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Bharat Heavy Plates Vs. Vessels Ltd. - Court Judgment

LegalCrystal Citation
SubjectLabour and Industrial
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revision Petition No. 214384
Reported in(1986)ILLJ145AP
ActsPublic Premises Eviction of Unauthorised Occupants Act, 1971; ;Code of Civil Procedure (CPC), 1908 - Sections 115; Constitution of India - Articles 14 and 21
AppellantBharat Heavy Plates
RespondentVessels Ltd.
labour and industrial - failure of justice - public premises eviction of unauthorised occupants act, 1971, section 115 of code of civil procedure, 1908 and articles 14 and 21 of constitution of india - husband motivated by desire to drive out his wife and children from company quarter terminated lease of quarter allotted to him - company started pressing wife to vacate company quarter - district court granted interim injunction restraining company from evicting wife except in due course of law - revision against order of interim injunction - according to second condition contained in proviso to section 115 of code civil revision against interlocutory order will not be maintainable unless interlocutory order would occasion failure of justice or cause irreparable injury to party against.....introduction :- 1. sodam kohinoor was married to sodam prasadarao and has three minor children. the husband is an employee of m/s. bharat heavy plates and vessels limited, visakhapatnam, which is a wholly government owned and controlled company and is, therefore, an instrumentality of the state, within the meaning of part iii of the constitution. the husband took on lease from that company, presumably on subsidised rates, quarters no. f-134 owned by that company where he set up his family. while the husband and wife were living together in that quarters which was made their matrimonial home by the apparent consent of the company, differences developed between them, leading to their estrangement and finally to the wife going to a court charging her husband with criminal neglect to maintain.....

Introduction :-

1. Sodam Kohinoor was married to Sodam Prasadarao and has three minor children. The husband is an employee of M/s. Bharat Heavy Plates and Vessels Limited, Visakhapatnam, which is a wholly Government owned and controlled company and is, therefore, an instrumentality of the State, within the meaning of Part III of the Constitution. The husband took on lease from that company, presumably on subsidised rates, quarters No. F-134 owned by that company where he set up his family. While the husband and wife were living together in that quarters which was made their matrimonial home by the apparent consent of the company, differences developed between them, leading to their estrangement and finally to the wife going to a court charging her husband with criminal neglect to maintain her and her three minor children. The Judicial First Class Magistrate, Kovvur, who inquired into that Charge in M.C. No. 70/80 upheld the wife's contention and granted maintenance decree. Under that order, the husband was made liable to pay maintenance at the rate of Rs. 100/- to his wife and Rs. 100/- to his minor children per month from 1st November, 1981. The husband appears to have obtained a decree against his wife for restitution of conjugal rights. But the wife says that although she is willing to live with her husband the husband had never come to her. Apparently the husband is living away from the company quarters. The result is that the wife with her minor children is living alone in the above quarters belonging to the company.


2. On 15th January 1981 the husband by his letter addressed to the company took what is clearly a retaliatory action against the wife and the children. On that day, he terminated the lease of the above quarters No. 134 which was in his name. The husband informed the company that he should not any longer be held liable for the payment of rent for that quarters. On receipt of the above letter from the husband, the company had started pressing the wife to vacate the above mentioned quarters belonging to the company. It could not have been unknown to the company that the husband was motivated by a desire to drive out his wife and children from the company quarters. Ignoring the husband's motive the company went on pressing the wife to vacate the quarter. For doing so, the justification of the company is purely legal. The company says that it was losing rent on the quarter which it was hitherto deducting from the salary of the husband, but which it could no longer collect from salary of the husband. As in law there was never any privity of contract nor privity of estate with the wife, the company thought, that the continued stay of the wife and her children in the company quarters had become unauthorised and unlawful. Treating the possession of the wife and the children as unlawful, the company asked the wife to vacate the quarters. Nice legal points apart, Visakhapatnam which is undoubtedly a city of the future, is today one of the costliest places in India to live in. For the ordinary people, living accommodation is very hard to secure there. The wife having no other place to go was not too ready and willing to vacate the quarters. By necessity, she is continuing to live in that company quarters. When the wife had thus failed to vacate the quarters, the company had threatened her with forcible eviction.

