it can be safely concluded that on the basis of the shareholding, the Government of India

would not be in control of the affairs of IICL. IICL cannot be declared as a State or other

authority within the meaning of Article 12 of the Constitution of Indistan as it does not

fall within the well recognized parameters of state under Article 12.

C. In the instant case the respondent company is a purely private entity and it is not boundby the recommendation dated 3rd May, 2001 of the Ministry of Social Justice and

Empowerment, Government of Indistan. It is just and fair that employees be given

enough time to seek alternative source of livelihood.

D. An alternative and equally efficacious remedy is open to a litigant, he should be requiredto pursue that remedy and not invoke the special jurisdiction of the High Court to issue a

prerogative writ.


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II. WHETHER TERMINATION OF EMPLOYEES WAS JUSTIFIED AND THERECOMMENDATIONS OF MINISTRY OF SOCIAL JUSTICE AND

EMPOWERMENT COULD BE SPECIFICALLY ENFORCED?

A. The termination of services of the employees was done in the year 2009 which was nineyears after the date of disinvestment. The termination of employees was not in violation of

the share purchase and share-holding agreement and the new management of IICL was well

within their bounds to terminate the services of such employees. Hence, the action of

respondent was not arbitrary.

B. The respondent company is a purely private entity. Therefore, it is not bound by therecommendation dated 3rdMay, 2001 of the Ministry of Social Justice and Empowerment,

Government of Indistan.

C. The new management of IICL being a purely private entity is not bound by theconstitutional mandates of the state and is free to choose whether to continue utilizing the

service of an employee or to terminate such service, based on a contract.

D.The purpose of serving a notice prior to the termination of service is not to leave theemployee suddenly in lurch with no resources. It is just and fair that employees be given

enough time to seek alternative source of livelihood.


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THE ARGUMENTS ADVANCED

A.WHETHER IICL & ITS NEW MANAGEMENT XYZ CORP. LTD. IS AMENABLETO WRIT JURISDICTION?

The answering respondent reverentially submits that IICL & its new management is not

amenable to writ jurisdiction and the high court order ought not to be set aside.

1. THE PETITIONER DOES NOT HAVE THE LOCUS STANDI TO FILE A WRITAGAINST THE RESPONDENT AS IT IS NOT A STATE WITHIN THE MEANING

OF ARTICLE 12 OF THE CONSTITUTION OF INDISTAN.

In the classical words of P.K. BALASUBRAMANYAN, J1: As the decisions of this Court

show2, there is no simple litmus test, to determine whether an entity is a State or other

authority within the meaning of Article 12 of the Constitution of India. What is clear from the

decisions is that the various facets of the foundation and the working of the entity would be

relevant in determining the question in the context of the duties entrusted to it or taken up by

it for performance. It is in that context that in the seven judges Bench decision in Pradeep

Kumar Biswas & Ors. v. Indian Institute of Chemical Biology & Ors 3,it was held that

expanding dimension of 'the State' doctrine through judicial wisdom ought to be accompanied

by wise limitations else the expansion may go much beyond what even the framers of Article

12 may have thought of.

1Lt. Governor Of Delhi & Ors vs V.K. Sodhi & Ors 2007 AIR 2885

2Prakash Rekhi v.Union of India & Anr., (1981)2 S.C.R. 111;B.S. Minhas v.Indian Statistical Institute & Ors

(1983)4 S.C.C. 582; Manmohan Singh Jaitla v. Commissioner, Union Territory of Chandigarh & Ors. (1984)

Supp. S.C.C. 540; Workmen of Hindustan Steel Ltd. & Anr. v.Hindustan Steel Ltd. & Ors.(1984) Supp. S.C.C.

554, 560;P.K. Ramachandra Iyer & Ors. v.Union of India & Ors. (1984) 2 S.C.R. 141; A.L. Kalra v. Project

and Equipment Corporation of India Ltd., [1984] 3 S.C.R. 316; West Bengal State Electricity Board & Ors. v.

Desh Bandhu Ghosh & Ors.(1985) 3 S.C.C. 116; Praga Tools Corporation v. C.A. Imanual & Ors., (1969) 3

S.C.R. 773; Sukhdev Singh & Ors. v. Bhagat Ram Sardar Singh Raghuvanchi & Anr.,(1975) 3 S.C.R. 619;

Ramana Dayaram Shetty v. The International Airport Authority of India & Anr. , (1979) 3 S.C.R. 1014;Managing Director, Uttar Pradesh Ware Housing Corporation & Anr. v. Vinay Narain Vajpayee, (1980) 2

S.C.R. 773;Ajay Hasia etc. v.Khalid Mujib Sehravardi & Ors. etc., (1981) 2 S.C.R. 79;

3(2002) 5 SCC 111


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1.1.The respondent deferentially submits that the majority summed up the position in paragraph40 thus: The question in each case would be whether in the light of the cumulative facts as

established, the body is financially, functionally and administratively dominated by or under

the control of the Government. Such control must be particular to the body in question and

must be pervasive. If this is found then the body is a State within Article 12. On the other

hand, when the control is merely regulatory whether under statute or otherwise, it would not

serve to make the body a State. The question is Whether IICL can be said to be financially,

functionally and administratively dominated by or under the control of the Government. It

has to be noted that financially majority of shares are held by XYZ corp. Ltd, in the matter of

administration in IICL, the New Management is supreme. The administration is also

completely with the IICL & its New Management. Therefore the governmental interference

or control financially, functionally or administratively, in the working of the Company is out

of the question. Hence, it can be safely determined that respondent company is not amenable

to writ jurisdiction. To Buttress this contention inspiration is drawn from the case of Chander

Mohan Khanna v.National Council Of Educational Research And training And Ors4wherein

these were the aspects taken note of to come to the conclusion that NCERT is not a State or

other authority within the meaning of Article 12 of the Constitution of India. No doubt, in

Chander Mohan Khanna5

, the Bench noted that the fact that education was a State function

could not make any difference.

