1995 (7) TMI 261 - HC - Companies Law

Summary

Issues Involved:
1. Whether the Cochin Stock Exchange Ltd. is amenable to writ jurisdiction under Article 226 of the Constitution of India.
2. Whether the Cochin Stock Exchange Ltd. is an authority under Article 12 of the Constitution of India.
3. Whether the termination of services and arbitration proceedings are purely contractual and thus not subject to writ jurisdiction.

Issue-Wise Detailed Analysis:

1. Whether the Cochin Stock Exchange Ltd. is amenable to writ jurisdiction under Article 226 of the Constitution of India:
The primary question addressed was whether the Cochin Stock Exchange Ltd., a company registered under the Companies Act, 1956, falls within the ambit of Article 226, which allows for the issuance of writs. The petitioners argued that the Exchange is under the control of the Central Government and performs public duties, making it an 'other authority'. They cited various provisions of the Memorandum of Association and the Securities Contracts (Regulation) Act, 1956, to substantiate their claim of deep and pervasive control by the Central Government. However, the court found that these provisions are regulatory in nature and do not confer the status of an authority under Article 12. The court concluded that the regulatory measures alone are insufficient to make the Exchange amenable to writ jurisdiction under Article 226.

2. Whether the Cochin Stock Exchange Ltd. is an authority under Article 12 of the Constitution of India:
The court examined whether the Cochin Stock Exchange Ltd. qualifies as an authority under Article 12, which would make it subject to writ jurisdiction. The petitioners cited several Supreme Court decisions to argue that the Exchange performs public functions and is under significant governmental control. However, the court found that the control exercised by the Central Government is only regulatory and not pervasive. The court referred to various tests laid down by the Supreme Court, such as financial assistance, control of management and policies, and public functions, and concluded that the Exchange does not meet these criteria. Therefore, the Cochin Stock Exchange Ltd. is not an authority under Article 12.

3. Whether the termination of services and arbitration proceedings are purely contractual and thus not subject to writ jurisdiction:
The court also addressed the specific cases of the petitioners, one involving the termination of services and the other involving arbitration proceedings. The court held that both matters are purely contractual in nature. The termination of services was found to be in accordance with the terms of the contract, and the arbitration proceedings were based on contractual obligations. The court emphasized that the extraordinary jurisdiction under Article 226 is not the proper forum for resolving contractual disputes. Consequently, the writ petitions were dismissed on these grounds as well.

Conclusion:
The court dismissed both the writ appeal and the original petition, concluding that the Cochin Stock Exchange Ltd. is not amenable to writ jurisdiction under Article 226 and does not qualify as an authority under Article 12. The court also held that the issues raised were purely contractual and not suitable for adjudication under the extraordinary jurisdiction of Article 226.