1

AFR

Reserved

Court No. - 29

Case :- WRIT - A No. - 9814 of 2020

Petitioner :- Uttam Chand Rawat

Respondent :- State Of U.P. And 7 Others

Counsel for Petitioner :- Shyam Shanker Pandey

Counsel for Respondent :- C.S.C.

Hon'ble Munishwar Nath Bhandari,Acting Chief Justice

Hon'ble Prakash Padia,J.

Hon'ble Sanjay Kumar Singh,J.

(As per : Hon'ble Munishwar Nath Bhandari, ACJ)

Learned Single Judge has referred following questions to the

Larger Bench finding conflicting judgments on the issue :

“(i) Whether the element of public function and public duty

inherent in the enterprise that an educational institution

undertakes, conditions of service of teachers, whose

functions are a sine qua non to the discharge of that public

function or duty, can be regarded as governed by the private

law of contract and with no remedy available under Article

226 of the Constitution?

(ii) Whether the decision in Rajesh Kumar Srivastava and

others versus State of U.P. and others, 2020 (2) AWC 1693 is

in teeth of the holding of the Full Bench in Roychan

Abraham versus State of U.P. and others, (2019) SCC

OnLine All 3935?”

The questions have been referred after detailed consideration of the

earlier judgments on the issue. The judgment in the case of M.K. Gandhi

and others versus Director of Education (Secondary) U.P. and others,

2005 (3) ESC 2265 (Alld) (FB) affirmed by the Apex Court in the case

of Committee of Management, Delhi Public School and another versus

M.K. Gandhi and others, (2015) 17 SCC 353 has also been considered.

Learned Single Judge has given reference of the judgments of the

Apex Court in the cases of Ramesh Ahluwalia versus State of Punjab

and others, (2012) 12 SCC 331 and Lal Bahadur Gautam versus State of

U.P. and others, (2019) 6 SCC 441. It also noticed that the issue of

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maintainability of the writ petition was considered by the Larger Bench

in the case of Roychan Abraham versus State of U.P. and others, (2019)

SCC OnLine All 3935. It was to revisit the view expressed by the Full

Bench in the case of M.K. Gandhi (supra) and Division Bench in the

case of Anjani Kumar Srivastava versus State of U.P. and others, 2017

(7) ADJ 112 (DB). The Full Bench in the case of Roychan Abraham

(supra) answered the questions as under:-

"64. Question (i): Private Institutions imparting education to

students from the age of six years onwards, including higher

education, perform public duty primarily a State function,

therefore are amenable to judicial review of the High Court

under Article 226 of the Constitution of India.

65. Question (ii): The broad principle of law which has been

formulated in the judgement of the Full Bench in M.K. Gandhi

and Division Bench in Anjani Kr. Srivastava is confined to the

facts obtaining therein and is not an authority on the

proposition of law that private educational institutions do not

render public function and, therefore, are not amenable to

judicial review of the High Court. The judgements do not

require to be revisited.”

Learned Single Judge found judgment in the case of Rajesh Kumar

Srivastava (supra) to be in conflict with other judgments. In the case of

Rajesh Kumar Srivastava (supra), learned Single Judge held writ petition

under Article 226 of the Constitution of India to be maintainable against

the authority or the person discharging public duty only when issue of

public law is involved. The writ petition would not be maintainable if

claim is arising out of a private contract between the two parties. The

aforesaid view was taken to be in conflict with the earlier judgment of

this Court and, accordingly, matter has been referred to the Larger

Bench.

The questions referred to the Larger Bench is about maintainability

of the writ petition against the authority or the person discharging public

duty/public function which may not fall within the definition of “State or

its authority” under Article 12 of the Constitution of India.

The issue aforesaid has been considered by the Apex Court at

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length recently in the case of Ramakrishnan Mission and another versus

Kago Kunya and others, (2019) 16 SCC 303. In the said case, the Apex

Court has considered all the earlier judgment on the issue. The judgment

in the case supra was given after considering the scope of Article 12 so

as Article 226 of the Constitution of India. It is not only after analyzing

the fact of the case but the proposition of law evolved by the Apex Court

in the earlier judgments on maintainability of the writ petition. For

maintainability of the writ petition, twin test is to be satisfied. The first

test is about the public function/public duty by an authority or a person

and the second test is about the challenge to the action falls in the

domain of public law. Accordingly, the writ petition would not be

maintainable against the authority or the person referred under Article

226 of the Constitution of India merely for the reason of discharge of

public function/public duty unless an issue of public law is involved.

The word “public law” has been elaborately discussed by the Apex

Court in the case of K.K. Saksena versus International Commission on

Irrigation and Drainage and others, (2015) 4 SCC 670. It was held that

private law remedies would not be enforceable through the extraordinary

jurisdiction of the High Court. Private law is a part of legal system under

the common law that involves relationship between individuals such as

law of contract or torts. It was held that even if writ petition is

maintainable against an authority or person, before issuing it, Court

needs to satisfy itself that the action of the authority or the person is in

the domain of public law distinguished from private law. The contractual

and commercial obligations are enforceable only by ordinary civil

action.

In view of the judgments in the cases of K.K. Saksena (supra) and

Ramakrishnan Mission (supra), the issue canvassed by learned Single

Judge can be answered but before that, we would like to give reference

of other judgments for clarity because issue of maintainability of the writ

petition is coming time and again before this Court and presently, two

judgments of the Larger Bench exist.

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The issue of maintainability was initially discussed by the Apex

Court in the case of Ajay Hasia and others versus Khalid Mujib

Sehravardi and others, (1981) 1 SCC 722. It was mainly in reference to

Article 12 of the Constitution of India. The issue of maintainability of

the writ petition against a private body not falling under the definition of

“State or its authority” under Article 12 of the Constitution of India

needs to be considered under Article 226 of the Constitution of India.

For ready reference, Article 12 and 226 of the Constitution of India are

quoted hereunder :-

“12. Definition - In this part, unless the context otherwise

requires, “the State” includes the Government and Parliament

of India and the Government and the Legislature of each of

the States and all local or other authorities within the territory

of India or under the control of the Government of India.

