# M/S Manoj Petroleum & Anr v. Union of India & Ors

- **Citation:** (2025) 3 ILRA 763
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-03-04
- **Case number:** Writ C No. 8253 of 2022
- **Bench:** Shekhar B. Saraf, Vipin Chandra Dixit
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-manoj-petroleum-anr-v-union-of-india-ors-53235
- **Pages:** 16

## Headnote

764 INDIAN LAW REPORTS ALLAHABAD SERIES
Sri Arvind Kumar Goswami, Sri Anand Tiwari, Sri
Yash Padia

A. Civil Law - Constitution of India, 1950 -
Article 12 - State - To determine whether
an authority/body would fall under 'State'
within the meaning of Article 12 would
have to be determined on the cumulative
facts
of
financial,
functional,
and
administrative dominance and/or control
of the Government upon such a body. If
such control is factually found, then the
body would be treated as 'State' within
Article 12. (Para 17)

B. Civil Law - Constitution of India, 1950 -
Article, 226 - writ of mandamus - Public
duty - Scope of issue of a writ of
mandamus is basically limited to an
enforcement of the public duty. It is the
duty of the court to ascertain whether the
nature of the duty comes within the
peripheral
of
public
duty.
The
body/authority must be shown to owe
that duty or obligation to the public which
involves the public law element. A right
which purely originates from a private law
cannot be enforced taking aid of the writ
jurisdiction, irrespective of the fact that
such institution is discharging the public
duties and/or public functions. Individual
wrongs or breach of mutual contracts,
without having any public law element as
its integral part, cannot be rectified
through a writ petition under Article 226.
(Para 12)

C. Civil Law - Constitution of India,
1950 - Article 226 - Maintainability of
Writ Petition - Private Contractual
Dispute - Franchise Agreement - A writ
petition under Article 226 was filed by
a partnership firm (Petitioner No. 1)
engaged in the business of selling
petroleum products, challenging the
termination of a franchise agreement
by Nayara Energy Limited (Respondent
No. 3), a private company registered
under the Companies Act, 1956. The
franchise
agreement
had
been
executed
solely
for
commercial
purposes involving sale of petroleum
and diesel products. Upon inspection,
samples collected from the petitioner's
retail
outlet
failed
to
conform to
required
specifications,
leading
to
termination of the agreement. Held:
Dispute pertains purely to contractual
obligations
between
two
private
parties.
Relationship
between
the
petitioners and Respondent No. 3 is
governed by private law and not public
law. Although petroleum products are
regulated commodities, the respondent
company is not a State or public
authority
within
the
meaning
of
Article 12 of the Constitution, as it is
not created by statute nor subject to
pervasive financial or administrative
control of the Government. Unlike
public
sector
oil
companies

the
respondent
company
is
an
independent
private
entity.
Termination
of
the
franchise
agreement due to breach of contract
terms does not involve any element of
public
duty.
Accordingly,
no
writ
would lie against Respondent No. 3,
and the writ petition was held to be
not maintainable. (Paras 20-23)

Dismissed. (E-5)

## Text

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3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
763
such view of the fact, this Court
does not find any error committed by the
Prescribed Authority in deciding Issue
No.1.

35. So far as Issue No.2 is
concerned, the Prescribed Authority has
recorded a categorical finding that no
dispute had been raised about the Members
of the Society, accordingly, it returned a
finding
that
all
the
persons
who
participated in the election are the valid
Members of Society. The finding on Issue
No.2 is also a finding of fact and does not
call for any interference by this Court under
Article 226 of the Constitution of India.

36. So far as Issue No.3 is
concerned, the Prescribed Authority has
recorded a categorical finding that the
record reveals that the quorum was
complete for convening the meeting for
taking a decision for holding the election. It
further held that all the Members of the
Society had been given prior notice of 15
days before holding the election, and 40
members
out
of
51
members
had
participated in the election. The finding
returned by the Prescribed Authority on
Issue
No.3
is
based
upon
proper
appreciation of evidence and material on
record.

37. Now, so far as the contention
of the learned counsel for the petitioner that
the Prescribed Authority has erred in law in
entering the dispute with respect to
subsequent election as he was referred the
dispute of the election of 2006 is
concerned, this Court does not find any
substance in the said argument inasmuch as
the Prescribed Authority after recording a
categorical finding that the election of the
respondent dated 05.03.2006 is legal and in
accordance with law has held that the
subsequent election of the Committee of
Management has also been held in
accordance with law. Therefore, this Court
finds that the Prescribed Authority has not
travelled beyond the reference inasmuch he
has categorically recorded a finding about
the election of 2006, and in such view of
the fact, the judgment of this Court relied
upon by the learned counsel for the
petitioner of this Court in 2007 (3) AWC
3066 (All) Mehandi Hasan and Ors. Vs.
State of U.P. and Ors. is not applicable in
the facts of the present case.