The present controversy :-

3. Faced by the hovering prospect of eviction, the wife had gone to the court of the Principal District Munsif, Visakhapatnam, for protection. She filed O.S. No. 689/82 on the file of the Principal District Munsif, Visakhapatnam, for a permanent injunction restraining the company and her husband from evicting her and her minor children from the company quarter. She made her husband a second defendant to the suit. Pending the hearing of that suit, she asked for a temporary injunction to maintain her possession of the quarter. The District Munsif had initially granted the wife an interim order of injunction in I.A. No. 1478 of 1982, but had later vacated it leaving the company thereafter free to forcibly throw out the wife and the children from the company quarter. Against that order of the District Munsif, the wife appealed to the District Court in C.M.A. No. 5/84. The District Court upheld the contention of the wife and issued an order of injunction restraining the company pending disposal of the suit from evicting the wife and her three minor children, except in due course of law. The District Court reasoned that the wife and the children cannot forcibly be thrown out by the company and that they can be evicted only in due process of law. The learned District Judge observed :

'So far as the loss sustained by the second respondent (husband) the same can be compensated by permitting him to deduct the amount from the maintenance payable to the petitioners. On the other hand, if no injunction is granted, it is likely that she may be thrown out of the house and that she and the children will have to stay in the streets before they can get an alternative accommodation for themselves and therefore, I feel that it is a fit case where an interim injunction ought to have been granted by the trial court'.

4. The learned District Judge had, however, left the company free to proceed under the provisions of the Public Premises Eviction of Unauthorised Occupants Act, 1971.

Civil Revision Petition :-

5. Having been aggrieved by that order of injunction passed by the learned District Judge in the above C.M.A., the company has preferred the present Civil Revision Petition.

6. Sri Poornaiah, the learned counsel for the company, argued two points to show where the District Judge went wrong. (1) He argued, that the order of injunction which had been passed by the learned District Judge maintaining the wife's possession was wholly unsustainable. The learned counsel said that quarter No. 134 belongs to the company and was demised in favour of the husband who had later terminated the lease. As the company had no privity of contract, nor privity of estate with the wife, he said, the continued occupation of the company quarter by the wife and her minor children is unlawful and unauthorised. For that reason, the learned District Judge, Sri Poornaiah argued, could be said to have acted illegally and without jurisdiction in granting an injunction restraining the company from evicting the wife and her children. (2) The learned counsel also argued, that the civil court has no jurisdiction to entertain a suit of this nature, because the quarter belongs to a wholly Government-owned company, falling under the provisions of the Public Premises Eviction of Unauthorised Occupants Act, 1971 which deny jurisdiction to the civil courts.

The Scope of proviso to Sec 115 C.P.C.

7. I assume for the present purpose that these submissions of the learned counsel for the company are correct. But, I note that these submissions of the learned counsel are not sufficient in law to justify this court to entertain this Civil Revision Petition. These submissions of the company are based on the meaning of S. 115 Clause (1) Sub-cls. (a) (b) and (c) of the Civil Procedure Code. There is no doubt that these sub-clauses of S. 115 C.P.C. prima facie, lend support to the arguments, of the learned counsel. If those provisions alone have been decisive in this case, I am prepared to hold on the basis of my present assumptions that the contention of the learned counsel is sound. But, it is plain that Sub-cls. (a), (b) and (c) of S. 115 Clause (1) of C.P.C. as they stand to-day are not sufficient to warrant admission of this Civil Revision Petition. The reason is that we are here concerned with a Civil Revision Petition filed against an interlocutory application. Section 115 Clause (1) Sub-cls. (a), (b) and (c) do not lay down exhaustive conditions for entertaining Civil Revision Petition filed against interlocutory orders of the sub-ordinate courts. It merely lays down necessary conditions which such a Civil Revision Petition should fulfil. Section 115 C.P.C. underwent statutory modifications recently by reason of Act No. 104 of 1976. Prior to that, there was a sharp division of opinion between the various High Courts on the question whether a Civil Revision Petition filed against an interlocutory order was maintainable at all in the High Courts. Adopting the British analytical approach which, on the whole, proved to be more a bane than a boon to the interpretation of a Procedural Code like the Civil Procedure Code some High Courts had held that an interlocutory order did not decide a case and that, therefore, no revision petition could be entertained against such an interlocutory order. Some other courts took a contrary view and held that a Civil Revision Petition was maintainable even against an interlocutory order. Armies or words had clashed over the terrain of S. 115 C.P.C. seeking to establish its true meaning. But peace had never come to that poor section. Its life had been tossed between conflicting versions. Now the statutory amendment of 1976 arbitrating on this wordy conflict firmly established peace by laying down that whole that there should be no ban for entertaining revision petitions against interlocutory orders the court should not entertain such revision petitions filed against interlocutory orders unless such revision petitions comply with the conditions now newly added by the proviso to the above S. 115 C.P.C. in addition to fulfilling those conditions which are to be found in Sub-cls. (a), (b) and (c) of Clause (1) of S. 115 C.P.C. The result today is that a civil revision petition should fulfil the new conditions contained in the proviso in addition to the conditions contained in S. 115 (a), (b) and (c) of C.P.C. As in the present case, the Civil Revision Petition has been filed by the company against an interlocutory order, it should be considered whether this revision petition satisfies the above conditions added by the proviso to S. 115 C.P.C. That proviso reads thus :

