TaxTMI 
TaxTMI 
2017 (4) TMI 254
X X X X Extracts X X X X
X X X X Extracts X X X X
....tition averments, Respondent No. 3 threatened and humiliated petitioner on 24-1-2015 because she had raised the issue of violations in the business transaction. Petitioner narrates several instances of harassment and humiliation by Respondent No. 3. 3. It is urged that petitioner was orally coerced to exit from the Company by Respondent No. 3. Respondent No. 4 who is the Director (Human Resource) of Respondent No. 1-Company allegedly acted in aid of the said design. Petitioner claims to have issued legal notice questioning the attempt made to oust her from Respondent No. 1-Company. Despite outstanding and meritorious service record, she was allegedly harassed and berated by Respondent No. 3. It is urged that he used his influence as Vice-President Cisco Systems in USA to ensure termination of service of petitioner by relying upon a term in the contract of employment. 4. In this background, petitioner has challenged the order dated 24-4-2015 terminating her services. She has sought for a declaration declaring that Clause 12(c)(ii) of the contract of employment as illegal, unfair and contrary to public policy as per Section 23 of the Indian Contract Act apart from being u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd management of Special Economic Zones for promotion of exports and for matters connected therewith or incidental thereto. Therefore, it followed that the newly created SEZ units were performing governmental functions like those established and created prior to the enactment of SEZ Act. Hence, though respondent-Company was a private company, it was carrying on governmental function under the provisions of SEZ Act which were carried on by the units in existence earlier. 9. Learned Senior Counsel has dealt with the procedure prescribed for establishment of SEZ Unit, guidelines for notifying SEZs as contained in SEZ Act that require Central Government to be guided by promotion of exports of goods and services, creation of employment opportunity, etc. It is, therefore, urged that acquisition of foreign exchange being a governmental function, respondent-Company had been engaged in discharging governmental and public function, hence, it is an instrumentality of State. 10. He refers to Section 12(2)(d) of the Act to contend that Development Commissioner monitors performance of the units in SEZ. Attention of the Court is invited to Section 14(f) of the Act, wherein Approval Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke away the same from the other. 14. It is necessary to notice here that the said judgment in S.C.R. Caterers's case arose in the context of allotment of State largesse, wherein it has been laid down that approach of the State should be reasonable, fair, non-arbitrary and non-discriminatory and shall be aimed at protecting the right to means of livelihood and freedom of occupation of small business units which completely depend upon earnings from their petty business and be conscious about rising unemployment and implementation of constitutional philosophy of egalitarian society which provides opportunity to everybody to live a life of dignity. 15. In Paragraph 32 of the said judgment, the Apex Court, while dealing with evolving concept of social justice has held that keeping in view the evolving concept of social justice, members of the respondent (S.C.R. CATERERS, DRY FRUITS, FRUIT JUICESTALLS WELFARE ASSOCIATION) who were the licensees, were entitled to continue their petty business, hence action of the railways in not granting renewal of licence was found arbitrary, unreasonable, unfair and discriminatory. 16. Reliance is also placed on the judgment of the Ape....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under the ordinary law or by way of writ petition under Article 226 of the Constitution which was much wider than Article 32. Observations of the Apex Court in Zee Telefilms Limited case - (2005) (4) SCC 649 made at Page 682 Paragraph 31 were quoted with approval to the following effect :- "Be that as it may, it cannot be denied that the Board does discharge some duties like the selection of an Indian Cricket Team, controlling the activities of the players and others involved in the game of cricket. These activities can be said to be akin to public duties or State functions and if there is any violation of any constitutional or statutory obligation or rights of other citizens, the aggrieved party may not have a relief by way of a petition under Article 32. But that does not mean that the violator of such right would go scot-free merely because it or he is not a State. Under the Indian jurisprudence there is always a just remedy for the violation of a right of a citizen. Though the remedy under Article 32 is not available, an aggrieved party can also seek a remedy under the ordinary course of law or by way of a writ petition under Article 226 of the Constitution, which is much wid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sive control over the game and its affairs and such powers as can make dreams end up in smoke or come true cannot be said to be undertaking any private activity. 