38. Since this Court has held above
that the Prescribed Authority has not
committed any illegality in recording the
finding on the issues framed by this Court
in
the
judgement
dated
03.05.2012,
therefore, this Court is of the view that the
writ petition lacks merit and deserves to be
dismissed.

39. Consequently, the writ petition
is dismissed with no order as to costs.
----------
(2025) 3 ILRA 763
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.03.2025

BEFORE

THE HON'BLE SHEKHAR B. SARAF, J.
THE HON'BLE VIPIN CHANDRA DIXIT, J.

Writ C No. 8253 of 2022

M/S Manoj Petroleum & Anr. ...Petitioners
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioners:
Sri Manish Gupta, Sri Punit Kumar Upadhyay, Sri
Arun Kumar Gupta (Sr. Adv.)

Counsel for the Respondents:
764 INDIAN LAW REPORTS ALLAHABAD SERIES
Sri Arvind Kumar Goswami, Sri Anand Tiwari, Sri
Yash Padia

A. Civil Law - Constitution of India, 1950 -
Article 12 - State - To determine whether
an authority/body would fall under 'State'
within the meaning of Article 12 would
have to be determined on the cumulative
facts
of
financial,
functional,
and
administrative dominance and/or control
of the Government upon such a body. If
such control is factually found, then the
body would be treated as 'State' within
Article 12. (Para 17)

B. Civil Law - Constitution of India, 1950 -
Article, 226 - writ of mandamus - Public
duty - Scope of issue of a writ of
mandamus is basically limited to an
enforcement of the public duty. It is the
duty of the court to ascertain whether the
nature of the duty comes within the
peripheral
of
public
duty.
The
body/authority must be shown to owe
that duty or obligation to the public which
involves the public law element. A right
which purely originates from a private law
cannot be enforced taking aid of the writ
jurisdiction, irrespective of the fact that
such institution is discharging the public
duties and/or public functions. Individual
wrongs or breach of mutual contracts,
without having any public law element as
its integral part, cannot be rectified
through a writ petition under Article 226.
(Para 12)

C. Civil Law - Constitution of India,
1950 - Article 226 - Maintainability of
Writ Petition - Private Contractual
Dispute - Franchise Agreement - A writ
petition under Article 226 was filed by
a partnership firm (Petitioner No. 1)
engaged in the business of selling
petroleum products, challenging the
termination of a franchise agreement
by Nayara Energy Limited (Respondent
No. 3), a private company registered
under the Companies Act, 1956. The
franchise
agreement
had
been
executed
solely
for
commercial
purposes involving sale of petroleum
and diesel products. Upon inspection,
samples collected from the petitioner's
retail
outlet
failed
to
conform to
required
specifications,
leading
to
termination of the agreement. Held:
Dispute pertains purely to contractual
obligations
between
two
private
parties.
Relationship
between
the
petitioners and Respondent No. 3 is
governed by private law and not public
law. Although petroleum products are
regulated commodities, the respondent
company is not a State or public
authority
within
the
meaning
of
Article 12 of the Constitution, as it is
not created by statute nor subject to
pervasive financial or administrative
control of the Government. Unlike
public
sector
oil
companies

the
respondent
company
is
an
independent
private
entity.
Termination
of
the
franchise
agreement due to breach of contract
terms does not involve any element of
public
duty.
Accordingly,
no
writ
would lie against Respondent No. 3,
and the writ petition was held to be
not maintainable. (Paras 20-23)

Dismissed. (E-5)

(Delivered by Hon'ble Shekhar B. Saraf, J.)

1. This is a writ petition under Article
226 of the Constitution of India wherein the
petitioners have prayed for a writ of
certiorari quashing the termination order
dated December 28, 2021 passed by Nayara
Energy Limited (hereinafter referred to as
'respondent no.3') based on the Lab
Testing Report dated August 21, 2021.
Petitioners have further prayed for a writ of
mandamus commanding the respondents
no.1 and 2 to make enquiry on the
complaint of the petitioners dated January
31, 2022 and reminder dated March 4,
2022.

