# Uttam Chand Rawat v. State of U.P. & Ors

- **Citation:** (2021) 10 ILRA 411
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2021-10-04
- **Case number:** Writ A No. 9814 of 2020
- **Bench:** Munishwar Nath Bhandari, A.C.J. Prakash Padia, Sanjay Kumar Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/uttam-chand-rawat-v-state-of-u-p-ors-46341
- **Pages:** 21

## Headnote

A. Constitution of India - Article 12 -
State or its authority - Definition - Twin
test
-
The
writ
petition
would
be
maintainable against an authority or
person only when it is discharging public
duty/public
function
and
the
matter
pertains to public law - It would be
maintainable against the authority or the
person which may be a private body, if it
discharges public function/public duty,
which is otherwise primary function of the
State - Apex Court verdict laid down in KK
Saksena's case followed. (Para 14, 17 and
20)
412 INDIAN LAW REPORTS ALLAHABAD SERIES
B. Constitution of India - Article 226 -
Writ - Maintainability - Authority against
whom writ can be maintained - Held, a
writ petition would be maintainable
against (i) the Government; (ii) an
authority; (iii) a statutory body; (iv) an
instrumentality or agency of the 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 obligation of public nature; and
(viii) a person or a body under liability to
discharge any function under any statute,
to compel it to perform such a statutory
function. (Para 18)
C. Constitution of India - Article 226 -
Writ - Maintainability - Claim arise out of
private contract - Held, if the writ
petition refers to contractual obligation
inter se between the parties, it would not
be maintainable - The writ petition
would not be maintainable against an
authority
or
person
even
if
it
is
discharging public function/public duty,
if the controversy pertains to the private
law such as a dispute arising out of
contract or under the common law. (Para
22)
Larger bench decided the issues referred
to it by writ court. (E-1)
Cases relied on :-

## Text

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10 All. Uttam Chand Rawat Vs. State of U.P. & Ors.
411

21. In that event, the employer would
not
be
required
to
initiate
regular
departmental proceedings under the Rules
for the reason that the verification of the
certificate by the competent authority
would bind the disciplinary authority. In
such a case, the delinquent employee can
be removed from service upon a show
cause notice. The disciplinary authority
would have no occasion to return a finding
in a proceedings to a charge. The very
foundation on which the service of the
delinquent employee rests upon being
demolished, the consequence would be
automatic removal from service.

22. In the instant case, the principle is
not applicable. The impugned order rests
upon a sole evidence i.e. medical report,
the report, per se, would not be sufficient to
terminate the service of the petitioners
outright, without returning a further finding
that the disability of the petitioners was
irreversible
and
not
liable
of
improvement/cured. Such a finding could
have been returned in a regular disciplinary
proceedings conducted under the rules, on a
specific charge and either side leading
evidence.
Admittedly,
the
procedure
mandated under the 1973 Rules, read with,
Rules, 1999, was not followed before
imposing major penalty that would in the
given facts vitiate the impugned order
terminating the services of the petitioner.

23. In view thereof, the writ petition
is allowed. The impugned order dated 23
June 2021, passed by third respondentDistrict
Basic
Education
Officer,
Sonbhadra, is set aside and quashed.
Petitioner of the leading petition and
connected petitions shall be reinstated on
their respective posts. Petitioners shall be
entitled to arrears of salary and salary on
month to month thereafter.

24. It is clarified that the disposal of
the writ petitions would not preclude the
respondents
from
verifying
the
genuineness/authenticity
of
the
P.H.
certificates as to whether it is a forged or
manufactured document.

25. No cost.
----------
(2021)10ILR A411
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 04.10.2021

BEFORE

THE HON'BLE MUNISHWAR NATH
BHANDARI, A.C.J.
THE HON'BLE PRAKASH PADIA, J.
THE HON'BLE SANJAY KUMAR SINGH, J.

