# JATYA PAL SINGH & ORS v. UNION OF INDIA & ORS

- **Citation:** [2013] 2 S.C.R. 970
- **Court:** Supreme Court of India
- **Decided:** 2013-04-17
- **Case number:** Civil Appeal No. 2147 of 2010
- **Bench:** Surinder Singh Nijjar, Anil R. Dave
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jatya-pal-singh-ors-v-union-of-india-ors-28886
- **Pages:** 33

## Headnote

CONSTITUTION OF IND/A, 1950:
c
Arts. 12 and 226 - Writ petitions before High Court by
employees of VSNL (renamed TCL) challenging termination
of their services - Held: Are not maintainable - Government
of India holding only 26.12% shares of TCL, would not be in
control of affairs of TCL - TCL cannot be said to be 'other
0 authority' within Art. 12 - Merely because TCL is performing
the functions which were initially performed by OCS would not
be sufficient to hold that it is performing a public function -
The functions performed by VSNUTCL are not of such nature
which could be said to be a public function - Therefore, High
E Court of Delhi and High Court of Bombay were fully justified
in rejecting the claim of appellants that TCL would be
amenable to writ jurisdiction of High Court by virtue of the
'other authority' within the purview of Art. 12 - Human Rights
Act, 1998 - s.6(3)(b).
F
The appellants, in C.A. No. 3933 of 2013 and C.A. No.
2147 of 2010, who had joined the service of the
Government of India in the Ministry of Telecommunication
known as Overseas Communication Service (OSS), and
were subsequently absorbed in Videsh Sanchar Nigam
G Limited (VSNL), filed writ petitions before the High Court
of Bombay, challenging the termination of their services
by the respondents. The writ petitions were dismissed in
limine by the Division Bench. In the writ petitions filed
before the Delhi High Court by former employees of
H
970
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
971
ORS.
VSNL, tl'te single Judge accepted the preliminary A
objection that the writ petitions were not maintainable, as
VSNL was neither a State within the meaning of Art.12 of
the Constitution of India nor was it performing any public
function. Their Lette.rs Patent Appeals were also
dismissed by the Division Bench of the High Court. Writ 8
Petition· No. 689 of 2007 was filed by Videsh Sanchar
Nig$m Scheduled Castes/Tribes Employees Welfare
samiti .
. '
I
~he questions for consideration before the Court
were: (i) Whether inspite of the Government of India
C
holding only 26.97% shares in VSNL/TCL, would it still
fall in the definition of State or other authority within the
. '.
ambit of Art.12 of the Constitution; and (ii) Whether VSNU
TCLl"is performing a public function/public duty," and as
such, would be amenable to writ jurisdiction of High
D
Court under Art. 226 of the Constitution.
.
Dismissing the appeals and the writ petition, the
Court
HELD: 1.1. It is significant to note that Ministry of E
Communication took a decision to convert its OCS
Department into a Public Sector Corporation (PSC)
known as VSNL. Eventually, from the date the OCS
employees were transferred to VSNL on deputation basis
· without deputation allowance on foreign service terms,
F
they ceased to be government servants. It is, thus, patent
that the appellant accepted the absorption voluntarily.
Therefore, it can not; be said that the appellants even
after absorption in VSNL, continued to enjoy the
protection available to the.m in the OCS as goverriment G
servants. [para 10 and 45] [979-E-F; 996-G-H; 997-A]
1.2 Subsequent to the dis.investment in 2002, the
name of VSNL being a Tata Group Company was
changed to "Tata Communications Limited" (TCL). Since
H
972
SUPREME COURT REPORTS
[2013) 2 S.C.R.
A 13.2.2002, Government of India holds only 26.12 %
shares of TCL. Therefore, it can be safely concluded that
on the basis of the shareholding, the Government of India
would not be in control of the affairs of TCL. [para 18 and
39] [983-F-G; 992-G; 993-A]
B
1.3 TCL cannot be said to be 'other authority' within
Art. 12 of the Constitution of India. The share holding of
Union of India would not satisfy test principles 1 and 2
in the case of Ramana Dayaram Shetty *. On perusal of
the facts, it would be evident that test No.3 would also
C not be satisfied as TCL does not enjoy a monopoly status
in ILDS. So far as domestic market is concerned, there 1
is open competition between the numerous operators,

## Text

_Characters 0–39,705 of 61,402. This is a partial read: ask again with offset=39705 for what follows._

A
B
[2013] 2 S.C.R. 970
JATYA PAL SINGH & ORS.
v.
UNION OF INDIA & ORS.
{Civil Appeal No. 2147 of 2010)
APRIL 17, 2013
[SURINDER SINGH NIJJAR AND ANIL R. DAVE, JJ.]
CONSTITUTION OF IND/A, 1950:
c
Arts. 12 and 226 - Writ petitions before High Court by
employees of VSNL (renamed TCL) challenging termination
of their services - Held: Are not maintainable - Government
of India holding only 26.12% shares of TCL, would not be in
control of affairs of TCL - TCL cannot be said to be 'other
0 authority' within Art. 12 - Merely because TCL is performing
the functions which were initially performed by OCS would not
be sufficient to hold that it is performing a public function -
The functions performed by VSNUTCL are not of such nature
which could be said to be a public function - Therefore, High
E Court of Delhi and High Court of Bombay were fully justified
in rejecting the claim of appellants that TCL would be
amenable to writ jurisdiction of High Court by virtue of the
'other authority' within the purview of Art. 12 - Human Rights
Act, 1998 - s.6(3)(b).
