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Kartick Chandra Nandi Vs. West Bengal Small Industries Corporation Ltd. and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Case NumberC.O. No. 2518(W) of 1966
Reported inAIR1967Cal231
ActsConstitution of India - Articles 12 and 226; ;Companies Act, 1956 - Section 617
AppellantKartick Chandra Nandi
RespondentWest Bengal Small Industries Corporation Ltd. and ors.
Appellant AdvocateC.F. Ali, Adv.
Respondent AdvocateS. Bose and ;Bhagabati Prosad Banerjee, Advs. for Opposite Parties No. 1
DispositionPetition dismissed
Cases ReferredSohan Lal v. State Industrial Tribunal
- .....either governmental (or executive) powers or legislative powers. so far as the union and a state government is concerned, it includes its executive basheshar v. income tax commr., : [1959]35itr190(sc) : bidi supply co. v. union of india. : [1956]29itr717(sc) and legislative k.k. kochunni v. state of madras, : air1959sc725 organs and departments.12. the expression 'local authorities' which come next in article 12, also partakes of the features which characterise the government and legislature of the union and a state, though in a limited way, inasmuch as a local authority, such as a municipality, exercises governmental powers within a local area and also legislative powers, though of a subordinate nature, within the limits imposed by the statute which creates the municipality.13......

1. The Petitioner has brought this Petition under Article 226 of the Constitution, as the Secretary of the Sribara Co-operative Sankha Silpi Society, praying for a writ of mandamus directing the Respondents who include the West Bengal Small Industries Corporation Ltd. (O. P. No. 1) and the Government of West Bengal (O. P. No. 2) to cancel the order dated the 5th August, 1966, made by Respondent No. 8, the Managing Director or Opposite Party No. 1 (hereinafter referred to as 'the Corporation'), which is at Ann. B to the Petition.

2. The Petitioner is a member, along with a number of other conch-shell artisans, of the Sribara Co-operative Sankha Silpi Society Ltd., and his case is that this Co-operative Society has a right 'to get an equitable distribution of Chanks' from the Corporation. This alleged right is founded in this way: Chanks are grown only in the States of Madras and Ceylon. In order to ensure a supply of these chanks to artisans of West Bengal, the Government of West Bengal, in 1956, formulated a scheme through its Directorate of Industries, for the purchase of chanks from Madras and Ceylon and then to distribute them to the artisans through the Cooperative Societies. In June, 1961, the Scheme, with its staff, was transferred to the West Bengal Industries Corporation Ltd., which describes itself as a Government of West Bengal Undertaking. It is further stated in the Petition that though the Corporation is a company registered under the Companies Act, its shares are confined to the Government or its nominees and its Articles of Association expressly declare that 'no invitation shall be issued to the public to subscribe any shares or stock or debentures stock of the Company.'

3. The Government of Madras has recently allotted chanks worth Rs. 6.75 lakhs to the Corporation but by the impugned order, the Managing Director has allotted all these chanks to only three out of the 24 Chank Co-operative Societies of West Bengal. But by the same order (Ann. B), the Corporation has intimated the Society to which the Petitioner belongs that another consignment of chanks is being expected from Tuticorin for the supply from which stock the Petitioner's Society may apply :

'We have already requested the Government of Madras to make available to us further quantities of Tutieorin chanks valued approximately at Rs. 7.5 lakhs. In case a society or a group of societies agree to execute the necessary agreement with this Corporation for purchase of the aforesaid quantity of chanks they may contact the undersigned.'

4. Not satisfied with any such assurance, the Petitioner has brought this Petition under Article 226, complaining of an infringement of theduty of the Corporation to distribute the chunks equitably amongst all the Co-operative Societies, as listed in Ann. A. The favourable treatment of only three Societies by the impugned order is alleged to be in violation of the public duty of the Corporation to effect equitable distribution of the chanks and of the guarantee of equal protection in Article 14 of the Constitution.

5. Without issuing a Rule in the first instance, I directed the Petitioner to move the petition after notice to the Opposite Parties, The Corporation and its Managing Director have appeared and opposed the Petition by a counter-affidavit.

6. The Respondent contends that the Petition must be dismissed since the Petitioner has failed to make out any legal right of the Petitioner to enforce an equal distribution of the ohanks by the Respondent or any corresponding legal duty on the part of the respondent which is a company registered under the Companies Act, and as such a legal entity separate from the State and has no statutory obligations in the matter of distribution of the chanks, which it is carrying on commercial terms with those who agree to accept those terms.