1.2.It is reverentially submitted that the Respondent-company is a private body as it is not underthe control of the Government. The employment of the Petitioner in the company was purely

a private contract entered into between the Master and Servant and even if its breach is

assumed to be wrongful, yet the Petitioner is not entitled to reinstatement as it may at the

best, give cause of action to them to claim damages in appropriate proceedings. It is further

submitted that even if the company is performing public duty of imparting

Telecommunication services, the action in employing managers or other employees or

governing their service conditions does not constitute a part of the aforementioned public

duty. Therefore, neither the writ petition is maintainable against Respondent nor the

Petitioner is entitled to reinstatement into service. To substantiate further the Counsel for

41992 AIR 76, 1991 SCR Supl. (1) 165; Lt. Governor of Delhi and Ors .v.V.K. Sodhi and Ors. AIR 2007 SC

2885

5ibid


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Respondent place reliance upon Integrated Rural Development Agency v. Ram Pyare

Pandey,6;Smt. J. Tiwari v. Jawala Devi Vidya Mandir and Ors.7, Executive Committee of

Vaish Degree College, Shamli and Ors. v.Lakshmi Narain and Ors.8, R.D., Sharma v.St.

John's High School and Ors.9, as well as the judgment inAndi Mukta's case10. Furthermore it

is reiterated that the Government is not controlling the Respondent-company therefore; the

State has nothing to do with the private action of the Respondent Company in the matter of

appointment and/or termination of its employees.

1.3.The answering respondent most respectfully submits that the tests for determining as towhether a particular body would fall within the definition of State or other authority have

been well defined by this Court in array of decisions and the law on the point is well settled.

Therefore, there is no scope for enlarging the time tested definitions rendered by this Court.

To buttress this assertion reliance is placed upon All India ITDC Workers Union & Ors.v.

ITDC & others11;Pradeep Biswas v. Indian Inst. of Chemical Biology12; G.Bassi Reddy v.

International Corps Research Institute 13 ; Balco Employees Union v. Union of India &

Another14;Agricultural Produce Market Committee vs. Ashok Harikunj & Another15and also

Zee Telefilms Ltd v Union of India16 in which the court by majority of 3 to 2 declined to

accept Board Of Control For Cricket In India(-a society registered under the Tamil Nadu

Society Registration Act,1975 as the state under article 12. Although the majority followed

Pradeep Biswas and earlier case on agency or instrumentality test and also recognised that

61995 Supp. (2) S.C.C. 495

71979 (1) S.L.R. (S.C.) 614

8AIR 1976 S.C. 888

9

2002 (3) R.S.J. Pb. & Hy. 398.10

1989 AIR 1607; G. Bassi Reddy v. International Crops Research Institute and Anr (2003) 4 S.C.C. 225

11(2006) 10 SCC 66

12Supra at pg 1

13(2003) 4 SCC 255

14(2002) 2 SCC 333

15(2000) 8 SCC 61

16, AIR 2005 SC 2677; c.f. V. N Shuklas, Constitution of India 53 (Eastern Book Company,Lucknow)


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some of the fundamental rights are available even against non state action including

individuals, it curiously held that the pre-requisite for the enforcement of a fundamental

right under article 32 is that the violator of that right should be a State first. ) In Ujjam Baiv.

Union of India17the Supreme Court rejected the principle of ejusdem generis .It observed that

there is no common genus between the authorities mentioned in Article 12.18InUniversity Of

Madras v. Southern Bal19The expression other authority did not include the university as it

did not discharge governmental function-its purpose being to promote education. It was also

observed that it was only a state aided institution and not state maintained. In Krishna Gopal

v.Punjab University20the Punjab high court took the same stand.21.

1.4.Furthermore it is submitted that IICL is a private company against which no writ ofmandamus can be issued. In several decisions, it has been held that a writ does not ordinarily

lie against private bodies 22 To augment this contention, the counsel would like to place

dependence upon two decisions of this Court: (a) Executive Committee of Vaish Degree

College, Shamli and Others v. Lakshmi Narain & Ors.23,and (b) Deepak Kumar Biswas v.

Director of Public Instructions.24In the first of the two cases, the respondent institution was a

17(1963) l SCR 778

18Article 12:Scope as expanded by judiciary available at http://www.legalserviceindia.com/article/l271-Article-

12.html (Visited on July 15, 2013)

19AIR 1954 Madras 67

20AIR 1966 Punjab 34

21B. I. Hansaria Tripathi, Writ Jurisdiction under the Constitution 34(Second edn.)

