N.K. Aggarwal v. UOI & Ors

order as to costs."

(vii) Binny Ltd. and Another Vs. V. Sadasivan and Others, [(2005) 6 SCC 657], the Court highlighted that 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. There cannot be any general definition of public authority or public action. The facts of each case decide the point. After holding that the bodies involved in that case purely private authorities and, therefore, not amenable to writ jurisdiction, significantly, the Court also held that public-policy principles can be applied to employment in public sector undertakings in appropriate cases, but the same principles cannot be applied to private bodies. There are various labour laws which curtail the power of the employer from doing any anti-labour activity. Sufficient safeguards are made in the labour law enactments to protect the interests of the employees of the private sector. The service rules and relations which are applicable to Government employees or employees of public sector undertakings stand on a different

footing and they cannot be tested on the same touchstone or enforced in the same manner.

Following observations are also to be necessarily noted as both the cases before us relate to termination of services of the employees: "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 nave got limited application. This was expressly stated by this Court in State of U.P. v. Bridge & Roof Co. AIR 1996 SC 3515 and also in Kerala State Electricity Board v. Kurien E. Kalathil AIR 2000 SC 2573. In the latter case, this Court reiterated that the interpretation and implementation of a clause in a contract cannot be the subject matter 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.

¶32Applying these principles, it can very well be said that a writ of mandamus can be issued against a private body which is not a 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."

¶11On the basis of principles laid down in the aforesaid cases, we have to determine as to whether KRIBHCO discharges any public function or public duties. Clause 5(a) of the Bye-Laws of KRIBHCO stipulates the main object for which KRIBHCO was registered as society and reads as under: "5(a) The objects of KRIBHCO shall be to promote the economic interest of its members by undertaking the business of manufacture, production, development, processing, conversion, sale, distribution, marketing, import, export, trade or otherwise deal in, store, or transport, build, construct, fabricate or otherwise turn to account, in India and abroad of chemical fertilizers, bio-fertilisers, man-made fibres, detergents, soaps, chemicals, petro-chemicals, refining, hydrocarbons, drugs and pharmaceuticals, industrial products, cement, steel, electronic products, satellite receives, pesticides, seeds, agricultural machinery and implements and other agricultural inputs/outputs, agricultural items, agro-based industrial items, food products, aquaculture, forestry products, power generation and distribution from conventional or non-conventional energy sources, automobiles, breweries, housing and real estate, construction and fabrication, and to provide/undertake the business of oil exploration, communication and telecommunication, information technology, shipping, trading, banking and insurance and to undertake such other activities which are conducive and incidental thereto."

¶12KRIBHCO is a federation. No individual is eligible for membership. It is open to categories specified in Clause 6, which includes National Cooperative Federations, Apex Cooperative Federations, Regional and District Cooperative, Primary

Agricultural Cooperative, Consumers" Cooperatives, Tribal Cooperative Federations, etc. dealing with agriculture credit/marketing/processing/supply and other agricultural Cooperative Societies, etc. It is a multi-state cooperative societies registered under the Multi-State Cooperative Societies Act. It is also mentioned as National Cooperative Societies in the Second Schedule of the said Act. As is clear from the above, the main business of the respondent is to manufacture, distribute and sell chemical fertilizers. For this purpose, the society has set up manufacturing unit and the distribution of its product is done through cooperative societies spread all over India. Under Bye-Laws 5, the object of the KRIBHCO is to promote the economic impressed of its members by undertaking fertilizers business. The membership of the society is open to various cooperative societies and some other bodies associated with agriculture. The society does not enjoy any monopoly in any business. The society does not discharge any statutory functions.

¶13In our view, the aforesaid function does not become public function or public duty. It is purely commercial activity undertaken by KRIBHCO, which makes it a commercial organization working for the benefits of its members and through them of the farming community. As noticed above in G. Bassi Reddy (supra), the Court had stated that though it would not be easy to define what a public function/public duty is. It can reasonably be said that functions are similar to or closely related to those performable by the State in its sovereign capacity.

¶14In a number of cases cited above, we have noted that these kind of activities are not treated as public duties/public functions. In addition, we refer to recent judgment of the Division Bench of this Court in the case of K.K. Saxena Vs. International Commission on Irrigation & Drainage & Ors., [180 (2011) DLT 204. In that case, the Court examined the functions of ICID which has been established as scientific, technical, professional and voluntary Non-Governmental international organisation, dedicated to enhance worldwide supply of food and fibre for all people by improving water and land management and productivity of irrigated and drained lands. That is for appropriate management of water, environment and application of irrigation, drainage and flood control techniques. These activities were held to be not public duties to make ICID to writ jurisdiction under Article 226 of the Constitution as is clear from Para 33 of the said judgment: "33. On a perusal of the preamble and the objects, it is clear as crystal that the Respondent has been established as a Scientific, Technical, Professional and Voluntary Non-Governmental International Organization, dedicated to enhance the world-wide supply of food and fibre for all people by improving water and land management and the productivity of irrigated and drained lands so that the appropriate management of water, environment and the application of irrigation, drainage and flood control techniques. It is required to consider certain kind of objects which are basically a facilitation process. It cannot be said that the functions that are carried out by ICID are anyway similar to or closely related to those performable by the State in its sovereign capacity. It is fundamentally in the realm of collection of data, research, holding of seminars and organizing studies, promotion of the development and systematic management of sustained irrigation and drainage systems, publication of newsletter, pamphlets and bulletins

and its role extends beyond the territorial boundaries of India. The memberships extend to participating countries and sometimes, as by-law would reveal, ICID encourages the participation of interested national and non-member countries on certain conditions."