F
The appellants, in C.A. No. 3933 of 2013 and C.A. No.
2147 of 2010, who had joined the service of the
Government of India in the Ministry of Telecommunication
known as Overseas Communication Service (OSS), and
were subsequently absorbed in Videsh Sanchar Nigam
G Limited (VSNL), filed writ petitions before the High Court
of Bombay, challenging the termination of their services
by the respondents. The writ petitions were dismissed in
limine by the Division Bench. In the writ petitions filed
before the Delhi High Court by former employees of
H
970
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
971
ORS.
VSNL, tl'te single Judge accepted the preliminary A
objection that the writ petitions were not maintainable, as
VSNL was neither a State within the meaning of Art.12 of
the Constitution of India nor was it performing any public
function. Their Lette.rs Patent Appeals were also
dismissed by the Division Bench of the High Court. Writ 8
Petition· No. 689 of 2007 was filed by Videsh Sanchar
Nig$m Scheduled Castes/Tribes Employees Welfare
samiti .
. '
I
~he questions for consideration before the Court
were: (i) Whether inspite of the Government of India
C
holding only 26.97% shares in VSNL/TCL, would it still
fall in the definition of State or other authority within the
. '.
ambit of Art.12 of the Constitution; and (ii) Whether VSNU
TCLl"is performing a public function/public duty," and as
such, would be amenable to writ jurisdiction of High
D
Court under Art. 226 of the Constitution.
.
Dismissing the appeals and the writ petition, the
Court
HELD: 1.1. It is significant to note that Ministry of E
Communication took a decision to convert its OCS
Department into a Public Sector Corporation (PSC)
known as VSNL. Eventually, from the date the OCS
employees were transferred to VSNL on deputation basis
· without deputation allowance on foreign service terms,
F
they ceased to be government servants. It is, thus, patent
that the appellant accepted the absorption voluntarily.
Therefore, it can not; be said that the appellants even
after absorption in VSNL, continued to enjoy the
protection available to the.m in the OCS as goverriment G
servants. [para 10 and 45] [979-E-F; 996-G-H; 997-A]
1.2 Subsequent to the dis.investment in 2002, the
name of VSNL being a Tata Group Company was
changed to "Tata Communications Limited" (TCL). Since
H
972
SUPREME COURT REPORTS
[2013) 2 S.C.R.
A 13.2.2002, Government of India holds only 26.12 %
shares of TCL. Therefore, it can be safely concluded that
on the basis of the shareholding, the Government of India
would not be in control of the affairs of TCL. [para 18 and
39] [983-F-G; 992-G; 993-A]
B
1.3 TCL cannot be said to be 'other authority' within
Art. 12 of the Constitution of India. The share holding of
Union of India would not satisfy test principles 1 and 2
in the case of Ramana Dayaram Shetty *. On perusal of
the facts, it would be evident that test No.3 would also
C not be satisfied as TCL does not enjoy a monopoly status
in ILDS. So far as domestic market is concerned, there 1
is open competition between the numerous operators,
like, MTNL, Airtel, Idea, Aircel, etc. Again in view of the 4th
test, it cannot be said that the Government of India
D exercises deep and pervasive control in either the
management or policy making of TCL which are purely
private enterprises. It may also be noticed that, in fact,
even Government Companies like MTNL and BSNL are
competitors of TCL, in respect of ILDS. [para 43-44] [995E E-H; 996-A]
Ramana Dayaram Shetty vs. International Airport
Authority of India 1979 (3) SCR 1014 = (1979) 3 SCC 489;
Pradeep Biswas v. Indian Inst. of Chemical Biology 2002 (3)
F SCR 100 =2002 (5) sec 111 - relied on.
1.4 Therefore, this Court is of the firm opinion that the
High Court of Delhi and the High Court of Bombay were
fully justified in rejecting the claim of the appellants that
TCL would be amenable to writ Jurisdiction of the High
G Court by virtue of the 'other authority' within the purview
of Art. 12 of the Constitution. [para 44] [996-A-B]
1.5 It can also not be said that the activities of TCL
are in aid of enforcing the fundamental rights under Art.
H 21-A of the Constitution. The recipients of the service of
JATYA PAL SINGH & ORS. v. UNION OF INDIA&
973
ORS.
the telecom service voluntarily enter into a commercial · A
agreement for receipt and transmission of information.
The function performed by VSNUTCL cannot be put on .
the same pedestal as the function performed by private
institution in imparting education to children. [para 52]
[1001-B-D]
B
2.1 Merely because TATA Communication Limited is
performing the functions which were initially performed
by OCS would not be sufficient to hold that it is
performing a public: function. The functions performed by C
VSNUTCL are not of such nature which could be said to
be a public function. Undoubtedly, these operators
provide a service to the subscribers. The service. is
available upon payment of commercial charges. [para 4748] [998-A-B, C-D]
Steel Authority of India Ltd. & Ors. vs. National Union
Waterfront Workers & Ors. 2001 (2) Suppl. SCR 343 = 2001
(7) sec 1 - referred to.
D
Air India Statutory Corporation vs. United Labour Union
E
& ors. 1996 (9) Suppl. scR 579 = 1997 (9) sec 377 -
stood overruled ..
