2017 (4) TMI 254 - HC - Indian Laws

Termination of petitioner who was working as a Senior Director - respondent-company discharges public function is on the strength of the provisions contained in SEZ Act and the rules framed thereunder - whether the respondent-company can be held to be discharging public function which is otherwise required to be discharged by the Government or its instrumentality so that a writ petition under Article 226 of the Constitution of India could be maintained against its action of termination of service of its officer? Held that -In the instant case, the respondent-company is engaged in carrying on its business which is purely its economic activity. In that process its actions are governed by the statute namely, SEZ Act. Certain rights and obligations are conferred on the units established under SEZ. If they effectively function, it will not only further their economic interest, but also helps the economy of the nation. That does not mean that each unit permitted to be established under SEZ by private entrepreneurs/companies shall be regarded as bodies enjoined with public functions. Therefore, the inescapable conclusion is that present writ petition filed seeking relief against a private company cannot be held to be maintainable. Respondent-Company being a private company is involved in its business and economic activities. It is not discharging any public or governmental functions in carrying on its business. Statutory regulation of its business as per the provisions of the SEZ Act will not make its activities in carrying on its business a public duty. Hence, writ petition challenging the order of termination of petitioner who was working as a Senior Director is not maintainable. Petitioner has to seek remedy under the Civil Law.

Issues Involved:
1. Allegations of harassment and humiliation by a senior official.
2. Coercion to exit from the company.
3. Legality of termination of employment.
4. Validity of Clause 12(c)(ii) of the employment contract under Section 23 of the Indian Contract Act.
5. Maintainability of the writ petition against a private company.
6. Determination of whether the respondent-company is discharging public functions.

Detailed Analysis:

1. Allegations of Harassment and Humiliation by a Senior Official:
The petitioner alleged that Respondent No. 3, a Vice-President at the respondent-company, harassed and humiliated her on multiple occasions, including a public leadership meeting. The petitioner claimed that this harassment was linked to her raising issues about business transaction violations.

2. Coercion to Exit from the Company:
The petitioner asserted that she was orally coerced by Respondent No. 3 to exit the company, with the Director of Human Resources allegedly aiding this effort. Despite her meritorious service, she was harassed and ultimately terminated.

3. Legality of Termination of Employment:
The petitioner challenged the termination order dated 24-4-2015, seeking a declaration that Clause 12(c)(ii) of the employment contract was illegal, unfair, and contrary to public policy under Section 23 of the Indian Contract Act. She requested the setting aside of the termination order and the restoration of her status with all consequential benefits.

4. Validity of Clause 12(c)(ii) of the Employment Contract:
Clause 12(c)(ii) allowed the company to terminate employment with 30 days' notice or payment of 30 days' salary. The petitioner contended that this clause was obtained in a standard form and was unreasonable, unfair, oppressive, and contrary to the doctrine of unconscionability and the provisions of the SEZ Act.

5. Maintainability of the Writ Petition Against a Private Company:
A preliminary objection was raised regarding the maintainability of the writ petition against a private company. The petitioner argued that the respondent-company, by virtue of operating an SEZ unit, was performing governmental functions and thus was an instrumentality of the State. However, the court held that the respondent-company was a private entity engaged in economic activities and not discharging public or governmental functions. The court cited several judgments, including Federal Bank Ltd. v. Sagar Thomas, to support this view.

6. Determination of Whether the Respondent-Company is Discharging Public Functions:
The court examined whether the respondent-company was discharging public functions, which would make it amenable to writ jurisdiction under Article 226 of the Constitution. The court referred to the SEZ Act and various judgments, including Board of Control for Cricket in India v. Cricket Association of Bihar, to conclude that the respondent-company's activities did not constitute public functions. The court emphasized that regulatory measures under the SEZ Act did not impart a public duty characteristic to the company's business activities.

Conclusion:
The court dismissed the writ petition, holding that the respondent-company, being a private entity, was not discharging public functions and thus the writ petition was not maintainable. The petitioner was directed to seek remedy under civil law. The court reserved the petitioner's liberty to move the Civil Court for her grievances.

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