22Praga Tools Corp. v.Imanuel. AIR 1969 SC 1306; Carlsbad Mineral Water Mfg. Co. Ltd. v.Jagtiani. AIR

1952 Cat 315 ; C. M. Khanna v. NCERT AIR1992 SC 76; Workmen Of Pepsico India Holdings v. Deputy

Labour Commissioner, (2002)1 SCC 356, Kisan Sahkari Chini Mills Ltd. v. Rakesh Chandra Gangwar And

Ors(2004) 1 SCC 45;Purshottam Das Tandon v.Military Estate Officer (2000); Smt. Biran Devi v.Sechu Lal,2001 (4) AWC 2659, Gajendra Kumar Sharma v. General Manager,1999 (4) AWC 2.149 (NOC) : 1999 (3)

UPLBEC 2452; Dr. Anand Kumar Gupta v.Rajghat Education Centre And Ors. on (2002)5 SCC 56; Bihari Lal

Chauhan v.Director Of Factories And Anr.,(2003); Air Vice Marshal J.S. Kumar v. Governing Council Of Air

Force And Another (2006)3 SCC 678;The Management Of Sivananda v. Sivananda Steels Employees (2005)1

SC 66;Devendrajeet Vadra v. State Of U.P. And Ors. (2003); Dr. A.K. Gupta v.Rajghat Education Centre,

2003 (1) AWC 503; General Manager, Modipon Fibre Co. v. Narendra Pal 2003 ALJ 980, Gopi Krishna

Srivastava v.Deputy Housing (2002);Ralli Estate Pvt. Ltd. v. N.D.M.C. (2005);Ravinder Singh v.Principal,

Parker Inter College( 1998); State Of U.P. And Ors.v. Labour Court And Ors. (1997); New India Co-

Op.Housing Society v.Municipal Corpn. of Greater (2008);Simco Rubber Product (P.) Ltd. v.Bank Of India(2003)

23(1976)2 SCR 1006

241987] 2 SCC 252


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Degree College managed by a registered co-operative society. A suit was filed against the

college by the dismissed principal for reinstatement. It was contended that the Executive

Committee of the college which was registered under the Co-operative Societies Act and

affiliated to the Agra University (and subsequently to Meerut University) was a statutory

body. The importance of this contention lies in the fact that in such a case, reinstatement

could be ordered if the dismissal is in violation of statutory obligation. But this Court refused

to accept the contention. It was observed that the management of the college was not a

statutory body since not created by or under a statute. It was emphasised that an institution

which adopts, certain statutory provisions will not become a statutory body and the dismissed

employee cannot enforce a contract of personal service against a non-statutory body.

1.5.A writ under Article 226 can lie against a 'person' if it performs a public function ordischarges a public or statutory duty 25 .Although, it is not easy to define what a public

function or public duty is, it can reasonably be said that such functions are similar to or

closely related to performance of obligations owed by a company towards its workmen or to

resolve any private disputes26. To buttress this contention attention is directed towards the

Judgement in Shri R.D. Sharma v.St. John'S High School And Ors27wherein it was held that:

If the controversy involved in a particular writ petition is purely a service matter pertaining

to the service conditions of a private contract, in such a situation if there is any breach, the

High Court will not issue a mandate under Article 226 of the Constitution. The distinction, in

my opinion, is patent and clear. In the present case the alleged cause of action arose to the

Petitioner when his services had been terminated in an illegal manner without adopting the

principles of natural justice. This is an alleged breach of contract of service on the part of St.

John's High School which is a private institute not even aided by the Government. In such

eventuality the remedy of the Petitioner lies somewhere else either under the general law or

he may file a suit for damages in the competent court of jurisdiction.

1.6.It is most humbly submitted that actions of the State or an instrumentality of the State or aninstrumentality of the State which do not properly belong to the field of public law but belong

25Praga Tools Corpn. v.C.A. Imanual (1969) 3 S.C.R. 773, Shri Andi Mukta Sadguru Trust v.V.R. Rudani

1989 AIR 1607; VST Industries Ltd. v.Workers Union2001 (1) SCC. 298

26Sohan Lal v. Union of India (1997) 9 SCC83

27CWP No. 15991 of 2009


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to the field of private law are not liable to be subjected to judicial review. Confidence is

placed upon Reilly v. Mackman28, Davy v. Spelthone29, I congress del Partido, R.V. East,

Bershire Health Authority 30 and Redbakrishna Aggarwal v. State of Bihar. 31 Therefore,

respondent company is not to be subjected to judicial review.

1.7.In the present case the company being a private entity there is no public duty imposed on itby a statute in respect of which enforcement could be sought by means of a writ. The High

Court therefore was right in holding that no writ petition could lie against the company. To

enhance this submission inspiration is drawn from the gamut of decisions including Sohan

Lal v. Union of India,32Regina v.Industrial Court & Ors.33,R. v. Lewisham Union,34,Mc.

Clelland v.Northern Ireland General Health Services Boards35,Ridge v. Baldwin,36, Short

v. Poole Corporation,37and Attorney- General v. St. Ives R.D.C.38wherein reviewing the

gamut of decisions the courts have succinctly, pithily and tersely laid down the law on the

point. For the sake of brevity the counsel would like to illuminate by submitting that the High

Court was correct in dismissing the writ petition. Once the writ petition was held to be

misconceived on the ground that it could not lie against a company which was neither a

statutory company nor one having public duties or responsibilities imposed on it by statute,

no relief by way of a declaration as to the invalidity of an impugned agreement between it

and its employees could be granted. The only course open to the High Court was to dismiss

the petition and leave the workmen to the remedies under the any other Act. No such

declaration against a company registered under the Companies Act, 1956 and not set up

28[1983] 2 AC 237

29[1984]AC 262

30[1987] 2 All ER 909

311977 AIR 1496, 1977 SCR (3) 249

32 [1957] S.C.R. 738

33 [1965] 1 Q.B. 377

34[1897] 1 Q.B. 498, 501

35 [1957] 1 W.L.R. 594

36[1964]A.C. 40

37

[1926] Ch. 66 at pp. 90 to 91

38 [1961] 1 Q.B. 366


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under any statute or having any public duties and responsibilities to perform under such a

statute could be issued in writ proceedings in respect of an agreement which was essentially

of a private character between it and its workmen.