34. The functions of the Board are clearly public functions, which, till such time the State intervenes to take over the same, remain in the nature of public functions, no matter discharged by a society registered under the Registration of Societies Act. Suffice it to say that if the Government not only allows an autonomous/private body to discharge functions which it could in law take over or regulate but even lends its assistance to such a non-government body to undertake such functions which by their very nature are public functions, it cannot be said that the functions are not public functions or that the entity discharging the same is not answerable on the standards generally applicable to judicial review of State action." Thus, the Apex Court has ruled in the above case that though BCCI may not be a 'State' under Article 12 of the Constitution, it would be certainly amenable to writ jurisdiction under Article 226 of the Constitution of India. 21. Dealing with the amendment brought to Regulation 6.2.4 of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s it would be same as executive Government established under the Constitution and the establishments of organization funded or controlled by the Government. It is further held in Paragraph 76 that it was not that everybody or association which was regulated in its private functions became a 'State'. What mattered was the quality and character of functions discharged by the body and the State Control following therefrom. It is further held that when law provided for a general control over a business in terms of the statute and not in respect of the body in question, it would not be a 'State'. In this regard, the Apex Court has drawn sustenance from the judgments in the case of Federal Bank Ltd. v. Sagar Thomas - (2003) 10 SCC 733; K.R. Anitha v. Regional Director, ESI Corporation - (2003) 10 SCC 303 and G. Bassi Reddy v. International Crops Research Institute - (2003) 4 SCC 225. 24. It is thus evident that while a body discharging public function could be amenable to judicial review under Article 226 of the Constitution, merely because the law provides for a general control over the business of a body as per the provisions of a statute, unless the body itself was not generally....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntral Government will have to keep in mind while notifying any area as SEZ cannot be construed to attribute character of public functions to units established under SEZ. 28. Merely because the object of the statute in enabling the Central Government to notify SEZ or an additional area to be included in the SEZ is to generate additional economic activities or promote export of goods and services, investment from domestic and foreign sources and also to create employment opportunities, it cannot be said that once such units are established by private individuals they discharge governmental functions and have to be regarded as units discharging public functions. 29. Discharge of functions as SEZ units may ultimately result in generation of additional economic activities or promotion of export of goods and services, investment from domestic and foreign sources and also creation of employment opportunities but that does not mean that said units discharge governmental functions so as to make them a body that discharges public functions. In that way, every individual, entrepreneur or a private company engaged in carrying on any business as its economic activity would be helpin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g themselves in the international arena were conferred with highest civilian award apart from supporting awards instituted by the Government. It was thus held that nature of passion the game has evoked countrywide and having regard to the nature of duties and functions discharged by the Board, it had to be held that the Board was discharging public functions. 34. 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. 35. Question whether terms of contract entered into between the respondent-company and the petitioner at th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of the public as having authority to do so. ....." It, therefore, emerges that remedy under Article 226 is pre-eminently public law remedy and is not generally available as remedy against private wrongs. The scope of writ of mandamus is limited to enforce public duty. If private bodies discharging public function and denial of any right is in connection with the public duty imposed on such body, the public law remedy can be enforced. The duty cast on the public body may be either statutory or otherwise and the source of such power is immaterial as long as public law element is present in such action. 39. In the case of Federal Bank Ltd. v. Sagar Thomas - (2003) 10 SCC 733, the Apex Court has held that a company registered under the Companies Act for the purposes of carrying on any trade or business is a private enterprise to earn livelihood and to make profits out of such activities. Even though a private banking company with all freedom that it has, has to act in a manner that it may not be in conflict with or against the fiscal policies of the State and for such purposes guidelines are provided by Reserve Bank so that a proper fiscal discipline to conduct its affairs ....