7. The question to be determined in this petition is one of law, namely, whether a writ of mandamus is available against a company which has no share-holder from amongst the public, and which is owned and managed by the Government and its officers, but without any statutory obligations.

8. Since the question has not yet been thrashed out by the Supreme Court authoritatively, and there have been High Court decisions of different shades, we must have to proceed analytically if confusion has to be avoided.

9. The attack against a respondent in a Writ Petition may be (a) constitutional or (b) non-constitutional.

9-A. A. In the case before me, it has been arged that the act of the Corporation complained of constitutes a violation of Article 14 of the Constitution, the other constitutional grounds taken in the petition not being pressed at the hearing.

10. One thing is clear, namely, that whenever a complaint of violation of fundamental rights included in Part III of our Constitution is made, the person aggrieved can have no remedy unless the respondent can be brought within the definition of 'State' given in Article 12. So far as Article 14 is concerned, the position is made clear by the Article itself inasmuch as it enjoins 'the State' specifically, by its opening words.

10A. There has been a mass of judicial decisions in the U. S. A. upon the concept of 'State action' which lies at the foundation of the guarantee of Equal Protection. In India, Courts have been spared that much of labour in view of the word 'State being defined at the beginning of Part III of the Constitution, and the controversy, if any, must be as to the interpretation of this definition. Article 12 gives the definition as follows: --

'In this part, unless the context otherwise requires, 'the State' includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the lerritory of India or under the control of the Government of India.'

11. But, notwithstanding the adoption of the definition, controversy has still arisen as to the meaning of the residuary words other anthorities'. There is a consensus of opinion that the opening words 'Government and Parliament of India and the Government and the Legislature of each of the States' give colour to the rest of the Article. These opening words indicate that in order to be included within the definition, the authority must exercise either Governmental (or executive) powers or legislative powers. So far as the Union and a State Government is concerned, it includes its executive Basheshar v. Income Tax Commr., : [1959]35ITR190(SC) : Bidi Supply Co. v. Union of India. : [1956]29ITR717(SC) and legislative K.K. Kochunni v. State of Madras, : AIR1959SC725 organs and Departments.

12. The expression 'local authorities' which come next in Article 12, also partakes of the features which characterise the Government and Legislature of the Union and a State, though in a limited way, inasmuch as a local authority, such as a Municipality, exercises Governmental powers within a local area and also legislative powers, though of a subordinate nature, within the limits imposed by the statute which creates the Municipality.

13. The residuary expression other authorities' comes after 'local authorities'. It is to be noted that the word 'authority' is common to both 'local' and 'other bodies referred to by the definition; The Dictionary meaning of the word 'authority' is a person or body exercising power or having a legal right to command and be obeyed (Webster's Dictionary; Odham's Dictionary). From this, it has been held that the word 'authority', in Article 12, refers to persons or bodies having the power to make rules, bye-laws etc. having the force of law Nambooripad v. Cochin Dewaswom Board, AIR 1956 Trav. Co. 19(21) and also the power to enforce them University of Madras v. Shanta Bai, : AIR1954Mad67 . The possession of these powers brings Use 'other authorities' on the same platform with the Government and Legislature of the Union or a State or a local authority, such as a Municipality and like bodies which come within the definition of the expression 'local authority' in Section 3(31) of the General Clauses Act, 1897, which has been imported to interprete the expression 'local authority' in Article 12 (cf. Sarangapani v. Madras Port Trust, : AIR1961Mad234 ; Kishan Singh v. State of Punjab, (3) (FB)). Though there has been some controversy as to whether the expression 'other authorities' must be interpreted ejusdem generis with the expression 'local authority' : AIR1954Mad67 or it would comprise other statutory bodies which do not discharge functions similar to that of a local self-Government organ, e.g., a State Electricity Supply Board (Mohan Lal v. State, (5) (FB)) or a Devaswom Board (AIR 1956 Trav. Co. 19(21)), there is an agreement on the following points:--

(i) In order to constitute an 'other authority' within the meaning of Article 12, the body must be a body created by statute and having the power to make regulations having the force of law (Paramatnia v. Chief Justice, (15); AIR 1956 Trav Co. 19 (21)) or exercising statutory powers as a 'public authority' (S.K. Mukherjee v. Chemicals and Allied Products, : (1962)ILLJ475Cal ; (FB)).