2.2 The functions performed by VSNUTCL examined
on the touchstone of the factors enumerated in s.6(3)(b)
of the Human Rights Act 1998 cannot be declared to be
F
the performance of a public function. The State has
divested its control by transferring the functions
performed by OCS prior to 1986 on VSNL/TCL. [para 50)
[999-F-G]
2.3 In order for it to be held that the body is
performing a public function, the appellant would have
to prove that the body seeks to achieve some collective
benefit for the public or a section of public and accepted
G
by the public as having authority to do so. In the instant
H
974
SUPREME COURT REPORTS
[2013] 2 S.C.R.
A case, all telecom operators are providing commercial
service for commercial considerations. Such an activity
in substance would be no different from any other
amenity which facilitates the dissemination of information
or DATA through any medium. [para 52) [1000-G-H; 1001B A-BJ
Binny Ltd. vs. Sadasivan 2005 (2) Suppl. SCR 421 =
(2005) 6 SCC 657; Federal Bank Ltd. vs. Sagar Thomas and
Ors. 2003 (4) Suppl. SCR 121 = 2003 (10) sec 733;
C and Dwaikanath vs. Income-tax Officer, Special Circle, Dward, Kanpur & Anr. 1965 (3) SCR 536 ·referred to.
D
E
Commentary on Judicial Review of Administrative Action
(Fifth Edn.) by de Smith, Woolf & Jowell in Chapter 3 para
0.24 ·referred to.
Andi Mukta Sadguru Shree Muktaji Vandas Swami
Suverna Jayanti Mahotsav Smarak Trust & Ors. vs.
V.R.Rudani & Ors. 1989 (2) SCR 697 = (1989) 2 SCC 691 •
held inapplicable.
3. In the instant appeals, the claim of the appellants
is that their services have been wrongly terminated by
VSNLITCL in breach of the assurances given by the
Government of India and VSNL in clause 5.13 of the share ·
holding agreement. A perusal of the aforesaid
F documents, however, would show that VSNL had merely
promised not to retrench any employee who had come
from OCS for a period of two years from 13.2.2002. Such
a condition, would not clothe the same with the
characteristic. of a public duty which the employer was
G bound to perform. The employees had· individual
contracts with the employer. In case the employer is
actually in breach of the contract, the appellants are at
liberty to approach the appropriate forum to enforce.their
rights. [para 53 and 54) [1001-G-H; 1002-B-C] ·
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
975
ORS.
Delhi Science Forum vs. Union of India 1996 (2) SCR A
767 =1996 (2) SCC 405; Appeal of South Africa in Mittal
Steel South Africa Limited (previously known as /SCOR
Limited) vs. Mondli Shadrack Hlatshwayo, case No.326 of
2005 decided by Supreme Court of South Africa on
31.8.2006; Secretary, Ministry of Information and B
Broadcasting vs. Cricket Association of Bengal (1995) 2 SCC
122; Unni Krishnan J.P. & Ors. vs. State of Andhra Pradesh
& Ors. 1993 (1) SCR 594 = 1993 (1) SCC 645 ; Zee
Te/efilms Ltd. vs. Union of India 2005 (1) SCR 913 = 2005
(4) SCC 649; Ramesh Ahluwalia vs. State of Punjab & Ors. c
2012 (12) SCC 331; Al/ India /TDC Workers Union & Ors. v.
/TDC & Anr. 2006 (8) Suppl. SCR 127 = 2006 (10) sec 66;
G. Bassi Reddy vs. International Corps Research Institute
2003 (1) SCR 1174 = 2003 (4) SCC 225; Ba/co Employees
Union vs. Union of India & Ors. 2001 (5) Suppl. SCR 511 = D
2002 (2) SCC 333; Agricultural Produce Market Committee
vs. Ashok Harikunj & Anr. 2000 (3) Suppl. SCR 379 = 2000
(8) SCC 61; Radhakrishna Agarwal vs. State of Bihar 1977
(3) SCR 249 = 1977 (3) SCC 457; Kulchinder Singh vs.
Hardaya/ Singh Brar 1976 (3) SCR 680 = 1976 (3) SCC 828;
E
and Praga Tools Corp. vs. C.A. /manual & Ors. 1969 (3) SCR
773 = 1969 (1) sec 585 • cited
Case Law Reference:
1996 (2) SCR 767
cited
para 25
f.
1996 (9) Suppl. SCR 579
stood overruled para 25
2005 (2) Suppl. SCR 421
referred to
para 26
2003 (4) Suppl. SCR 121
referred to
para 26
case No.326 of 2005 decided by Supreme Court
G
of South Africa on 31.8.2006
cited
para 26
(1995) 2 sec 122
cited
para 27
H
976
SUPREME COURT REPORTS
[2013) 2 S.C.R.
A
1989 (2) SCR 697
held inapplicable para 27
1993 (1) SCR 594
cited
para 27
2005 (1) SCR 913
cited
para 32
B
2012 (12) sec 331
cited
para 32
2006 (8) Suppl. SCR 127
cited
para 33
2003 (1) SCR 1174
cited
para 33
2001 (5) Suppl. SCR 511
cited
para 33
c
2000 (3) Suppl. SCR 379
cited
para 33
1979 (3) SCR 1014
relied on
para 39
2002 (3) SCR 100
relied on
para 33
D
1977 (3) SCR 249
cited
para 36,
1976 (3) SCR 680
cited
para 36
1969 (3) SCR 773
cited
para 36
E
2001 (2) Suppl. SCR 343
referred to
para 39 _
1965 (3) SCR 536
referred to
para 50
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2147 of 2010.