Writ A No. 9814 of 2020

Uttam Chand Rawat ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Shyam Shanker Pandey, Sri Krishna
Mohan Singh, Sri Avneesh Tripathi

Counsel for the Respondents:
C.S.C., A.S.G.I., Sri Dhananjay Awasthi,Sri
Rahul Sahai

A. Constitution of India - Article 12 -
State or its authority - Definition - Twin
test
-
The
writ
petition
would
be
maintainable against an authority or
person only when it is discharging public
duty/public
function
and
the
matter
pertains to public law - It would be
maintainable against the authority or the
person which may be a private body, if it
discharges public function/public duty,
which is otherwise primary function of the
State - Apex Court verdict laid down in KK
Saksena's case followed. (Para 14, 17 and
20)
412 INDIAN LAW REPORTS ALLAHABAD SERIES
B. Constitution of India - Article 226 -
Writ - Maintainability - Authority against
whom writ can be maintained - Held, a
writ petition would be maintainable
against (i) the Government; (ii) an
authority; (iii) a statutory body; (iv) an
instrumentality or agency of the 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 obligation of public nature; and
(viii) a person or a body under liability to
discharge any function under any statute,
to compel it to perform such a statutory
function. (Para 18)
C. Constitution of India - Article 226 -
Writ - Maintainability - Claim arise out of
private contract - Held, if the writ
petition refers to contractual obligation
inter se between the parties, it would not
be maintainable - The writ petition
would not be maintainable against an
authority
or
person
even
if
it
is
discharging public function/public duty,
if the controversy pertains to the private
law such as a dispute arising out of
contract or under the common law. (Para
22)
Larger bench decided the issues referred
to it by writ court. (E-1)
Cases relied on :-
1. M.K. Gandhi & ors. Vs Director of Education
(Secondary) U.P. & ors.; 2005 (3) ESC 2265
(Alld) (FB)
2. Committee of Management, Delhi Public
School & anr. Vs M.K. Gandhi & ors.; (2015) 17
SCC 353
3. Ramesh Ahluwalia Vs St.of Pun. & ors.;
(2012) 12 SCC 331
4. Lal Bahadur Gautam Vs St.of U.P. & ors.;
(2019) 6 SCC 441
5. Roychan Abraham Vs St. of U.P. & ors.;
(2019) SCC OnLine All 3935
6. Anjani Kumar Srivastava Vs St. of U.P. & ors.,
2017 (7) ADJ 112 (DB)
7. Ramakrishnan Mission & anr. Vs Kago Kunya
& ors.; (2019) 16 SCC 303
8. K.K. Saksena Vs International Commission on
Irrigation & Drainage & ors.; (2015) 4 SCC 670
9. Ajay Hasia & ors. Vs Khalid Mujib Sehravardi
& ors.; (1981) 1 SCC 722
10. Andi Mukta Sadguru Shree Muktajee Vandas
Swami Suvarna Jayanti Mahotsav Smarak Trust
Vs V.R. Rudani; (1989) 2 SCC 691
11. Binny Ltd. & anr. Vs Sadasivan & ors.,
(2005) 6 SCC 657
12. Federal Bank Ltd. Vs Sagar Thomas & ors.,
(2003) 10 SCC 333

(Delivered by Hon'ble Munishwar Nath
Bhandari, A.C.J.)

1. Learned Single Judge has referred
following questions to the Larger Bench
finding conflicting judgments on the issue :

"(i) Whether the element of public
function and public duty inherent in the
enterprise that an educational institution
undertakes,
conditions
of
service
of
teachers, whose functions are a sine qua
non to the discharge of that public function
or duty, can be regarded as governed by
the private law of contract and with no
remedy available under Article 226 of the
Constitution?

(ii) Whether the decision in
Rajesh Kumar Srivastava and others versus
State of U.P. and others, 2020 (2) AWC
1693 is in teeth of the holding of the Full
Bench in Roychan Abraham versus State of
U.P. and others, (2019) SCC OnLine All
3935?"

2. The questions have been referred
after detailed consideration of the earlier
judgments on the issue. The judgment in
the case of M.K. Gandhi and others versus
Director of Education (Secondary) U.P.
10 All. Uttam Chand Rawat Vs. State of U.P. & Ors.
413
and others, 2005 (3) ESC 2265 (Alld) (FB)
affirmed by the Apex Court in the case of
Committee of Management, Delhi Public
School and another versus M.K. Gandhi
and others, (2015) 17 SCC 353 has also
been considered.

