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TMI Blog2017 (4) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... uired tax or other deduction". 6. This clause in the contract of employment has been questioned contending inter alia that the same was obtained by the respondent-company in the standard form from the petitioner and was contrary to Section 23 of Indian Contract Act being opposed to public policy, unreasonable, unfair, oppressive, contrary to the doctrine of un-conscionability and also to the provisions of Special Economic Zones Act, 2005 (for short, 'SEZ Act'). Sri Gururaj Rao, learned Senior Counsel appearing for the petitioner urges that impugned order of termination dated 24-4-2015 is unenforceable, void and liable to be set aside. 7. A preliminary objection has been raised with regard to maintainability of the writ petition against a private company registered under the Companies Act. Learned Senior Counsel has urged several contentions by taking me through several judgments of the Apex Court and various provisions of SEZ Act, inter alia contending that writ petition is maintainable. It is urged by him that respondent-Company has set up SEZ Unit in the processing zone. As contemplated under the SEZ Act and Rules framed thereunder, the Company is an instrumental agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect to the provisions of SEZ Act. Rules 53 and 54 of the Special Economic Zones Rules, 2006 which stipulate that unit shall achieve foreign exchange for certain period from the commencement of production and for monitoring its performance by the approval committee respectively are also referred to point out that units established under SEZ are discharging public functions and are controlled and regulated by the authorities under SEZ Act. 11. Attention of the Court is invited to an undertaking furnished in Form-H which is a bond-cum-legal undertaking for SEZ unit. As per the said undertaking, the unit has undertaken to abide by the provisions of the Act and Rules and also the orders made thereunder. 12. Sri Gururaj Rao, learned Senior Counsel, has relied upon the judgment of the Apex Court in the case of The Lord Krishna Sugar Mills Limited & Another v. The Union of India & Another - 1960 SCR (1) 226, wherein it is held that power of Parliament to make laws in relation to creation of foreign exchange was manifest in Entry No. 36 of Union List; if interpreted widely, the said entry would embrace within itself not only laws relating to control of foreign exchange, but also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Constitution by way of writ petition under Article 226. Therefore, merely because a non-governmental body exercises some public duty, that by itself would not suffice to make such body a State for the purpose of Article 12. In the instant case, the activities of the Board (BCCI) do not come under the guidelines laid down by the Court in Pradeep Kumar Biswas case. Hence, there is force in the contention of Mr. Venugopal that this petition under Article 32 of the Constitution is not maintainable." 18. However, the minority view expressed in the said case was that the Constitution being an ongoing document, it should be interpreted liberally. Interpretation of Article 12, having regard to the exclusive control and management of the sport of cricket by the Board and enormous power exercised by it, calls for a new approach; the Constitution should be interpreted in the light of our whole experience and not merely in that of what was the State of the law at the commencement of the Constitution. 19. Reliance is next placed on the judgment of the Apex Court in the case of Board of Control for Cricket in India v. Cricket Association of Bihar & Others - (2015) 3 SCC 251. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the respondent Board has a complete sway over the game of cricket in this country. It regulates and controls the game to the exclusion of all others. It formulates rules, regulations, norms and standards covering all aspects of the game. It enjoys the power of choosing the members of the national team and the umpires. It exercises the power of disqualifying players which may at times put an end to the sporting career of a person. It spends crores of rupees on building and maintaining infrastructure like stadia, running of cricket academies and supporting State associations. It frames pension schemes and incurs expenditure on coaches, trainers, etc. It sells broadcast and telecast rights and collects admission fee to venues where the matches are played. All these activities are undertaken with the tacit concurrence of the State Government and the Government of India who are not only fully aware but supportive of the activities of the Board. The State has not chosen to bring any law or taken any other step that would either deprive or dilute the Board's monopoly in the field of cricket. On the contrary, the Government of India has allowed the Board to select the national team whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SAW Pipes Limited - (2003) 5 SCC 705, the Apex Court has held in Paragraph 96 that public policy was not a static concept; it varied with times and from generation to generation; what was in public good and public interest could not be opposed to public policy and vice versa; any rule, contract or arrangement that actually defeated or tended to defeat the high ideals of fairness and objectivity in the discharge of public functions, no matter by a private non-governmental body would be opposed to public policy. The Apex Court, applying the said test to the Regulation 6.2.4 of BCCI Regulations to the extent it permitted, protected and even perpetuated situations where the administrators could have commercial interests in breach or in conflict with the duty they owed to BCCI or to the people at large was held to be against public policy and hence, illegal. 