F
From the Judgment and order dated 08.09.2009 of the
High Court of Judicature at Bombay in Writ Petition No. 2652
of 2007.
WITH
G Civil Appeal No. 3933 of 2013.
Civil Appeal No. 425 of 2012.
W.P. (C) No. 689 of 2007.
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
977
ORS.
Civil Appeal No. 5740 of 2012.
A
Triloki Nath Razdan, P.P.N. Razdan, Dr. Krishan Singh
Chauhan, Ajit Kumar Ekka, Chand Kiran, Kartar Singh, D.N.
Ray, Amit Mahajan, Navin Chawla, Abhishek Kumar Jha for the
Appellants.
B
C.U. Singh, Mahesh Agarwal, Rishi Agrawala, E.C.
Agrawala, Ankur Saigal, Ankur, R.K. Rathore, Baldev Ateya (for
D.S. Mahra), Arvind Kumar Sharma for the respondents.
The Judgment of the Court was delivered by
SURINDER SINGH NIJJAR, J. 1. Leave granted in
SLP© No.4619 of 2011.
2. This judgment will dispose of a group of appeals, details
c
of which are given hereunder, as they raise only one question D
of law:
Proceedings before the Bombay High Court :-
3. Writ Petition No.2139 of 2007 titled as Mahant Pal
Singh vs. Union of India dismissed in limine by the Division E
Bench on 7th September, 2009. Civil Appeal No.3933 of 2013
@ Special Leave Petition (C) No.4619 of 2011 titled as
M.P.Singh vs. Union of India & Ors. has been filed challenging
the aforesaid order of the Division Bench. Writ Petition
No.2652 of 2007 titled as Jatya Pal Singh & Ors. vs. Union of F
India & Ors. was dismissed in limine by the Division Bench on
8th September,. 2009 in view of the order dated 7th September,
2009 passed in Writ Petition No.2139 of 2007. The aforesaid
order has been impugned by the appellants (writ petitioners in
the High Court) Jatya Pal Singh & Ors. vs. Union of India & G
Ors. in C.A.No.2147 of 2010.
H
978
SUPREME COURT REPORTS
[2013] 2 S.C.R.
A
Proceedings in the Delhi High Court :-
4. Ten writ petitions were filed by the former employees of
the Videsh Sanchar Nigam Limited (VSNL). The common
question of law raised in all the appeals relates to the very
B
maintainability of the writ petitions. VSNL had raised a
preliminary objection that a writ petition would not be
maintainable against it as it is neither a State within the
meaning of Article 12 of the Constitution of India nor is it
performing any public function. The learned Single Judge
accepted the aforesaid preliminary objection and dismissed the
C writ petitions by judgment and order dated 29th August, 2011·.
D
Letters Patent Appeal No.924 of 2011 challenging the
aforesaid order was dismissed by the Division Bench on 14th
November, 2011. LPA Nos. 930 of 2011 and 931 of 2011 were
dismissed by the common order dated 15th November, 2011.
4A. Only two of the original writ appellants have
approached this Court in the civil appeals against the judgment
of the learned Single Judge and the Division Bench of the Delhi
High Court by way of civil appeals. These are Ram Prakash
E
vs. Union of India & Ors. in C.A.No.5740 of 2012 and Vijay
Thakur vs. V.S.N.L. and Anr. in C.A.No.425 of 2012.
5. For the purpose of this order, we shall make a reference
to the facts as pleaded in C.A.No.2147 of 2010. All the
appellants in writ petitions had been working in the Ministry of
F
Communication, in particular, Department of Overseas
Communication Service (OCS) from 1st March, 1971 onwards.
Their dates of appointment on various posts are as under :
6. Appellant Nos. 1 and 2 were appointed as Assistant
G Engineer on 16th May 1983 and 1st September, 1983,
respectively. Appellant Nos. 3 and 4 were appointed as Junior
Technical Assistant on 1st March, 1971 and 13th January, 1976
and appellants 5 and 6 were appointed on 8th January, 1980.
During their continuous service with respondent No.1, they had
H earned promotions at due time on merit. They have a clean
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
979
ORS. [SURINDER SINGH NIJJAR, J.]
record of service. Till 31st March, 1986, they were holding
A
responsible posts in the OCS.
Background of VSNL:
A) Origin of Overseas Communication Service (in short
OCS)-
B
7. On 1st of January, 1947 'Indian Radio and
Telecommunication company Ltd.' a Private Company
operating India's external telecommunication service was taken
over by the Govt. along with its employees on the terms and c
conditions as they had with the private company.
8. The Govt. created a department in ministry of
telecommunication known as Overseas Communication
Service (OCS) that dealt communication of India subjects with
0
the rest of the world.
9. The OCS department of Ministry of telecommunication
continued till 31st of March, 1986.
B) Conversion of OCS into VSNL -
10. Ministry of Communication took a decision to convert
its OCS Department into a Public Sector Corporation (PSC).