3. Learned Single Judge has given
reference of the judgments of the Apex
Court in the cases of Ramesh Ahluwalia
versus State of Punjab and others, (2012)
12 SCC 331 and Lal Bahadur Gautam
versus State of U.P. and others, (2019) 6
SCC 441. It also noticed that the issue of
maintainability of the writ petition was
considered by the Larger Bench in the case
of Roychan Abraham versus State of U.P.
and others, (2019) SCC OnLine All 3935.
It was to revisit the view expressed by the
Full Bench in the case of M.K. Gandhi
(supra) and Division Bench in the case of
Anjani Kumar Srivastava versus State of
U.P. and others, 2017 (7) ADJ 112 (DB).
The Full Bench in the case of Roychan
Abraham (supra) answered the questions
as under:-

"64.
Question
(i):
Private
Institutions imparting education to students
from the age of six years onwards,
including higher education, perform public
duty primarily a State function, therefore
are amenable to judicial review of the High
Court under Article 226 of the Constitution
of India.

65. Question (ii): The broad
principle of law which has been formulated
in the judgement of the Full Bench in M.K.
Gandhi and Division Bench in Anjani Kr.
Srivastava is confined to the facts obtaining
therein and is not an authority on the
proposition of law that private educational
institutions do not render public function
and, therefore, are not amenable to judicial
review of the High Court. The judgements
do not require to be revisited."

4. Learned Single Judge found
judgment in the case of Rajesh Kumar
Srivastava (supra) to be in conflict with
other judgments. In the case of Rajesh
Kumar Srivastava (supra), learned Single
Judge held writ petition under Article 226
of the Constitution of India to be
maintainable against the authority or the
person discharging public duty only when
issue of public law is involved. The writ
petition would not be maintainable if claim
is arising out of a private contract between
the two parties. The aforesaid view was
taken to be in conflict with the earlier
judgment of this Court and, accordingly,
matter has been referred to the Larger
Bench.

5. The questions referred to the
Larger Bench is about maintainability of
the writ petition against the authority or the
person
discharging
public
duty/public
function which may not fall within the
definition of "State or its authority" under
Article 12 of the Constitution of India.

6. The issue aforesaid has been
considered by the Apex Court at length
recently in the case of Ramakrishnan
Mission and another versus Kago Kunya
and others, (2019) 16 SCC 303. In the said
case, the Apex Court has considered all the
earlier
judgment
on
the
issue.
The
judgment in the case supra was given after
considering the scope of Article 12 so as
Article 226 of the Constitution of India. It
is not only after analyzing the fact of the
case but the proposition of law evolved by
the Apex Court in the earlier judgments on
maintainability of the writ petition. For
maintainability of the writ petition, twin
test is to be satisfied. The first test is about
414 INDIAN LAW REPORTS ALLAHABAD SERIES
the public function/public duty by an
authority or a person and the second test is
about the challenge to the action falls in the
domain of public law. Accordingly, the
writ petition would not be maintainable
against the authority or the person referred
under Article 226 of the Constitution of
India merely for the reason of discharge of
public function/public duty unless an issue
of public law is involved.

7. The word "public law" has been
elaborately discussed by the Apex Court in
the
case
of
K.K.
Saksena
versus
International Commission on Irrigation
and Drainage and others, (2015) 4 SCC
670. It was held that private law remedies
would not be enforceable through the
extraordinary jurisdiction of the High
Court. Private law is a part of legal system
under the common law that involves
relationship between individuals such as
law of contract or torts. It was held that
even if writ petition is maintainable against
an authority or person, before issuing it,
Court needs to satisfy itself that the action
of the authority or the person is in the
domain of public law distinguished from
private
law.
The
contractual
and
commercial obligations are enforceable
only by ordinary civil action.

8. In view of the judgments in the
cases of K.K. Saksena (supra) and
Ramakrishnan Mission (supra), the issue
canvassed by learned Single Judge can be
answered but before that, we would like to
give reference of other judgments for
clarity because issue of maintainability of
the writ petition is coming time and again
before this Court and presently, two
judgments of the Larger Bench exist.

9. The issue of maintainability was
initially discussed by the Apex Court in the
case of Ajay Hasia and others versus
Khalid Mujib Sehravardi and others,
(1981) 1 SCC 722. It was mainly in
reference to Article 12 of the Constitution
of India. The issue of maintainability of the
writ petition against a private body not
falling under the definition of "State or its
authority"
under
Article
12
of
the
Constitution
of
India
needs
to
be
considered under Article 226 of the
Constitution of India. For ready reference,
Article 12 and 226 of the Constitution of
India are quoted hereunder :-

"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.