22. Main question, therefore, revolves on the issue 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamine the instant case, it cannot be said that the respondent-company is discharging public or Governmental functions in carrying out its business activities. The respondent-company is a private company. Composition of the company and its management is not, in any manner, regulated or controlled by the Central or the State Government or by its undertakings. The Chairman, Vice-chairman and Managing Director of the company are required to be appointed as per Articles of Association produced at Annexure-E. The same does not envisage any control of the State. 27. The only reason why it is contended before this Court that respondent-company discharges public function is on the strength of the provisions contained in SEZ Act and the rules framed thereunder. Establishment of SEZ unit has been provided under Chapter II of the Act (Act 28 of 2005). Section 3 provides for establishment of SEZ by the Central Government, State Government or by any person jointly or severally for manufacturing of goods or rendering services or for both or as a Free Trade and Warehousing Zone. Interested person intending to set up such economic zone can make a proposal to the State Government concerned. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter, approval Committee monitors and supervises compliance of conditions subject to which letter of approval or permission was granted to the developer or entrepreneur in terms of Section 14(1)(f) of SEZ Act, it would not, in any manner, impart the characteristic feature of public duty required to be discharged by the units. 31. Likewise, special fiscal provisions for SEZ made under Section 26 of SEZ Act and applications of provisions of Income-tax Act with certain modifications in relation to developers and entrepreneurs as provided under Section 27 and the deeming provisions enacted under Section 53 stating that SEZ shall be deemed to be a territory outside the customs territory of India for certain purposes will not make the units established under SEZ as bodies performing public functions. 32. Similarly provisions contained under Section 50 enabling the State Government to grant exemption from taxes, levies and duties to the developer or the entrepreneur also cannot be construed to enjoin these bodies with public functions. It may be true that effective discharge of their functions by these bodies may advance economic status and improve foreign exchange of the coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egality and impermissibility of having such a term in the service contract which enables an employer to terminate his employee by giving a month's notice or by paying amount equal to 30 days fixed salary, this Court cannot examine the same, having regard to the view taken by me holding that the writ petition is not maintainable. 37. Learned counsel for the respondent is right and justified in contending that respondent-company which has established the unit under SEZ is engaged in carrying on commercial activity and even if its activity has an impact on the economy, it cannot be treated as a public function on the basis that regulatory measures have been envisaged as per the provisions of the SEZ Act. He is right and justified in placing reliance on the judgments of the Apex Court in the case of Federal Bank Ltd. v. Sagar Thomas - (2003) 10 SCC 733 and Binny Ltd. and Another v. V. Sadasivan and Others - (2005) 6 SCC 657. 38. The Apex Court in Binny Ltd. and Another v. V. Sadasivan and Others - (2005) 6 SCC 657 has held that principles of judicial review cannot be applied in the matter of employment of employees by private bodies on the basis of contracts entered into be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming its duties in the realm of collection of data, research, holding of seminars, organizing studies, promotion of the development and systematic management of sustained irrigation and drainage systems, publication of newsletter, pamphlets and bulletins and its role extended beyond the territorial boundaries of India. Thus, the activities undertaken by ICID did not actually partake the nature of public duty or State actions. In Paragraph 49 of the judgment, the Apex Court has held as under : "49. There is yet another very significant aspect which needs to be highlighted at this juncture. Even if a body performing public duty is amenable to writ jurisdiction, all its decisions are not subject to judicial review, as already pointed out above. Only those decisions which have public element therein can be judicially reviewed under writ jurisdiction. In Praga Tools Corpn. v. C.A. Imanual - (1969) 1 SCC 585), as already discussed above, this Court held that the action challenged did not have public element and writ of mandamus could not be issued as the action was essentially of a private character. That was a case where the employees concerned was seeking reinstatement to an offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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