'Provided that the High Court shall not, under this section, vary of reverse any order made, or any order deciding an issue, in the course of a suit or other proceeding, except where,

(a) the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceeding, or

(b) The order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it was made.'

We may omit from our consideration the first condition mentioned in the above proviso, because it is not relevant for our discussion. It is only the scope of the second condition which we have to consider. According to that condition a Civil Revision Petition filed against an interlocutory order will not be maintainable unless the interlocutory order sought to be revised would occasion failure of justice or cause irreparable injury to the party against whom it was made. Let us see whether the present Civil Revision Petition satisfies those extra conditions. It must be noted that the order made by the learned District Judge provided for deducting the amount of rent from the salary of the husband from and out of the amount of maintenance awarded to the wife and the children in the above mentioned maintenance decree as payable by the husband. Because of the imposition of the above condition, neither the company nor the husband can be said to suffer any irreparable injury by the interlocutory order maintaining continued possession of the company quarter by the wife. The only other question is, whether the present interlocutory order would occasion failure of justice. We have already seen that only if and when an interlocutory order can be said to occasion failure of justice in addition to its having been vitiated by reasons of jurisdictional excesses or procedural illegalities, a Civil Revision Petition can be entertained against such an interlocutory order. It may be noted that those words 'failure of justice' are used to lay down additional and independent condition for the exercise of revisional jurisdiction. Those words must, therefore, be given a meaning different from the meaning we give to Cls. (a), (b) and (c) of S. 115(1) of C.P.C. Those words, therefore, cannot be interpreted as merely duplicating the meaning which Sub-cls. (a), (b) and (c) of Clause (1) of S. 115 C.P.C. carry. Clauses (a), (b) and (c) of S. 115(1) C.P.C. lay down legal and jurisdictional conditions. It follows that for entertaining a Civil Revision Petition against an interlocutory order it is not sufficient that the interlocutory order suffers from jurisdictional errors, but additionally it must also be bad for the reason if its occasioning failure of justice. It follows that the legal argument about the absence of privity of contract or privity of estate cannot even if valid be a ground to entertain this Civil Revision Petition. We have to see additionally whether there is failure of justice.

No Failure of justice

8. It not easy is to see how the interim order can be said to occasion failure of justice in the above sense of the term. The quarter is owned by a legal person and not by a natural person. It is meant to be used by the employees. The husband is under an obligation to provide shelter to his wife and children. The husband and the company acting in different ways have been recognizing all these years the occupation of the quarter by the wife in her matrimonial right. Neither the company suffers, nor the husband suffers any monetary loss by reason of the interlocutory order passed by the learned District Judge, because the learned Judge directed deduction of rental amount from the sum of maintenance payable by the husband to the wife and the children. It almost amounts to making a book transfer. In these circumstances, I hold that the interlocutory order cannot be said to occasion any failure of justice.

9. The fact that the legal person in this case is a State instrumentality is an additional reason for my holding that there is no failure of justice. A State instrumentality is under an obligation to act in conformity with Arts. 21 and 14 of the Constitution.