A notification to this effect was issued on 19th March, 1986 and
E
the Corporation was named as VSNL. Accordingly, w.e.f. 1st
April, 1986, all international telecommunication services of the
F
country handled by the Govt. stood transferred to VSNL. All the
employees were deemed to have been transferred to the VSNL
on the existing terms and cond)tions till their case for
absorption or otherwise are decided upon by the. VSNL in
consultation with the cadre controlling authority and other G
concerned Govt. Departments. They were to be· treated on
deputation on Foreign Service to VSNL without deputation
allowance. These employees also were to be treated as though
on the strength of OCS as on 31st March, 1986 till their cases
were finalized by the VSNL. Those who do not opt for
H
980
SUPREME COURT REPORTS
(2013] 2 S.C.R.
A absorption will be treated as on deputation on foreign service
with the Corporation for a period of 2 years without deputation
allowance. The Corporation (VSNL) would finalise the terms
and conditions for employment in the Corporation within a
period of 12 months or on any specified date as may be
B agreed upon by the Government. It was provided that the
employees will be asked to exercise their option for being
absorbed in the company or otherwise within the stipulated
period. The date of induction of the employees in the
Corporation will be the date from which they have exercised
c the option to be absorbed in the Company with the approval
of the competent authority. The notification also provided that
pensionary and other retirement benefits to the employees on
their absorption in the Corporation will be determined in
accordance with the Department of Pensions and Pensioners
D Welfare O.M. No.4(8)-85-P & PW dated 13th January, 1986
· and as amended from time to time.
11. Thereafter on 11th December, 1989, VSNL issued
STAFF NOTICE on the subject 'Absorption of OCS Employees
in VSNL'. In this notice, it is mentioned that date of absorption
E of OCS employees in the VSNL has been approved by the
Ministry of Communication on 1st January, 1990. It is further
mentioned that accordingly from that date, the OCS employees
transferred to VSNL on deputation basis without deputation
allowance on foreign service terms will cease to be government
F ·servants. The aforesaid notice of absorption including the terms
and conditions of absorption was also issued individually to
each employee. On 5th July, 1989, the Government had issued
Office Memorandum No.4/18/87-P&PW (D) on the subject
'Settlement of Pensionary terms etc. in respect of Government
G employees transferred en masse to Central Public Sector
Undertakings/Central Autonomous Bodies'. Under this, the
employees were given the option to retain the pensionary
benefits available to them under the Government rules or be
governed by the rules of the Public Sector Undertaking/
H Autonomous Bodies. The Government also assured that the
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
981
ORS. [SURINDER SINGH NIJJAR, J.]
employees of the OCS will not be removed by the VSNL unless
A
their case was placed before the competent authority in the
Government. Finally, the VSNL absorbed en-masse the
erstwhile employees of OCS with effect from 1st January, 1990.
The solemn promise of not being removed was incorporated
in the Conduct Discipline and Appeal Rules framed by the
8
VSNL in the year 1992. It is pertinent to note here that all the
appellants had opted to join VSNL.
C. Disinvestment
12. Between 1992 and 2000, Government of India
C
divested a portion of its share holding in VSNL by sale of equity
to certain funds, banks and financial institutions controlled by
the Government in 1992 a'nd to the general public in 1999.
Thereafter, the company was listed on Indian Stock Exchange.
In 1997, the Government of India sold some of its equity
D
holdings by issuing Global Depository Receipts (GDRs)
following which VSNL was li$ted on the London Stock
Exchange. On 15th August, 2000, VSNL became first Public
Sector Undertaking of India to be listed on the New York Stock
Exchange through conversion of underlying GDRs to American
E
Depository Receipts (ADRs). However on 13th February, 2002,
Government of India which till then held 52.97% of shares in
VSNL, divested 25% shares in favour of Panatone Finvest
Limited, (comprising of 4 companies of the Tata Group) and
1.85% in favour of its employees after following due process
F
in accordance with its disinvestment policy. This brought the
share holding of the Government of India to 26.12 %. Tata
Group also made a. public offer for acquiring a further 20% of
the share capital of the VSNL, from the public in terms of SEBI
(Substantial Acquisition of Share and Takeover) Regulations
G
1997. Consequently, the total holding of the Tata Group in VSNL
increased to 44.99 % of the paid up share capital in 2002.
Presently, Tata Group holdings in VSNL is about 50.11 %.
13. As per the share holding agreement and share
purchase agreement, the Government of India mandated the
H
982
SUPREME COURT REPORTS
[2013] 2 S.C.R.
A Tata Group to ensure that none of the employees should be
retrenched for a period of one year. Clause 5.13 of the
aforesaid agreement was as under :-
"5.13 Employees.
B
(a) Notwithstanding anything to the contrary in this
Agreement, the Strategic Partner shall not cause the
Company to retrench any of the employees of the
Company for a period of 1 (one) year from the closing other
than any dismissal or termination of employees of the
C
company from their employment in accordance with the
applicable staff regulations and standing orders of the
Company or applicable law."
14. It appears that the Tata Group by a letter dated 14th
April, 2002 to ensure that the morale of the present employees
D of the VSNL is maintained at a high level and that they continue.
to deliver their best performance, decided that it shall cause
VSNL not to retrench any of the employees of VSNL for a
period of two years from 13th February, 2002.
