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1984 Supreme(Guj) 224

Gujarat High Court
Judgename :S.L.TALATI
BIPINCHANDRA JUGALDAS SONI - Appellant
Versus
GUJARAT STATE CO OPERATIVE COTTON FEDERATION - Respondent
S.C.A. 4559 of 1984
Decided On : 10/16/1984

Advocates Appeared: J.J.YAGNIK, VITTHALBHAI PATEL

Headnote:

Constitution of India – Article 12 - Article 19 - Ministry of Agriculture – Termination of Service - Petitioner submitted that 65% of share capital of respondent is contributed - Further submitted that three Directors are appointed by Govt on the Board of Directors of respondent and Ministry of Agriculture is supervising affairs of respondent - Wide enlargement of meaning must be tempered by a wise limitation - Relevant tests gathered decision in International Airport Authoritys case follows - One thing is clear that if entire share capital of corporation is held by Government it would go a long way towards indicating that corporation is an instrumentality or agency of Government - Where financial assistance of State is so much as to meet almost entire expenditure of corporation it would afford some indication of corporation being impregnated with governmental character - Corporation enjoys monopoly status which is State conferred or State protected - Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality - Corporation of public importance and closely related to governmental functions it would be a relevant factor in classifying corporation as an instrumentality or agency of Government - Department of Govt. is transferred to a corporation should be strong factor supportive inferences of corporation being an instrumentality agency of Government - Held , Argument the petitioner required to offered lower post that also cannot be agitated by filing Special Civil Application - Petitioners feel that their services are wrongly terminated and they are entitled to have some redress only thing that could be said is that for that purpose no Social Civil-Application is maintainable - What other remedies are open to them it is for petitioners to decide - But one thing is absolutely clear that respondent decided to abolish posts of Deputy Managers and respondent is not State within meaning of Article 19 of Constitution of India - Under these circumstances these petitions are not maintainable and therefore they are dismissed - INTERIM relief is vacated - Notice discharged - No costs - AD-INTERIM stay granted during pendency of petition shall continue in force for a period of ten days from today - Petition Dismissed

S. L. TALATI, J.

( 1 ) SPECIAL Civil Application No. 4559 of 11984 is filed by the Deputy Manager (Administration) and Special Civil Application No. 4560 of 1984 is filed by the Deputy Manager (Marketing ). They came to be appointed by. separate orders by Gujarat State Co-operative Cotton Federation Limited respondent no. 1 Their services came to be terminated because according to respondent no. 1 as a measure of economy they wanted to abolish posts of Deputy Managers from that Organisation. Now Gujarat State Co-operative Cotton Federation Limited is an Apex body of co-operative societies and the first question which is required to be decided is whether respondent no. 1 is a State within the meaning of Article 12 of the Constitution of India. Now sd far as Article 12 of the Constitution of India is concerned. it reads as under:-"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".

( 2 ) NOW an effort is made to show that respondent no. 1 would come within the words other authorities as contemplated by Article 12 of the Constitution of India. For that purpose the learned advocate Shri J. J. Yagnik for the petitioner submitted that 65% of the share capital of respondent no. 1 is contributed by the State of Gujarat. It is further stated that respondent no. 1 is working as an Agent of the State of Gujarat for the purpose of purchasing cotton and respondent no. 1 is helping the agriculturists who are mainly cotton growers and therefore the objects of the State are undertaken by respondent no. 1 and Respondent no. 1 for that purpose receives assistance from the State of Gujarat and Government of India and therefore in any case it is an instrumentality of an agency of the State and therefore it is covered by the words other authori ties as stated in Article 12 of the Constitution of India. It is further submitted that three Directors are appointed by the Govt. of Gujarat on the Board of Directors of respondent no. 1 and Ministry of Agriculture is supervising the affairs of respondent no. 1. My attention is drawn to a case of Ajay Hasia etc. v. Khalid Mujib Sehravardi and others etc. reported in A. I. R. 1981 Supreme Court at page 487. The relevant paragraph is 9 which is reproduced whereunder:-" 9 The tests for determining as to when a corporation can be said to be an instrumentally or agency of Government may now be culled out from the judgment in the International Airport Authoritys case (AIR 1979 SC 1628 ). These tests are not con clusive or clinching but they are merely indicative indicia which have to be used with care and caution because while stressing the necessity of a wide meaning to be placed on the expression other authorities it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government with the sweep of the expression. A wide enlargement of the mean ing must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authoritys case as follows; (1) One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. (2) Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation it would afford some indication of the corpora tion being impregnated with governmental character. (3) It may also be relevant factor. . . . whether the corporation enjoys monopoly status which is the State conferred or State protected. (4) Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality. (5) If the funct









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