FACTS
3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
765
2. Factual matrix giving rise to the
instant writ petition is delineated below:

a. Petitioner no.1 is a
partnership firm, registered via
partnership deed dated October 2,
2018
between
Smt.
Sangeeta
Pathak (one of the partners of the
partnership firm) and Smt. Sonam
Singhal (hereinafter referred to as
'petitioner no.2'), created for the
purpose of carrying on business of
sale of petroleum products (oil),
grease, distilled water among other
products.
b. Nayara Energy Limited,
a company registered under the
Companies Act, 1956, originally
known as Essar Oil Limited, has
acquired
authorization
from
Ministry of Petroleum and Natural
Gas,
Government
of
India
(hereinafter
referred
to
as
'respondent no.1') to distribute
franchise for sale and purchase of
essential
commodities
like
petroleum and diesel products to
private individuals/firms such as
the petitioner no.1.
c. Petitioner no.1 made an
application for retail outlets of
petroleum and diesel products and
consequently
respondent
no.3
issued letter of appointment dated
November 5, 2019 to the petitioner
no.1 for sale of Motor Speed Petrol
and High Speed Diesel lubes at a
retail outlet.
d. In pursuance of aforesaid
letter of appointment, a franchise
agreement dated January 6, 2020
was executed between petitioner
no.1 and respondent no.3 for the
supply of Petrol and High-Speed
Diesel lubes to the retail outlet of
petitioner no.1, situated at Khasra
No.232 Village Narsaina, Tehsil
Sayana,
District
Bulandshahar,
Uttar Pradesh.
e. On August 18, 2021,
officials of respondent no.3 made a
visit to the said retail outlet of
petitioner
no.1
for
conducting
inspection
and
collection
of
samples of products from the retail
outlet.
The
samples
of
such
products were sent to Bharat
Petroleum
Corporation
Limited
(hereinafter referred to as 'BPCL'),
Quality
Assurance
Laboratory,
Bijwasan, New Delhi for further
examination on August 18, 2021.
Out of the drawn samples, BPCL
prepared a report dated August 21,
2021 wherein several anomalies
were pointed out in the same and it
was communicated to respondent
no.3 that the sent samples has
failed
to
meet
the
required
specifications.
f. On the basis of the
aforesaid test report, the respondent
no.3 issued a show cause notice
dated August 26, 2021 to the
petitioner no.1 directing it to
explain the same within fifteen
days of the receipt of the notice as
to why the franchise agreement
dated January 6, 2020 should not
be terminated on account of various
abnormalities
found
in
the
aforesaid report that tantamounted
to violation of the terms and
conditions
of
the
franchise
agreement dated January 6, 2020.
g.
The
petitioner
no.1
replied in detail to the aforesaid
show cause notice on September 9,
2021 wherein it has been stated that
in the sample of products drawn
766 INDIAN LAW REPORTS ALLAHABAD SERIES
from the outlet amongst which
there were two major anomalies (a)
discrepancy in delivery of petrol as
well as diesel by nozzle regarding
which a complaint was made to the
visiting officer of the respondent
company on August 6, 2021 which
was
never
redressed
by
the
respondent company and (b) the
collected samples were unendorsed
with seal numbers hence it created
a doubt on the veracity of the test
report as the test report may not
have been prepared for the samples
drawn from the petitioners' outlet.
However,
the
respondent
no.3
found
the
answers
to
be
unsatisfactory
and
accordingly
terminated the aforesaid franchise
agreement,
vide
order
dated
December 28, 2021.
h.
Aggrieved
by
the
termination, the petitioner no.1 had
approached the Central Vigilance
Commission (hereinafter referred
to as the 'CVC') on January 31,
2022 making a complaint against
respondent no.3 for misusing its
powers and illegally and arbitrarily
terminating
the
franchise
agreement dated January 6, 2020
executed between the petitioner
no.1 and respondent no.3.
i. Since no response was
received
from
the
CVC,
the
petitioner no.1 sent a reminder
dated March 4, 2022 to the
respondent no.1 for redressal of
their grievances placed before the
CVC.

j. On account of inaction
from the side of the aforesaid
authorities, the petitioner no.1 has
approached this court seeking the
aforementioned reliefs as prayed in
this petition.

ISSUE

3. At the very outset, a preliminary
objection has been raised by the learned
counsel appearing on behalf of the
respondent
no.3
with
regard
to
maintainability of the present writ petition.
He contends that the main dispute in the
present writ petition is between the
petitioner no.1 and respondent no.3 and the
same should not be adjudicated by this
Court in its extraordinary writ jurisdiction
on the ground that the respondent no.3 is
not 'State' as per Article 12 of the
Constitution of India. In light of the
preliminary objection raised, we are of the
view that the same should be dealt by us at
the first instance before addressing the
matter on merits.

