2004 (8) TMI 405 - HC - Companies Law

Summary

Issues Involved:
1. Challenge to Notifications No. 733 and No. 734.
2. Maintainability of writ jurisdiction under Article 226 against respondent No. 2.
3. Whether respondent No. 2 performs a public duty or function.

Issue-wise Detailed Analysis:

1. Challenge to Notifications No. 733 and No. 734:
The petitioner challenged two Notifications dated 25th June 2004 and 30th July 2004, issued by respondent No. 2, which sought to implement new audit guidelines for its members' publications. The petitioner argued that these new guidelines affected the rights of the members by altering the established method of auditing circulation figures since 1988. The petitioner contended that these guidelines impacted the value estimation of publications for advertising purposes, thereby affecting the rates of advertisements and the benefits to the members of the Association.

2. Maintainability of writ jurisdiction under Article 226 against respondent No. 2:
The primary contention was whether respondent No. 2, a company incorporated under section 25 of the Companies Act, 1956, performing the function of certifying circulation figures of its members' publications, could be subjected to writ jurisdiction under Article 226. The petitioner argued that respondent No. 2 performed an important public duty related to the freedom of the press and was thus amenable to writ jurisdiction. The petitioner cited decisions such as *Shri Anadi Mukta Sadguru Shree Muktajee Vandasjiswami Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani* and *Tata Press Ltd. v. Mahanagar Telephone Nigam Ltd.*, asserting that commercial speech is part of the freedom of speech under Article 19(1)(a) of the Constitution.

3. Whether respondent No. 2 performs a public duty or function:
Respondent No. 2 argued that it did not perform any public duty or statutory function that could make it amenable to writ jurisdiction. It was contended that the primary object of respondent No. 2 was to audit circulation figures for the benefit of its members and not for any public purpose. The respondent relied on the decision in *Federal Bank Ltd. v. Sagar Thomas*, which outlined the entities against which writ jurisdiction could be invoked. The court considered various decisions, including *G. Bassi Reddy v. International Crops Research Institute*, *Pradeep Kumar Biswas v. Indian Institute of Chemical Biology*, and *VST Industries Ltd. v. VST Industries Workers' Union*, to determine whether respondent No. 2 could be considered an "authority" or "person" under Article 226.

Judgment:
The court held that respondent No. 2 could not be treated as an "authority" or "any other person" under Article 226 of the Constitution. It was determined that respondent No. 2 was a voluntary body formed by publishers, advertising agencies, and advertisers in print media, with the primary object of certifying circulation figures of member publications. The court concluded that respondent No. 2 did not perform any public or statutory duty and its activities were purely voluntary, not controlled by any statute. Consequently, the court vacated the ad interim order and held that the writ jurisdiction was not maintainable against respondent No. 2. The petitioner's request for a stay of the order was also refused.