IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 6.4.2010 CORAM: THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.Nos.6747 to 6752 of 2010 N.Jhanarthanan .. Petitioner in WP:6747/2010 D.M.Krishan .. Petitioner in WP:6748/2010 V.Sampath Kumar .. Petitioner in WP:6749/2010 D.Kumaravelu .. Petitioner in WP:6750/2010 B.Mahalakshmi .. Petitioner in WP:6751/2010 Muthulakshmi .. Petitioner in WP:6752/2010 Vs. 1. Khadi Gramodyog Sangh rep. by its Secretary 844, Anna Salai Chennai – 600 002. 2. Khadi Gramodyog Sangh Employees Superannuation Fund, rep. by its Chairman and Trustee 844, Anna Salai Chennai – 600 002. 3. Khadi and Village Industries Commission rep. by its Director 326, Avvai Shanmugam Salai Gopalapuram, Chennai – 86. 4. The Registrar of Societies District Registrar (Central) Chamiers Road Chennai – 600 018. .. Respondents in all the petitions Prayer: Petitions under Article 226 of the Constitution of India for issue of a writ of Certiorarified Mandamus to call for the records relating to the decision of the first respondent regarding stoppage https://hcservices.ecourts.gov.in/hcservices/ of payment of pension passed by its resolution dated 5.10.2003 and attendant relieving orders dated 4.5.2007, 22.5.2008, 1.2.2008, 10.12.2007, 24.4.2006 and 20.4.2005 respectively, to quash the same and to consequently direct the first respondent to pay pension to the petitioners in W.P.Nos.6747 to 6751 of 2010 from the date of their retirement and to the petitioner in W.P.No.6752 of 2010 from the date of her entitlement, viz., 22.4.2006, and also issue direction to the fourth respondent to appoint a Special Officer for managing the affairs of the first respondent society and also hold meeting in respect of the above issue, i.e., stoppage of pension to the retired employees of the 1st respondent society specifically convened for such purpose in accordance with law. For Petitioners : Mr.K.Shakespeare For Respondents : Mr.N.Senthil Kumar Government Advocate for 4th respondent ORDER All these writ petitions are filed by the employees of the first respondent/ Khadi Gramodyog Sangh. 2. In the first writ petition (W.P.No.6747 of 2010), the petitioner was working as a Chief Accountant and he challenges the resolution of the first respondent dated 5.10.2003 denying him pension and the order dated 4.5.2007 of the first respondent stating that he will be retiring from the services on 10.6.2007, on attaining the age of superannuation. The petitioner claimed that there was no scope for retiring him from service since the said retirement is contrary to the bye laws of the society. Therefore, he wanted the order to be set aside. 3. In the second writ petition (W.P.No.6748 of 2010), the petitioner was working as a Sales Assistant and he challenges the resolution of the first respondent denying him pension and also the order dated 22.5.2008 superannuating him from service. 3. In the third writ petition (W.P.No.6749 of 2010), the petitioner was working as a Poly Counter Incharge and he made a similar challenge to the resolution denying him pension and the order of superannuation dated 1.2.2008. 4. In the fourth writ petition (W.P.No.6750 of 2010), the petitioner was working as a Sales Assistant and he also made a similar challenge to the resolution denying him pension and the order of superannuation dated 10.12.2007. 5. In the fifth writ petition (W.P.No.6751 of 2010), the petitioner was working as an Assistant Godown Incharge and she also made a similar challenge to the resolution denying her pension and the order of superannuation dated 24.4.2006. https://hcservices.ecourts.gov.in/hcservices/ 6. In the sixth writ petition (W.P.No.6752 of 2010), the petitioner's late husband was working as a Chief Inspector and she also made a similar challenge to the resolution denying pension and the order of superannuation dated 20.4.2005. 7. Excepting for the first petitioner and the husband of the last petitioner, the other writ petitioners are workmen covered by various Labour enactments and it is not clear as to why they did not challenge the said orders passed by the respondents before the appropriate forum. Even in respect of the first and last writ petitioners, there is no reason stated as to why they did not come forward to challenge the order before the appropriate forum questioning the action of the respondents. 8. When this matter came up for admission, this Court asked the counsel for the petitioners as to how the writ petitions are maintainable against the first respondent in which the petitioners in W.P.Nos.6747 to 6751 of 2010 and the husband of the petitioner in W.P.No.6752 of 2010 were employed? 