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TMI Blog2025 (2) TMI 616X X X X Extracts X X X X X X X X Extracts X X X X ..... the State, contending that the actions of the State or an instrumentality of the State, which do not properly belong to the field of public law but belong to the field of private law, were not subject to judicial review.
A body, public or private, should not be categorized as "amenable" or "not amenable" to writ jurisdiction. The most important and vital consideration should be the "function" test as regards the maintainability of a writ application. If a public duty or public function is involved, any body, public or private, concerned or connection with that duty or function, and limited to that, would be subject to judicial scrutiny under the extraordinary writ jurisdiction of Article 226 of the Constitution of India.
Conclusion - i) A writ petition under Article 226 is maintainable against entities performing public functions or duties, not merely due to regulatory compliance. ii) The distinction between public law and private law is crucial in determining the maintainability of writ applications. iii) The function test is essential in assessing whether an entity is performing a public duty.
The petitions are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'state' or its instrumentality under Article 12 of the Constitution, he proceeded to entertain the petitions and passed the order. The party-in-person submitted that it was a COVID-19 time when she approached the High Court by way of petitions, therefore, they ought to have been entertained. The Court is not impressed with the submission. 5.5 The remedy for the petitioner may be to institute the civil suit and to seek appropriate relief. It was further pointed out by learned advocate for the appellant that the loan agreement between the Company and the petitioner contains an arbitration clause. The loan agreement figures on record (page No.88 onwards) which is found to be containing arbitration clause. Paragraph No.6 (page No.100) of the loan agreement is the arbitration clause." 3. The Division Bench of the High Court is right in taking the view that Muthoot Finance Ltd. is not a "State" within the meaning of Article 12 of the Constitution and therefore not amenable to writ jurisdiction of the High Court under Article 226 of Constitution. 4. The learned counsel appearing for the petitioner would submit that although the Finance Company may not be strictly falling within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c matters or concern itself with the intricacies of trade and commerce. If the action of the State is related to contractual obligation or obligations arising out of the contract, the Court may not ordinarily examine it unless the action has some public law character attached to it. Broadly speaking, the Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field. The difficulty will lie in demarcating the frontier between the public law domain and the private law field. It is impossible to draw the line with precision and we do not want to attempt it. The question must be decided in each case with reference to the particular action, the activity in which the State or the instrumentality of the State is engaged when performing the action, the public law or private law character of then action and a host of other relevant circumstances. When the State or an instrumentality of the State ventures into the corporate world and purchases the shares of a company, it assumes to itself the ordinary role of a share holder, and dons the robes of a share-holder, with all the rights available to such a sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatutory undertakings and corporations, are all 'public authorities'. So are members of a statutory tribunal or inquiry, and the board of visitors of a prison. The Criminal Injuries Compensation Board is a public authority. So also, I suggest, is a university incorporated by Royal charter; and the managers of a State School. So is the Boundary Commission: and the Committee of Lloyd's. But a limited liability company incorporated under the Companies Acts is not a 'public authority'; (see Tozer v. National Greyhound Racing Club Ltd. (1983) Times, 16 May). Nor is an unincorporated association like the Jockey Club...". (see pp. 122, 123, 124) 38. Sir Harry Woolf, a Lord Justice of Court of Appeal, points out the distinction in the following words:- "I regard public law as being the system which enforces the proper performance by public bodies of the duties which they owe to the public. I regard private law as being the system which protects the private rights of private individuals or the private rights of public bodies. The critical distinction arises out of the fact that it is the public as a whole, or in the case of local government the public in the locality, who are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion before the Court was "whether the Board are a body of persons amenable to the supervisory jurisdiction of this Court?". For the Board reliance was placed upon the well-known words of Atkin, L.J., in' R. v. Electricity Commissioners (1924) 1 KB 171, at p. 205 to the effect that the body of persons to be amenable to writ jurisdiction must have the legal authority to determine questions affecting the rights of subjects and who are under a duty to act judicially. The Court held that the said words of Atkin. L. J., were not supposed to be exhaustive of the situation where a certiorari may issue, and pointed out that the Board, though not set up under a statute, is set up by the executive Government, i.e., under the prerogative, and that its acts are no less lawful on that account. The Court observed: "Indeed, the writ of certiorari has been issued not only to courts set up by statutes but also to courts whose authority was derived, inter alia, from the prerogative. Once the jurisdiction is extended, as it clearly has been, to tribunals as opposed to courts, there is no reason why the remedy by way of certiorari cannot be invoked to a body of persons set up under the prerogative. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evised and operated the City Code on Take-overs and Mergers prescribing a Code of Conduct to be observed in the take-overs of listed public companies. The panel had no direct statutory, prerogative or common law powers, nor were its powers based solely on consensus; its acts were supported and sustained by certain statutory powers and penalties introduced after the inception of the Panel. A decision of the panel was sought to be questioned by way of certiorari. One of the objections of the respondents was that the supervisory jurisdiction of the Court was confined to bodies whose power was derived solely from legislation or the exercise of the prerogative, and that the power of judicial review did not extend to a body such as the Panel on Takeovers. Overruling this objection, it was held that in determining whether the decisions of a particular body were subject to judicial review, the Court was not confined to considering the source of that body's powers and duties, but could also look to their nature. Accordingly, if the duty imposed on a body, whether expressly or by implication, was a public duty and the body was exercising public law functions, the Court had jurisdiction t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being subjected to "fundamental constitutional limitations". The learned Judge felt that "the need to subject the power centres to the control of the Constitution requires an expansion of the concept of State action". (see para 93 at p. 1352). 7. Applying the above test, the respondent herein cannot be called a public body. It has no duty towards the public. It's duty is towards its account holders, which may include the borrowers having availed of the loan facility. It has no power to take any action, or pass any order affecting the rights of the members of the public. The binding nature of its orders and actions is confined to its account holders and borrowers and to its employees. Its functions are also not akin to Governmental functions. 8. A body, public or private, should not be categorized as "amenable" or "not amenable" to writ jurisdiction. The most important and vital consideration should be the "function" test as regards the maintainability of a writ application. If a public duty or public function is involved, any body, public or private, concerned or connection with that duty or function, and limited to that, would be subject to judicial scrutiny under the extra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... immaterial but, nevertheless, there must be the public law element in such action. (8) According to Halsbury's Laws of England, 3rd Ed. Vol.30, p.682, "a public authority is a body not necessarily a county council, municipal corporation or other local authority which has public statutory duties to perform, and which perform the duties and carries out its transactions for the benefit of the public and not for private profit". There cannot be any general definition of public authority or public action. The facts of each case decide the point. 10. Even while rejecting the writ petition on the ground of its maintainability, the High Court has protected the interest of the parties by observing in paras 6.1 as under:- "6.1 Following order shall govern, (i) It would be open for the respondent - original petitioner to have recourse to civil remedy before the appropriate Court in relation to the claim and grievance which she agitated by filing the writ petitions. (ii) The appellant-Company is not precluded from taking any recourse in law, if it is of the view that it has any claim against the respondent - party-in-person. (iii) It is also open to either side to invoke arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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