226. Power of High Courts to issue certain writs. -

(1) Notwithstanding anything in Article 32, every High Court

shall have powers, throughout the territories in relation to

which it exercise jurisdiction, to issue to any person or

authority, including in appropriate cases, any Government,

within those territories directions, orders or writs, including

writs in the nature of habeas corpus, mandamus, prohibitions,

quo warranto and certiorari, or any of them, for the

enforcement of any of the rights conferred by Part III and for

any other purpose.

(2) The power conferred by clause (1) to issue directions,

orders or writs to any Government, authority or person may

also be exercised by any High Court exercising jurisdiction

in relation to the territories within which the cause of action,

wholly or in part, arises for the exercise of such power,

notwithstanding that the seat of such Government or

authority or the residence of such person is not within those

territories.

(3) Where any party against whom an interim order, whether

by way of injunction or stay or in any other manner, is made

on, or in any proceedings relating to, a petition under clause

(1), without -

(a) furnishing to such party copies of such

petition and all documents in support of the

plea for such interim order; and

(b) giving such party an opportunity of being

heard, makes an application to the High Court

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for the vacation of such order and furnishes a

copy of such application to the party in whose

favour such order has been made or the counsel

of such party, the High Court shall dispose of

the application within a period of two weeks

from the date on which it is received or from

the date on which the copy of such application

is so furnished, whichever is later, or where the

High Court is closed on the last day of that

period, before the expiry of the next day

afterwards on which the High Court is open;

and if the application is not so disposed of, the

interim order shall, on the expiry of that period,

or, as the case may be, the expiry of the aid

next day, stand vacated.

(4) The power conferred on a High Court by this article shall

not be in derogation of the power conferred on the Supreme

Court by clause (2) of Article 32.”

The issue in reference of Article 12 and 226 of the Constitution of

India was considered by the Apex Court in the case of Andi Mukta

Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav

Smarak Trust v. V.R. Rudani, (1989) 2 SCC 691. It was a case where

order of termination of a teacher of a private aided and affiliated college

was challenged. The Apex Court held writ petition to be maintainable

even against the private body finding it to be discharging public duty. It

was after referring to the activity of education by Andi Mukta Sadguru

Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust.

The judgment aforesaid was given in reference to Article 226 of the

Constitution of India which provides jurisdiction of the High Court to

issue order or writ against any person or authority. According to the

judgment in the case supra, the writ petition is maintainable against the

private educational institution discharging public duty/public function.

The issue of maintainability of the writ petition was again

considered by the Apex Court in the case of Binny Ltd. and another

versus V. Sadasivan and others, (2005) 6 SCC 657. It was held that writ

of mandamus or remedy under Article 226 of the Constitution of India is

a public law remedy and can be exercised against a body or person

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discharging public function/public duty. The word “public function” was

elaborately discussed to define it. It was held that a body or person

would be performing public function when it seeks to achieve collective

benefit for the public or section thereof. Relevant paras of the said

judgment are quoted hereunder:-

“9. The superior court's supervisory jurisdiction of judicial

review is invoked by an aggrieved party in myriad cases. High

Courts in India are empowered under Article 226 of the

Constitution to exercise judicial review to correct

administrative decisions and under this jurisdiction the High

Court can issue to any person or authority, any direction or

order or writs for enforcement of any of the rights conferred by

Part III or for any other purpose. The jurisdiction conferred on

the High Court under Article 226 is very wide. However, it is

an accepted principle that this is a public law remedy and it is

available against a body or person performing a public law

function. Before considering the scope and ambit of public law

remedy in the light of certain English decisions, it is

worthwhile to remember the words of Subba Rao, J. expressed

in relation to the powers conferred on the High Court under

Article 226 of the Constitution in Dwarkanath v. ITO [(1965) 3

SCR 536 : AIR 1966 SC 81] (SCR, pp. 540 G-541 A):

“This article is couched in comprehensive

phraseology and it ex facie confers a wide power on

the High Courts to reach injustice wherever it is

found. The Constitution designedly used a wide

language in describing the nature of the power, the

purpose for which and the person or authority

against whom it can be exercised. It can issue writs

in the nature of prerogative writs as understood in

England; but the scope of those writs also is

widened by the use of the expression ‘nature’, for

the said expression does not equate the writs that

can be issued in India with those in England, but

only draws an analogy from them. That apart, High

Courts can also issue directions, orders or writs

other than the prerogative writs. It enables the High

Court to mould the reliefs to meet the peculiar and

complicated requirements of this country. Any

attempt to equate the scope of the power of the

High Court under Article 226 of the Constitution

with that of the English courts to issue prerogative

writs is to introduce the unnecessary procedural

restrictions grown over the years in a comparatively

small country like England with a unitary from of

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Government into a vast country like India

functioning under a federal structure. Such a

construction defeats the purpose of the article

itself.”

10. The writ of mandamus lies to secure the performance of a

public or a statutory duty. The prerogative remedy of

mandamus has long provided the normal means of enforcing

the performance of public duties by public authorities.

Originally, the writ of mandamus was merely an administrative

order from the Sovereign to subordinates. In England, in early

times, it was made generally available through the Court of

King's Bench, when the Central Government had little

administrative machinery of its own. Early decisions show that

there was free use of the writ for the enforcement of public

duties of all kinds, for instance against inferior tribunals which

refused to exercise their jurisdiction or against municipal

corporations which did not duly hold elections, meetings, and

so forth. In modern times, the mandamus is used to enforce

statutory duties of public authorities. The courts always

retained the discretion to withhold the remedy where it would

not be in the interest of justice to grant it. It is also to be

noticed that the statutory duty imposed on the public

authorities may not be of discretionary character. A distinction

had always been drawn between the public duties enforceable

by mandamus that are statutory and duties arising merely from

contract. Contractual duties are enforceable as matters of

private law by ordinary contractual remedies such as damages,

injunction, specific performance and declaration. In the

Administrative Law (9th Edn.) by Sir William Wade and

Christopher Forsyth (Oxford University Press) at p. 621, the

following opinion is expressed:

“A distinction which needs to be clarified is that

between public duties enforceable by mandamus,

which are usually statutory, and duties arising merely

from contract. Contractual duties are enforceable as

matters of private law by the ordinary contractual

remedies, such as damages, injunction, specific

performance and declaration. They are not

enforceable by mandamus, which in the first place is

confined to public duties and secondly is not granted

where there are other adequate remedies. This

difference is brought out by the relief granted in

cases of ultra vires. If for example a minister or a

licensing authority acts contrary to the principles of

natural justice, certiorari and mandamus are standard

remedies. But if a trade union disciplinary

committee acts in the same way, these remedies are

inapplicable: the rights of its members depend upon

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their contract of membership, and are to be protected

by declaration and injunction, which accordingly are

the remedies employed in such cases.”