CONTENTIONS
OF
THE
PETITIONERS

4. Sri Arun Kumar Gupta, Senior
Advocate, appearing on behalf of the
petitioners
has
made
the
following
submissions with regard to maintainability
of the writ petition:

A. Ministry of Petroleum
and Natural Gas, Government of
India,
appoints
agents
like
Hindustan Petroleum Corporation
Limited (hereinafter referred to as
the
'HPCL'),
Indian
Oil
Corporation Limited (hereinafter
referred to as the 'IOCL') which
includes other agencies such as
respondent no.3 by giving them
authority for the sale of essential
commodities, such as, petroleum
products as the same is prohibited
3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
767
to be sold in the open market.
Therefore, respondent no.3 being
the
'extended
hand'
of
the
respondent no.1 comes under the
aegis of Central Government and is
ultimately discharging functions in
public
interest
on
behalf
of
respondent no.1. Hence, respondent
no.3 comes within the meaning of
'State' under Article 12 of the
Constitution of India.
B. Respondent no. 3 is an
'instrumentality of the State'. The
word 'instrumentality' has been
defined in Black's Law dictionary
(7th Edition) as, "a means or
agency through which a function of
another entity is accomplished,
such as a branch of governing
body" and 'agency' means, "a
fiduciary relationship created by
express or implied contract or by
law, in which one party (the agent)
may act on behalf of another party
(the principal) and bind that other
party
by
words
or
actions".
Respondent no.3, as an authorized
agent distributes franchise of retail
outlets for the sale of petroleum
products
to
private
individuals/company on behalf of
respondent no.1 through which the
functions
of
the
State
is
accomplished, and therefore, it is
an instrumentality and agency of
the 'State'.
C. Under entries 52 and 53
in List 1 of the seventh schedule to
the Constitution of India, the
authority to control the Industries
has been vested in the Central
Government.
Therefore,
the
Parliament
has
enacted
the
Petroleum Act, 1934 to regulate the
Petroleum Industry in the country.
From a conjoint reading of both the
entries 52 and 53, it is established
that
Constitution
has
chosen
Central Government, not only to
regulate but also take over the
control of the Petroleum Industry.
Petroleum Products are classified
as essential commodities and are
dangerously
inflammable,
and
accordingly
no
private
individuals/company can sell or
store or transport the petroleum
products except as permitted by
license issued under the Petroleum
Act, 1934. It is also submitted that
power of search of the premises of
corporations like the petitioner no.1
is made by the officers appointed
by the Central Government as per
Section 26 of the Petroleum Act,
1934
and
power
of
inspection/sampling are carried on
as per Section 14 of the same
legislation. Therefore, respondent
no.3 is functioning under the
control of the Central Government,
making it amenable to the writ
jurisdiction under Article 226 of the
Constitution of India.

D. Nature of work of
respondent no.3 is at parity with
that of other oil companies like
HPCL, BPCL and IOCL working
on behalf of respondent no.1 to
distribute franchise of retail outlets
for the sale of petroleum and allied
products
and
the
other
oil
companies fall under the definition
of 'State' under Article 12 of the
Constitution of India. Therefore,
respondent no.3 is also a 'State' as
per Article 12 of the Constitution of
India, making it amenable to writ
jurisdiction.
768 INDIAN LAW REPORTS ALLAHABAD SERIES
E.
To
buttress
the
arguments, reliance has placed
upon the judgment of the Apex
Court in Ajay Hasia v. Khalid
Mujib Sehravardi reported in
(1981) 1 SCC 722 wherein six key
tests were formulated to determine
whether a corporation may be said
to be an instrumentality or agency
of the Government. It is submitted
that the tests are not a rigid set of
principles such that if a body falls
within any of them, it must exhypothesi be considered to be
'State', within the meaning of
Article 12 of the Constitution of
India. The fifth test as emphasised
from the aforementioned judgment
is as follows:

"5. If the functions
of the corporation are of
public
importance
and
closely
related
to
governmental functions, it
would be a relevant factor
in
classifying
the
corporation
as
an
instrumentality or agency
of Government."

