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TMI Blog1999 (9) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... detailed discussion and analysis found that it was neither a 'State' because the Central Government had no effective control or involvement in it nor was it otherwise amenable to writ jurisdiction under article 226, because it did not discharge any public duty. The Court, consequently, dismissed all the writ petitions as not maintainable. 3. Writ petitioners are up in appeal against this. Their case expectedly is that the Stock Exchange was a 'State' under article 12 and alternatively otherwise amenable to writ jurisdiction under article 226, engaged as it was in discharge of public duty, responsibility and functions imposed on it under the relevant statute, and the Rules/Bye-laws. 4. Appellants' counsel Mr. Mathur contended that the Stock Exchange had all the trappings of the 'State' and was an 'authority' of the State and inasmuch as its entire functioning was governed and regulated by the Securities Contracts (Regulation) Act, 1956 ('the Act') and the Rules, conferring power on the Central Government to direct and regulate its functioning every inch. Under the Act it was to be recognised by the Government which could also impose conditions on it related to qualification of it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade us to take a partially contrary view in the matter. 7. It requires to be clarified at the very outset that a body or association, a society or a corporation may not strictly fall within the definition of 'State' under article 12 and yet may be amenable to writ jurisdiction under article 226, if it satisfied the newly evolved tests of being engaged in discharge of public duty/functioning and responsibility and disclosing an element of public interest in its functioning. Gone are days when the writ was believed to run only up to the 'State' under article 12. The concept had undergone a sea change and made spectacular advance over the years widening the frontiers and horizons of the writ jurisdiction. Now it was available even against private persons, bodies, associations and corporations if it was found that a statutory public duty was cast on these and an element of public interest was present in their functioning. This was so because of the liberal interpretation placed by the Supreme Court on the provisions of article 226 conferring writ jurisdiction on the High Court and distinguishing it from the ambit and contours of article 12 occurring in Chapter III of the Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owned by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists mandamus cannot be denied. ****** "... mandamus cannot be denied on the ground that the duty to be enforced is not imposed by the statutes. Commenting on the development of this law, Professor De Smith states: To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have been imposed by charter, common law, custom or even contract. We share this view. The judicial control over the fast expanding maze of bodies affecting the rights of the people should not be put into watertight compartment. It should remain flexible to meet the requirements of variable circumstances. Mandamus is a very wide remedy which must be easily available to reach injustice wherever it is found. Technicalities should not come in the way of granting that relief under article 226...." (p. 1613) 9. The focus on nature of duty as a determination factor was again underscored ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not constitute a decisive factor in such determination. But a demarcation was required to be made between public law domain and the private law field. Where the body was wholly and purely a private body with no public duty cast on it and no element of public interest involved in its operations and if the rights claimed against such body were also private in nature and character, then it would not be surely attracting the writ jurisdiction. The question was, therefore, to be decided with reference to nature of action complained of, the activity in which the body was engaged and other circumstances. 13. Summarising it, a body may not partake the character and status of 'State' under article 12 and still be amenable to writ jurisdiction under article 226 in case of breach of public duty cast on it, by the statute, Rules and bye-laws. But even then, a distinction was to be drawn between a private law action and a public law one. The writ jurisdiction would not be available where the claimed right and the action complained were wholly private in nature and character. Viewed in this backdrop, all that remained to be examined was whether respondent-Stock Exchange was amenable to writ jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearers, the manner in which the business was to be transacted by it, the qualification for its membership and the procedure for registration of the members and above all the suspension-exclusion and the re-admission of members. The Exchange was also allowed to make Bye-laws but only with the approval of Securities and Exchange Board of India (SEBI) which could also make such Bye-laws on its own regarding the host of matters specified in section 9. 18. What was significant to note was that Central Government was empowered to supersede the governing body of a recognised Stock Exchange and even to suspend its business in case of emergency and it could also prohibit contracts in certain areas to prevent undesirable speculation in terms of sections 11, 12 and 13 of the Act. It was also competent to make Rules for giving effect to the object of the Act under section 30, pursuant whereto such Rules stand already framed and are in force. 19. These Rules called 'The Securities Contracts (Regulations) Rules, 1957 prescribe the mode and method for a host of matters, including the form of application for recognition, fees to be paid, documents to be filed, qualifications for membership, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goes undisputed that the existence and functioning of the Stock Exchange was provided for and regulated by the Act and the Rules made thereunder which had the consequence of making it a public authority if not statutory body in the strict sense of that term. It could qualify to be statutory body also even though it did not owe its birth to the statute because all its ins and outs were regulated by the statute and the Rules and also Bye-laws to be made under such statute. 24. It can't also be overlooked that the Act and the Rules made thereunder provided for do's and dont's for its operations. For instance the Act prohibited contracts in certain cases and declared contracts in notified areas illegal in certain circumstances. It required the Exchange to submit annual reports and periodical returns regarding its affairs and also cast a duty on it to frame Rules and Bye-laws with the approval of the Central Government or the SEBI as the case may be. Similarly, the Rules prescribed for qualifications of membership of the Exchange, the manner of inquiry into the affairs of the Exchange and the requirements for listing of security on the Exchange. Likewise, Bye-laws required to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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