1.8.Since the year 2000, Government of Indistan holds only 31 % shares of IICL. Therefore, itcan be safely concluded that on the basis of the shareholding, the Government of India would

not be in control of the affairs of IICL. In order for IICL to be declared as a State or other

authority within the meaning of Article 12 of the Constitution of India, it would have to fall

within the well recognized parameters laid down in a number of judgments of this Court. In

the case of Pradip Kumar Biswas39, a Seven Judge Bench of this Court considered the

question as to whether Indian Institute of Chemical biology would fall within the definition

of State or other authority under Article 12. Ruma Pal, J. speaking for the majority

considered the manner in which the aforesaid two expressions have been construed by this

Court in the earlier cases. It has been categorically held in the case of Ramana Dayaram

Shetty v. International Airport Authority of India 40if only the functions of the Corporation

are of public importance and closely related to Government functions, it would be a relevant

factor in classifying the Corporation as an instrumentality or agency of the Government.

Strong reliance can be placed on Jatya Pal Singh & Ors. v. Union Of India & Ors41where

the Bench held that the functions performed by VSNL/TCL42are not of such nature which

could be said to be a public function. Undoubtedly, these operators provide a service to the

subscribers. The service is available upon payment of commercial charges. Similarly

functions performed by IICL are not of such nature which could be said to be a public

function.43 The tests propounded for determining as to when the Corporation will be said to

39Supra at page 1

40(1979) 3 SCC 489

41WPN.2652 of 2007

42Ministry of Communication took a decision to convert its Overseas CommunicationService Department into

a Public Sector Corporation (PSC). A notification to this effect was issued on 19th March, 1986 and the

Corporation was named as VSNL. Accordingly, all international telecommunication services of the country

handled by the Govt. stood transferred to VSNL.

43 VST Industries Ltd. v. IST Industries Workers' Union (2001) 1 SCC 298, G. Bassi Reddy v. International

Crops Research Institute, S.S. Rana v. Register Cooperative Societies 2006 AIR SCW 3723, 1995 Supp. (4)SCC 617, K. Vasudevan Nair v. Union of India 1991 Supp.(2) SCC 134;


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be an instrumentality or agency of the Government as stated, in Ramana Dayaram Shetty v.

International Airport Authority of India44were summarized as follows :

1)

One thing is clear that if the entire share capital of the corporation is held byGovernment, it would go a long way towards indicating that the corporation is an

instrumentality or agency of Government. 45

2)Where the financial assistance of the State is so much as to meet almost entireexpenditure 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 whichis State-conferred or State-protected. (SCC p. 508, para 15)

4) Existence of deep and pervasive State control may afford an indication that thecorporation 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 togovernmental 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 bea strong factor supportive of this inference of the corporation being an instrumentality

or agency of Government. (SCC p.510, para 18)

The aforesaid ratio in Ramana Dayaram Shetty46has been consistently followed by this

Court, as is evident from paragraph 31of the judgment in Biswas47. Para 31 reads as under:

The tests to determine whether a body falls within the definition of State in Article 12 laid

down in Ramana with the Constitution Bench imprimatur in Ajay Hasia form the keystone of

the subsequent jurisprudential superstructure judicially crafted on the subject which is

apparent from a chronological consideration of the authorities cited.

44(1979)3 SCC 489

45SCC p. 507, para 14

46Supra at page 13

47Supra at page 13


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The subsequent paragraphs of the judgment noticed the efforts made to further define the

contours within which to determine; whether a particular entity falls within the definition of

other authority, as given in Article 12. The ultimate conclusion of the Constitution Bench is

recorded in paragraph 39 and 40 as under:-Fresh off the judicial anvil is the decision in

Mysore Paper Mills Ltd. v. Mysore Paper Mills Officers' Assn. which fairly represents what

we have seen as a continuity of thought commencing from the decision in Rajasthan

Electricity Board in 1967 up to the present time. It held that a company substantially

financed and financially controlled by the Government, managed by a Board of Directors

nominated and removable at the instance of the Government and carrying on important

functions of public interest under the control of the Government is an authority within the

meaning of Article 12.

In view of the aforesaid authoritative decision of the Constitution Bench (Seven Judges), it

would be wholly unnecessary and unwarranted to consider the other judgments cited by the

learned petitioners.

1.9Further, if one examines the facts in the present case on the basis of the aforesaid tests, theconclusion is inescapable that IICL cannot be said to be other authority within Article 12 of

the Constitution of India. As noticed above, the share holding of Government of Indistan

would not satisfy test principles 1 and 2 in the case of Ramana Dayaram Shetty 48.On perusal

of the facts, it would be evident that test No.3 would also not be satisfied as IICL does not

enjoy a monopoly status in ILDS. So far as domestic market is concerned, there is open

competition between the numerous operators.This brings us to the 4th test and again we are

unable to hold that the Government of Indistan exercises deep and pervasive control in either

the management or policy making of IICL which are purely private enterprises. We may also

notice that in fact even Government Company like RIMCL is competitor of IICL in respectof ILDS.