10. Further it is arguable in the circumstances of this case that the interim order is justifiable on the basis of recognition accorded by the company and the husband to the wife's occupation of the company quarter as her matrimonial home for all these years.

11. For all these reasons, I hold that there is no failure of justice occasioned by the interim order passed by the learned District Judge. By preventing the State instrumentality from rendering the wife and the children homeless, this court is only preventing failure of justice. This cannot be regarded as occasioning failure of justice in a Socialist Democratic Republic like ours. As there is no failure of justice occasioned by the interlocutory order I hold that the present Civil Revision Petition is not maintainable against such an interlocutory order.

Equity Jurisdiction :

12. There is also another reason why I think I should not entertain this Civil Revision Petition.

13. No one can deny that the court enjoys wide equity jurisdiction that should not be limited be definition. Writing in Scandinavian Tanker v. Flota Petroleva (1983) I All E.R. 300 at 307, Robert Goff L.J. recently noted quoting the authority of Holdsworth's 'History of English Law', Vol. 5 (3rd Edition 1945, page 330) the nature of equity jurisdiction. He said that :

'no doubt at bottom the equitable jurisdiction rests upon the idea that it is not fair that a person should use his legal rights to take advantage of another's misfortune, and still less that he should scheme to get legal rights with this object in view.'

The meaning of this view of equity is that legal powers should not be allowed to be used by courts to exploit others' misfortunes and miseries. This is no more than extending into private law the principle of public law that all powers should be exercised honestly and reasonably. The justification for the above extension is shown in a later part of this judgment. Courts should uphold only claims prosecuted in good faith. Where legal actions are tainted by the unfair desire to cause undeserving suffering to others, courts should suppress such legal actions and should not support them. They should refuse to lend their aid for enforcement of such claims. This is one of the considerations that additionally weighs with me in upholding the order of the lower court.

Common law concept of ownership rights and the Courts, attitude in enforcing them.

14. But there is even a more fundamental reason why this revision petition should not be entertained. That reason is the reason of Socialist jurisprudence.

15. The entire argument of Sri Poornaiah is based upon the theory that the company's rights are property rights, in exercise of which, the owner is answerable to none. He argues that the quarter is owned by the company and consequently, the company has a right to use it, posses it and exclude the wife and the children from the quarter without regard to or consideration for the misery and the suffering there by caused to the wife and the children. This would, undoubtedly, be the position under the common law where the courts are ready and willing to enforce property rights as understood by the Anglo-Saxon Jurisprudence. It is accepted in Anglo-Saxon Jurisprudence that, 'Ownership denotes the relation between person and an object forming the subject matter of the ownership. It consists in a complex in rights all of which, rights in rem, being good against all the world and not merely against specific persons.' (Salmond's Jurisprudence, 12th Edition, page 246). It would be not illogical from the above point of view of Anglo-Saxon Jurisprudence for the courts to disregard the suffering of the wife and the children in enforcing property rights of the company to the quarter, because the concept of property in the Anglo-Saxon Jurisprudence takes into account only the relationship between the owner and the object. In that situation, the person who suffers from the exercise of the ownership rights is not heard or taken note of at all. Only the inanimate object is counted. The juridical significance of this long established view of ownership rights consists in its total exclusion of all questions relating to the rights and interest of all persons other than the owner.

16. Once we accept the above Anglo-Saxon definition of ownership rights, it would wholly be logical for the courts to grant their authority and aid in enforcing these ownership rights for the mere asking of the owner without taking into account the sufferings of others. Such considerations relating to others' interests and sufferings could never be said to arise logically out of the above definition of ownership rights as a relation between owner and object. The profound legal significance of ownership rights being described as right in rem consists exactly in this.

17. Courts working under the traditional Anglo-Saxon Jurisprudence and accepting the above definition of ownership do not, therefore, hesitate to enforce the ownership rights showing no concern to others, interests. The wife's agony and the children's suffering will all be totally alien and irrelevant considerations for the courts in lending their aid for the enforcement of the ownership rights of the company.

But the socialist concept of ownership rights is different and the attitude of the Courts towards the enforcement of ownership rights in a socialist republic should also be different.