11. Judicial review is designed to prevent the cases of abuse of

power and neglect of duty by public authorities. However,

under our Constitution, Article 226 is couched in such a way

that a writ of mandamus could be issued even against a private

authority. However, such private authority must be discharging

a public function and the decision sought to be corrected or

enforced must be in discharge of a public function. The role of

the State expanded enormously and attempts have been made

to create various agencies to perform the governmental

functions. Several corporations and companies have also been

formed by the Government to run industries and to carry on

trading activities. These have come to be known as public

sector undertakings. However, in the interpretation given to

Article 12 of the Constitution, this Court took the view that

many of these companies and corporations could come within

the sweep of Article 12 of the Constitution. At the same time,

there are private bodies also which may be discharging public

functions. It is difficult to draw a line between public functions

and private functions when they are being discharged by a

purely private authority. A body is performing a “public

function” when it seeks to achieve some collective benefit for

the public or a section of the public and is accepted by the

public or that section of the public as having authority to do so.

Bodies therefore exercise public functions when they intervene

or participate in social or economic affairs in the public

interest. In a book on Judicial Review of Administrative Action

(5th Edn.) by de Smith, Woolf & Jowell in Chapter 3, para

0.24, it is stated thus:

“A body is performing a ‘public function’

when it seeks to achieve some collective benefit for

the public or a section of the public and is accepted

by the public or that section of the public as having

authority to do so. Bodies therefore exercise public

functions when they intervene or participate in

social or economic affairs in the public interest. This

may happen in a wide variety of ways. For instance,

a body is performing a public function when it

provides ‘public goods’ or other collective services,

such as health care, education and personal social

services, from funds raised by taxation. A body may

perform public functions in the form of adjudicatory

services (such as those of the criminal and civil

courts and tribunal system). They also do so if they

regulate commercial and professional activities to

ensure compliance with proper standards. For all

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these purposes, a range of legal and administrative

techniques may be deployed, including rule making,

adjudication (and other forms of dispute resolution);

inspection; and licensing.

Public functions need not be the exclusive

domain of the State. Charities, self-regulatory

organisations and other nominally private

institutions (such as universities, the Stock

Exchange, Lloyd's of London, churches) may in

reality also perform some types of public function.

As Sir John Donaldson, M.R. urged, it is important

for the courts to ‘recognise the realities of executive

power’ and not allow ‘their vision to be clouded by

the subtlety and sometimes complexity of the way in

which it can be exerted’. Non-governmental bodies

such as these are just as capable of abusing their

powers as is Government.”

29. Thus, it can be seen that a writ of mandamus or the remedy

under Article 226 is pre-eminently a public law remedy and is

not generally available as a remedy against private wrongs. It

is used for enforcement of various rights of the public or to

compel public/statutory authorities to discharge their duties

and to act within their bounds. It may be used to do justice

when there is wrongful exercise of power or a refusal to

perform duties. This writ is admirably equipped to serve as a

judicial control over administrative actions. This writ could

also be issued against any private body or person, specially in

view of the words used in Article 226 of the Constitution.

However, the scope of mandamus is limited to enforcement of

public duty. The scope of mandamus is determined by the

nature of the duty to be enforced, rather than the identity of the

authority against whom it is sought. If the private body is

discharging a public function and the denial of any right is in

connection with the public duty imposed on such body, the

public law remedy can be enforced. The duty cast on the public

body may be either statutory or otherwise and the source of

such power is immaterial, but, nevertheless, there must be the

public law element in such action. Sometimes, it is difficult to

distinguish between public law and private law remedies.

According to Halsbury's Laws of England, 3rd Edn., Vol. 30, p.

682,

“1317. A public authority is a body, not necessarily

a county council, municipal corporation or other

local authority, which has public or statutory duties

to perform and which perform those duties and

carries out its transactions for the benefit of the

public and not for private profit.”

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There cannot be any general definition of public authority or

public action. The facts of each case decide the point.

30. A contract would not become statutory simply because it is

for construction of a public utility and it has been awarded by a

statutory body. But nevertheless it may be noticed that the

Government or government authorities at all levels are

increasingly employing contractual techniques to achieve their

regulatory aims. It cannot be said that the exercise of those

powers are free from the zone of judicial review and that there

would be no limits to the exercise of such powers, but in

normal circumstances, judicial review principles cannot be

used to enforce contractual obligations. When that contractual

power is being used for public purpose, it is certainly amenable

to judicial review. The power must be used for lawful purposes

and not unreasonably.

31. The decision of the employer in these two cases to

terminate the services of their employees cannot be said to

have any element of public policy. Their cases were purely

governed by the contract of employment entered into between

the employees and the employer. It is not appropriate to

construe those contracts as opposed to the principles of public

policy and thus void and illegal under Section 23 of the

Contract Act. In contractual matters even in respect of public

bodies, the principles of judicial review have got limited

application. This was expressly stated by this Court in State of

U.P. v. Bridge & Roof Co. (India) Ltd. [(1996) 6 SCC 22] and

also in Kerala SEB v. Kurien E. Kalathil [(2000) 6 SCC 293] .

In the latter case, this Court reiterated that the interpretation

and implementation of a clause in a contract cannot be the

subject-matter of a writ petition. Whether the contract

envisages actual payment or not is a question of construction

of contract. If a term of a contract is violated, ordinarily, the

remedy is not a writ petition under Article 226.

32. Applying these principles, it can very well be said that a

writ of mandamus can be issued against a private body which

is not “State” within the meaning of Article 12 of the

Constitution and such body is amenable to the jurisdiction

under Article 226 of the Constitution and the High Court under

Article 226 of the Constitution can exercise judicial review of

the action challenged by a party. But there must be a public

law element and it cannot be exercised to enforce purely

private contracts entered into between the parties.