Therefore, it is succinctly submitted that the High Court of Indistan was fully justified in

rejecting the claim of the petitioners that IICL would be amenable to writ jurisdiction of the

High Court by virtue of the other authority within the purview of Article 12 of the

Constitution of Indistan.

48Supra at page 13


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1.10 It is emphatically submitted that, it is in highlighting the positive aspects of the public-privatepartnership that distinct gains accrue to public policy and economic decision-making. A

partnership of this nature is collaborative and, contrary to widespread but facile assumptions,

is not anti-public sector but is pro-competition.49Therefore, the new management of IICL in

furtherance of the betterment of the corporation has terminated the employees whose services

were of no use it.

Reliance is placed upon another decision of the Hon'ble Supreme Court in the case of Sindhi

Education Society & Anr. v.Government (NCT of Delhi)50. In this case the court observed

that even if Minority Institution which is enjoying special Rules under Art 30 of the

Constitution of India, receives Government aid towards dearness allowances for its teaching

and non-teaching staff, still then writ does not lie against such institution, as such a

Government aided institution cannot be construed as a State or instrumentality of the State

within the meaning of Article 12 of the Constitution of India inasmuch as the Government

does not retain control either financially, functionally or administratively in the working of

such monitory aided institution, enjoying special Rules under article 30.

2. THE RESPONDENT COMPANY IS NOT PERFORMING PUBLIC FUNCTION.2.1.It is reverentially submitted that XYZ Ltd. erstwhile IICL is not performing a public function

or a mandatory public duty and, therefore, would not be amenable to the writ jurisdiction of

the High Court under Article 226 of the Constitution51.

2.2.It is most respectfully submitted that when an alternative and equally efficacious remedy is

open to a litigant, he should be required to pursue that remedy and not invoke the special

jurisdiction of the High Court to issue a prerogative writ. It is true that the existence of

another remedy does not affect the jurisdiction of the Court to issue a writ; but, the existence

of an adequate legal remedy is a thing to be taken into consideration in the matter of granting

49Public Private Partnership ,available at http://www.hindu.com/2002/02/18/stories/2002021800091000.htm

(Visited on July 15,2013)

50(2010) 8 SCC 49

51

G. Bassi Reddy v. International Crops Research Instt.&

Anr (2003) 4 S.C.C. 225;Binny Ltd. & Anr v.V.Sadasivan & Ors (2003) 4 SCC 255
http://www.hindu.com/2002/02/18/stories/2002021800091000.htmhttp://www.hindu.com/2002/02/18/stories/2002021800091000.htm


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writs. And where such remedy exists, it will be a sound exercise of discretion to refuse to

interfere in a petition under Article 226, unless there are good grounds therefore. 52Thus,

resort to Articles 226 and 227 should be discouraged when there is an alternative remedy.53

To intensify this submission, the petitioner relies on Radhakrishna Agarwal v. State of

Bihar54; Binny Ltd.55andPraga Tools Corp. v.C.A.Imanual & Ors56.Reference is also drawn

from another decision of the Hon'ble Supreme Court in the case of Poonam v. Sumit

Tanwar57, wherein it was held that writ lies only against a person if it is a statutory body or

performs a public function or discharges a public or statutory duty or a State within the

meaning of Article 12 of the Constitution of India. Thus, it is flagrant that since the

Respondent Company does not perform a public function and it should not be regarded as an

instrumentality of the State and as such the writ will not lie against such an institution.

Confidence is placed upon a judgment of this Court in the case of VST Industries Ltd. v.VST

Industries Workers' Union & Anr58. In the said case, this Court held "In Anadi Mukta case

this Court examined the various aspects and the distinction between an authority and a

person and after analysis of the decisions referred in that regard came to the conclusion that

it is only in the circumstances when the authority or the person performs a public function or

discharges a public duty that Article 226 of the Constitution can be invoked."

2.3.It has been noticed earlier that ILDS functions, prior to 1981, were being performed by

RIMCL, a Department of Telecommunications. IICL was incorporated under the Indistan

Companies Act, 1956 as a wholly owned Government company to take over the activities of

erstwhile RIMCL with effect from 1981. The employees of erstwhile RIMCL continue to

52Visva Bharati v. Smt. Rakhi Debnath And Ors. (1996) 1 CALLT 51 HC; P. Electricity Board v.Regional

Provident Fund (2004) IILLJ 40 MP;Basu Distributors Pvt. Ltd. v.Income Tax Officer 2007 292 ITR 29 Delhi;

Gita Theatres And Anr. . v. Municipal Corporation (1998) 3 GLR 2591; A.B. Joglekar And Anr. . v. Debts

Recovery Tribunal And Anr. III (2004) BC 41, 2002 (5) MPHT 187; Calcutta Municipal Corporation . v.M/S.

Bala Bestos India Ltd(1998) 2 CALLT 249 HC, 1998 (1) CHN 49253

Sri Ramdas Motor Transport Ltd. v.Tadi Adhinarayana Reddy And Ors.AIR 1997 SC 2189; Shyam Kishore

and others . v.Municipal Corporation of DelhiAIR 1991 Delhi 104; Municipal Corporation Of Delhi . v. R.P.