The respondent no.3, by the
of sale of petroleum and allied
products, was executing functions
of public importance, as only the
Central Government has the power
to deal with the Petroleum Industry.
Falling under one of the tests as
laid down in Ajay Hasia (supra),
patently makes the respondent no.3
an instrumentality or agency of the
Government.
F.
To
substantiate
the
arguments, further reliance has
been placed on Pradeep Kumar
Vishwas v. Indian Institute of
Chemical Biology and others
reported in (2002) 5 SCC 111
wherein initially the definition of
'State' was treated as exhaustive
and confined to the authorities or
thus which could be read as
'Ejusdem
Generis'
with
the
authorities
mentioned
in
the
definition of Article 12 of the
Constitution of India. At a later
stage, definition of 'State' came to
be established with reference to
remedies available against it. Thus,
a
statutory
corporation
with
regulation
framed
by
such
corporation pursuant to statutory
powers was considered as 'State'
for the reason that the public duty
was limited to those which were
created by the statute.
G. Another aspect of the
matter is that alternative remedy is
not an absolute bar to invoke writ
jurisdiction, hence writ in the
present facts of the case is
maintainable. For this, reliance has
been placed upon a judgment of the
Apex Court in Ram and Shyam
Company v. State of Haryana
reported in (1985) 3 SCC 267.

CONTENTIONS
OF
THE
RESPONDENTS

5. Learned counsel appearing on
behalf of respondents, challenging the
maintainability of the writ petition has
made the following submissions:

A. It is admitted by the
petitioner that the respondent no.3
is an authorized agent of the
respondent no.1, for retail sale of
petroleum products. Unlike the
3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
769
other petroleum corporations like
IOCL, BPCL and HPCL, that are,
operating in the same domain, the
administrative and financial control
of
the
respondent
no.3
is
completely
independent
and
Central Government has no control
over the management or finances of
the respondent no. 3. Hence, the
respondent no.3 does not come
within the ambit of the definition of
'State' as per Article 12 of the
Constitution of India.
B. Respondent no.3, a
company incorporated under the
Companies Act, 1956 is a privately
owned
and
controlled
entity,
authorized to distribute franchise of
retail sale of petroleum products by
Ministry of Petroleum and Natural
Gas. Consequently, a franchise
agreement dated January 6, 2020
was executed between petitioner
no.1 and respondent no.3 for the
said
purpose.
The
franchise
agreement is clearly and essentially
a private contract executed by and
between
private
parties
untrammelled
by
Government
control.
C. As respondent no.3 is a
profit making organization and the
said business of sale of petroleum
products is not undertaken with the
objective of any public welfare but
is solely undertaken for the purpose
of profit and development of the
respondent no.3 itself, hence it is
only
discharging
duties
and
following
directions
from
the
respondent no.1, in pursuance of
agreement executed between them.
The same can never be treated as
discharging functions in public
interest.
D. Being a private limited
company, there is no element of
public
law
involved
in
the
contractual relationship between
petitioner no.1 and respondent
no.3.
E.
Petitioners
have
an
alternative and efficacious remedy,
and without availing the said
remedy have approached this Court
under writ jurisdiction which is a
travesty of law. Clause 20 of the
Franchise Agreement provides for
grievance redressal establishment
and Clause 21 of the same contains
an arbitration clause that is integral
to the agreement between the
parties.

ANALYSIS

6. The limited question for
determination before this court is whether the
respondents no.3, that is, Nayara Energy
Limited falls within the definition of 'State'
as enunciated and explicated by the Hon'ble
Supreme Court within the ambit of Article 12
of the Constitution of India.

7. Article 12 of the Constitution of
India defines the term 'State' for the
purpose of enforcing fundamental rights.
Fundamental
rights
are
primarily
enforceable against the 'State' and its
instrumentalities
rather
than
private
individuals or bodies. Writ petitions under
Article 226 are only maintainable against
bodies/persons
covered
within
the
terminology
of
Article
12
of
the
Constitution of India.

8. The said definition for the term
'State' is provided under Article 12 of the
Constitution of India, which is quoted
below:
770 INDIAN LAW REPORTS ALLAHABAD SERIES
"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."

9. Upon perusal of the above
definition, it is clear that term 'State'
includes:

(i) The Government and
Parliament of India,
(ii) The Government and
Legislature of each State,
(iii) All local authorities,
(iv)
Other
authorities
within the territory of India or
under
the
control
of
the
Government of India.

10.

The
expression
local
authorities is defined in Section 3(31) of
the General Clauses Act, 1897:- ' "local
authority"
shall
mean
a
municipal
committee, district board, body of port
Commissioners or other authority legally
entitled to, or entrusted by the Government
with, the control or management of a
municipal or local fund.' However the term
'other authorities' has not been defined in
any
legislation
and
therefore
the
interpretation of the above term has caused
a good deal of difficulty, and judicial
opinion on its definition has undergone
several changes over the years.