226. Power of High Courts to
issue certain writs. -

(1) Notwithstanding anything in
Article 32, every High Court shall have
powers, throughout the territories in
relation to which it exercise jurisdiction, to
issue to any person or authority, including
in appropriate cases, any Government,
within those territories directions, orders
or writs, including writs in the nature of
habeas corpus, mandamus, prohibitions,
quo warranto and certiorari, or any of
them, for the enforcement of any of the
rights conferred by Part III and for any
other purpose.

(2) The power conferred by
clause (1) to issue directions, orders or
writs to any Government, authority or
person may also be exercised by any High
Court exercising jurisdiction in relation to
10 All. Uttam Chand Rawat Vs. State of U.P. & Ors.
415
the territories within which the cause of
action, wholly or in part, arises for the
exercise of such power, notwithstanding
that the seat of such Government or
authority or the residence of such person is
not within those territories.

(3) Where any party against
whom an interim order, whether by way of
injunction or stay or in any other manner,
is made on, or in any proceedings relating
to, a petition under clause (1), without -

(a) furnishing to such party
copies of such petition and all documents in
support of the plea for such interim order;
and

(b)
giving
such
party
an
opportunity of being heard, makes an
application to the High Court for the
vacation of such order and furnishes a copy
of such application to the party in whose
favour such order has been made or the
counsel of such party, the High Court shall
dispose of the application within a period
of two weeks from the date on which it is
received or from the date on which the
copy of such application is so furnished,
whichever is later, or where the High Court
is closed on the last day of that period,
before the expiry of the next day afterwards
on which the High Court is open; and if the
application is not so disposed of, the
interim order shall, on the expiry of that
period, or, as the case may be, the expiry of
the aid next day, stand vacated.

(4) The power conferred on a
High Court by this article shall not be in
derogation of the power conferred on the
Supreme Court by clause (2) of Article 32."

10. The issue in reference of Article
12 and 226 of the Constitution of India was
considered by the Apex Court in the case of
Andi Mukta Sadguru Shree Muktajee
Vandas Swami Suvarna Jayanti Mahotsav
Smarak Trust v. V.R. Rudani, (1989) 2
SCC 691. It was a case where order of
termination of a teacher of a private aided
and affiliated college was challenged. The
Apex Court held writ petition to be
maintainable even against the private body
finding it to be discharging public duty. It
was after referring to the activity of
education by Andi Mukta Sadguru Shree
Muktajee Vandas Swami Suvarna Jayanti
Mahotsav Smarak Trust. The judgment
aforesaid was given in reference to Article
226 of the Constitution of India which
provides jurisdiction of the High Court to
issue order or writ against any person or
authority. According to the judgment in the
case supra, the writ petition is maintainable
against the private educational institution
discharging public duty/public function.

11. The issue of maintainability of the
writ petition was again considered by the
Apex Court in the case of Binny Ltd. and
another versus V. Sadasivan and others,
(2005) 6 SCC 657. It was held that writ of
mandamus or remedy under Article 226 of
the Constitution of India is a public law
remedy and can be exercised against a body
or
person
discharging
public
function/public duty. The word "public
function" was elaborately discussed to
define it. It was held that a body or person
would be performing public function when
it seeks to achieve collective benefit for the
public or section thereof. Relevant paras of
the said judgment are quoted hereunder:-

"9.
The
superior
court's
supervisory jurisdiction of judicial review
is invoked by an aggrieved party in myriad
cases. High Courts in India are empowered
under Article 226 of the Constitution to
416 INDIAN LAW REPORTS ALLAHABAD SERIES
exercise
judicial
review
to
correct
administrative decisions and under this
jurisdiction the High Court can issue to any
person or authority, any direction or order
or writs for enforcement of any of the rights
conferred by Part III or for any other
purpose. The jurisdiction conferred on the
High Court under Article 226 is very wide.
However, it is an accepted principle that
this is a public law remedy and it is
available against a body or person
performing a public law function. Before
considering the scope and ambit of public
law remedy in the light of certain English
decisions, it is worthwhile to remember the
words of Subba Rao, J. expressed in
relation to the powers conferred on the
High Court under Article 226 of the
Constitution in Dwarkanath v. ITO [(1965)
3 SCR 536 : AIR 1966 SC 81] (SCR, pp.
540 G-541 A):