E
15. On 5th February, 2004, VSNL was granted a non
exclusive licence by the Government of India pursuant to the
disinvestment. Clause (1) of the non exclusive licence reads as
under:-
"1. In view of the fact that the LICENSEE is the
F
INCUMBENT OPERATOR and in consideration of the
payments including LICENCE FEE and due performance
of all the terms and conditions mentioned in the
SCHEDULE on the part of the LICENSEE, the Licensor
does, hereby grant, under Section 4 of the Indian Telegraph
G
Act, 1885, on a non-exclusive basis, this Licence to
establish, install, operate and maintain INTERNATIONAL
LONG DISTANCE SERVICE on the terms and conditions
contained in the SCHEDULE and ANNEXURES
appended to this LICENCE AGREEMENT." (emphasis
H
added)
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
983
ORS. [SURINDER SINGH NIJJAR, J.] _
16. Prior to disinvestment, VSNL enjoyed the monopoly in
A
respect of international long distance service (ILDS), which
ceased with effect from 5th February, 2004. Thereafter other
telecom licensees like Reliance, Airtel, Idea, Aircel, HFCL and
even Government companies like MTNL and BSNL became
competitors in respect of ILDS.
B
17. It appears that on 16th July, 2007 and 4th October,
2007, the services of 20 managerial employees were
terminated after paying them 3 months' salary in lieu of notice.
The aforesaid termination was said to have been effected in
terms of Clause 1.6 of the appointment letter which reads as
under:
c·
"1.6 After confirmation, your appointment may be
terminated by either side at any time by giving three
months notice in writing. VSNL however, reserve the right
D
of terminating your services forthwith or before expiry of
the stipulated period of notice of 3 months by making
payment to you of a sum equivalent to the pay and
allowances for the period of notice or unexpired portion
thereof. The decision of the management shall not be
E
question."
F
18. The orders of termination issued to the aforesaid 20
employees were identical. Meanwhile on 28th January, 2008,
subsequent to the disinvestment in 2002, the name of VSNL
being a Tata Group Company was changed to "Tata
Communications Limited". Ten writ petitions were filed by the
employees before the Delhi High Court and 2 writ petitions were
filed before the Bombay High Court challenging the orders of
termination. On 29th August, 2011, learned Single Judge of the
Delhi High Court vide common order dismissed the 10 writ
G
petitions, as not maintainable against TCL, the reconstituted
entity of VSNL after disinvestment. The aforesaid ordef was
challenged by four of the writ appellants in LPA which was
dismissed by separate orders on 14th November, 2011, 15th
H
984
SUPREME COURT REPORTS
[2013) 2 S.C.R.
A November, 2011 and 17th February, 2012. Out of the said four
persons Ram Prakash and Vijay Thakur have filed Civil Appeal
No.5740 of 2012 and Civil Appeal No. 425 of 2012 before this
Court.
B
19. As noticed earlier, Division Bench of the Bombay High
Court also dismissed the writ petitions by order dated 7th
September, 2009 and 8th September, 2009 against which the
appellant herein have filed Special Leave Petition (C) No. 4619
of 2011 and Civil Appeal No. 2147 of 2010.
C Submissions:
20. We have heard the learned counsel for the parties.
21. Mr. T.N. Razdan, learned counsel for the appellants has
D submitted that VSNL cannot be said to have become an
absolute private entity after Union of India sold its 25% shares
out of 52.97% to Panatone Finvest Ltd. Union of India still holds
26.97% shares in VSNL. Other Government Companies hold
17.35 % shares in VSNL. Therefore, VSNL cannot be said to
E be not amenable to the writ jurisdiction. Furthermore, VSNL is
under the complete control of Telecom Regulatory Authority of
India (TRAI) Act, 1997 and the Telegraph Act, 1948. Therefore,
the_ writ petition would lie in cases where the services of the
employees were terminated in breach of the rules governing
F the service conditions of the employees. Referring to the share
holding pattern in VSNL, it is claimed that Union of India is the
single large shareholder holding 26.12% shares in VSNL. It is
further the case of the appellant that Panatone Finvest Ltd.
having stepped into the shoes of erstwhile shareholder and is
G bound by the commitments and obligations, rights and liabilities
arising from the sale/purchase of shares.
22. Dr. K.S. Chauhan, learned counsel, also reiterated the
aforesaid submissions. In addition, he submitted that Central
Government still has pervasive control over the VSNL/TCL. The
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
985
ORS. [SURINDER SINGH NIJJAR, J.]
strategic partner i.e. Panatone Finvest Limited/TATAs have
A
been bound by the Government agreement in relation to
divestment of the 25% stakes, and there is a further condition
that if the strategic partner wish to sell its stakes in the VSNU
TCL, it is not free for the strategic partner to sell off the same
in the open market, but the shares can be sold off back to the
B
Government only. It clearly, according to learned counsel,
buttresses the fact that the Government consider the function/
activity so sacrosanct and of such public importance that it
does not wish to alter the nature. of the functions of VSNUTCL.
However, there is no such condition precedent in the agreement c
with the other telecommunication companies which are merely
service providers. Thus, both the learned counsel h~ve
reiterated the submission that VSNL would be covered by the
term "other authority" within the scope and ambit of Article 12.
Nature of the Functions performed by the VSNL:-
23. According to Mr. Razdan, the right to communication
is a facet of freedom of speech and expression under Article
19(1) (a) of the Constitution of India. The Government of India
D
is duty bound to provide uninterrupted Telecommunication
E
Services to enable its citizen to effectively exercise the
aforesaid right. This public duty was being provided through one
of the departments i.e. Department of Telecommunication, in
particular, the OCS. The same function was subsequently
oerformed by the VSNL, a wholly owned government
F
enterprises, till disinvestment. Even after disinvestment, VSNL
continues to perform the same functions by connecting its
subscribers to their receivers in India as well as abroad. VSNL
performs the aforesaid functions under license in terms of
Section 4 of Indian Telegraph Act, 1948. Being the licensee,
VSNL is under the control of TRAI for all its activities of ILDS.