Khaitan And Anr.1995 IVAD Delhi 883, 1995 (35) DRJ 604, 1996 RLR 13

54(1977) 3 SCC 457

55Supra at page 21

56(1969)1 SCC 585

57AIR 2010 SC 1384

58(2001)1SCC 298


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work for IICL Non-governmental bodies such as these are just as capable of abusing their

powers as is government. To demonstrate, as to who can be regarded as a public servant and

which duty can be regarded as public duty to be performed by such public servant, he relied

upon a decision of the Hon'ble Supreme Court in the case of P.V. Narsimha Rao . v.State59.

Reference is drawn to paragraph 160 of the said decision, it is submitted that a public servant

is a person who holds an office by virtue of which he is authorized or required to perform any

public duty. Not only such a person must hold an office but he must be authorized or required

by virtue of that office to perform public duty meaning a duty in the discharge of which the

public or that community at large has interest. Inspiration is drawn from another decision of

the Hon'ble apex Court, in the case ofDalco Engg. (P) Ltd. v.Satish Prabhakar Padhya60, in

this case it was held that since the school was not established by or under an Act, it is neither

a statutory body nor an instrumentality of the State and as such even if any illegality is

committed by the school authority in the process of selection of candidates for admission in

Class XI in the said school, such illegality on the part of the school authority cannot be

challenged before this Court in its Constitutional writ jurisdiction.

These observations make it abundantly clear that in order for it to be held that the body is

performing a public function, the petitioner would have to prove that the body seeks to

achieve some collective benefit for the public or a section of public and accepted by the

public as having authority to do so. In the present case, as noticed earlier, all telecom

operators are providing commercial service for commercial considerations. Such an activity

in substance is no different from the activities of a bookshop selling books. It would be no

different from any other amenity which facilitates the dissemination of information or DATA

through any medium. Therefore the contention of the petitioners cannot be appreciated that

the activities of IICL tantamount to public function. The recipients of the service of the

telecom service voluntarily enter into a commercial agreement for receipt and transmission of

information. The function performed by IICL cannot be put on the same pedestal as the

function performed by private institution in imparting education to children.61

59AIR 1998 Supreme Court 2120

60(2010) 4 SCC 378

61

General Manager, Kisan Sahkar Chini Mills Limited, Sultanpur, UP . v.Satrughan Nishad and Ors.(2003) 8SCC 639


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2.4.IICL had merely promised not to retrench any employee, who had stayed as an employee in

IICL prior to disinvestment for a period of three years from disinvestment. Such a condition,

in our opinion, would not clothe the same with the characteristic of a public duty which the

employer was bound to perform. The employees had individual contacts with the employer.

In case the employer is actually in breach of the contract, the appellants are at liberty to

approach the appropriate forum to enforce their rights.

2.5.After scaling the facts in the light of the law the counsel would like to summarize the

approach of the Honble apex court in the apt wordings of R.P. NAGRATH,J wherein

reviewing the catena of decisions his lordship lucidly elucidated that62:

The functions and activities of institutions relating to recruitment of their staff, governance

of service conditions of such staff or other internal management related affairs are of purely

private character and these are not relatable to the "public duty" which such institution/body

or a person perform.

B. WHETHER TERMINATION OF EMPLOYEES WAS JUSTIFIED AND OFFICEMEMORANDUM AND THE RECOMMENDATIONS OF MINISTRY OF SOCIALJUSTICE AND EMPOWERMENT COULD BE SPECIFICALLY ENFORCED?

1. THE TERMINATION OF EMPLOYEES WAS FAIR, JUST AND PROPER.

1.1It is most respectfully submitted that it would be appropriate to draw attention to para 11 ofthe agreed statement of facts that there was a restriction on the new management of IICL to

not retrench any employee for a period of three years from the date of disinvestment in the

year 2000.

It is further contended that the termination of services from the new management of IICL was

done in the year 200963which was nine years after the date of disinvestment. It is in light of

above concluded that the termination of employees was not in violation of the share purchase

62Mrs. K. Naqvi v.State of Punjab and Ors2004ILR 2(Punjab and Haryana)11

63Para 15 of statement of facts


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and share-holding agreement and the new management of IICL was well within their bounds

to terminated the services of such employees.

1.2The respondent submits that the termination of employees was fair and proper and itwas not in violation of the principles of natural justice.

The respondent most humbly submits that in the instant case the respondent company is a

purely private entity and it is not bound by the recommendation dated 3rdMay, 2001 of the

Ministry of Social Justice and Empowerment, Government of Indistan.

To substantiate further reliance is placed upon the case of Vaish Degree College64, which was

run by a society registered under the Societies Registration Act; the services of the

Respondent-Principal of the College were terminated by the Appellant-society which caused

initiation of proceedings in a civil suit. Rejecting the claim of reinstatement in services, the

Supreme Court held as under:

On a consideration of the authorities mentioned above, it is, therefore, clear that a contract

of personal service cannot ordinarily be specifically enforced and a Court normally would

not give a declaration that the contract subsists and the employee, even after having been

removed from service can be deemed to be in service against the will and consent of the

employer. This Rule, however, is subject to three well recognised exceptions-(i) where a

public servant is sought to be removed from service in contravention of the provisions of

Article 311 of the Constitution of India; (ii) where a worker is sought to be reinstated on

being dismissed under the Industrial Law; and (iii) where a statutory body acts in breach or

violation of the mandatory provisions of the statute.

