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1980 Supreme(Cal) 198
HIGH COURT OF CALCUTTA
Chittatosh Mookherjee, J.
Nikhil Kumar Roy
vs.
Union of India & Ors.
C. R. No. 5487(W) of 1976
Decided On: May 21, 1980
K.K. Moita, Adyanath Ghosh for the petitioner;
Jatin Ghosh, Malay Mohan Guha for the respondents.
A writ application is maintainable against a company incorporated under the Companies Act for enforcement of statutory or public duties.
Headnote:
WRIT APPLICATION - Maintainability - Against a company incorporated under the Companies Act - Whether maintainable - Scope of Article 226(1) - Interpretation - Whether a writ can issue against a company for enforcement of statutory or public duties - Tests to be applied - Applicability of Article 12 of the Constitution - Distinction between the meaning of "State" in Part-III and Part-IV of the Constitution - Whether a corporation established by statute or incorporated under law is an instrumentality or agency of the government - Factors to be considered - Applicability of the principles laid down in Ramana Dayaram Shetty v. The International Airport Authority of India & Ors AIR 1979 SC 1628 - Whether a writ can issue against the Oriental Fire and General Insurance Co. Ltd. for termination of the petitioner's service - Held, yes.
Fact of the Case:
The petitioner was appointed as an Inspector of Agencies of the New Great Insurance Company of India Ltd. in August 1970. After nationalisation of the general insurance business, the petitioner became an employee of the Oriental Fire and General Insurance Co. Ltd. In March 1976, the petitioner's service was terminated by the respondent company on the ground of unsatisfactory performance. The petitioner challenged the termination of his service by filing a writ petition under Article 226 of the Constitution.
Finding of the Court:
The court held that a writ can issue against a company incorporated under the Companies Act for enforcement of statutory or public duties. The court further held that the Oriental Fire and General Insurance Co. Ltd. was an instrumentality or agency of the government and, therefore, a writ could issue against it for termination of the petitioner's service.
Issues: 1. Whether a writ application is maintainable against a company incorporated under the Companies Act? 2. Whether a writ can issue against a company for enforcement of statutory or public duties? 3. Whether the Oriental Fire and General Insurance Co. Ltd. was an instrumentality or agency of the government? 4. Whether a writ could issue against the Oriental Fire and General Insurance Co. Ltd. for termination of the petitioner's service?
Ratio Decidendi: 1. The court held that a writ application is maintainable against a company incorporated under the Companies Act for enforcement of statutory or public duties. The court relied on the following factors: - The expression "any person or authority" in Article 226(1) of the Constitution is not exhaustive. - The High Court's powers under Article 226(1) cannot be curtailed by making incorporated bodies not amenable to the said jurisdiction even in respect of their statutory or public duties and for breach of which no alternative remedies exist. - The decisive factor in determining the maintainability of a writ application is the nature and character of the duty which is sought to be enforced by applying for a writ of Mandamus. 2. The court held that a writ can issue against a company for enforcement of statutory or public duties. The court relied on the following factors: - A writ can issue, for instance, to an official of a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out the duties entrusted to them by the statutes authorising their undertakings. - A writ would also lie against a company constituted by a statute for the purposes of fulfilling public responsibilities. 3. The court held that the Oriental Fire and General Insurance Co. Ltd. was an instrumentality or agency of the government. The court relied on the following factors: - The entire share capital of the company was held by the government. - The company was wholly controlled by the government not only in the matter of policy issues but also in carrying out the functions entrusted to it by the law establishing it or by the charter of its incorporation. 4. The court held that a writ could issue against the Oriental Fire and General Insurance Co. Ltd. for termination of the petitioner's service.
Final Decision: The court discharged the rule without any order as to costs.
In August, 1970 the petitioner was appointed as an Inspector of Agencies, Alipurduar of the New Great Insurance Company of India Ltd. The terms and conditions of the contract of his employment were set out in tile letter dated 11th August, 1970 written by the Divisional Secretary of the said insurance company. The petitioner claims to have been confirmed in the said post with effect from 1st May, 1971.
2. After nationalisation of the General Insurance business, with effect from the "appointed day" (January 1, 1973), the petitioner had become an employee of the insurance company in which his employer, the New Great Insurance Company of India Ltd. had vested under the provisions of he General Insurance Business (Nationalisation) Act, 1972. Under S. 7 of the said Act the petitioner continued to have the same terms and conditions and the same rights of pension and gratuity until termination of his employment or until his remuneration and other terms and conditions were duly altered. Thereafter, in exercise of its powers under S. 16 of the General Insurance Business (Nationalisation) Act, 1972, the Central Government had framed a scheme for merger of the company in which the petitioner had been serving with the Oriental Fire and General Insurance Co. Ltd. The petitioner under the said merger scheme became an employee of the transferee company under the same terms and conditions and the same rights as to pension, gratuity and other incidental matters until termination or until his remuneration and terms and conditions were duly altered by the transferee company.
3. The Assistant General Manager, Oriental Fire and General Insurance Company Ltd., Eastern Region Office, Calcutta by his letter dated 31st March, 1976 advised the petitioner, that in view of his unsatisfactory performance, it had been decided by the management to terminate the petitioner's service with immediate effect. The petitioner was further informed that he would be paid one month's salary in lieu of the notice period and he might call at the Divisional Office an any working day to collect his dues (vide Anuexure 'D' to the writ petition). The said termination of the petitioner's service is the subject-matter of challenge in the present Rule.
4. The respondent have raised a preliminary objection that this writ application against the Oriental Fire and General Insurance Co. Ltd., which was a limited company and not a statutory was not maintainable and, therefore, the writ application should be dismissed in limini.
5. I am not prepared to subscribe to the extreme proposition that a writ application far any other purpose within the meaning of Article 226 of the Constitution is not maintainable against a company incorporated under the Companies Act irrespective of the questions whether the said company had committed breach of any statutory or public duty imposed upon it and whether there existed any other adequate alternative remedy for enforcement of such duty. It is significant that clause (1) of Article 226 lays dawn that every High Court may issue directions, orders or writs "to any person or authority, including in appropriate cases, any government". Thus, the Constitution itself has not exhaustively specified the said persons and authorities. The High Court's powers under Article 226(1) cannot be curtailed by making incorporated bodies not amenable to the said jurisdiction even in respect of their statutory or public duties and far breach of which no alternative remedies exist. In considering whether a writ application under Article 226 lies against "person" or an "authority", the correct test would be whether the said writ application is for enforcement of any statutory or public duty by the said person or authority. The said person may be a natural person or a juristic person like a statutory body or an incorporated body. In determining the maintainability of a writ application, the decisive factor is the nature and character of the duty which is sought to be e
