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1990 Supreme(Cal) 362

High Court Of Calcutta
G. N. RAY, PABITRA KUMAR BANERJEE
ANUPAM GHOSH - Appellant
Versus
UNION OF INDIA - Respondent
F. M. A. T.  2649  Of  1987
Decided On : 08/31/1990

Advocates Appeared:
BIMAL JYOTSNA CHATTERJI, MALAY BOSE, MILAN BANERJI, Tapan Kumar Roy

The impugned action of termination of service is not amenable to writ jurisdiction even if the company is held to be a 'state' within the meaning of Article 12 of the Constitution, as the service of the appellant and conditions thereof flow from private contract between the parties and the employment and corresponding duties relate to matters of private law character.

Headnote:

WRIT PETITION - INSTRUMENTALITY OF STATE - GOVERNMENT COMPANY - PUBLIC OR PRIVATE LAW - WRIT JURISDICTION - COMPANY NOT INSTRUMENTALITY OF STATE - NO WRIT JURISDICTION - WRIT PETITION DISMISSED.

Fact of the Case:

The appellant, Sri Anupam Ghosh, was the Finance Director of Andrew Yule and Co. Ltd., a Government Company. His service was terminated by an order dated 22.8.86, and he was served with a letter of termination with immediate effect and a cheque of three months' salary in lieu of notice was enclosed with the letter of termination. The appellant challenged the order of termination in a writ petition, contending that it was malafide and an utter abuse of power vested in the concerned authority, and also that it was bad on the ground of lack of fairness. The learned trial Judge dismissed the writ petition, holding that the company was not a 'state' within the meaning of Article 12 of the Constitution, and therefore, the writ petition for challenging the order of termination of contract of service was not maintainable.

Finding of the Court:

The learned trial Judge held that the company was not an instrumentality of the Central Government and as such, not a 'state' within the meaning of Article 12 of the Constitution. The learned trial Judge also held that the impugned action of termination of service was not amenable to writ jurisdiction even if it is held that the company is 'state' within the meaning of Article 12 of the Constitution.

Issues: 1. Whether the company is an instrumentality of the Central Government and as such, a 'state' within the meaning of Article 12 of the Constitution? 2. Whether the impugned action of termination of service is amenable to writ jurisdiction?

Ratio Decidendi: 1. To determine whether an institution, company, society or corporation is an instrumentality of the 'state' within the meaning of Article 12 of the Constitution, the cumulative effect of various tests indicated by the Supreme Court in various decisions should be considered, and satisfaction of one or two tests may not be sufficient to constitute an institution, company, society or corporation a 'state'. 2. The impugned action of termination of service is not amenable to writ jurisdiction even if it is held that the company is 'state' within the meaning of Article 12 of the Constitution, as the service of the appellant and conditions thereof flow from private contract between the parties and the employment and corresponding duties relate to matters of private law character.

Final Decision: The appeal is dismissed.

G. N. RAY, J.

( 1 ) THIS appeal is directed against the judgment dated 10. 8,87 passed by Mr. Justice Umesh Chandra Banerjee in C. O. No. 11155 (W) of 1986. By the aforesaid judgment, the learned trial Judge dismissed the writ petition. Sri Anupam Ghosh was the Finance Director of Andrew Yule and Co. Ltd. , which is admittedly a Government Company within the meaning of the Companies Act. In the letter of appointment of the writ petitioner-appellant, Sri Anupam Ghosh, it was inter alia, provided that the service of Sri Ghosh was liable to be terminated on either side on three months' notice or on payment of three month's salaries in lieu thereof. The service of Sri Ghosh was terminated by an order dated 22. 8. 86 and he was served with a letter of termination with immediate effect and a cheque of three months salary in lieu of notice was enclosed with the letter of termination. Such letter of termination was the subject matter of challenge in the writ petition concerning Civil Order No. 11155 (W) of 1986 and it was contended that such order of termination was malafide and an utter abuse of the power vested in the concerned authority and the same was also bad on the ground of lack of fairness. In the writ proceeding, it was strongly contended on behalf of M/s. Andrew Yule and Co. Ltd. and also other respondents that the said Company not being a 'state' within the meaning of Article 12 of the Constitution, the writ petition for challenging the order of termination of contract of service was not maintainable. It was also contended that in any event, the said order of termination squarely belongs to the field of private law and not to the field of public law and no public duty being involved in regulating the contract of service between the writ petitioner and M/s. Andrew Yule and Co. Ltd. no writ would be issued in a challenge of the said order of termination of service. The learned trial Judge has held that the said Company was not a 'state' within the meaning of Article 12 of the Constitution, the writ petition therefore, was not maintainable for challenging the said order of termination. The learned trial Judge indicated the outline of the arguments advanced by the parties on the question of nature of duties, namely, whether public or private law was involved in dealing with the contractual service of the writ petitioner but the learned trial Judge refrained from making any finding on the said question in view of his finding that the Company not being an instrumentality of the Government, no writ would lie against the Company and therefore, the decision on the said question was not necessary for the disposal of the writ petition. It appears that large number of decisions were cited at the hearing of the said case and the learned trial Judge has taken pains in summarising the decisions cited by the respective parties on the question as to whether or not M/s. Andrew Yule and Co. Ltd. (hereinafter referred to as the 'company') was an instrumentality of the Central Government and as such, a 'state' within the meaning of Article 12. The features and characteristic of an institution, corporation, company or society making it an instrumentality of the State as indicated in various judgment of the Supreme Court have been indicated by the learned trial Judge very succinctly and considering the facts and circumstances of the case and the incorporation and functioning of the Company and the nature of control exercised by the Central Government over the Company, the learned trial Judge has come to the finding that the said Company is not an instrumentality of the Central Government and as such, not a 'state' within the meaning of Article 12 of the Constitution. The various aspects relevant for the consideration as to whether or not an institution, company, society or a body corporate is an instrumentality of the 'state' within the meaning of Article 12 of the Constitution have been indicated by the learned trial Judge with reference to th












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