33. We are unable to perceive any public element in the

termination of the employees by the appellant in Civil Appeal

No. 1976 of 1998 and the remedy available to the respondents

is to seek redressal of their grievance in civil law or under the

labour law enactments especially in view of the disputed

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questions involved as regards the status of employees and

other matters. So also, in the civil appeal arising out of SLP

(Civil) No. 6016 of 2002, the writ petition has been rightly

dismissed by the High Court. We see no merit in the contention

advanced by the appellant herein. The High Court rightly held

that there is no public law element and the remedy open to the

appellant is to seek appropriate relief other than judicial review

of the action taken by the respondent Company.”

Prior to the judgment aforesaid, the Apex Court had considered the

same issue in the case of Federal Bank Ltd. versus Sagar Thomas and

others, (2003) 10 SCC 333. The judgment aforesaid was given after

considering the nature of work performed by the Federal Bank. The

argument was raised that not only Bank was incorporated under the

Companies Act but is governed by regulatory provisions of banking. The

Apex Court did not accept the argument on maintainability of the writ

petition merely for the reason that the authority or the person was

incorporated under the Companies Act and is governed by the regulatory

provisions. It was held that a writ petition under Article 226 of the

Constitution of India would be maintainable against following; (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; and (viii) a person or a body under liability

to discharge any function under any statute with compulsion to perform

statutory function. The writ petition therein was not held maintainable

merely for the reason that Bank was incorporated under the Companies

Act and otherwise governed by the regulatory provisions which may be

Industries (Development and Regulation) Act, 1951. The Apex Court did

not find State dominance or control over the affairs of the company. The

relevant paras of the said judgment are quoted hereunder for ready

reference :-

“27. Such private companies would normally not be amenable

to the writ jurisdiction under Article 226 of the Constitution.

But in certain circumstances a writ may issue to such private

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bodies or persons as there may be statutes which need to be

complied with by all concerned including the private

companies. For example, there are certain legislations like the

Industrial Disputes Act, the Minimum Wages Act, the

Factories Act or for maintaining proper environment, say the

Air (Prevention and Control of Pollution) Act, 1981 or the

Water (Prevention and Control of Pollution) Act, 1974 etc. or

statutes of the like nature which fasten certain duties and

responsibilities statutorily upon such private bodies which

they are bound to comply with. If they violate such a statutory

provision a writ would certainly be issued for compliance with

those provisions. For instance, if a private employer dispenses

with the service of its employee in violation of the provisions

contained under the Industrial Disputes Act, in innumerable

cases the High Court interfered and has issued the writ to the

private bodies and the companies in that regard. But the

difficulty in issuing a writ may arise where there may not be

any non-compliance with or violation of any statutory

provision by the private body. In that event a writ may not be

issued at all. Other remedies, as may be available, may have to

be resorted to.

28. The six factors which have been enumerated in the case of

Ajay Hasia [Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1

SCC 722 : 1981 SCC (L&S) 258] and approved in the later

decisions in the case of Ramana [Ramana Dayaram Shetty v.

International Airport Authority of India, (1979) 3 SCC 489]

and the seven-Judge Bench in the case of Pradeep Kumar

Biswas [(2002) 5 SCC 111 : 2002 SCC (L&S) 633] may be

applied to the facts of the present case and see whether those

tests apply to the appellant Bank or not. As indicated earlier,

share capital of the appellant Bank is not held at all by the

Government nor is any financial assistance provided by the

State, nothing to say which may meet almost the entire

expenditure of the company. The third factor is also not

answered since the appellant Bank does not enjoy any

monopoly status nor can it be said to be an institution having

State protection. So far as control over the affairs of the

appellant Bank is concerned, they are managed by the Board

of Directors elected by its shareholders. No governmental

agency or officer is connected with the affairs of the appellant

Bank nor is any one of them a member of the Board of

Directors. In the normal functioning of the private banking

company there is no participation or interference of the State

or its authorities. The statutes have been framed regulating the

financial and commercial activities so that fiscal equilibrium

may be kept maintained and not get disturbed by the

malfunctioning of such companies or institutions involved in

the business of banking. These are regulatory measures for the

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purpose of maintaining a healthy economic atmosphere in the

country. Such regulatory measures are provided for other

companies also as well as industries manufacturing goods of

importance. Otherwise these are purely private commercial

activities. It deserves to be noted that it hardly makes any

difference that such supervisory vigilance is kept by Reserve

Bank of India under a statute or the Central Government. Even

if it was with the Central Government in place of Reserve

Bank of India it would not have made any difference,

therefore, the argument based on the decision of All India

Bank Employees' Assn. [AIR 1962 SC 171 : (1962) 3 SCR

269] does not advance the case of the respondent. It is only in

case of malfunctioning of the company that occasion to

exercise such powers arises to protect the interest of the

depositors, shareholders or the company itself or to help the

company to be out of the woods. In times of normal

functioning such occasions do not arise except for routine

inspections etc. with a view to see that things are moved

smoothly in keeping with fiscal policies in general.

29. There are a number of such companies carrying on the

profession of banking. There is nothing which can be said to

be close to the governmental functions. It is an old profession

in one form or the other carried on by individuals or by a

group of them. Losses incurred in the business are theirs as

well as the profits. Any business or commercial activity,

maybe banking, manufacturing units or related to any other

kind of business generating resources, employment,

production and resulting in circulation of money are no doubt,

such which do have impact on the economy of the country in

general. But such activities cannot be classified as one falling

in the category of discharging duties or functions of a public

nature. Thus the case does not fall in the fifth category of

cases enumerated in the case of Ajay Hasia [Ajay Hasia v.

Khalid Mujib Sehravardi, (1981) 1 SCC 722 : 1981 SCC

(L&S) 258] . Again we find that the activity which is carried

on by the appellant is not one which may have been earlier

carried on by the Government and transferred to the appellant

company. For the sake of argument, even if it may be assumed

that one or the other test as provided in the case of Ajay Hasia

[Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 :

1981 SCC (L&S) 258] may be attracted, that by itself would

not be sufficient to hold that it is an agency of the State or a

company carrying on the functions of public nature. In this

connection, observations made in the case of Pradeep Kumar

Biswas [(2002) 5 SCC 111 : 2002 SCC (L&S) 633] quoted

earlier would also be relevant.

