WRIT AGAINST PRIVATE BODY IS NOT MAINTAINABLE IN LAW

[Mr. M. GOVINDARAJAN]

Part III of the Constitution of India guarantees fundamental rights to the citizens. The citizens can enforce the fundamental rights as guaranteed in the Constitution by filing writ petitions before the High Court or Supreme Court.   Such writ petitions lie only against ‘State’.   The term ‘State’ has been defined by Article 12 of the Constitution as including 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 territory of India or under the control of the Government of India. Writ is not maintainable against the private entity.

 In this article a different situation is discussed with reference to decided case law.   In this case a fully owned Government Company later on reduced its shareholding to 26%   A company is said to be a ‘Government company’ if 51% or more shares are held by the Government. Therefore the company becomes non governmental company. The following case law reveals that no writ lies against a private entity.

In ‘S. Babu and others V. Managing Director, Hindustan Teleprinters Limited, Chennai and others’ [2013 (3) TMI 339 - MADRAS HIGH COURT] Hindustan Teleprinters Limited (‘HTL’ for short) was originally a public sector organization under the control of Central Government.   The company announced Voluntary Retirement Scheme requiring the willing employees to apply. The condition is that once application for VRS is submitted the same could not be revoked. The petitioners applied VR scheme.   Accordingly they were relieved on 31.3.1998 and their benefits were given to them.   Wage revision was made effective from 01.01.1997.   The difference in basic pay, DA, gratuity due to the revision of pay was given to the petitioners.

The grievance of the petitioners is the difference in ex-gratia amount granted by virtue of VRS scheme was not paid to them. The petitioners were informed that they are not entitled for the difference because there was no specific clause at the time of retirement for extending it in case of subsequent wage revision. The petitioners filed this writ petition seeking for issuance of a writ of mandamus, directing the Managing Director of the company to pay the difference in the VRS amount based on the revised scale of pay and DA together with 9% interest per annum from the date of the circular.

The petitioner contended that the denial of difference in ex-gratia amount is arbitrary and violation of Article 14 of the Constitution of India. The action of the company in denying the legitimate claim is superfluous and unjustifiable.   The company raised a question on the maintainability of writ petition seeking mandamus against a private concern. The company further contended that when VRS was introduced by the company which was then a Government of India undertaking engaged in the business of manufacturing Telecommunication Equipments. After four years the Government of India has disinvested its shareholding in the company on 16.10.2001 to the extent of 74% of its share to Himachal Futuristic Communications Limited and retained only the balance share capital and, by virtue of such disinvestment, the company ceased to be a Government of India undertaking on and from 16.10.2001. Therefore, in view of the change in share holding pattern, the company as on the date of filing of the writ petition during 2002 was neither a Government of India Company nor functioning under the Government of India.   It was no longer a State or an establishment carried on by or under the authority of Central Government.   Therefore, a writ against such private body is not maintainable in law.

 The petitioners, in response to the above arguments, relied on a judgment of Supreme Court in ‘Anandi Mukta S.M.V.S.S.J.M.S. Trust V. V.R. Rudani’ [1989 (4) TMI 292 - SUPREME COURT ] to highlight the position that the law relating to mandamus has made the most spectacular advance and added that, therefore, it is not legally tenable for the company o say that prerogative writ of mandamus is confined only to public authority to compel performance of public duty. According to them Article 226 of the Constitution gives wide powers to High Courts to issue writs in the nature of prerogative writs, there is no restraint for the High Court to accede to the prayer of the petitioners despite the fact that the present petition lies against purely a private entity.

 The company contended that VRS amount, an ex-gratia payable at the time of retirement, is a fixed sum calculated as per the terms of Special Scheme dated 5.10.1988 which was the scheme in force at the time when the petitioners opted for VR and as such, recalculation of the ex-gratia because of the revision in wage structure does not arise at all. The company relied on a case of its own in ‘P. Subban V. HTL Limited’ [2003 (8) TMI 472 - MADRAS HIGH COURT]in which the Court held that it is a fit case where a writ can no longer be issued in view of the changed circumstances, namely, privatization of the respondent company. The Court held that the writ petition is no longer maintainable. The company argued that when the identical writ petition was decided against the employees any endeavor by the Court to consider the claim of the petitioners would only be a futile exercise and so submitting they prayed for dismissal of the writ petition on the sole ground of maintainability itself.          

 The High Court held that testing the present case in the light of the case laws relied on by the petitioners and the respondents it could be seen that the two traits/exceptions viz.,

• The rights are purely of a private character; and
• The company is purely a private body

 are apparently present in this case. The case is to be dismissed in threshold on the ground that no writ would lie against the company.   The Court dismissed the petition.