11.

While
considering
this
question, it is necessary to bear in mind that
an authority falling within the expression
'other authorities' by reason of its inclusion
within the definition of 'State' under Article
12 would be amenable to writ jurisdiction.

12. In the celebrated case of Ajay
Hasia
(supra),
the
five-judge
Constitutional Bench of the Supreme Court
headed by Justice Y.V. Chandrachud, C.J.
considered R.D. Shetty v. International
Airport Authority of India reported in
(1979) 3 SCC 489 and laid down the six
factors test to determine whether an entity
is an instrumentality or agency of the
Government. The tests are as follows:

(i) If the entire share capital
of the body is held by the
Government;
(ii)
If
the
financial
assistance given by the government
is so significant that it meets almost
the entire expenditure of the body;
(iii) If the body enjoys a
monopoly
status
conferred
or
protected by the State;
(iv) If there is deep and
pervasive State control;
(v) If the functions of the
body are of public importance
and
closely
related
to
governmental functions;
(vi)
Transfer
of
a
Government department to the
corporation.
(Emphasis supplied)

13. The relevant paragraphs of
judgment in Ajay Hasia (supra) have been
delineated
below
for
a
better
understanding:

"9.
The
tests
for
determining
as
to
when
a
corporation can be said to be an
instrumentality
or
agency
of
Government may now be culled out
3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
771
from
the
judgment
in
the
International
Airport
Authority
case [(1979) 3 SCC 489]. These
tests
are
not
conclusive
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 within the sweep of
the expression. A wide enlargement
of the meaning must be tempered
by a wise limitation. We may
summarise
the
relevant
tests
gathered from the decision in the
International
Airport
Authority
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. (SCC p. 507, para 14)
(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
corporation
being
impregnated
with Governmental character. (SCC
p. 508, para 15)
(3) It may also be a
relevant factor ... whether the
corporation enjoys monopoly status
which is State conferred or State
protected. (SCC p. 508, para 15)
(4) Existence of deep and
pervasive State control may afford
an indication that the corporation
is a State agency or instrumentality.
(SCC p. 508, para 15)
(5) If the functions of the
corporation
are
of
public
importance and closely related to
Governmental functions, it would
be a relevant factor in classifying
the
corporation
as
an
instrumentality
or
agency
of
Government. (SCC p. 509, para 16)
(6)
'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 instrumentality or agency
of Government." (SCC p. 510, para
18)
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 International Airport
Authority case, be an "authority"
and, therefore, 'State' within the
meaning of the expression in
Article 12."
***
"11. We may point out that
it is immaterial for this purpose
whether the corporation is created
by a statute or under a statute. The
test
is
whether
it
is
an
instrumentality or agency of the
Government and not as to how it is
created. The inquiry has to be not
as to how the juristic person is
born but why it has been brought
into existence. The corporation
may be a statutory corporation
created by a statute or it may be a
government
Company
or
a
Company
formed
under
the
Companies Act, 1956 or it may be a
772 INDIAN LAW REPORTS ALLAHABAD SERIES
society
registered
under
the
Societies. Registration Act, 1860 or
any other similar statute. Whatever
be its genetical origin, it would be
an "authority" within the meaning
of
Article
12
if
it
is
an
instrumentality or agency of the
Government and that would have to
be decided on a proper assessment
of the facts in the light of the
relevant factors. The concept of
instrumentality or agency of the
Government is not limited to a
corporation created by a statute but
is equally applicable to a Company
or society and in a given case it
would have to be decided, on a
consideration
of
the
relevant
factors, whether the Company or
society is an instrumentality or
agency of the Government so as to
come within the meaning of the
expression "authority" in Article
12."

14. In Pradeep Kumar Biswas
(supra), the Hon'ble Supreme Court further
crystallized the test wherein it has been
held that to constitute a body as 'State',
Government must have a pervasive control
over the particular body as has been earlier
formulated in R.D. Shetty (supra) and
Ajay
Hasia
(supra).
The
relevant
paragraph of the judgment is provided
below:

"40.
The
picture
that
ultimately emerges is that the tests
formulated in Ajay Hasia [Ajay
Hasia v. Khalid Mujib Sehravardi,
(1981) 1 SCC 722 : 1981 SCC
(L&S) 258] 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."

