le^r-7 IN THE HON'BLE HIGH COURT OF CHHATTISGARH AT BILASPUR W.P.(S)No. ^CS Of 2010 PETITIONER RESPONDENTS ,YVV.^Q^' ^-^y ^y -:.^: Subhash Chandrakar, S/o. Shri Nand Kumar Chandrakar, aged about 32 years, R/o. Panchsheel Club, Ward No.19, Mahasamund, Tahsil and District Mahasamund, (Chhattisgarh) Pin 493 445 Versus /' 1) Shriram Transport Finance Co. Ltd. its head office at 101- 105, Shiv Chamber, 1st Floor, B-kling Sector-11, C.B.D. Belapur, Navi Mumbai-400614 (Maharashtra) through Executive Director -Mr.Umesh Revenkar/ Managing Director Mr.R.Sridhar ^' :2) Shriram Transport Finance Co. Ltd. (Pune Office) at D- Wing, 1st Floor, Sagar Deep Compex, 233 near Deserve Classes, Sudushiv Pet. Pune (Marashtra) 411 030 through National Product Head - Mr. Ravi Limaye - y' :3) Shriram Transport Finance Co. Ltd. (Bhopal Office) at 4th Floor, Amrit Building, Near Hotel G.K.Palace, M.P. Nagpur Zone-2, Bhopal (Madhya Pradesh) through Regional Product Head - Mr. Anup Sinha :4) Shriram Transport Finance Co. Ltd., (Regional Office),Plot lNo.316, 1st ploor, M.G. House, Ravinath Tagore Road, Civil Line, Nagapur (Maharashtra) 440 001 through Vice President- Central Region Mr. Bhupender Singh Padda \ :5) Shriram Transport Finance Co. Ltd. (C.G. State Office),2nd Floor, Crystal Tower, Opp Minnochha Petrol Pump, Telibandha, Raipur (Chhattisgarh) through State Business Unit Head - Mr. Abhijit Chakarborty WRITPETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA ::^':2;._'^ '^S5-i-";li% y A^ mGH COURT OF CHHATTISGARH AT BILASPUR WRIT PETITION (S) No. 408 of2010 PETITIONER Subhash Chandrakar. RESPONDENTS VERSUS Shriram Transport Finance Co. Ltd & Others. 6'-. Post for pronouncement ofjudgment & orderon /....day ofMareh, 2011. Sd/- Satish K. Agnihotri Judge .<.*.:":"--& a '"Sa.SaEd t I*^ s ^^./ HIGH COURT OF CHHATTISGARH AT BILASPUR WRIT PETITION (S) No. 408 of2010 PETITIONER RESPONDENTS Subhash Chandrakar. VERSUS Shriram Transport Finance Co. Ltd & Others. WRIT_PETITIQNUNDERARTICLE, 226 OF THE CONSTITUTION SB: Hpn'ble Shn Satish K. Agnihotrj, J. Present: Shri H.B.Agrawal, Senior Advocate with Smt. Meera Jaiswal, Advocate for the petitioner. Shri Pradeep Saxena, Advocate for the respondents. ^ ll^. (Delivered on .../.... day of March, 2011) 1. Challenge in this petition is to the order dated 08.12.2010 (Annexure P/4) passed by the Assistant Vice President - HR & Admin. ofthe respondent-company, on the ground that the transfer of the petitioner from Raipur to Kothagudam Branch was not bonafide and the same being colourable exercise of power and leads to reduction in salary. 2. On query, asto whefher a writ is maintainable against a private finance company when the respondent-company is not a state, its instmmentalities or under control of the State or the Govemment oflndia, underArticle 12 ofthe Constitution oflndia. 3. Shri Agrawal, learned senior counsel appearing with Smt. Meera Jaiswal, counsel for the petitioner would submit that the "-company is engaged in business of financing of /Wk. ^.tiSSas^ j ^^ss^^^' 6. commercial vehicles and registered under the provisions of the Companies Act, 1956 (for short, 'the Act, 1956'). They are having shares in market and they are creation of the statute as the respondents are registered under the Act, 1956. Thus, they are amenable to writ jurisdiction in the light of the Supreme Court in Som Prakash Rekhi v. Union of India & Another . It was further contended that the office is registered under the Reserve Bank of India, Department of non-Banking Supervision, Chennai (Annexure-A). It was next contended that 51% shares of the company are held by the Govemment of India, however, no document in support ofthis contention has been filed. On the other hand, ShriSaxena, leamed counsel appearing for the respondents would submit that the respondent-company is registered under the provisions of the Act, 1956 having its registered office m the State of Tamil Nadu. The respondent- company is a private company and it is not an instrumentality of the State or its agency. The respondent-company is not fmanced by the Govemment or the State. It does not enjoy any monopoly status and there is no state control. It is further not a department as pleaded by the petitioner. Having heard leamed counsel appearing for the parties, perused th pleadings and documents appended thereto. On the basis of documents appended to the pleadings, it appears that the respondent-company is a private company and registered under the provisions ofthe Act,1956. The company cannot be held s-^ AIR 1981 SC 212 ^ "(... \% as a statutory company on the ground that the same is registered under the provisions ofthe Act, 1956. 