¶15To be fair to the counsel for the appellant, it is necessary to deal with their submission on the basis of which they have endeavoured to convince this Court to hold that KRIBHCO is discharging public function. Their argument was that KRIBHCO has made substantial investments in companies such as IFFCO-Tokio General Insurance Company and Gujarat State Energy Generation Limited among others; it has established many Community Development Programmes, which look after the welfare of the Community at large and adopted villages and tribal areas; it had adopted 72 villages for community developments which include six Scheduled Castes and five Scheduled Tribes dominated villages; KRIBHCO was involved in construction activities in various schools; KRIBHCO runs various Farmers Benefit Programmes; conducts Crop Seminars, Farmers" meetings, filed demonstrations, technology melas, etc., Seed Multiplication programmes, etc.

¶16We are afraid these functions may not have any bearing on the issue involved. We have already reproduced and stated the main objective of KRIBHCO. Merely because KRIBHCO is involved in philanthropic activities as well that would not change the main character of KRIBHCO. Those activities are in the nature of voluntary social responsibility, which term for private corporation is known as "Corporate Social Responsibility". Such types of

philanthropic and charitable activities are organized by private entrepreneurs as well. In order to determine the character of KRIBHCO and to ascertain whether it is discharging public function or public duty, it is the main activity carried on by the KRIBHCO which has been the focal point. Examined from that angle, we do not find that KRIBHCO is covered by the test laid down.

¶17We are, therefore, of the opinion that KRIBHCO is not discharging any public functions or any public duties and, hence, is not amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India.

¶18As a result, LPA No.291 of 2012 is dismissed affirming the order of the learned Single judge dismissing the writ petition. LPA No.719 of 2012 is allowed, thereby setting aside the impugned order of the learned Single Judge and as a consequence dismissing the writ petition filed by the respondent in this appeal. However, there shall be no orders as to costs.

ACTING CHIEF JUSTICE

(RAJIV SAHAI ENDLAW) JUDGE SEPTEMBER 13, 2012 pmc

* IN THE HIGH COURT OF DELHI AT NEW DELHI LPA No.291 of 2002 with LPA No.719 of 2002 Reserved on: 23.8.2012 % Pronounced on: 13.9.2012 + LPA No.291/2002 & CM No.5363/2010 N.K. AGGARWAL . . . APPELLANT through : Mr. Assem Mehrotra, Advocate. VERSUS UOI & ORS. . . .RESPONDENTS through: Mr. Saqib along with Mr. Anuj Agarwal, Advocates for UOI. Mr. V.P. Singh, Sr. Advocate along with Mr. Rajat Arora and Mr. Om Prakash, Advocates for R-2 & 3. + LPA No.719/2002 & CM No.5362/2010 KRISHAK BHARTI COOP. LTD. & ANR. . . . APPELLANT through : Mr. V.P. Singh, Sr. Advocate along with Mr. Rajat Arora and Mr. Om Prakash, Advocates. VERSUS N.K. TANDON . . .RESPONDENT through: Mr. Ravi P. Mehrotra along with Mr. Vibhu Tiwari, Advocates for R-1. CORAM :- HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW A.K. SIKRI (Acting Chief Justice) 1. In both these appeals, the concerned body is Krishak Bharati Cooperative Ltd. ("KRIBHCO" for the sake of brevity). The question posed is as to whether it is discharging any public function and, thus, amenable to the writ jurisdiction of this Court under Article 226 of the Constitution of India. 2. The learned Single Judge vide impugned order dated 15.2.2002 passed in W.P.(C) No.189/1996 (out of which LPA No.291/2002 arises) by referring to the judgment dated 09.1.2002 in W.P.(C) No.3035/1999 and other connected matters titled R.K. Mishra and Others Vs. Krishak Bharti Co-operative Limited (Kribhco), which is a society registered under the Registration Act, is not to be treated as "another authority" or "instrumental or agency of the State" within the meaning of Article 12 of the Constitution of India, having regard to the constitution of the society and its bye-laws, etc. inasmuch as none of the test laid down by the Supreme Court on this aspect are fulfilled. In the appeal, challenge on this count is given up. However, the submission was that since KRIBHCO discharges public functions, it would still be amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India. 3. In LPA No.719/2002, KRIBHCO is in appeal. Here the learned Single Judge in its impugned order dated 12.8.2002 has taken the view that even if KRIBHCO is not State under Article 12 of the Constitution, there is no impediment in invoking the jurisdiction of the High Court under Article 226 of the Constitution, if any, of the fundamental rights as enshrined in Part III of the Constitution are affected. In the brief order passed by the learned Single Judge for taking this view, reliance is placed on the judgment of the Apex Court in the case of U.P. State Co-operative Land Development Bank Ltd. Vs. Chandra Bhan Dubey and Ors. [(1999) 1 SCC 741]. 4. Thus, the pure legal question which arises for consideration before us is identical in both the appeals on which submissions were made by the counsel for the parties. 5. Learned counsel for the appellant appearing in LPA No.291/2002 pointed out that in this very appeal, the Division Bench on earlier occasion had decided the issue vide judgment dated 03.10.2006. After detailed analysis, it had come to the conclusion that KRIBHCO was discharging public function and, therefore, it was amenable to writ jurisdiction. However, KRIBHCO had approached the Supreme Court challenging the said order and vide order dated 25.8.2008, the Supreme Court set aside the said order and remitted the case back for fresh consideration only because the reason that while deciding maintainability of writ petition under Article 226 of the Constitution, the Division Bench had not referred to counter affidavit filed by the Central Government and also did not consider the bye-laws of the society as amended upto March, 1995. His plea was that the Central Government in its affidavit has taken the position that KRIBHCO is not a State under Article 226 of the Constitution. Bye-laws of KRIBHCO society are also pressed into service from this angle. On this basis, it was his submission