G
After disinvestment, VSNL has spread its ILDS activities to 52
locations and has increased the strength of its employees from
3000 to 7000. It has been located in prime areas in all the cities
like Delhi, Pune, and Kolkata. The aforesaid land belongs to
H
986
SUPREME COURT REPORTS
[2013] 2 S.C.R.
A Union of India and is in the possession of VSNL. Union of India
is the licensor of all the lands, assets, equipment machine and
tools under the license of VSNL. Land belonging to Union of
India is worth lakhs of crores of rupees. In the face of this, the
High Court would not have concluded that Government of India
B has no control over the activities of VSNL.
24. This submission was also reiterated by Dr. K.S.
Chauhan, learned counsel. Dr. Chauhan, in addition to the
aforesaid arguments, submitted that Respondents herein have
. C monopoly over the international communication, as VSNLffCL
is the gateway of the world. VSNL can communicate worldwide
for India which facility is not available to any other
communication company. Companies, such as Vodafone etc.,
are only transferring speech whereas VSNL is providing value
added service. It provides EMER Set service to Defence
D Forces including Merchant Navy. VSNL/TCL is specially
catering to the requirement of the President and Prime Minister
of India for preparation of hotline, etc. Further, learned counsel
submitted that even a private function which is performed for
public benefit would be a public function. He submitted that in
E the case of Delhi Science Forum vs. Union of lndia1 that
telecommunication has been internationally recognized as a
public utility of strategic importance. Therefore, it cannot be said
that VSNL is not performing public functions.
F
25. The High Court, it was submitted, was unduly
influenced by the fact that the VSNL does not enjoy a
monopolistic character. Further more, it was wrongly held that
services provided by other telecom operators are no different
to the service provided by VSNL. Mr. Razdan further submitted
G that the High Court has failed to distinguish the expression 'other
authority' as defined in Article 12 of the Constitution of India from
that of 'any person or authority' in Article 226 of the Constitution.
In fact, the High Court totally ignored the submission that the
definition of other authority would now have to be seen by taking
H
1.
(1996 (2) sec 405.
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
987
ORS. [SURINDER SINGH NIJJAR, J.]
into account the mixed economy of State and the private
A
enterprises. The High Court, however, confined itself only to the
issue as to whether VSNL after disinvestment is State within
Article 12 of the Constitution. He submitted that it is important
to have a re-look at the definition of State/other authorities
under Article 12 of the Constitution. In view of the present set
B
up of mixed economy i.e. where the State is in partnership with
semi-government/private corporations that take over the
Government companies in part or full. In support of his
submission, he relies on the judgment of this Court in the case
of Air India Statutory Corporation vs. United Labour Union & c
Ors. 2
26. Dr. Chauhan further submitted that when the
Government, in the exercise of its executive power by way of a
policy decision, creates an entity or divests its functions, which
0
may have a bearing upon the Fundamental Rights, in favour of
a private body or transfer of public entity to a private body, in
such an eventuality, the functions earlier discharged by the
Government cannot be termed as purely a private function. He
submitted that realizing the necessity to promote, protect and
enjoyment of human rights, including the right to freedom of E
expression, on the internet and in other technologies, the U.N.
Human Rights Council has passed a resolution with regard to
the same. Similarly, the right to telecommunication (Overseas),
a service exclusively provided by Government of India before
disinvestment has the public law element and, therefore, nature
F
of work performed by VSNL/TCL continued to remain the
same. He submits that the functions performed by VSNL would
satisfy all the tests for determining whether a function is a public
function provided under the Human Rights Act, 1998. Learned
counsel has submitted that it is necessary to look at the nature
G
of the public functions which have been transferred. He submits
that the meaning of public function would have to be determined
by taking into account the effect of transfer of the public function
from a public body to a private body. Learned counsel submitted
2.
(1997 (9) sec 377)
H
988
SUPREME COURT REPORTS
[2013] 2 S.C.R.
A that in view of the above, it can be safely concluded that VSNL
is performing a public function. He relied on the observations
made by this Court in the case of Binny Ltd. vs. Sadasivan3•
Besides, he relied on the judgment of this Court in Federal
Bank Ltd. vs. Sagar Thomas and Ors.4 Learned counsel also
B relied on a judgment of the Supreme Court of South Africa in
Appeal of South Africa in Mittal Steel South Africa Limited
(previously known as /SCOR Limited) vs. Mondli Shadrack
Hlatshwayo, rendered in case No.326 of 2005 on 31st August,
2006.
c
27. Another submission made by Mr. Razdan is that the
High Court has wrongly held that the functions performed by
VSNL are not sovereign functions and, therefore, it cannot be
said to be performing public functions. He submitted that the
so called dichotomy between sovereign and non-sovereign
D functions of the State does not really exist. The question that
whether a particular function of the State is a sovereign function
depends on the nature of the power and manner of its exercise.