7. The criteria for declaring a company as State agency or instrumentality, a Bench of Hon'ble three Judges of the Supreme Court, in Som Prakash Rekhi, by majority, held as under: 28. Control by Govemment ofthe corporation is writ large in theAct and in the factum of being a govemment company. Morever, here, Section 7 gives to the govemment company mentioned in it a statutory recognition, a legislative sanction and a status above a mere govemment company. If the entity is no more than a company under the Company Law or society under the law relating to registered societies or co-operative societies you cannot call it an authority. 39.....The following factors have been emphasised in that ruling as telling, though not clinching. These characteristics convert a statutory corporation, a govemment company, a cooperative society and other registered society or body into a State and they are not confined to statutory corporations alone. We may decoct the tests for ready reference: 1. "One thing is clear that if the entire share capital of the corporation is held by Govemment, it would go a long way towards indicating that the corporation is an instmmentality or agency ofGovemment." 2. Existence of "deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality." 3. "It may also be a relevant factor. whether the corporation enjoys monopoly status which is the State conferred or State protected." 4. "If the functions of the corporation are of public importance and closely related to govemmental functions, it would be a relevant factor in classifying the corporation as an instmmentality or agency ofGovemment." 5. "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an jnstrumentality or agency ofGovemment." A Constitution Bench of the Supreme Court, in AJay Hasia & Others v. Khalid Mujib Sehravardi & Others , "9. The tests for determining as to when a corporation can be said to be a instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority case. These tests are not conclusive or clincliing, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wid? meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far asto bring in every autonomous body which has some nexus with the Government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may siu-nmarise the relevant tests gathered from the decision in the Intemational Airport Authority case as follows: (1) One thing is clear that ifthe entire share capital of the corporation is held by Govemment it would go a long way tovvards indicating that the corporation is an instrumentality or agency of Government. (2) Where the financial assistance ofthe State is so much as to meet almost entire expenditure ofthe corporation, it would afford some indication of the corporation being impregnated with governmental character. (3) It may also be a 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 indicationthat the Corporation is a State agency or instmmentality. (5) Ifthe functions ofthe corporation of public importance aiid closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency ofGovemment. (6) "Specifically, if a department of Government is transferred to a corporation, it »*•. 9. would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of Govemment. If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the Intemational Airport Authority case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12. A Bench of Hon'ble seven Judges of the Supreme Court, in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology & Others , by majority, held as under: 10. "40. The picture that ultimately emerges is that the tests foniiulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be whether in the light of the cumulative facts as established, the body is fmancially, functionally and administratively dominated by or under the control of the Government. Such control must be paiticular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State" A two Judges Bench ofthe Supreme Court, in Federal Bank Ltd. v. Sagar Thomas & Others , held as under: ' (2002)53cc 111 4 (2003) 10 SCC 733 "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) Authority; (iii) a statutory body; (iv) an instmmentality or agency ofthe 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 "L^-\ 11. obligation of public nature (viii) a person or a body under liability to discharge any function under any Statute, to compel it to perform such a statutory function. 33. For the discussion held above, in our view, a private company carrying on baaking business as a Scheduled bank, cannot be termed as an institution or 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 enforee 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 baaking. 