9. Mr.K.Shakespeare, learned counsel for the petitioners contended that though the first respondent is registered under the Societies Registration Act with Registration No.54 of 1969 and is deemed to have registered under the Tamil Nadu Societies Registration Act, 1975, the activities of the said society are controlled by the Khadi and Village Industries Commission established by the Khadi and Village Industries Commission Act, 1956 (for short, "the KVIC Act"). He also submitted that there is a substantial subsidy given by the Central Government through the Khadi and Village Industries Commission. 10. Initially, the learned counsel for the petitioner wanted to contend that the first respondent is also an authority coming within the meaning of Article 12 of the Constitution of India in view of the pervasive control which the Khadi and Village Industries Commission and the Central Government have over the society. He also alternatively contended that it will be an "other authority" amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India. 11. He submitted that the administrative control over the affairs of the society vest with the Khadi and Village Industries Commission and there is a deep and pervasive control over the society by the Commission. He further submitted that the budget prepared by the Society is subject to audit by the Khadi and Village Industries Commission and the Director of the Khadi and Village Industries Commission attends the Annual General Body Meetings of the society. Though trading activities are carried on, that is also subject to the further control by Khadi and Village Industries Commission. He also referred to certain circulars issued by the Khadi and Village Industries Commission to show the nature and control the Khadi and Village Industries Commission has over the society. https://hcservices.ecourts.gov.in/hcservices/ 12. It is brought to the notice that the first respondent/Society came into existence on 13.9.1969 and at that time, the said organization was run directly by the Khadi and Village Industries Commission, which was a statutory body established under the KVIC Act. However, these units were de-centralised on a policy decision taken by the Khadi and Village Industries Commission, and the first respondent/Bhavan was handed over to the workers to run as a society on and from 14.9.1969 and thus it was also registered under the Societies Registration Act. 13. Though it is claimed that the Khadi and Village Industries Commission provides a working capital of Rs.145 Lakhs up to 31.3.2003 and the society had also availed finance from various bodies. There is nothing on record to show that it is controlled by the Central Government. On the contrary, it is a society run by the members who were its workers once and they are acting in terms of the bye laws framed under the Societies Registration Act. 14. A perusal of the KVIC Act, 1956 will show that the powers of the Khadi and Village Industries Commission under Section 15(2) of the KVIC Act includes planning and organizing training of persons employed or desirous of seeking employment in Khadi and Village Industries. 15. The term "village industry" is defined under Section 2(h) of the KVIC Act as under: "Section 2(h): "Village Industry" means - (i) any industry located in a rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of an artisan or a worker does not exceed one lakh rupees or such other sum as may, by notification in the Official Gazette, be specified from time to time by the Central Government; Provided that any industry specified in the Schedule and located in an area other than a rural area and recognized as a village industry at any time before the commencement of the Khadi and Village Industries Commission (Amendment) Act, 1987 shall, notwithstanding anything contained in the sub-clause, continue to be a village industry under this Act; Provided further that in the case of any industry located in a hilly area, the provisions of this sub- clause shall have effect as if for the words "one lakh rupees", the words "one lakh and fifty thousand rupees" had been substituted. (ii) any other non-manufacturing unit established for the sole purpose of promoting, maintaining, assisting, servicing (including mother units) or managing any village industry." https://hcservices.ecourts.gov.in/hcservices/ 16. The counsel for the petitioner placed heavy reliance upon the judgment of the Supreme Court in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, [2002] 5 SCC 111. The ratio of Pradeep Kumar Biswas case came to be considered once again by the Constitution Bench of the Supreme Court in Zee Telefilms Ltd. v. Union of India, [2005] 4 SCC 649. In paragraphs [21] and [22] of the said judgment, the parameters of Pradeep Kumar Biswas case were laid down as under: "21. Thereafter the larger Bench of this Court in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, [2002] 5 SCC 111 after discussing the various case laws laid down the following parameters for gauging whether a particular body could be termed as State for the purpose of Article 12 : "40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia v. Khalid Mujib Sehravardi, [1981] 1 SCC 722 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 financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular 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." 