"This article
is couched in
comprehensive phraseology and it ex facie
confers a wide power on the High Courts to
reach injustice wherever it is found. The
Constitution designedly used a wide
language in describing the nature of the
power, the purpose for which and the
person or authority against whom it can be
exercised. It can issue writs in the nature of
prerogative
writs
as
understood
in
England; but the scope of those writs also
is widened by the use of the expression
''nature', for the said expression does not
equate the writs that can be issued in India
with those in England, but only draws an
analogy from them. That apart, High
Courts can also issue directions, orders or
writs other than the prerogative writs. It
enables the High Court to mould the reliefs
to meet the peculiar and complicated
requirements of this country. Any attempt
to equate the scope of the power of the
High Court under Article 226 of the
Constitution with that of the English courts
to issue prerogative writs is to introduce
the unnecessary procedural restrictions
grown over the years in a comparatively
small country like England with a unitary
from of Government into a vast country like
India functioning under a federal structure.
Such a construction defeats the purpose of
the article itself."

10. The writ of mandamus lies to
secure the performance of a public or a
statutory duty. The prerogative remedy of
mandamus has long provided the normal
means of enforcing the performance of
public
duties
by
public
authorities.
Originally, the writ of mandamus was
merely an administrative order from the
Sovereign to subordinates. In England, in
early times, it was made generally
available through the Court of King's
Bench, when the Central Government had
little administrative machinery of its own.
Early decisions show that there was free
use of the writ for the enforcement of public
duties of all kinds, for instance against
inferior tribunals which refused to exercise
their jurisdiction or against municipal
corporations which did not duly hold
elections, meetings, and so forth. In modern
times, the mandamus is used to enforce
statutory duties of public authorities. The
courts always retained the discretion to
withhold the remedy where it would not be
in the interest of justice to grant it. It is also
to be noticed that the statutory duty
imposed on the public authorities may not
be of discretionary character. A distinction
had always been drawn between the public
duties enforceable by mandamus that are
statutory and duties arising merely from
contract.
Contractual
duties
are
enforceable as matters of private law by
ordinary contractual remedies such as
damages, injunction, specific performance
10 All. Uttam Chand Rawat Vs. State of U.P. & Ors.
417
and declaration. In the Administrative Law
(9th Edn.) by Sir William Wade and
Christopher Forsyth (Oxford University
Press) at p. 621, the following opinion is
expressed:

"A distinction which needs to be
clarified is that between public duties
enforceable by mandamus, which are
usually statutory, and duties arising merely
from contract. Contractual duties are
enforceable as matters of private law by the
ordinary contractual remedies, such as
damages, injunction, specific performance
and declaration. They are not enforceable
by mandamus, which in the first place is
confined to public duties and secondly is
not granted where there are other adequate
remedies. This difference is brought out by
the relief granted in cases of ultra vires. If
for example a minister or a licensing
authority acts contrary to the principles of
natural justice, certiorari and mandamus
are standard remedies. But if a trade union
disciplinary committee acts in the same
way, these remedies are inapplicable: the
rights of its members depend upon their
contract of membership, and are to be
protected by declaration and injunction,
which
accordingly
are
the
remedies
employed in such cases."

11. Judicial review is designed to
prevent the cases of abuse of power and
neglect of duty by public authorities.
However, under our Constitution, Article
226 is couched in such a way that a writ of
mandamus could be issued even against a
private authority. However, such private
authority must be discharging a public
function and the decision sought to be
corrected or enforced must be in discharge
of a public function. The role of the State
expanded enormously and attempts have
been made to create various agencies to
perform
the
governmental
functions.
Several corporations and companies have
also been formed by the Government to run
industries
and
to
carry
on
trading
activities. These have come to be known as
public sector undertakings. However, in the
interpretation given to Article 12 of the
Constitution, this Court took the view that
many of these companies and corporations
could come within the sweep of Article 12
of the Constitution. At the same time, there
are private bodies also which may be
discharging public functions. It is difficult
to draw a line between public functions and
private functions when they are being
discharged by a purely private authority. A
body is performing a "public function"
when it seeks to achieve some collective
benefit for the public or a section of the
public and is accepted by the public or that
section of the public as having authority to
do so. Bodies therefore exercise public
functions
when
they
intervene
or
participate in social or economic affairs in
the public interest. In a book on Judicial
Review of Administrative Action (5th Edn.)
by de Smith, Woolf & Jowell in Chapter 3,
para 0.24, it is stated thus:

"A body is performing a ''public
function' when it seeks to achieve some
collective benefit for the public or a section
of the public and is accepted by the public
or that section of the public as having
authority to do so. Bodies therefore
exercise
public
functions
when
they
intervene or participate in social or
economic affairs in the public interest. This
may happen in a wide variety of ways. For
instance, a body is performing a public
function when it provides ''public goods' or
other collective services, such as health
care,
education
and
personal
social
services, from funds raised by taxation. A
body may perform public functions in the
418 INDIAN LAW REPORTS ALLAHABAD SERIES
form of adjudicatory services (such as
those of the criminal and civil courts and
tribunal system). They also do so if they
regulate commercial and professional
activities to ensure compliance with proper
standards. For all these purposes, a range
of legal and administrative techniques may
be
deployed,
including
rule
making,
adjudication (and other forms of dispute
resolution); inspection; and licensing.

Public functions need not be the
exclusive domain of the State. Charities,
self-regulatory organisations and other
nominally private institutions (such as
universities, the Stock Exchange, Lloyd's of
London, churches) may in reality also
perform some types of public function. As
Sir John Donaldson, M.R. urged, it is
important for the courts to ''recognise the
realities of executive power' and not allow
''their vision to be clouded by the subtlety
and sometimes complexity of the way in
which it can be exerted'. Non-governmental
bodies such as these are just as capable of
abusing their powers as is Government."

29. Thus, it can be seen that a
writ of mandamus or the remedy under
Article 226 is pre-eminently a public law
remedy and is not generally available as a
remedy against private wrongs. It is used
for enforcement of various rights of the
public
or
to
compel
public/statutory
authorities to discharge their duties and to
act within their bounds. It may be used to
do justice when there is wrongful exercise
of power or a refusal to perform duties.
This writ is admirably equipped to serve as
a judicial control over administrative
actions. This writ could also be issued
against any private body or person,
specially in view of the words used in
Article 226 of the Constitution. However,
the scope of mandamus is limited to
enforcement of public duty. The scope of
mandamus is determined by the nature of
the duty to be enforced, rather than the
identity of the authority against whom it is
sought. If the private body is discharging a
public function and the denial of any right
is in connection with the public duty
imposed on such body, the public law
remedy can be enforced. The duty cast on
the public body may be either statutory or
otherwise and the source of such power is
immaterial, but, nevertheless, there must be
the public law element in such action.
Sometimes, it is difficult to distinguish
between public law and private law
remedies. According to Halsbury's Laws of
England, 3rd Edn., Vol. 30, p. 682,

"1317. A public authority is a
body, not necessarily a county council,
municipal corporation or other local
authority, which has public or statutory
duties to perform and which perform those
duties and carries out its transactions for
the benefit of the public and not for private
profit."

There cannot be any general
definition of public authority or public
action. The facts of each case decide the
point.

30. A contract would not become
statutory
simply
because
it
is
for
construction of a public utility and it has
been awarded by a statutory body. But
nevertheless it may be noticed that the
Government or government authorities at
all levels are increasingly employing
contractual techniques to achieve their
regulatory aims. It cannot be said that the
exercise of those powers are free from the
zone of judicial review and that there
would be no limits to the exercise of such
powers, but in normal circumstances,
10 All. Uttam Chand Rawat Vs. State of U.P. & Ors.
419
judicial review principles cannot be used to
enforce contractual obligations. When that
contractual power is being used for public
purpose, it is certainly amenable to judicial
review. The power must be used for lawful
purposes and not unreasonably.

31. The decision of the employer
in these two cases to terminate the services
of their employees cannot be said to have
any element of public policy. Their cases
were purely governed by the contract of
employment entered into between the
employees and the employer. It is not
appropriate to construe those contracts as
opposed to the principles of public policy
and thus void and illegal under Section 23
of the Contract Act. In contractual matters
even in respect of public bodies, the
principles of judicial review have got
limited application. This was expressly
stated by this Court in State of U.P. v.
Bridge & Roof Co. (India) Ltd. [(1996) 6
SCC 22] and also in Kerala SEB v. Kurien
E. Kalathil [(2000) 6 SCC 293] . In the
latter case, this Court reiterated that the
interpretation and implementation of a
clause in a contract cannot be the subjectmatter of a writ petition. Whether the
contract envisages actual payment or not is
a question of construction of contract. If a
term of a contract is violated, ordinarily,
the remedy is not a writ petition under
Article 226.