(ii) A non-statutory body, such as a company (S. K. Mukherjee's case, : (1962)ILLJ475Cal (ibid), or a State-aided educational institution (Devdas v. Karnatak Engineering College, AIR 1964 Mys 6(11)) and exercising no statutory powers, cannot come within the definition of Stale' in Article 12.

14. Applying these principles to the instant case, it is patent that the Corporation is a company registered under the Companies Act; it is neither a statutory corporation created by statute nor does it exercise any statutory powers. It is governed by its Memorandum and Articles of Association, which have no statutory force and it has no power to make regulations having the force of law. Hence, the mere fact that the function of distribution of chanks was, previous to the formation of this company, being carried on by the Government of West Bengal Departmentally, cannot convert the company into the 'State'. Mr. Ali contended that, by reason of its composition, the Corporation is a 'Government Company' within the definition in Section 617 of the Companies Act, 1956. But that definition is for the purposes of the Companies Act and does not make such company identified with the 'State' under Article 12. Nor does any importance attach to the fact that in the pamphlets published by the Corporation, its undertaking is described as 'a Government of India undertaking' or that the publication is issued by the Government of West Bengal tinder the State emblem, because the meaning of 'other authorities' in Article 12, as explained above, does not take cognisance of such elements, which I would venture to say, come in owing to the intertia and failure of those who are responsible for bringing out these publications to appreciate the change in the legal position which has come into existence after the formation of the company registered under the Companies Act and the transference of the business from the Government Department to that company. In fact, the very object of the Government in constituting the company to take over this business has been defeated by the tactlessness of those officials who are responsible for these publications and have prompted the Petitioner to institute the instant litigation.

15. In fine, I must hold that the Petitioners challenge under Article 14 must fail.

16. B. But even though a body of persons may not constitute 'State' within the definition of Article 12, a writ under Article 226 may sometimes lie against it on non-constitutional grounds or on ground of contravention of provisions of the Constitution outside Part III.

17. The prerogative writ of mandamus lies to enforce the performance of a 'public duty' at the instance of a person who establishes that he has a legal right to enforce the performance of such duty. Such right or duty may not be constitutional and may be founded on statute or common law, but no relief by way of mandamus will be available unless the legal right of the Petitioner and the legal duty of the Respondent is of a public nature (R. v. Bank of England, (1819) 2 B. and A. 620 (622); R. v. London Assurance Co., (1822) 106 ER 1420, Halsbury, 3rd Ed., Vol. 11 Para 195, p. 105). It will not, therefore, issue to enforce a private right, such as one arising from a contract, (Ex parte Pering, (1836) 111 ER 1040).

18. Mr. Ali, on behalf of the Petitioner before me relied on the observations in Norris v. Irish Land Co. (1857) 8 E. and B. 512 (513): 120 ER 191 (192), where it was held that mandamus was available to compel a company established by royal charter to execute a deed to provide for the registration of its members. It cannot, however, be overlooked that this was a case of statutory action of mandamus and not a prerogative writ of mandamus and this was clearly pointed out in the judgment itself :

'Held : that plaintiff was entitled to the mandamus.--Semble, that the remedy by mandamus given by Section 68 of the Common Law Procedure Act, 1854 is not confined to cases in which the prerogative writ of mandamus was granted.'

19. It is now established that Article 226 of our Constitution has adopted the English 'Prerogative writs', founded on common law,--shorn, of course, of their technical deficiencies (Basappa v. Nagappa, : [1955]1SCR250 , Satyanarayana v. Mallikarjun, : [1960]1SCR890 , Dwarka Nath v. Income Tax Officer, : [1965]57ITR349(SC) ). But it has never been suggested that Article 226 would comprise the features of an action of mandamus which is founded on English statutes. Norris's case (1857) 8 E and B 512 (ibid.) has, therefore, no application in India. It is well-established in India that a private right, such as founded on a contract is not enforceable under Art. 226 (Achutan v. State ofKerala : AIR1959SC490 , even where the other party to the contract is a public official (Lekhraj v. Deputy Custodian. AIR 1963 SC 334 (336-7)).

(a) This is not to say that a writ of mandamus will never issue against a private individual or a company, for, a private person or persons may also be subjected to a public duty, say, by a statute. In fact, in all the cases referred to by Mr. Ali, such as Sudhir Chandra v. Calcutta Tramways Co. Ltd., : AIR1960Cal396 ; Nagpur Corporation v. Nagpur Electric Light and Power Co., : AIR1958Bom498 , were cases where duties of a public nature had been imposed by statute upon companies doing public utility service.