Relying on the judgment of this Court in Secretary, Ministry of
Information and Broadcasting vs. Cricket Association of
E Benga/5, he submitted that airwaves or frequencies are public
property. Their use has to be controlled and regulated by a
public authority in the interest of the public and to prevent the
invasion of their rights. The right to impart and receive
information is a species of the right of freedom of speech and
F expression guaranteed under Article 19(1 )(a) of the
Constitution. Therefore, it cannot be said that VSNL is not
performing a public function. Learned counsel also relied on the
judgment of this Court in Andi Mukta Sadguru Shree Muktaji
Vandas Swami Suvema Jayanti Mahotsav Smarak Trust &
G Ors. vs. V.R.Rudani & Ors.6• Learned counsel has also placed
reliance on the judgment of this Court in Unni Krishnan J.P. &
3.
c2005) 6 sec 657.
4.
(2003) 10 sec 733.
5.
(1995) 2 sec 122.
H 6.
(1989) 2 sec 691.
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
989
ORS. [SURINDER SINGH NIJJAR, J.]
Ors. vs. State of Andhra Pradesh & Ors. 7•
A
Employees Structure:
28. It was also submitted by Mr. Razdan that the
Government had assured that the employees of the OCS will
8
not be removed by the VSNL unless their case was placed
before the competent authority in the Government. The solemn
promise of not being removed was incorporated in the Conduct
Discipline and Appeal Rules framed by the VSNL in the year
1992.
29. According to the appellants, the employees of the
VSNL fall into three categories which are as under :
c
(a) The employees that were transferred to VSNL by
notification dated 19th March, 1986 i.e. erstwhile employees
D
of OCS.
(b) The employees who are recruited directly under the
VSNL Recruitment and Promotion Rules, 1983 dated 21st May,
1993, subject to the rules of Conduct Discipline and Appeal
Rules of 1992 framed by VSNL.
E
(c) The employees recruited after the disinvestment on
· 13th February, 2002. The employees of TATA are guided by
TATA Conduct Rules. It is pointed out that VSNL was granted
a licence by the Ministry of Communication for short distance
F
service and long distance service. International Long Distance
Service (ILDS) was granted by the Department of
Telecommunication, Government of India under Section 4 of the
Indian Telegraph Act. The licences of VSNL for ILDS which
expired on 31st March, 2004 has been re-granted for another
G
20 years.
The brief factual matrix of case:
30. Civil Appeal No.2147 of 2010 pertains to the group of
7.
(1993) 1 sec 645.
H
990
SUPREME COURT REPORTS
(2013) 2 S.C.R.
A employees detailed in category 'a' above. The appellants in
C.A.No.425 of 2012 are from category 'b'. In C.A.No.2647 of
2010, the VSNL terminated the services of appellants 2, 3, and
4 on 13th July, 2007 and those of appellants 1, 5, and 6 on 16th
July, 2007. The termination letter of appellant Nos. 2, 3, and 4
B is issued by Vice President while as those of appellant Nos. 1
and 5 is issued by the Chief Officer Global operation. The
termination order of appellant No.6 is issued by the Chief
International Facilities Officer.
31. According to the appellants, none of these officers
C were either competent or authorised officers to terminate the
services of appellants in terms of Conduct Discipline and
Appeal Rules of VSNL. Similarly, in C.A.No.421 of 2012, the
services of the appellants were terminated by the Vice
President without any authority of law. Challenging the order of
D the Division Bench in C.A.No.2147 of 2010, it is submitted that
the Division Bench has erroneously held that the service rules
governing the appellants do not have any statutory force and
the status of the rules of a contract between the employer and
the employee. The High Court failed to appreciate the issue
E raised in the writ petition that VSNL has breached the
fundamental rules and regulations contained in its Conduct
Discipline and Appeal Rules, 1992 which had the force of law.
It was also pointed out that the Corporation (VSNL) being in
partnership with Union of India is duty bound to uphold the rule
F of law. Learned Counsel submitted that the aforesaid judgment
is liable to be set aside on the short ground that it is cryptic
and non-speaking.
32. This submission was also reiterated by Dr.K.S.
Chauhan, learned counsel. He submitted that the powers of the
G High Court under Article 226 is much wider than the powers of
this Court under Article 32 of the Constitution of India. He relied
on the Constitution Bench judgment of this Court in Zee
Telefilms Ltd. vs. Union of lndia8• In this case, the activities of
Board of Cricket Control of India were held to be akin to public
H a. 2oos (4) sec 649.
JATYA PAL SINGH & ORS. v. UNION OF INDIA &
991
ORS. [SURINDER SINGH NIJJAR, J.]
duties or State functions. On the basis of the above, he
A
submitted that when a private body exercises public functions
even if it is not a State, the aggrieved person would have a
remedy by way of a writ petition under Article 226. Dr. Chauhan
relied on a judgment of this Court in Ram~sh Ahluwalia vs.
State of Punjab & Ors. in C.A.No.6934 of 2012 decided on
B
13th September, 2012.
33. In response, Mr. C.U. Singh, learned senior counsel
appearing for the respondent has submitted that the tests for
determining as to whether a particular body would fall within the
C
definition of State or other authority have been well defined by
this Court in a number of judgments. Therefore, there is no
scope for enlarging the time tested definitions rendered by this
Court. In support of the submissions, he relied on All India
/TDC Workers Union & Ors. v. /TDC & Anr. 9; Pradeep Biswas
v. Indian Inst. of Chemical Bio/ogy10; G.Bassi Reddy vs.
D
International Corps Research lnstitute11; Ba/co Employees
Union vs. Union of India & Ors. 12; Agricultural Produce Market
Committee vs. Ashok Harikunj & Anr. 13
34.