Reliance is also placed upon Integrated Rural Development Agency's case 65 , where the

relationship between the Integrated Rural Development Agency and the Respondent-

employee was based on contract and was purely one of Master and Servant. Relying upon thejudgment in Nandganj Sihori Sugar Company Ltd. Rae Bareli v. Badri Nath Dixit66., their

Lordships held that the relief of reinstatement could not be granted as by affording the relief

of reinstatement or back wages, will, in fact, be granting a specific performance of contract

of service; which could be done only in the exceptional or rare cases.

641976 SCR (2)1006

651995 SCC, Supl. (2) 495

66(1991) 3 S.C.C. 54


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1.3IICL being a private entity would not be bound by Constitutional Mandate of the stateUnlike the private parties the State while exercising its powers and discharging its functions,

acts indubitably, as is expected of it, for public good and in public interest. The impact of

every State action is also on public interest. It is really the nature of its personality as State

which is significant and must characterize all its actions, in whatever field, and not the nature

of function, contractual or otherwise, which is decisive of the nature of scrutiny permitted for

examining the validity of its act. The requirement of Article 14 being the duty to act fairly,

justly and reasonably, there is nothing which militates against the concept of requiring the

State always to so act, even in contractual matters. This factor alone is sufficient to import at

least the minimal requirements of public law obligations and impress with this character the

contracts made by the State or its instrumentality.

However, the new management of IICL being a purely private entity is not bound by the

constitutional mandates of the state and is free to choose whether to continue utilizing the

service of an employee or to terminate such service, based on a contract.

1.4Salary in lieu of notice is completely legalThe petitioner submits that in the instant case, the employees were given three months

advance salary at the time of termination of their services. It has been held by this Honble

Court that the purpose of serving a notice prior to the termination of service is not to leave the

employee suddenly in lurch with no resources67. It is just and fair that employees be given

enough time to seek alternative source of livelihood. It has also been held by this Honble

court that providing three months salary in lieu of notice is not illegal but rather in the favor

of employees as it gives them sustenance for three months and ample free time to explore

alternative jobs

68

.

67GRIDCO Ltd. V. Sadananda Doloi ; Asst. Engineer v. Ram Charan

68DAV Managing Committee v. Surender Rana


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2. THE OFFICE MEMORANDUM AND THE RECOMMENDATION OF THEMINISTRY OF SOCIAL JUSTICE AND EMPOWERMENT CANNOT BE

ENFORCED

2.1The Office Memorandum cannot have retrospective effect.The respondent humbly submits that the disinvestment of IICL was done by the Government

of Indistan in the year 2000 and that the Office Memorandum was passed on 13 thAugust

2001. Furthermore, an office memorandum does not, ordinarily have retrospective effect.

Reliance is placed upon the judgement of this Honble Court in the case of Sonia v Oriental

Insurance Co. Ltd69.Wherein it was held as follows:An office memorandum cannot have a

retrospective effect unless and until intention of the authorities to make it as such is revealed

expressly or by necessary implication

It is pleaded that in the instant case, the office memorandum reads as follows: In case the

Government disinvests its equity in any public sector units or autonomous body to the extent

of 51% or more, it shall specify adequate safeguards for protecting the interests of the

absorbed employees of PSUs or autonomous bodies

The language used in the memorandum indicates only retrospective effect i.e. in case the

government disinvests. Once it is established that the memorandum was intended to have

prospective effect which is clear from the language used, the respondent submits that the

office memorandum cannot be specifically enforced and the Government of Indistan cannot

make any new regulation for the welfare of the employee which were absorbed prior to the

passing of the office memorandum.

69Appeal (civil) 3521 of 2007


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2.2THE RECOMMENDATION CANNOT BE ENFORCED IN VIEW OFLEGITIMATE EXPECTATION

a) There has been no discriminationIt is humbly submitted that in the instant case, it has been clearly mentioned in the statement

of facts70that: .however, it is not the case that the services of all the employees from

that category has been terminated The foregoing para of the factual matrix makes it clear

that there has been no discrimination against the said category of employees. A mere

coincidence that most of the employees whose services were terminated belonged to the

backward class of employees does not necessitate discrimination against the said employees.

It is further wrong on the part of petitioner to presume out of thin air that the ground on

which the services of employees have been terminated is the factum of them belonging to the

backward classes whereas there is no mention as to what is the ground for termination of

services.

b) The senior managerial employees should be excluded from affirmative actionAffirmative action is a measure used by welfare states all over the globe to uplift the

disadvantaged sections of the society. Any further affirmative action once the original task of

reservation is complete would result into reverse discrimination and become violative of Art.

14 of the Constitution of Indistan. To further augment the contention, inspiration is drawn

from Jeevan Reddy, J. who wrote the majority judgment in Indra Sawhney (supra) 71and made a

reference to his judgment in Narayana Rao and Anr. v. State of A.P. and Anr.,72

wherein the learned

Judge opined:

"Article 15(4) or Article 16(4) are not designed to achieve abolition of caste-system-much less to

remove the meanness or other evils in the society. They are designed to provide opportunities in

education, services and other fields to raise the educational social and economic levels of those

lagging behind, and once this is achieved, these Articles must be deemed to have served their purpose.