18. But the serious question that falls for our consideration in this case is, whether this common law concept of ownership rights is the one that can legally be recognised in full by our courts and enforced by them to the full. It is often assumed that the above concept of ownership rights is a universal category, and is not a historical Category. But this assumption is not correct. Common law concept of ownership is a historical social institution and is not an eternal and universal legal principle. So, man can unmake it if he so chooses. In my humble opinion, with the inauguration of our Constitution, at any rate with the Forty-second Constitutional Amendment, the common law concept of ownership has undergone radical and fundamental changes in our polity. The preamble to our Constitution, as amended by the Forty-second Constitutional Amendment, provides evidence of this change. The preamble to our Constitution declares the character of our Democratic Republic as Socialist. The declaration contained in our basic charter cannot be without profound legal significance to our legal system. Today, it is an accepted proposition of our constitutional law that the preamble to our Constitution is itself an integral part of the Constitution. The decision of the Supreme Court in Kesavananda Bharai's case is a refutation of the old theory that looks down upon the constitutional preamble as some what of a sleep-walker. As a part of the Constitution, preamble will enjoy the same legal status and significance as other parts of the Constitution do. It, therefore, becomes necessary to ascertain the legal significance of the preamble declaring India to be a Socialist Democratic Republic. What is the significance of the addition of the word 'Socialist' in the preamble to our Constitution Addressing itself to somewhat a similar question, the Supreme Court in Excelwear v. Union [1978-II L.L.J. 527], outlined the legal significance of description made by the preamble of our Democratic Republic as Socialist. In that decision, the Supreme Court first rejected the theoretical meaning of the word 'Socialist' as unacceptable. It next opted for the pragmatic meaning of the word 'Socialist'. Finally, it indicated the legal change that this word 'Socialist' inserted into the preamble by the 42nd Constitutional Amendment has brought about. Describing that change, the Supreme Court made the following observations which I think, are of great significance. The Supreme Court said at Para 23 on page 538.

'The difference pointed out between the doctrinaire approach to the problem of socialism and the pragmatic one is very apt and may enable the courts to lean more and more in favour of nationalisation and State ownership of any industry after the addition of the word 'Socialist' in the preamble of the Constitution.'

19. The above observations by the Supreme Court in Excelwear's case call for radical attitudinal changes in the courts enforcing ownership rights. Those observations of the Supreme Court call for the enforcement of law by the courts in our Socialist Democratic Republic only in accordance with the jurisprudential notions that are appropriate to our Socialist Democratic Republic. What then is the appropriate jurisprudential notion of ownership that fits into our polity of Socialist Democratic Republic In order to be able to answer that question, we should first notice the meaning of the ownership rights in a Socialist Republic. We may note that there exists a sharp cleavage in the jurisprudential thought between the socialist conception of ownership and the common law conception of ownership. We have already seen that in common law concept of ownership, it is a relationship between a person and an inanimate object. In socialist jurisprudence, concept of ownership does not refer to the relationship between the owner and an inanimate object, as the concept of common law ownership does. In socialist jurisprudence, concept of ownership refers, only to a relation between person and person. (see 'Ownership and other property Rights' by V. Fabry, Vol. 18, International and Comparative Law Quarterly, 1960, page 970).

Ownership as power

20. The reason behind this jurisprudential view of ownership rights in a Socialist Republic is rooted in the recognition of the well accepted social fact that exercise of ownership rights by the owner is only an exercise of power in a particular form and in a particular way over other persons. This is an article of faith with all socialist though and is common to all brands of Socialism. Galbraith wrote,

'For socialists property was and in no small measure remains not only the decisive, but the sole source of power...... As long as it remains in private hands, no other can possess power.'

(See - Galbraith's 'Anotomy of Power' p. 47).

21. Hundreds of years ago, the Great Telugu Poet Vemana, recognised property as power. In a steeply hierarchical society, such as ours, money can purchase and property can coerce human beings.