30. We may now consider the two decisions i.e. Andi Mukta

[(1989) 2 SCC 691] and U.P. State Coop. Land Development

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Bank Ltd. [(1999) 1 SCC 741 : 1999 SCC (L&S) 389 : AIR

1999 SC 753] upon which much reliance has been placed on

behalf of the respondents to show that a writ would lie against

the appellant company. So far as the decision in the case of

U.P. State Coop. Land Development Bank Ltd. [(1999) 1 SCC

741 : 1999 SCC (L&S) 389 : AIR 1999 SC 753] is concerned,

it stands entirely on a different footing and we have

elaborately discussed it earlier.

31. The other case which has been heavily relied upon is Andi

Mukta [(1989) 2 SCC 691]. It is no doubt held that a

mandamus can be issued to any person or authority

performing public duty, owing positive obligation to the

affected party. The writ petition was held to be maintainable

since the teacher whose services were terminated by the

institution was affiliated to the university and was governed

by the ordinances, casting certain obligations which it owed to

that petitioner. But it is not the case here. Our attention has

been drawn by the learned counsel for the appellant to paras

12, 13 and 21 of the decision (Andi Mukta [(1989) 2 SCC

691] ) to indicate that even according to this case no writ

would lie against the private body except where it has some

obligation to discharge which is statutory or of public

character.”

The issue was again considered by the Apex Court in the case of

K.K. Saksena (supra) where after elaborate discussion of the issue, a

difference between the private law and public law was made. A

controversy under private law is held to be a part of legal system under

common law depending on individual’s relationship which may be under

contract law or law of torts, etc. The writ petition involving a question

under private/common law would not be maintainable even if an

authority or a person is discharging public duty or public function. It was

held that if a writ petition is brought against an authority or a person

discharging public duty or public function, it would be maintainable if an

element of public law is involved. A writ petition involving a question

under common law, i.e., arising out of the contract between the parties or

a relationship involving a dispute under private law would not be

maintainable. The word “public law” has been elaborately discussed and

defined in the said judgment and is the governing factor to answer the

question referred by learned Single Judge in this case.

15

According to the judgment of the Apex Court in the case of K.K.

Saksena (supra), twin test is to be satisfied for maintainability of the writ

petition under Article 226 of the Constitution of India. The writ petition

would be maintainable against an authority or person only when it is

discharging public duty/public function and the matter pertains to public

law. Merely for the reason that an authority or a person is discharging

public function/public duty would not be amenable to writ jurisdiction

unless the action challenged therein falls under the domain of public law.

A dispute arising out of Contract or under the common law would not

make a writ to be maintainable. The relevant paras of the judgment in the

K.K. Saksena (supra) are quoted hereunder:-

“44. Within a couple of years of the framing of the

Constitution, this Court remarked in Election Commission of

India v. Saka Venkata Rao [Election Commission of India v.

Saka Venkata Rao, AIR 1953 SC 210] that administrative law

in India has been shaped in the English mould. Power to issue

writ or any order of direction for “any other purpose” has been

held to be included in Article 226 of the Constitution with a

view apparently to place all the High Courts in this country in

somewhat the same position as the Court of the King's Bench

in England. It is for this reason ordinary “private law remedies”

are not enforceable through extraordinary writ jurisdiction,

even though brought against public authorities (see

Administrative Law, 8th Edn., H.W.R. Wade and C.F. Forsyth,

p. 656). In a number of decisions, this Court has held that

contractual and commercial obligations are enforceable only by

ordinary action and not by judicial review.

45. On the other hand, even if a person or authority does not

come within the sweep of Article 12 of the Constitution, but is

performing public duty, writ petition can lie and writ of

mandamus or appropriate writ can be issued. However, as

noted in Federal Bank Ltd. [Federal Bank Ltd. v. Sagar

Thomas, (2003) 10 SCC 733], such a private body should

either run substantially on State funding or discharge public

duty/positive obligation of public nature or is under liability to

discharge any function under any statute, to compel it to

perform such a statutory function.

46. In the present case, since ICID is not funded by the

Government nor is it discharging any function under any

statute, the only question is as to whether it is discharging

public duty or positive obligation of public nature.

47. It is clear from the reading of the impugned judgment that

16

the High Court was fully conscious of the principles laid down

in the aforesaid judgments, cognizance whereof is duly taken

by the High Court. Applying the test in the case at hand,

namely, that of ICID, the High Court opined that it was not

discharging any public function or public duty, which would

make it amenable to the writ jurisdiction of the High Court

under Article 226. The discussion of the High Court is

contained in paras 34 to 36 and we reproduce the same for the

purpose of our appreciation : (K.K. Saksena case [K.K.

Saksena v. International Commission on Irrigation and

Drainage, 2011 SCC OnLine Del 1894 : (2011) 180 DLT 204],

SCC OnLine Del)

“34. On a perusal of the preamble and the objects, it

is clear as crystal that the respondent has been

established as a scientific, technical, professional

and voluntary non-governmental international

organisation, dedicated to enhance the worldwide

supply of food and fibre for all people by improving

water and land management and the productivity of

irrigated and drained lands so that there is

appropriate management of water, environment and

the application of irrigation, drainage and flood

control techniques. It is required to consider certain

kind of objects which are basically a facilitation

process. It cannot be said that the functions that are

carried out by ICID are anyway similar to or closely

related to those performable by the State in its

sovereign capacity. It is fundamentally in the realm

of collection of data, research, holding of seminars

and organising studies, promotion of the

development and systematic management of

sustained irrigation and drainage systems,

publication of newsletter, pamphlets and bulletins

and its role extends beyond the territorial boundaries

of India. The memberships extend to participating

countries and sometimes, as bye-law would reveal,

ICID encourages the participation of interested

national and non-member countries on certain

conditions.