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 puts any such obligation upon it which may be enforced through issue of a writ under Article 226 ofthe Constitution. Present is a 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. That being the position, the appeal deserves to be allowed." Another Constitution Bench of the Supreme Court, in Zee Telefilms Ltd. & Another v. Union oflndia & Others , by majority, held as under: 22. Above is the ratio decidendi laid down by a seven Judge Bench of this Court which is binding on this Bench. The facts of the case in hand will have to be tested on the touch stone of the parameters laid down in Pradeep Kumar Biswas case. Before doing so it would be worthwhile once again to recapitulate what are the guidelines laid down in Pradeep ^ Kumar Biswas case for a body to be a State underArticle 12. They are :- (1) Principles laid down in Ajciy Hasia are not a rigid set ofprinciples so that if a body falls within any one of them it must ex hypothesi, be considered to be a State within the meaning ofArticle 12. (2) The Question in each case will have to be considered on the basis of facts available as to whether in the light of the cumulative facts as established, the body is financially, functionally, administratively dominated, by or under the control of the Govemment. (3) Such control must be particular to the body in question and must be pervasive. (4) Mere regulatory control whether under statute or othenvise would not serve to make a body a State. 23. The facts established in this case show the following:- 1. Board is not created by a statute. 2. No part ofthe share capital ofthe Board is held by the Govemment. 3. Practically no financial assistance is given by the Govenunent to meet the whole or entire expenditure ofthe Board. 4. The Board does enjoy a monopoly status in the field of cricket but such status is not State conferred or State protected. 5. There is no existehce of a deep and pervasive State control. The control if any is only regulatory in nature as applicable to other similar bodies. This control is not specifically exercised under any special statute applicable to the Board. All functions of the Board are not public functions nor are they closely related to govemmental functions. 6. The Board is not created by transfer ofa GovemiTient owned corporation. It is an autonomous body." Ultimately, it vvas held that the Boai-d of Control for Cricket in India, cannot be held to be a State for the purpose ofArticle 12. 12. Reliance of leamed counsel for the petitioner on a decision of the __Simrenie_ Court in S.U.M.Prasad v. Andhra Pradesh State ••-^:.'^^"' Federation of Cooperative Spinni.ng Mills Limited & Others , wherein the Federation was held to be an instrumentality of the State, is not applicable to the facls ofthe case. 13. In the case on hand, applying the well scttled principles of law to the facts ofthe case, the following conclusion einerges: (i) That tlie responclents-company is not a statutory company as it is not createil under any statute. Neither The State Govemment nor the Govemment of India has any control over the financing of the company. and the company is also not financed or owned by the State. (ii) The respondents-company does not have any monopoly status as in the field of financing companies, there are several private companies which are in the business of financing eommercial vehicles. (iii) The State has neither deep nor pervasive control over tiie respondents-company, except that the respondents-company is regulated by the terms and conditions of financing companies as prescribed by the Reserve Bank oflndia. (iv) Tke respondents-company is a fully autonomous body. 14. In the identical facts of the case, tlie Supreme Court, in Federal Bank Ltd , held that "private company carn'ing on banking biisiness as a scheduled bank, cannot be termed as an institulion or company carrying on any statulory or pr.blic ditty." Even the service conditions of the employees are not govemed by any statutory provisions, as pleaded by the respondents. (2009) 16 SCCj20_, -rf^ 'a^\^- £!L- 15. For the reasons mentioned hereinabove, the respondents-company is not a "State" as defined under Article 12 ofthe Constitution of India. Thus, a writ petition under Article 226 ofthe Constitution of India, against the respondents-company is not maintainable. 16. Resultantly, the writ petition is dismissed. 17. There shall be no order asto costs. Sd/- Satish K. Agnihutri Judge AlTllt