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's case (supra). Before doing so it would be worthwhile once again to recapitulate what are the guidelines laid down in Pradeep Kumar Biswas's case (supra) for a body to be a State under Article 12. They are: (1) Principles laid down 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. (2) The Question in each case will have to be considered on the bases of facts available as to https://hcservices.ecourts.gov.in/hcservices/ whether in the light of the cumulative facts as established, the body is financially, functionally, administratively dominated, by or under the control of the Government. (3) Such control must be particular to the body in question and must be pervasive. (4) Mere regulatory control whether under statute or otherwise would not serve to make a body a State." 17. After referring to Pradeep Kumar Biswas case and the parameters laid down therein, the Supreme Court negatived the contention that the Board of Control for Cricket in India will come within the definition of Article 12 of the Constitution or that it is amenable to the writ jurisdiction under Article 226 of the Constitution of India. 18. Though the Supreme Court in paragraph [32] of Zee Telefilms Ltd. case referred to the Andi Mukta Sadguru Shree Muktajee Pandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani and Ors., [1989] 2 SCC 691 and held that in certain circumstances even private body is subject to writ jurisdiction, viz., in cases where the private body exercises a public function, the Supreme Court also struck a note of caution in paragraph [35], which is as follows: "35. In conclusion, it should be noted that there can be no two views about the fact that the Constitution of this country is a living organism and it is the duty of Courts to interpret the same to fulfil the needs and aspirations of the people depending on the needs of the time. It is noticed earlier in this judgment that in Article 12 the term 'other authorities' was introduced at the time of framing of the Constitution with a limited objective of granting judicial review of actions of such authorities which are created under the Statute and which discharge State functions. However, because of the need of the day this Court in Rajasthan State Electricity Board Electricity Board v. Mohan lal, [1967] 3 SCR 377 and Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, [1975] 1 SCC 421 noticing the socio- economic policy of the country thought it fit to expand the definition of the term "other authorities" to include bodies other than statutory bodies. This development of law by judicial interpretation culminated in the judgment of the 7-Judge Bench in the case of Pradeep Kumar Biswas (supra). It is to be noted that in the meantime the socio-economic policy of the Government of India has changed [See Balco Employees' Union (Regd.) v. Union of India and Ors., [2002] 2 SCC 333] and the State is today distancing itself from commercial activities and concentrating on governance rather than https://hcservices.ecourts.gov.in/hcservices/ on business. Therefore, the situation prevailing at the time of Sukhdev Singh (supra) is not in existence at least for the time being, hence, there seems to be no need to further expand the scope of "other authorities" in Article 12 by judicial interpretation at least for the time being. It should also be borne in mind that as noticed above, in a democracy there is a dividing line between a State enterprise and a non-State enterprise, which is distinct and the judiciary should not be an instrument to erase the said dividing line unless, of course, the circumstances of the day require it to do so." (emphasis supplied) 19. The counsel for the petitioner places further reliance upon several judgments of this Court (both Full Bench as well as Division Bench). It is unnecessary to refer to those judgments, as they were given before the Supreme Court's decision in Zee Telefilms Ltd. case (cited supra). Otherwise, in those cases the nature of the institution in question was specifically considered for the purpose of arriving at a conclusion about the maintainability of such writ petitions. 