32. Applying these principles, it
can very well be said that a writ of
mandamus can be issued against a private
body which is not "State" within the
meaning of Article 12 of the Constitution
and such body is amenable to the
jurisdiction under Article 226 of the
Constitution and the High Court under
Article 226 of the Constitution can exercise
judicial review of the action challenged by
a party. But there must be a public law
element and it cannot be exercised to
enforce purely private contracts entered
into between the parties.

33. We are unable to perceive
any public element in the termination of the
employees by the appellant in Civil Appeal
No. 1976 of 1998 and the remedy available
to the respondents is to seek redressal of
their grievance in civil law or under the
labour law enactments especially in view of
the disputed questions involved as regards
the status of employees and other matters.
So also, in the civil appeal arising out of
SLP (Civil) No. 6016 of 2002, the writ
petition has been rightly dismissed by the
High Court. We see no merit in the
contention advanced by the appellant
herein. The High Court rightly held that
there is no public law element and the
remedy open to the appellant is to seek
appropriate relief other than judicial
review of the action taken by the
respondent Company."

12. Prior to the judgment aforesaid,
the Apex Court had considered the same
issue in the case of Federal Bank Ltd.
versus Sagar Thomas and others, (2003)
10 SCC 333. The judgment aforesaid was
given after considering the nature of work
performed by the Federal Bank. The
argument was raised that not only Bank
was incorporated under the Companies Act
but is governed by regulatory provisions of
banking. The Apex Court did not accept the
argument on maintainability of the writ
petition merely for the reason that the
authority or the person was incorporated
under the Companies Act and is governed
by the regulatory provisions. It was held
that a writ petition under Article 226 of the
Constitution
of
India
would
be
maintainable against following; (i) the State
420 INDIAN LAW REPORTS ALLAHABAD SERIES
(Government); (ii) an authority; (iii) a
statutory body; (iv) an instrumentality or
agency of the 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 obligation of public
nature; and (viii) a person or a body under
liability to discharge any function under
any statute with compulsion to perform
statutory function. The writ petition therein
was not held maintainable merely for the
reason that Bank was incorporated under
the Companies Act and otherwise governed
by the regulatory provisions which may be
Industries (Development and Regulation)
Act, 1951. The Apex Court did not find
State dominance or control over the affairs
of the company. The relevant paras of the
said judgment are quoted hereunder for
ready reference :-

"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, 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.

28. The six factors which have
been enumerated in the case of Ajay Hasia
[Ajay Hasia v. Khalid Mujib Sehravardi,
(1981) 1 SCC 722 : 1981 SCC (L&S) 258]
and approved in the later decisions in the
case of Ramana [Ramana Dayaram Shetty
v. International Airport Authority of India,
(1979) 3 SCC 489] and the seven-Judge
Bench in the case of Pradeep Kumar
Biswas [(2002) 5 SCC 111 : 2002 SCC
(L&S) 633] may be applied to the facts of
the present case and see whether those tests
apply to the appellant Bank or not. As
indicated earlier, share capital of the
appellant Bank is not held at all by the
Government nor is any financial assistance
provided by the State, nothing to say which
may meet almost the entire expenditure of
the company. The third factor is also not
answered since the appellant Bank does not
enjoy any monopoly status nor can it be
said to be an institution having State
protection. So far as control over the
affairs of the appellant Bank is concerned,
they are managed by the Board of
Directors elected by its shareholders. No
governmental
agency
or
officer
is
connected with the affairs of the appellant
Bank nor is any one of them a member of
the Board of Directors. In the normal
functioning of the private banking company
there is no participation or interference of
10 All. Uttam Chand Rawat Vs. State of U.P. & Ors.
421
the State or its authorities. The statutes
have been framed regulating the financial
and commercial activities so that fiscal
equilibrium may be kept maintained and
not get disturbed by the malfunctioning of
such companies or institutions involved in
the business of banking. These are
regulatory measures for the purpose of
maintaining
a
healthy
economic
atmosphere in the country. Such regulatory
measures are provided for other companies
also as well as industries manufacturing
goods of importance. Otherwise these are
purely private commercial activities. It
deserves to be noted that it hardly makes
any difference that such supervisory
vigilance is kept by Reserve Bank of India
under a statute or the Central Government.
Even if it was with the Central Government
in place of Reserve Bank of India it would
not have made any difference, therefore,
the argument based on the decision of All
India Bank Employees' Assn. [AIR 1962 SC
171 : (1962) 3 SCR 269] does not advance
the case of the respondent. It is only in case
of malfunctioning of the company that
occasion to exercise such powers arises to
protect the interest of the depositors,
shareholders or the company itself or to
help the company to be out of the woods. In
times of normal functioning such occasions
do not arise except for routine inspections
etc. with a view to see that things are
moved smoothly in keeping with fiscal
policies in general.