22. Exercise of ownership rights as power affects, undermines and even destroys, like the exercise of any other power, others right to pursue their happiness. Socialist concept of ownership rights demystifies the concept of ownership and helps to see it in its true social reality. Now others rights to happiness when they are affected and destroyed by exercise of ownership rights and affected and destroyed only though the media of enforcement by the State organs like courts. It is for this reason that Marx called 'State' as 'an executive committee for managing the affairs of the governing class as a whole.' More or less, the same view of courts' power is taken by Mr. Justice Holmes. Mr. Justice Holmes, throughout his long and illustrious career, was never tired of describing law as no more than a statement of the circumstances in which the public force will be brought to bear upon a man through courts. (see his letter to Polak written on 21st April, 1935 just a few years before his death.)

23. Now the question is whether the courts in our Socialist Republic can supply public force to the enforcement of ownership rights on the same basis and for the same considerations as the courts in common law jurisdiction can do, knowing full well that exercise of ownership rights can have serious effects on others. The answer is clearly, 'no'. As Mr. Justice Douglas said in Walker v. Birmingham 18 L.Ed. 1210 (1967), 'A court does not have jurisdiction to do what a city or other agency of State lacks jurisdiction to do.' No agency of the State can, under our Constitution, adversely affect or unjustifiably destroy any our citizen's right to pursue his happiness. The right to pursue one's own happiness is recognised in Guruswamy v. State of Mysore 1954 Mys. 592, as a basic right. After Forty-fourth Constitutional Amendment Act of 1978 which deleted right to property from our Constitution as a fundamental right and kept it merely as a legal right, it would be open to law to recognise property right only as a right subordinate to the fundamental rights of the Constitution.

24. If the courts in Socialist Democratic Republic supply public force to the exercise of ownership rights without examining the destruction such exercise of ownership rights might cause to the rights of other persons to pursue their happiness it would not only amount to supplying public force for the destruction of a constitutionally recognised basic rights, but it would also amount to working contrary to the fundamental purpose of the Constitution as enumerated in the preamble and other parts of the Constitution. This clearly our courts have no jurisdiction to do. Our countrymen, should lend their ears to the mandatory messages our Constitution constantly radiates in its effort to secure to all citizens justice, liberty equality and fraternity. Particularly courts cannot disobey the clear constitutional mandate contained in Articles like Article 38 of the Constitution. Article 38 directs, 'the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political, shall inform all the institutions of the national life.' Consistent with his oath of office, a constitutional Judge cannot allow the use of the court's power to defeat the fulfilment of the above constitutional promises. Courts must, therefore, consider in each case whether the exercise of ownership rights is unjustifiably affecting others' inalienable rights to pursue their own happiness and whether such exercise is causing undeserving suffering and sorrow to others. It follows, courts cannot act merely as the mouth-pieces of the property owners, nor at the behest of the property owners as they do in common law jurisdictions while enforcing ownership rights. Courts, therefore, must examine the motive and the purpose behind the exercise of ownership rights on a case to case basis as they arise. In other words, they should examine the motive and the purpose behind the exercise of private power, as they do in the case of exercise of public power by public authorities. Once courts recognise the fact that exercise of ownership rights is one form of exercising power and, in fact, its most important form, there can be no escape from undertaking such an examination. There can therefore, be no justification in allowing exercise of private power without examination of the motive and purpose behind such exercise. Motive behind the exercise of State power is always made examinable by the courts to limit the exercise of State authority only to justifiable purposes. Why it should be otherwise and why the exercise of ownership rights in a Socialist Republic should not be similarly examinable, is not easy to understand. Why it was not so done in the past by the courts enforcing the common law concept of ownership rights is wholly understandable. That system of jurisprudence is different from Socialist jurisprudence. The fact that in the past we were following the common law principle alone cannot provide justification for continuing that rule under our Socialist Republic. We have the high authority of the venerable Holmes to say that a rule cannot be continued merely on the basis of its past history of enforcement. We must realise that these social institutions are historically evolving and what is suitable in one age may not be conducive to produce social happiness in another context. When courts realise that 'property does not have rights. (Only) People have rights,' as Mr. Justice Stewart said in Lynch v. Household Finance Corporation Ltd. (405 U.S. 538, 1972) courts in a Socialist Republic would not be unjustified in refusing to allow the exercise of every private power masquerading as exercise of ownership rights without examining the motive and the purpose behind its exercise and the consequences of its exercise.