If so, excluding those who have already attained such economic well-being (inter-linked as it is with

social and educational advancement) from the special benefits provided under these clauses cannot

be called unreasonable or discriminatory or arbitrary much less contrary to the intention of the

70Para 15 of the statement of facts

71AIR 1993 SC 477

72AIR 1987 AP 57


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founding-fathers. It can be reasonably presumed that these people have ceased to be socially if not

educationally backward and hence do not require the preferential treatment contemplated by Articles

15(4) and 16(4). Moreover, in the face of the repeated pronouncements of the Supreme Court referred

to above, these arguments cannot be countenanced. Not only it does not amount to creating a class

within a class, it is a proper delineation of classes..."73

It is humbly submitted that in the instant case, the employees in question are already senior

managerial employees which necessitates their developed economic and educational status. It

is therefore pleaded before this Honble Court that any affirmative action in favour of the

petitioner employees would result into reverse discrimination and this be violative of Art. 14

of the Constitution of Indistan.

c) The principle of legitimate expectation is inapplicable as the decision is merely a part ofchange in administrative policy.

It has been held under English law that the decision maker's freedom to change the policy in

public interest cannot be fettered by the application of the principle of substantive legitimate

expectation.

In R. v. IRC, ex p Preston74 the House of Lords rejected the plea that the altered policy

relating to parole for certain categories of prisoners required prior consultation with the

prisoner, Lord Scarman observed:

"But what was their legitimate expectation. Given the substance and purpose of the

legislative provisions governing parole, the most that a convicted prisoner can legitimately

expect is that his case be examined individually in the light of whatever policy the Secretary

of State sees fit to adopt provided always that the adopted policy is a lawful exercise of the

discretion conferred upon him by the statute. Any other view would entail the conclusion that

the unfettered discretion conferred by statute upon the minister can in some cases by

restricted so as to hamper or even to prevent changes of policy."

To a like effect are the observations of Lord Diplock in Hughes vs. Department of Health and Social

Security (HL)75

: "Administrative policies may change with changing circumstances, including

73Triloki Nath and Anr. v. State of Jammu & Kashmir and Ors . (1969) 1 SCR 103; M. R. Balaji v. State of

Mysore ((1963) Supp 1 SCR 439; State of A. P. v. P. SagaAIR 1975 SC 563; State of Uttar Pradesh v. Pradip

Tandon and Ors1985 SC1495;Kailash Chand Sharma v. State of Rajasthan, (2002) 6 SCC 562.

74

[1985] AC 835

751985 AC 776 (788)


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changes in the political complexion of governments. The liberty to make such changes is something

that is inherent in our constitutional form of government."76

On the facts of the case in the instant matter, the principle of legitimate expectation has no

application. It has not been shown as to how any act was done by the authorities which

created an impression that the conditions attached in the original appointment order were

waived. Mere continuance does not imply such waiver. No legitimate expectation can be

founded on such unfounded impressions. It was not even indicated as to who, if any and with

what authority created such impression. No waiver which would be against requisite

compliances can be countenanced. Whether an expectation exists is, self-evidently, a question

of fact and this Honble court decides only upon the questions of law.

The respondent concedes that the petitioner shall have a legitimate expectation of affirmative

action from the state in view of the constitutional provisions. However, IICL, ever since its

divestment in 2000 has become a private entity and the absorbed employees legitimate

expectation has ceased to exist as a private entity cannot be bound by the constitutional

provisions which were intended to bind the state.

It was indicated in the case Union of India and Ors. vs. Hindustan Development Corporation

and Ors.

77

: The legitimacy of an expectation can be inferred only if it is founded on thesanction of law or custom or an established procedure followed in regular and natural

sequence. Such expectation should be justifiably legitimate and protectable.

It is humbly submitted that in the case, the expectation is not protectable. Arguendo this court

finds merit in the legitimate expectation of the petitioner and directs the respondent to

undertake affirmative action; it would amount to making mandatory a constitutional

provision on a private entity which would be against the intention of the framers of the

constitution which has made such provisions mandatory only on the state and not on private

entities.

It is therefore pleaded that in light of above, the recommendation shall not be specifically

enforced.

76Mr. Detan's article "Why Administrators should be bound by their policies" (Vol. 17) 1997 Oxford Journal of

Legal Studies, p. 23

771993 (3) SCC 499


32/32


-32-

THE PRAYER

WHEREFORE IN THE LIGHT OF THE ISSUES RAISED, ARGUMENT ADVANCED,

REASONS GIVEN AND AUTHORITIES CITED, THIS HONBLE COURT MAY

GRACIOUSLY BE PLEASED TO:

A. HOLD THAT IICL & ITS NEW MANAGEMENT IS NOT AMENABLE TO THEWRIT JURISDICTION.

B. DECLARETHAT TERMINATION OF SERVICES OF EMPLOYEES WAS NOTARBITRARY.

C. DECLARE THAT RECOMMENDATION OF SOCIAL JUSTICE ANDEMPOWERMENT DEPARTMENT CANNOT BE SPECIFICALLY ENFORCED.

AND ANY OTHER RELIEF THAT THIS HONBLE COURT MAY BE PLEASED TO

GRANT IN THE INTERESTS OF JUSTICE, EQUITY AND GOOD CONSCIENCE

ALL OF WHICH IS RESPECTFULLY SUBMITTED.

COUNSELS FOR RESPONDENT

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