A writ petition under Article 226 of the Constitution is not maintainable against a private company, even if it discharges a public function, unless the contract of service is governed or regulated by a statutory provision.

Headnote:
WRIT PETITION - MAINTAINABILITY - CONTRACT OF SERVICE - PUBLIC FUNCTION - AIR INDIA LIMITED - PRIVATIZATION - TERMINATION OF CONTRACTUAL ENGAGEMENT - CAR - SECTION 7 - APPLICABILITY - NOTICE PERIOD - PUBLIC INTEREST - CONTRACTUAL TERMS - VIOLATION OF PRINCIPLES OF NATURAL JUSTICE - STATUTORY RULES - AVAILABILITY OF ALTERNATIVE REMEDY - PRELIMINARY OBJECTION - DISMISSAL OF WRIT PETITION.
Fact of the Case:

Petitioners, permanently employed and rendered service as commanders and co-pilots with Air India Limited [AIL], were appointed on contractual terms post their superannuation. They challenged the validity of orders dated 02 April 2020 and 07 August 2020. The first order placed their engagement on contractual terms under temporary suspension considering the outbreak of COVID-19 and its impact on operations of airlines worldwide. The subsequent order discontinued their contractual engagement in view of the prevailing scenario in the civil aviation sector. AIL raised a preliminary objection to the maintainability of the writ petition, contending that the terms of engagement of the petitioners were not governed by any statutory provisions and hence, a writ petition for its enforcement or alleged violation of its terms would not be maintainable.
Finding of the Court:

The Court upheld the preliminary objections raised by AIL and dismissed the writ petitions. It held that a writ petition under Article 226 of the Constitution is not maintainable against a private company, even if it discharges a public function, unless the contract of service is governed or regulated by a statutory provision. The Court also held that AIL, having ceased to be a government company after its privatization, is no longer amenable to the writ jurisdiction of the High Court. The Court further held that the provisions of CAR Section 7, which deal with flight crew standards training and licensing, do not control or regulate the termination of the contract affected by AIL based on its assessment that it would not be in a position to utilize the services of the petitioners in light of the prevailing economic constraints faced by the civil aviation sector.
Issues: 1. Whether a writ petition is maintainable against a private company, even if it discharges a public function, unless the contract of service is governed or regulated by a statutory provision? 2. Whether AIL, having ceased to be a government company after its privatization, is amenable to the writ jurisdiction of the High Court? 3. Whether the provisions of CAR Section 7, which deal with flight crew standards training and licensing, control or regulate the termination of the contract affected by AIL based on its assessment that it would not be in a position to utilize the services of the petitioners in light of the prevailing economic constraints faced by the civil aviation sector?
Ratio Decidendi: 1. A writ petition under Article 226 of the Constitution is not maintainable against a private company, even if it discharges a public function, unless the contract of service is governed or regulated by a statutory provision. 2. AIL, having ceased to be a government company after its privatization, is no longer amenable to the writ jurisdiction of the High Court. 3. The provisions of CAR Section 7, which deal with flight crew standards training and licensing, do not control or regulate the termination of the contract affected by AIL based on its assessment that it would not be in a position to utilize the services of the petitioners in light of the prevailing economic constraints faced by the civil aviation sector.
Final Decision: The writ petitions were dismissed.

ORDER

1. The petitioners before this Court were permanently employed and rendered service as commanders and co-pilots with the second respondent Air India Limited [AIL]. Post their superannuation, they were appointed on contractual terms. They have approached this Court assailing the validity of the orders dated 02 April 2020 and 07 August 2020. In terms of the first order, AIL considering the outbreak of COVID-19 and its impact on operations of airlines worldwide, had proceeded to place their engagement on contractual terms under temporary suspension. By the subsequent order of 07 August 2020, AIL apprised the petitioners that in view of the prevailing scenario in the civil aviation sector, a decision had been taken to discontinue their contractual engagement.

2. Mr. Nayar, learned Senior Counsel appearing for AIL, has taken a preliminary objection to the maintainability of the writ petition and submits that the writ petition would not lie since the terms of engagement of the petitioners was not governed by any statutory provisions. Learned Senior Counsel contended that since the engagement of the petitioners was governed by a mere contract of service, a writ petition either for its enforcement or alleged violation of its terms would not be maintainable. Mr. Nayar has in this regard placed reliance upon the following principles as laid down by the Allahabad High Court in Ram Niwas Sharma vs. Union of India and Others, 2020 SCC OnLine All 205:

"15. Roychan Abraham clearly holds that it is only a "public law action" which confers a right upon an aggrieved person to invoke the jurisdiction under Article 226 of the Constitution. It also notes that wherever the Courts have in fact intervened and invoked their powers conferred by Article 226, it was only in situations where service conditions were regulated either by statutory provisions or where the employer had the status of State.

16. It must be consequently held that while a body may be discharging a public function or performing a public duty and thus its actions becoming amenable to judicial review by a Constitutional Court, its employees would not have the right to invoke this Courts powers conferred by Article 226 in respect of matter relating to service where they are not governed or controlled by statutory provisions. An educational institution may perform myriad functions touching various facets of public life and in the societal sphere. While such of those functions as would fall within the domain of a "public function" or "public duty" be undisputedly open to challenge and scrutiny under Article 226 of the Constitution, actions or decisions taken solely within the confines of an ordinary contract of service, having no statutory force or backing, cannot be recognised as being amenable to challenge under Article 226 of the Constitution. In the absence of the service conditions being controlled or governed by statutory provisions the matter would remain in the realm of an ordinary contract of service.

17. This distinction which must necessarily be borne in mind has been eloquently explained by the Supreme Court in a decision rendered just a few days after Roychan Abraham in Ramkrishna Mission v. Kago Kunya. After noticing the earlier decisions rendered on the subject, the Supreme Court held thus:

"35. 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.

36. 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 rende