(b) Another exception is mentioned in the case of : AIR1959SC725 , which was, of course, a case of infringement of the Petitioner's fundamental rights. The principle laid down in that case is that where a Petitioner's right is invaded by a law made by the State, the Petitioner may obtain relief under Art. 226 not only against the State and its officials who seek to enforce that law but also against those private individuals who claim against the Petitioner under that law.

The principle laid down in this case is, in fact, applied in Sohan Lal v. State Industrial Tribunal, : [1957]1SCR738 , with respect to the invasion of any legal right of the, Petitioner by the executive action of the State. Suppose a private person dispossesses another in collusion with or with the aid of public officials, but without the authority of law. In such a case, the Petitioner is entitled to his relief not only against the public officials but also against the private person, for, otherwise, his relief against the public officials would be infructuous. This is what is meant in the following observation in Sohan Lal's case. AIR 1959 SC 529 -

'Normally, a writ of mandamus does not issue to or an order in the nature of mandamus is not made against a private individual. Such an order is made against a person directing him to do some particular thing, specified in the order, which appertains to his office and is in the nature of a public duty. If it had been proved that the Union of India and the appellant (a private person) had colluded and the transaction between them was merely colourable, entered into with a view to deprive Jagannath of his rights, jurisdiction to issue a writ or make an order in the nature of mandamus against the appellant may be said to exist in a Court.'

20. The case of the Petitioner before medoes not present any of the exceptional featuresjust discussed. The Corporation was notIncorporated by statute nor has it any statutoryduties to perform. It is a mere trader, doingthe business in chanks, purchasing fromMadras and other places in the South andselling them by private bargain to artisans inWest Bengal, unfettered by any statutory obligations. It has been rightly urged on behalf ofthe respondent that from the affidavits onrecord, it must be held that the petitioner hasfailed to establish that the State of West Bengalhas imposed any control over the sale or purchase of chanks, or that the Corporation hasbeen set up as a monopolist, so as to prevent thepetitioner from purchasing chanks exceptthrough the Corporation. The petitioner is freeto make direct purchases from the producers atMadras or even from South Indian dealers atCalcutta (Para 8 of the counter-affidavit).

21. The case of the petitioner is that the Government of West Bengal formed a scheme to purchase and distribute chanks to artisans in West Bengal through Co-operative Societies (Para 3 of the petition) and that, accordingly, the Corporation which has been created in pursuance of that scheme, is bound to distribute the instant consignment to all registered Cooperative Societies equitably (para 8(IV) ). This contention is unfounded inasmuch as the alleged scheme is a non-statutory scheme and, as urged in the counter-affidavit, there are no statutory rules governing the business of the Corporation. Mr. AH pointed out to Articles III(I) and (41) of the Memorandum of Association of the Corporation as imposing upon them an obligation to distribute the chanks purchased by the Corporation equitably amongst the various Societies. I do not find anything in these provisions of the Memorandum imposing any such duty. Besides, the Memorandum is not a statutory provision having the force of law, which may be enforced by mandamus. I should also point out that the impugned letter at Ann. B does not refuse to supply chanks to the petitioner altogether, but assures him that he may apply for a share in a further consignment which has been asked for by the Corporation.

22. Be that as it may, I am of opinion that the instant petition under Article 226 is not maintainable. Respondent has filed counter affidavit, meeting the averments in the petition, and the petition has been canvassed on the merits. There is no arguable issue for which a Rule may he issued, prolonging the litigation.

23. Though dismissing the petition. I would, in fairness to the petitioner, like to observe that I feel that hardship and economic disadvantage may possibly be caused to particular Societies unless the Corporation directs its plan of distribution to the needs of the industry as a whole, and, having regard to the history and magnitude of the Corporation, there is reason to apprehend that the powers in the hands of the Corporation are liable to be abused unless the Government, at its topmost level, exercises some control over the activities of such a big middleman. Even though I am bound to dismiss the petition, I do believe that the petitioner may still obtain some consideration or relief if he approaches the heads of the Department concerned. I may also add that the problem created by such hybrid 'Government Companies' and public corporations has attracted the attention of the Legislatures in other countries and the need for controlling them has been acknowledged. I am not sure whether this problem has so far been placed before the Legislature of West Bengal.

24. With these observations, the petition under Article 226 is dismissed but without any order as to costs.

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