35. As has been held in Federal Bank Ltd. [Federal

Bank Ltd. v. Sagar Thomas, (2003) 10 SCC 733]

solely because a private company carries on banking

business, it cannot be said that it would be amenable

to the writ jurisdiction. The Apex Court has opined

that the provisions of the Banking Regulation Act

and other statutes have the regulatory measure to

play. The activities undertaken by the respondent

Society, a non-governmental organisation, do not

17

actually partake the nature of public duty or State

actions. There is absence of public element as has

been stated in V.R. Rudani [Andi Mukta Sadguru

Shree Muktajee Vandas Swami Suvarna Jayanti

Mahotsav Smarak Trust v. V.R. Rudani, (1989) 2

SCC 691] and Sri Venkateswara Hindu College of

Engg. [K. Krishnamacharyulu v. Sri Venkateswara

Hindu College of Engg., (1997) 3 SCC 571 : 1997

SCC (L&S) 841] It also does not discharge duties

having a positive application of public nature. It

carries on voluntary activities which many a non-

governmental organisations perform. The said

activities cannot be stated to be remotely connected

with the activities of the State. On a scrutiny of the

Constitution and bye-laws, it is difficult to hold that

the respondent Society has obligation to discharge

certain activities which are statutory or of public

character. The concept of public duty cannot be

construed in a vacuum. A private society, in certain

cases, may be amenable to the writ jurisdiction if the

writ court is satisfied that it is necessary to compel

such society or association to enforce any statutory

obligation or such obligations of public nature

casting positive public obligation upon it.

36. As we perceive, the only object of ICID is for

promoting the development and application of

certain aspects, which have been voluntarily

undertaken but the said activities cannot be said that

ICID carries on public duties to make itself

amenable to the writ jurisdiction under Article 226

of the Constitution.”

The issue was recently considered by the Apex Court in the case of

Ramakrishnan Mission (supra). In the said judgment, the Apex Court has

elaborately discussed the earlier judgments. The writ petition was not

found maintainable against the mission merely for the reason that it is

running a hospital, thus discharging public function/public duty. It is also

when the land was allotted by the State on concessional price and the

Mission was even receiving aid. It was found that aid received from the

Government is not sufficient to meet with the expenditure incurred by

the Mission. The Apex Court has considered the issue in reference to the

element of public function which should be akin to the work performed

by the State in its sovereign capacity. In the light of the judgment

18

aforesaid, every public function/public duty would not make a writ

petition to be maintainable against an authority or a person referred

under Article 226 of the Constitution of India unless functions are such

which are akin to the functions of the State or are sovereign in nature.

Relevant paras of the said judgment are quoted hereunder for ready

reference :-

“17. The basic issue before this Court is whether the functions

performed by the hospital are public functions, on the basis of

which a writ of mandamus can lie under Article 226 of the

Constitution.

18. The hospital is a branch of the Ramakrishna Mission and

is subject to its control. The Mission was established by

Swami Vivekanand, the foremost disciple of Shri

Ramakrishna Paramhansa. Service to humanity is for the

organisation co-equal with service to God as is reflected in

the motto “Atmano Mokshartham Jagad Hitaya Cha”. The

main object of the Ramakrishna Mission is to impart

knowledge in and promote the study of Vedanta and its

principles propounded by Shri Ramakrishna Paramahansa and

practically illustrated by his own life and of comparative

theology in its widest form. Its objects include, inter alia to

establish, maintain, carry on and assist schools, colleges,

universities, research institutions, libraries, hospitals and take

up development and general welfare activities for the benefit

of the underprivileged/backward/tribal people of society

without any discrimination. These activities are voluntary,

charitable and non-profit making in nature. The activities

undertaken by the Mission, a non-profit entity are not closely

related to those performed by the State in its sovereign

capacity nor do they partake of the nature of a public duty.

19. The Governing Body of the Mission is constituted by

members of the Board of Trustees of Ramakrishna Math and

is vested with the power and authority to manage the

organisation. The properties and funds of the Mission and its

management vest in the Governing Body. Any person can

become a member of the Mission if elected by the Governing

Body. Members on roll form the quorum of the annual general

meetings. The Managing Committee comprises of members

appointed by the Governing Body for managing the affairs of

the Mission. Under the Memorandum of Association and

Rules and Regulations of the Mission, there is no

governmental control in the functioning, administration and

day to day management of the Mission. The conditions of

service of the employees of the hospital are governed by

19

service rules which are framed by the Mission without the

intervention of any governmental body.

20. In coming to the conclusion that the appellants fell within

the description of an authority under Article 226, the High

Court placed a considerable degree of reliance on the

judgment of a two-Judge Bench of this Court in Andi Mukta

[Andi Mukta Sadguru Shree Muktajee Vandas Swami

Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani,

(1989) 2 SCC 691]. Andi Mukta [Andi Mukta Sadguru Shree

Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak

Trust v. V.R. Rudani, (1989) 2 SCC 691] was a case where a

public trust was running a college which was affiliated to

Gujarat University, a body governed by the State legislation.

The teachers of the University and all its affiliated colleges

were governed, insofar as their pay scales were concerned, by

the recommendations of the University Grants Commission.

A dispute over pay scales raised by the association

representing the teachers of the University had been the

subject-matter of an award of the Chancellor, which was

accepted by the government as well as by the University. The

management of the college, in question, decided to close it

down without prior approval. A writ petition was instituted

before the High Court for the enforcement of the right of the

teachers to receive their salaries and terminal benefits in

accordance with the governing provisions. In that context, this

Court dealt with the issue as to whether the management of

the college was amenable to the writ jurisdiction. A number of

circumstances weighed in the ultimate decision of this Court,

including the following:

20.1. The trust was managing an affiliated college.

20.2. The college was in receipt of government aid.

20.3. The aid of the government played a major role in the

control, management and work of the educational institution.

20.4. Aided institutions, in a similar manner as government

institutions, discharge a public function of imparting

education to students.

20.5. All aided institutions are governed by the rules and

regulations of the affiliating University.

20.6. Their activities are closely supervised by the University.

20.7. Employment in such institutions is hence, not devoid of

a public character and is governed by the decisions taken by

the University which are binding on the management.

