Bhola Nath vs Union of India (UOI) and Others

Shiv Kumar Sharma, J.—The appellants'' prayer seeking directions to the respondent Company not to act upon his offer of voluntary retirement was declined by the learned Single Judge on the ground that the writ petition was not maintainable since the respondent was purely a Private Ltd. Company. Challenging the order of learned Single Judge the appellant has filed the instant appeal.

During the pendency of appeal the appellant has filed an application for taking additional document on record. The respondent Company submitted reply to the application.

We have heard learned Counsel for the parties.

In order to show that the respondent Company is the instrumentality of the State and amenable under Article 12 of the Constitution, the appellant has placed on record the question raised in Rajya Sabha about the respondent Company on August 19, 1985. We deem it appropriate to refer the document Annexure 19 filed by the appellant along with the application. The document reads thus:

RAJYA SABHA

UNSTARRED QUESTION NO. 2324

TO BE ANSWERED ON MONDAY THE 19TH AUGUST 1985/28TH

MANAGING DIRECTOR OF GERMAN REMEDIES 2324. SHRI

SHNKARAO NARANRAODESMUKH

Will the Minister of Industry and Company Affairs be pleased to state.

(a) Whether it is a fact that extention regarding further stay of Managing Director of German Remedies has not been agreed to by Government.

(b) if so, what are the main reasons for the same (c) Whether it is a fact that another German National has been permitted by Government for employment in the Company.

If so, his name qualifications, nature of employment, salary and the terms of the contract;

(e) What is the jurisdiction of such approval when a number of highly qualified experienced Indian are available and

(f) What is government''s policy in this regard?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF INDUSTRY AND

COMPANY AFFAIRS SHRI AR1F MOHAMMAD KHAN:

(a) Yes Sir

(b) The reappointment of Mr. H.R. Voss as Managing Director of the company was not approved as the Government was not satisfied . u/s 269(3) of the Companies Act, 1956. Mr. Voss was not fit and proper person to be appointed as such and that his appointment would be against public interest. This conclusion was reached after it came to Government notice that the company had violated during Mr. Voass''s tenure, certain conditions of an industrial licence granted to the company for the manufacture formulations based on Oxyfedrine Hydrochoride and provision for Drug price control order 1979 and for not supplying correct information about import of Theo-phylline used by the company for production of Hydroxy Ethyl Theo-phylline HE,

(c) Government has not received any application for employment of another German national in German Remedies.

(d)

&

(e) Question does not arise in view of (c) above.

(f) Approvals to the appointments of expatriate directors are given keeping in mind various factors like foreign equity terms of collaboration agreements, nature of concerned industry. Article of Association of the Company, need for technical know- how etc.

In regard to appointments of technicians, expatriates are considered only when it is essential and relevant technical skills are not adequately available in India.

Further, compliance with the provision of FERA, 1972 is also ensured in their case.

The aforequoted document appear to us as relevant for deciding the controversy poised in the appeal for our determination. We therefore allow the application and take the document 19 on record.

It is contended on behalf of the appellant that the respondent Company is a State within the purview of Article 12 since it is controlled by twelve ministries of Central Government and its Managing Director has been appointed with the approval of Central Government as is evident from the document Annexure-19.

Seven Judge Bench of the Hon''ble Supreme Court in Pradeep Kumar Biswas and Others Vs. Indian Institute of Chemical Biology and Others, 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 of the Constitution-

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 hypthesi, be considered to be a State within the meaning of Article 12.

(i) 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 Government,

(ii) Such control must be particular to the body in question and must be pervasive,

(iii) Mere regulatory control whether under statute or otherwise would not serve to make a body a State.

Having tested the facts of the case on hand on the touchstone of the parameters laid down in Pradeep Kumar Biswas''s case (supra) we notice as under-

(i) The respondent company is not created by the statute.

(ii) Practically no financial assistance is given by the Government to meet the expenditure of the company.

(iii) There is no existence of a deep and pervasive State control. The-control if any is only regulatory in nature and nothing more.

We thus find that the respondent company is not a State within the purview of Article 12.

Their Lordships of the Supreme Court in Zee Telefilms Ltd. and Another Vs. Union of India (UOI) and Others, indicated that "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 lone 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.

That takes us to the other submission of learned Senior Counsel that even if the respondent company is not a State, the mandamus could be issued since injustice was caused to the appellant.

In Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others Vs. V.R. Rudani and Others, Bench of Hon''ble Two Judges of Supreme Court indicated that the judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into water- tight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available to reach injustice wherever it is found. Technicalities should not come in the way of granting relief under Article 226.

We have also scanned the material on record in order to adjudge as to whether the remedy of mandamus was available to the appellant. We notice that contention of the appellant that he withdrew his request of voluntary retirement on October 6, 1998 is disputed by the respondent company. It is stated by the company in the written statement that request dated October 6, 1998 of the appellant had already been accepted by the Managing Director of the Company on October 8, itself taking a sympathetic view of the matter by granting him Rs, 476251- additional exgratia in addition to VR''s amount of Rs. 723751- and three months basic pay of Rs. 28,9501-. Disputed questions of facts can not be adjudicated under Article 226 of the Constitution and learned Single Judge in our opinion rightly advised the appellant to approach the civil court.

For these reasons we find no merit in the instant appeal and the same stands dismissed without any order as to costs.