Theory of state action applies to courts also :

25. The examination of the matter from the point of view of the doctrine of State Action, in the early pioneering of which in our country, this court has played a notable role leads to the same conclusion. According to that doctrine, the act of enforcing ownership rights by the courts constitutes State Action and is therefore, subject to constitutional limitations and prohibitions. In other words, constitutional limitations inhibit the exercise of public power by court is as much as they inhibit exercise of State power by any other State organ. Shally v. Kraemer (92 L.Ed. 1161, 1948), is a clear example of the doctrine of State Action being applied to the courts. In that case, the White house-owners, living in a block of houses, entered into an agreement among themselves, restricting the sale of their houses only to Caucasians. Those restrictive covenants which bind the White house-owners deny them the right to sell their houses to the Blacks. However, some defiant Blacks ignoring those restrictive covenants, purchased the houses from some liberal minded Whites who were willing to sell their houses in disregard of the above mentioned restrictive covenants. Some of the enraged neighbouring White owners sued the Black purchasers in the State courts for a declaration that the purchases of the houses by the Blacks were invalid and also for injunctive relief of restraining the Blacks from taking possession of those houses. The State Supreme Court, upholding the contention of the White suitors had granted the reliefs which they have asked for and declared the sales of houses effected in contravention of the restrictive covenants, as void and also restrained the Blacks from taking possession of those houses. The State courts acted on the theory that in granting relief to suitors they were merely giving effect to the agreements entered into among the Whites and supplied public force restraining the Whites from selling the houses to the Blacks as per the terms of the restrictive covenants.

26. In appeal, the American Supreme Court had reversed the judgment of the State courts and vacated the order of the State Supreme Court holding that in supplying public force for the purpose of enforcing the restrictive covenants, the State courts acted as organs of the State and were therefore bound not to transgress the famous 14th Amendment of the American Constitution prohibiting the racial discrimination. Vinson C.J., speaking for the Court noted :

'These are cases in which the purposes of the agreements were secured only by judicial enforcement by the State courts of the restrictive terms of the agreements...... The enforcement of the restrictive agreements by the State courts in these cases was directed pursuant to the common law policy of the States as formulated by those courts in earlier decisions. The judicial action in each case bears the clear and unmistakable imprematur of the State'.

27. In a large measure, our constitutional jurisprudence has already acknowledged the social reality that exercise of ownership rights is only a particular form of exercise of social power and for that reason, courts are under a duty while supplying public force enforcing ownership rights to examine the motive and purpose behind the owners' request to the court for help. The judgment of the Supreme Court reported in the National Textile Workers' Union v. P. R. Rama Krishnan [1983-I L.L.J. 45] may be considered as a clear example of this line of new thinking. The controversy arose out of a petition filed by some of the share-holders for winding up a private limited company in which the two groups of share-holders were locked up in an unresolvable conflict. Because of the internal disputes, the company was closed down. Then an application for winding up was filed on the ground that the company was unable to pay its debts and that it was just and equitable that the company should be wound up. The point of jurisprudential importance which the Supreme Court decision holds for us lies in its ruling that a winding up company application shall not be heard by the company court without the view of the workers being heard and considered at p. 58 of [1983-I L.L.J. 45].

Bhagwati, J.


'No system of law designed to promote justice through fairplay in action can permit the court to make a winding up order which has the effect to bringing about termination of the services of the workers without giving them an opportunity of being heard against the making of such order.'

Earlier the learned Judge also said : at p. 54-55

'A company is no more regarded as the property of the shareholders, as a legal device adopted by shareholders, for carrying on trade or business as proprietors. A Company is now considered as a species of social organisation with a life and dynamics of its own and having a firm and deep-rooted affiliation with and duties and responsibility towards the contemporary society. Therefore, maximisation of social welfare should be the legitimate goal of a company.'

These observations show that the old common law concept of ownership as right in rem is no longer acceptable to our jurisprudence. The emphasis on a company being a species of social organisation helps to bring out the social accountability of exercise of ownership rights. Exercise of ownership right is regarded by the above decision as exercise of social power involving adverse civil consequences for those against whom that power has been exercised. It is also on that basis that in an earlier decision in Fertilizer Corporation Kamgar Union v. Union of India [1981-I L.L.J. 193] the Supreme Court entertained an application at the instance of the workers' Union complaining against a proposal of the Government of India to sell a factory which is wholly owned by the Government-company.