20. In essence, the counsel for the petitioners wanted the parameters adopted by the minority opinion of S.B.Sinha.J. in Zee Telefilms Ltd. case to be followed and not the majority binding precedent rendered therein. The tests applied by the Supreme Court for the purpose of arriving that a particular body is a "State" within the meaning of Article 12 or that it was amenable to writ jurisdiction are not available in the present case. No such materials are produced to show that there was any pervasive or deep control over the first respondent/society. 21. On the other hand, the first respondent/Society itself is registered under the Societies Registration Act and it is a membership society. Merely because subsidies are received or that one of the Director of Khadi and Village Industries Commission attends its AGM, or that the affairs of the first respondent/society are subject to audit by the Khadi and Village Industries Commission, that by themselves will not make it any more a public body or that a public duty was vested by any law made by the Parliament. 22. A Division Bench of the Patna High Court vide its decision in Khadi Gramodyog Sangh, Muzaffarpur v. State of Bihar, 1977 LAB. I.C. 466 considered the application of the Industrial Disputes Act to the Bihar Khadi Gramodyog Sangh. In the course of that exercise, they dealt with the powers of the Commission and the nature of the units run by them. In paragraph [19] it was held as follows: "19. .... It will be seen from the provision of the Khadi Act noticed above that the Commission is a body corporate acting on its own behalf as specifically provided in Section 22 of the Khadi Act. Neither can https://hcservices.ecourts.gov.in/hcservices/ the Khadi commission be brought within the sweep of the phrase "under the authority of" the Central Government nor much less the Sangh, whose activities may be presumed to be supervised by the commission, can be so embraced within that phrase." 23. The view taken by the Patna High Court was subsequently confirmed by the Supreme Court vide its decision in Gopalji Jha Shastri v. State of Bihar, [1983] 2 LLJ 22 : [1983] 2 SCC 44. 24. Further, the nature of the activities of the first respondent are akin to a co-operative society registered under the Tamil Nadu Co-operative Societies Act. In dealing with the maintainability of a writ petition against a co-operative society, a Larger Bench of this Court in K.Marappan v. The Deputy Registrar of Co-operative Societies, Namakkal, 2006 (4) CTC 689 laid down the parameters to the followed while considering the maintainability of a writ petition against a co-operative society. This Court rejected the contention that merely because a co-operative society is manned by a Special Officer, who is a Government Servant; its funds are audited by the Co-operative audit; and that substantial funding by the State in the form of subsidy and finance for its Banking activities by themselves will not make it either a "State" within the meaning of Article 12 of the Constitution of India or that it was an "other authority" coming under Article 226 of the Constitution of India. 25. The nature of activities carried on by the first respondent society cannot be said to be different from any other trading organizations which are carrying on similar activities. On the contrary, by a conscious policy decision taken by the Khadi and Village Industries Commission, the Units run directly by them were handed over to the workers themselves to be run as an independent society with nominal control by the Khadi and Village Industries Commission. Therefore, this Court is not inclined to accept that the first respondent is amenable to the writ jurisdiction of this Court and that the impugned orders are liable to be interfered with by this Court. 26. Apart from these facts, the petitioners have not explained as to how it took several years for them to challenge the impugned orders. Moreover, except the first writ petitioner and the husband of the last writ petitioner, the other writ petitioners are admittedly workmen covered by various Labour enactments. It is not clear as to why they did not challenge the impugned orders of the respondents before a proper forum. In the light of the above, this Court it not inclined to entertain the writ petitions. All the writ petitions will stand dismissed. No costs. Consequently, M.P.Nos.1 to 3 of 2010 in W.P.No.6747 of 2010, M.P.Nos.1 to 3 of 2010 in W.P.No.6748 of 2010, M.P.Nos.1 to 3 of 2010 in W.P.No.6749 of 2010, M.P.Nos.1 to 3 of 2010 in W.P.No.6750 of 2010, https://hcservices.ecourts.gov.in/hcservices/ M.P.Nos.1 to 3 of 2010 in W.P.No.6751 of 2010 and M.P.Nos.1 to 3 of 2010 in W.P.No.6752 of 2010 are closed. Sd/ Assistant Registrar /True Copy/ Sub Assistant Registrar sasi To: The Registrar of Societies District Registrar (Central) Chamiers Road Chennai – 600 018. + 6 Ccs to Mr.Puren Khemka, Advocate SR Nos.22658 to 22663 W.P.Nos.6747 to 6752 of 2010 AR(CO) PKS 13/04/2010 https://hcservices.ecourts.gov.in/hcservices/