15. Subsequently, the Hon'ble
Supreme Court in Federal Bank Ltd. v.
Sagar Thomas reported in (2003) 10 SCC
733 has further elaborated on the issue of
maintainability of a writ petition against
private companies registered under the
Companies Act, 1956 carrying on any trade
and business to earn livelihood and to make
profit out of such activity and stated that
they are not discharging public duties. The
relevant paragraph of the judgement is
delineated below:

"27.
Such
private
companies would normally not be
amenable to the writ jurisdiction
under
Article
226
of
the
Constitution.
But
in
certain
circumstances a writ may issue to
such private bodies or persons as
there may be statutes which need to
be complied with by all concerned
including the private companies.
For example, there are certain
legislations
like
the
Industrial
Disputes Act, the Minimum Wages
Act, the Factories Act or for
maintaining proper environment,
3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
773
say the Air (Prevention and Control
of Pollution) Act, 1981 or the Water
(Prevention
and
Control
of
Pollution) Act, 1974 etc. or statutes
of the like nature which fasten
certain duties and responsibilities
statutorily upon such private bodies
which they are bound to comply
with. If they violate such a statutory
provision a writ would certainly be
issued for compliance with those
provisions. For instance, if a
private employer dispenses with the
service of its employee in violation
of the provisions contained under
the Industrial Disputes Act, in
innumerable cases the High Court
interfered and has issued the writ
to the private bodies and the
companies in that regard. But the
difficulty in issuing a writ may
arise where there may not be any
non-compliance with or violation of
any statutory provision by the
private body. In that event a writ
may not be issued at all. Other
remedies, as may be available, may
have to be resorted to."

16. In St. Mary's Education
Society v. Rajendra Prasad Bhargava,
reported in (2023) 4 SCC 498, the Supreme
Court has held that though the Educational
Society is affiliated to Central Board of
Secondary Education, that would not bring
it within the purview of 'State'. The
relevant paragraphs of the above judgement
are quoted herein below:

"66. Merely because a writ
petition can be maintained against
the private individuals discharging
the public duties and/or public
functions, the same should not be
entertained if the enforcement is
sought to be secured under the
realm of a private law. It would not
be safe to say that the moment the
private institution is amenable to
writ jurisdiction then every dispute
concerning
the
said
private
institution is amenable to writ
jurisdiction. It largely depends
upon the nature of the dispute and
the enforcement of the right by an
individual against such institution.
The right which purely originates
from a private law cannot be
enforced taking aid of the writ
jurisdiction irrespective of the fact
that such institution is discharging
the public duties and/or public
functions.
The
scope
of
the
mandamus is basically limited to
an enforcement of the public duty
and, therefore, it is an ardent duty
of the court to find out whether the
nature of the duty comes within the
peripheral of the public duty. There
must be a public law element in any
action."
***

"75.1. An
application
under
Article
226
of
the
Constitution
is
maintainable
against a person or a body
discharging public duties or public
functions. The public duty cast may
be either statutory or otherwise and
where it is otherwise, the body or
the person must be shown to owe
that duty or obligation to the public
involving the public law element.
Similarly,
for
ascertaining
the
discharge of public function, it
must be established that the body
or the person was seeking to
achieve the same for the collective
benefit of the public or a section of
774 INDIAN LAW REPORTS ALLAHABAD SERIES
it and the authority to do so must
be accepted by the public.
75.2. Even if it be assumed
that an educational institution is
imparting public duty, the act
complained of must have a direct
nexus with the discharge of public
duty. It is indisputably a public law
action which confers a right upon
the
aggrieved
to
invoke
the
extraordinary
writ
jurisdiction
under Article 226 for a prerogative
writ. Individual wrongs or breach
of mutual contracts without having
any public element as its integral
part cannot be rectified through a
writ petition under Article 226.
Wherever Courts have intervened
in their exercise of jurisdiction
under Article 226, either the
service conditions were regulated
by the statutory provisions or the
employer had the status of "State"
within the expansive definition
under Article 12 or it was found
that the action complained of has
public law element.
75.3. 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
the powers of the High Court
conferred by Article 226 in respect
of matter relating to service where
they are not governed or controlled
by the 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,
the
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.
75.4. Even if it be perceived
that imparting education by private
unaided school is a public duty
within the expanded expression of
the term, an employee of a nonteaching staff engaged by the
school for the purpose of its
administration
or
internal
management is only an agency
created by it. It is immaterial
whether "A" or "B" is employed
by school to discharge that duty. In
any case, the terms of employment
of contract between a school and
non-teaching
staff
cannot
and
should not be construed to be an
inseparable part of the obligation
to
impart
education.
This
is
particularly in respect to the
disciplinary proceedings that may
be initiated against a particular
employee. It is only where the
removal of an employee of nonteaching staff is regulated by some
statutory provisions, its violation by
the employer in contravention of
law may be interfered with by the
Court. But such interference will be
3 All. M/S Manoj Petroleum & Anr. Vs. Union of India & Ors.
775
on the ground of breach of law and
not on the basis of interference in
discharge of public duty.
75.5. From the pleadings in
the original writ petition, it is
apparent that no element of any
public law is agitated or otherwise
made out. In other words, the
action challenged has no public
element and writ of mandamus
cannot be issued as the action was
essentially of a private character."