28. Another judgment of the Supreme Court in Ajay Hasia v. Khalid Mujib [1981-I L.L.J. 103] which is usually understood as an illustration of the doctrine of State Action can also be understood as laying down the proposition that the common law concept of ownership can no longer be applied in full in our Socialist Republic. The petitioners in Ajay Hasia's case (supra) complained to the Court against an Educational Society registered under the J & K Societies Registration Act for its refusal to admit the petitioners in its Engineering College Courses. The petitioners alleged violation of their fundamental rights guaranteed to them under Part III of the Constitution as having occurred by such acts of refusal by the Private Educational Society. That allegation gave rise to a question whether act of refusal to admit the applicants into the portals of Engineering College owned and managed by a private Society can be corrected by exercise of writ jurisdiction. In refusing admission to the petitioners, one cannot deny the fact that the Private Educational Society is exercising its normal ownership rights and that it is not exercising any sovereign powers of the State. Following the traditional view adumbrated in Rajasthan State Electricity Board case [1968-I L.L.J. 257] the petitioner's claim for relief ought to have been negatived on the ground that exercise of ownership rights by a Private Educational Society is not amenable to correction in writ jurisdiction, because no private society exercises sovereign coercive power. Yet, the Supreme Court, by its judgment in the above Ajay Hasia's case (supra), intimated that acts of such Private Educational Society are amenable to correction. No doubt the apparent reason mentioned by the Supreme Court for so holding is that the running of an Engineering College as well as its establishments are wholly financed by the use of State funds and that the society in fact is a State instrumentality. But can financing by State be considered to be conclusive of the matter It can be argued that grants obtained by a private institution either in the form of loans or gifts from State cannot produce legal results which are different from the legal results which grants or loans obtained by such private colleges from private sources can produce. The reason is the grantee or the donee college which is endowed with a distinct artificial legal personality possessing right to borrow monies and accept gifts and act according to its character, cannot after the authorship of its acts. Clearly the legal nature of their acts performed in admitting or refusing to admit the candidates to academic courses cannot, but be attributed to the ownership rights of those bodies. The legal nature of such act cannot vary depending upon the methods the college or the society adopts for raising finances or from the nature of the sources from which it mobilises its resources. It is an inalienable right of all persons, either natural or artificial, to beg and/or to borrow, thought not to steal. In accepting Governments loans or grants the society is merely exercising this ancient right. For that reason, the legal character of the society cannot change. State financing therefore may not be regarded as the real reason for upholding jurisdictional control in Ajay Hasia's case (supra). The real reason behind the judgment in Ajay Hasia's case must, therefore be found outside the fact of State lending its finances to the college or society. I respectfully suggest that the real reason lies in the Supreme Court tacitly accepting the social reality that exercise of ownership rights in a Socialist Democratic Republic is only exercising social power affecting other persons. It is not without significance that the decisions in Ajay Hasia's case, Fertilizer Corporation's case and National Textile's case were all rendered after the insertion of the word 'Socialist' in our preamble while the Rajasthan decision was rendered at a time when the word 'socialist' was not part of our Constitution.

29. For the above reasons, I hold that on the authority of the above decisions of the Supreme Court it would no longer be permissible for the Courts to apply the old common law principle of ownership in our Socialist Republic.

30. Hence, I invoke the immortal words of Mr. Justice Cardozo :

'The law, like a traveller, must be ready for the tomorrow. It must have a principle of growth.'

31. If ever there would be a case which would attract the application of the above principles, it should be this case. Applying the above principles to the facts of this, case, it appears to me that it is wholly proper for this Court to refuse to aid the Company and the husband in this scheme to get the wife and the children out of the company quarters. The fact that the Company is acting in exercise of his lawful rights, cannot prevent this Court from refusing its aid to the Company to carry out it scheme. The situation is, no doubt, complicated by the intervention of the interest of the company. But fortunately, they are amply safeguarded by the order of the District Judge providing for the payment of rent-to the company out of the maintenance amount payable by the husband.

32. For all the aforesaid reasons, I dismiss this Civil Revision Petition.

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