21. It was in the above circumstances that this Court came to

the conclusion that the service conditions of the academic

staff do not partake of a private character, but are governed by

20

a right-duty relationship between the staff and the

management. A breach of the duty, it was held, would be

amenable to the remedy of a writ of mandamus. While the

Court recognised that “the fast expanding maze of bodies

affecting rights of people cannot be put into watertight

compartments”, it laid down two exceptions where the

remedy of mandamus would not be available: (SCC p. 698,

para 15)

“15. If the rights are purely of a private character no

mandamus can issue. If the management of the

college is purely a private body with no public duty

mandamus will not lie. These are two exceptions to

mandamus.”

22. Following the decision in Andi Mukta [Andi Mukta

Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti

Mahotsav Smarak Trust v. V.R. Rudani, (1989) 2 SCC 691] ,

this Court has had the occasion to re-visit the underlying

principles in successive decisions. This has led to the

evolution of principles to determine what constitutes a “public

duty” and “public function” and whether the writ of

mandamus would be available to an individual who seeks to

enforce her right.

25. A similar view was taken in Ramesh Ahluwalia v. State of

Punjab [Ramesh Ahluwalia v. State of Punjab, (2012) 12 SCC

331 : (2013) 3 SCC (L&S) 456 : 4 SCEC 715], where a two-

Judge Bench of this Court held that a private body can be held

to be amenable to the jurisdiction of the High Court under

Article 226 when it performs public functions which are

normally expected to be performed by the State or its

authorities.

26. In Federal Bank Ltd. v. Sagar Thomas [Federal Bank Ltd.

v. Sagar Thomas, (2003) 10 SCC 733], this Court analysed

the earlier judgements of this Court and provided a

classification of entities against whom a writ petition may be

maintainable: (SCC p. 748, para 18)

“18. From the decisions referred to above, the

position that emerges is that a writ petition under

Article 226 of the 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; and (viii) a

person or a body under liability to discharge any

function under any statute, to compel it to perform

21

such a statutory function.” (emphasis supplied)

27. In Binny Ltd. v. V. Sadasivan [Binny Ltd. v. V. Sadasivan,

(2005) 6 SCC 657 : 2005 SCC (L&S) 881], a two-Judge

Bench of this Court noted the distinction between public and

private functions. It held thus: (SCC pp. 665-66, para 11)

“11. … It is difficult to draw a line between public

functions and private functions when they are being

discharged by a purely private authority. A body is

performing a “public function” when it seeks to

achieve some collective benefit for the public or a

section of the public and is accepted by the public or

that section of the public as having authority to do

so. Bodies therefore exercise public functions when

they intervene or participate in social or economic

affairs in the public interest.”

28. The Bench elucidated on the scope of mandamus: (SCC p.

673, para 29)

“29. … However, the scope of mandamus is limited

to enforcement of public duty. The scope of

mandamus is determined by the nature of the duty to

be enforced, rather than the identity of the authority

against whom it is sought. If the private body is

discharging a public function and the denial of any

right is in connection with the public duty imposed

on such body, the public law remedy can be

enforced. The duty cast on the public body may be

either statutory or otherwise and the source of such

power is immaterial, but, nevertheless, there must be

the public law element in such action … There

cannot be any general definition of public authority

or public action. The facts of each case decide the

point.” (emphasis supplied)

29. More recently in K.K. Saksena v. International

Commission on Irrigation & Drainage [K.K. Saksena v.

International Commission on Irrigation & Drainage, (2015) 4

SCC 670 : (2015) 2 SCC (Civ) 654 : (2015) 2 SCC (L&S)

119] , another two-Judge Bench of this Court held that a writ

would not lie to enforce purely private law rights.

Consequently, even if a body is performing a public duty and

is amenable to the exercise of writ jurisdiction, all its

decisions would not be subject to judicial review. The Court

held thus: (SCC p. 692, para 43)

“43. What follows from a minute and careful reading

of the aforesaid judgments of this Court is that if a

person or authority is “State” within the meaning of

Article 12 of the Constitution, admittedly a writ

22

petition under Article 226 would lie against such a

person or body. However, we may add that even in

such cases writ would not lie to enforce private law

rights. There are a catena of judgments on this aspect

and it is not necessary to refer to those judgments as

that is the basic principle of judicial review of an

action under the administrative law. The reason is

obvious. A private law is that part of a legal system

which is a part of common law that involves

relationships between individuals, such as law of

contract or torts. Therefore, even if writ petition

would be maintainable against an authority, which is

“State” under Article 12 of the Constitution, before

issuing any writ, particularly writ of mandamus, the

court has to satisfy that action of such an authority,

which is challenged, is in the domain of public law

as distinguished from private law.”

30. Thus, even if the body discharges a public function in a

wider sense, there is no public law element involved in the

enforcement of a private contract of service.

31. Having analysed the circumstances which were relied

upon by the State of Arunachal Pradesh, we are of the view

that in running the hospital, Ramakrishna Mission does not

discharge a public function. Undoubtedly, the hospital is in

receipt of some element of grant. The grants which are

received by the hospital cover only a part of the expenditure.

The terms of the grant do not indicate any form of

governmental control in the management or day to day

functioning of the hospital. The nature of the work which is

rendered by Ramakrishna Mission, in general, including in

relation to its activities concerning the hospital in question is

purely voluntary.

32. Before an organisation can be held to discharge a public

function, the function must be of a character that is closely

related to functions which are performed by the State in its

sovereign capacity. There is nothing on record to indicate that

the hospital performs functions which are akin to those solely

performed by State authorities. Medical services are provided

by private as well as State entities. The character of the

organisation as a public authority is dependent on the

circumstances of the case. In setting up the hospital, the

Mission cannot be construed as having assumed a public

function. The hospital has no monopoly status conferred or

mandated by law. That it was the first in the State to provide

service of a particular dispensation does not make it an

“authority” within the meaning of Article 226. State

Governments provide concessional terms to a variety of

23

organisations in order to attract them to set up establishments

within the territorial jurisdiction of the State. The State may

encourage them as an adjunct of its social policy or the

imperatives of economic development. The mere fact that

land had been provided on a concessional basis to the hospital

would not by itself result in the conclusion that the hospital

performs a public function. In the present case, the absence of

State control in the management of the hospital has a

significant bearing on our coming to the conclusion that the

hospital does not come within the ambit of a public authority.