CONCLUSION

17. Upon a perusal of the umpteen
judgements cited by both the parties and
sifting through the ratios laid down by the
Supreme Court in the various judgements,
one may extract the principles that would
apply to make a company amenable to writ
jurisdiction.
The
said
principles
are
summarised below:

A. To determine whether an
authority/body would fall under
'State' within the meaning of
Article 12 would have to be
determined on the cumulative facts
of
financial,
functional
and
administrative dominance and/or
control of the Government upon
such a body. If such control is
factually found, then the body
would be treated as 'State' within
Article 12.
B. Simpliciter because a
private institution is carrying out a
public duty or function and may
come within the definition of
'State' under Article 12 of the
Constitution of India making it
amenable to writ jurisdiction would
not by itself make every dispute
concerning the said institution
amenable to writ jurisdiction. The
same would largely depend upon
the nature of the dispute and the
enforcement of the right by an
individual
against
such
an
institution. A right which purely
originates from a private law
cannot be enforced taking aid of the
writ jurisdiction irrespective of the
fact
that
such
institution
is
discharging the public duties and/or
public functions.
C. The scope of issue of a
writ of mandamus is basically
limited to an enforcement of the
public duty and therefore it is the
ardent duty of the court to ascertain
whether the nature of the duty
comes within the peripheral of
public duty. The public duty cast
may
be
either
statutory
or
otherwise and where it is otherwise,
the body/authority must be shown
to owe that the duty or obligation to
the public involves the public law
element.
D. It has to be kept in mind
that individual wrongs or breach of
mutual contracts without having
any public law element as its
integral part cannot be rectified
through a writ petition under
Article 226.

18. The primary contention raised
by the learned Senior Advocate appearing
for the petitioners is that the present writ
petition is maintainable as the respondent
no.3 being the extended hand of respondent
no.1, is involved in the sale of petroleum
products which is an essential commodity
and only the Parliament has an absolute
right to deal with such commodities and no
private individual/company as per entries
52 and 53 in List 1 of the seventh schedule
776 INDIAN LAW REPORTS ALLAHABAD SERIES
to the Constitution of India has the power
to
deal
with
the
same.
Therefore,
respondent no.3 is an instrumentality or
agency of the state. The entries 52 and 53
in List 1 of seventh schedule to the
Constitution of India are quoted below:

"52. Industries, the control
of which by the Union is declared
by Parliament by law to be
expedient in the public interest."
"53.
Regulation
and
development
of
oilfields
and
mineral oil resources; petroleum
and petroleum products; other
liquids and substances declared by
Parliament
by
law
to
be
dangerously inflammable."

19. A bird's eye view of the
present writ petition simplifies the issue at
hand. The present dispute arises out of the
termination of the franchise agreement that
had been entered between the parties.
Before carrying out the said termination,
the respondent no.3 had issued a show
cause notice to the petitioner on August 26,
2021 and the same was replied to by the
petitioner no.1 on September 9, 2021. After
considering the said reply the respondent
no.3 terminated the franchise agreement as
per the provisions in the said franchise
agreement. The reasons for cancellation of
the said franchise agreement have been
provided in Clauses 4 and 5 of the
termination letter dated December 28, 2021
The said paragraphs of the termination
order are delineated below:

"4. Under the Franchise
Agreement you are obliged to carry
out the business as per the terms
and conditions contained therein
and in compliance of the applicable
laws
and
policies
including
Marketing
procedure
discipline
code. The state of affairs at the RO
at the time of inspection and failure
of samples establishes that you
have
procured
product
from
sources other than the Company. It
also proves that you were operating
the RO in violation of applicable
provisions in this regards.
5. The aforesaid acts and
omissions are flagrant violation of
the
Franchise
Agreement
and
applicable legal provisions.