29. There are a number of such
companies carrying on the profession of
banking. There is nothing which can be
said to be close to the governmental
functions. It is an old profession in one
form or the other carried on by individuals
or by a group of them. Losses incurred in
the business are theirs as well as the
profits.
Any business
or
commercial
activity, maybe banking, manufacturing
units or related to any other kind of
business
generating
resources,
employment, production and resulting in
circulation of money are no doubt, such
which do have impact on the economy of
the country in general. But such activities
cannot be classified as one falling in the
category of discharging duties or functions
of a public nature. Thus the case does not
fall in the fifth category of cases
enumerated in the case of Ajay Hasia [Ajay
Hasia v. Khalid Mujib Sehravardi, (1981) 1
SCC 722 : 1981 SCC (L&S) 258] . Again
we find that the activity which is carried on
by the appellant is not one which may have
been earlier carried on by the Government
and transferred to the appellant company.
For the sake of argument, even if it may be
assumed that one or the other test as
provided in the case of Ajay Hasia [Ajay
Hasia v. Khalid Mujib Sehravardi, (1981) 1
SCC 722 : 1981 SCC (L&S) 258] may be
attracted, that by itself would not be
sufficient to hold that it is an agency of the
State or a company carrying on the
functions
of
public
nature.
In
this
connection, observations made in the case
of Pradeep Kumar Biswas [(2002) 5 SCC
111 : 2002 SCC (L&S) 633] quoted earlier
would also be relevant.

30. We may now consider the two
decisions i.e. Andi Mukta [(1989) 2 SCC
691]
and
U.P.
State
Coop.
Land
Development Bank Ltd. [(1999) 1 SCC 741
: 1999 SCC (L&S) 389 : AIR 1999 SC 753]
upon which much reliance has been placed
on behalf of the respondents to show that a
writ would lie against the appellant
company. So far as the decision in the case
of U.P. State Coop. Land Development
Bank Ltd. [(1999) 1 SCC 741 : 1999 SCC
(L&S) 389 : AIR 1999 SC 753] is
concerned, it stands entirely on a different
422 INDIAN LAW REPORTS ALLAHABAD SERIES
footing and we have elaborately discussed
it earlier.

31. The other case which has
been heavily relied upon is Andi Mukta
[(1989) 2 SCC 691]. It is no doubt held
that a mandamus can be issued to any
person or authority performing public duty,
owing positive obligation to the affected
party. The writ petition was held to be
maintainable since the teacher whose
services were terminated by the institution
was affiliated to the university and was
governed by the ordinances, casting certain
obligations which it owed to that petitioner.
But it is not the case here. Our attention
has been drawn by the learned counsel for
the appellant to paras 12, 13 and 21 of the
decision (Andi Mukta [(1989) 2 SCC 691] )
to indicate that even according to this case
no writ would lie against the private body
except where it has some obligation to
discharge which is statutory or of public
character."

13. The issue was again considered by
the Apex Court in the case of K.K. Saksena
(supra) where after elaborate discussion of
the issue, a difference between the private
law and public law was made. A
controversy under private law is held to be
a part of legal system under common law
depending on individual's relationship
which may be under contract law or law of
torts, etc. The writ petition involving a
question under private/common law would
not be maintainable even if an authority or
a person is discharging public duty or
public function. It was held that if a writ
petition is brought against an authority or a
person discharging public duty or public
function, it would be maintainable if an
element of public law is involved. A writ
petition
involving
a
question
under
common law, i.e., arising out of the
contract
between
the
parties
or
a
relationship involving a dispute under
private law would not be maintainable. The
word "public law" has been elaborately
discussed and defined in the said judgment
and is the governing factor to answer the
question referred by learned Single Judge
in this case.

14. According to the judgment of the
Apex Court in the case of K.K.