33. It has been submitted before us that the hospital is subject

to regulation by the Clinical Establishments (Registration and

Regulation) Act, 2010. Does the regulation of hospitals and

nursing homes by law render the hospital a statutory body?

Private individuals and organizations are subject to diverse

obligations under the law. The law is a ubiquitous

phenomenon. From the registration of birth to the reporting of

death, law imposes obligations on diverse aspects of

individual lives. From incorporation to dissolution, business

has to act in compliance with law. But that does not make

every entity or activity an authority under Article 226.

Regulation by a statute does not constitute the hospital as a

body which is constituted under the statute. Individuals and

organisations are subject to statutory requirements in a whole

host of activities today. That by itself cannot be conclusive of

whether such an individual or organisation discharges a public

function. In Federal Bank [Federal Bank Ltd. v. Sagar

Thomas, (2003) 10 SCC 733], while deciding whether a

private bank that is regulated by the Banking Regulation Act,

1949 discharges any public function, the Court held thus:

(SCC pp. 758-59, para 33)

“33. … in our view, a private company carrying on

banking business as a scheduled bank, cannot be

termed as an institution or a company carrying on

any statutory or public duty. A private body or a

person may be amenable to writ jurisdiction only

where it may become necessary to compel such

body or association to enforce any statutory

obligations or such obligations of public nature

casting positive obligation upon it. We don't find

such conditions are fulfilled in respect of a private

company carrying on a commercial activity of

banking. Merely regulatory provisions to ensure

such activity carried on by private bodies work

within a discipline, do not confer any such status

upon the company nor put any such obligation upon

it which may be enforced through issue of a writ

under Article 226 of the Constitution. Present is a

24

case of disciplinary action being taken against its

employee by the appellant Bank. The respondent's

service with the Bank stands terminated. The action

of the Bank was challenged by the respondent by

filing a writ petition under Article 226 of the

Constitution of India. The respondent is not trying to

enforce any statutory duty on the part of the Bank.”

(emphasis supplied)

34. Thus, contracts of a purely private nature would not be

subject to writ jurisdiction merely by reason of the fact that

they are structured by statutory provisions. The only

exception to this principle arises in a situation where the

contract of service is governed or regulated by a statutory

provision. Hence, for instance, in K.K. Saksena [K.K.

Saksena v. International Commission on Irrigation &

Drainage, (2015) 4 SCC 670 : (2015) 2 SCC (Civ) 654 :

(2015) 2 SCC (L&S) 119] this Court held that when an

employee is a workman governed by the Industrial Disputes

Act, 1947, it constitutes an exception to the general principle

that a contract of personal service is not capable of being

specifically enforced or performed.

35. It is of relevance to note that the Act was enacted to

provide for the regulation and registration of clinical

establishments with a view to prescribe minimum standards

of facilities and services. The Act, inter alia, stipulates

conditions to be satisfied by clinical establishments for

registration. However, the Act does not govern contracts of

service entered into by the hospital with respect to its

employees. These fall within the ambit of purely private

contracts, against which writ jurisdiction cannot lie. The

sanctity of this distinction must be preserved.”

In the light of the judgments referred to above, it is not difficult to

answer questions framed by learned Single Judge. We are not elaborately

discussing the judgments of the Larger Bench of this Court for the

reason that the recent judgment of the Apex Court covers the issue. Thus,

the questions can be answered with clarity though the earlier decision of

the Larger Bench of this Court in the case of Roychan Abraham (supra)

is also based on the judgment of the Apex Court referred in this order.

The substance of the discussion made above is that a writ petition

would be maintainable against the authority or the person which may be

a private body, if it discharges public function/public duty, which is

25

otherwise primary function of the State referred in the judgment of the

Apex Court in the case of Ramakrishnan Mission (supra) and the issue

under public law is involved. The aforesaid twin test has to be satisfied

for entertaining writ petition under Article 226 of the Constitution of

India.

From the discussion aforesaid and in the light of the judgments

referred above, a writ petition under Article 226 of the Constitution

would be maintainable against (i) the 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; and (viii) a person or

a body under liability to discharge any function under any statute, to

compel it to perform such a statutory function.

There is thin line between “public functions” and “private

functions” discharged by a person or a private body/authority. The writ

petition would be maintainable only after determining the nature of the

duty to be enforced by the body or authority rather than identifying the

authority against whom it is sought.

It is also that even if a person or authority is discharging public

function or public duty, the writ petition would be maintainable under

Article 226 of the Constitution, if Court is satisfied that action under

challenge falls in the domain of public law, as distinguished from private

law. The twin tests for maintainability of writ are as follows :

1.The person or authority is discharging public duty/public

functions.

2.There action under challenge falls in domain of public

law and not under common law.

The writ petition would not be maintainable against an authority or

a person merely for the reason that it has been created under the statute

or is to governed by regulatory provisions. It would not even in a case

26

where aid is received unless it is substantial in nature. The control of the

State is another issue to hold a writ petition to be maintainable against an

authority or a person.

If the writ petition refers to contractual obligation inter se between

the parties, it would not be maintainable. Thus, the twin test, as

suggested by us in this judgment is to be satisfied for maintainability of

the writ petition and that too, after taking notice of the finding and

observation made by us in reference to the nature of authority or person.

Accordingly, we answer the questions referred by learned Single Judge

in following terms :

(1)The remedy under Article 226 of the Constitution of India

would be available against an authority or a person only when twin tests

are satisfied. The authority or the person should not only discharge

public function or public duty but the action challenged therein should

fall in the domain of public law. The writ petition would not be

maintainable against an authority or person even if it is discharging

public function/public duty, if the controversy pertains to the private law

such as a dispute arising out of contract or under the common law.

(2)The judgment of this Court in the case of Rajesh Kumar

Srivastava (supra) is not against the ration pronounced by the Larger

Bench in the case of Roychan Abraham (supra) rather it has followed the

judgment of the Apex Court in the case of K. K. Saksena (supra).

Since the questions have been answered by the Larger Bench, the

Registry is directed to place this order before the learned Single Judge

where the writ petition is pending for hearing.

Order Date :- 4.10.2021

Shubham

(Munishwar Nath Bhandari, A.C.J.)

(Prakash Padia, J.)

(Sanjay Kumar Singh, J.)