Rajpal Mittal v. Union of India

2. It is'the submission ofthe,learned counsel for the'petitioner that much, - ' water has. flown after the judgment rendered by the Division Bench -in'. Wflrfortfl/ Agricuiturai Cd-operaUve Marketing Federation of India Ltd. (suprah According to him, the status oftheNafed hasundergone a change, v' He wOuldVrely upon the averments in the writ petition (W.P.(C) No.. \, 6645/2017) at pa^es 10 to 13. He would also rely upon the judgmentsofthe '• ^Supreme Court in the case, reported as (2003) 10 SCC 733 Federal Bani^ •; Lid. V. Sagar Thomas andOrs and 2W[5] (13) SCALE Dr. JanetJeyapaul v, SRMUniversity.& Ors. iri support ofhis conteniioT^. ^ \. 3. ' J am afraid that the ayerments made, in the writ petition and also the.,-., reliance placed-by the learned counsel for the petitioners, on the judgiiients ofFederalBdiikLtd. (supra) amd Dr. Janet Jeyapaul (supra) v^quU not be ^" ofany help,to the petitioners Herein, inasmuch as the DivisionBench,ofthis:. Court mrntional AgricuUur(d Co-oper<Uke:M«^^ /Hdio L<rf. hasfon consideration ofthe Bye.tew^ ofthe NaM ^ • pdms 7to 14beanie to thefollowing conclusion..,.; \, "7. It is essential to know the constitution of the Society for finding an answer to this question.

NAFED is a co-operative Society registered under the Bombay Co-operative Societies Act as extended to Delhi. Later it was deemed to be registered as a Co-operative Society under the Delhi Co-operative Societies Act, 1973. It being a Multi-Unit Cooperative Society it is deemed to be registered as a Cooperative Society under the Multi State Co-operative Societies Act, 1984 in view ofSection 3(g) ofthis Act. The second schedule ofthis Act contains a list of National Level Co-operative Societies. The name of petitioner figures at item no.4 in this list. It has its own buy^ laws as per which it manages its affairs. It is createdfor the benefit and welfare ofits members. The entire share capital of the Society is held by Members, Co-operative Societies, andno share capital is vested with the Government of India. In the counter affidavitfiledby the appellant in the appeal it has,been asserted that the. Society does not receive any financial I assistance or subsidyfrom the Government and it runs its own business on commercial principles, raising 'its own funds/resources, and obtaining loans from financial institutions/commercial banks on commercial terms.

NAFED does not enjoy any monopoly status in its business. Some times export of certain commodities like nigerseed, onions etc. are canalised through NAFED. According to the Buy-laws the Board of Directors is the authority responsible for the management, administration, business and functioning of •-1 NAFED. The Board ofDirectors is elected in accordance with the Bye-Laws and, out of 42 Directors, only three are government nominees who do not have special or veto powers in the management ofthe society i.e. NAFED.. 8. On the basis ofaforesaidstructure in constitution ofNAFED it cannot be, treated as "State" or other authority or instrumentality or agency of the "State" within the meaning of Article 12 ofthe Constitution ofIndia.

9. The respondents could not dispute the factual position contained in the bye-laws ofNAFED as spelt out above. Infact respondents admit that the management ofNAFED vests in the Board ofDirectors electedfrom amongst the representatives of the State owned, cooperatives marketing Federations and other member societies with three representatives from the Government ofIndia and one each from National Cooperative Union of India, National Cooperative' Development Corporation, National Cooperative Consumer Federation Ltd., Bharat Krishik Samaj and State Bank ofIndia. However, they ' emphasise that out of 44 Directors, ten are Indian Administrative Service officers and two are Provincial Civil Service officers representing Government of India and state owned Federations. Support is also sought to be takenfrom the fact that NAFED has been entrusted with the implementation of Market Intervention Scheme in respect of perishables (onions/potatoes etc.) and spices like blackpepper, chillies, as well asthefact that Government ofIndia has also canalised the i export.of onion and higer seed through NAFED. But these would not be sufficient considerations to lead to afinding that NAFED us a "State" under Article 12 of the Constitution of India.

10. There are number'ofjudgments of various High Courts whereby such co-operative societies are held not to be "State" or other authority within the meaning of Article 12. of the Constitution: Learned counselfor the appellant referred to the followingjudgments in this behalf:i. J.S. Arneja versus NCCF.: a. S.S.Dharioaversus Municipal Corporation ofDelhi. • lii. Ajmer Singh versus The Registrar, Cooperative Societies, Punjab.. iv. Pritham Singh Gill versus State ofPunjab..

V. R.R. Sahu versus NCCF. vi. Bana Bihari Tripathi versus Registrar of Cooperative Societies. ~ vii. Sri Kona Seema Cooperative Central Bank versus N. Sitarama Raju reported in AIR 1990 AP 171... 11. The judgment in the case ofJ.S. Arneja (supra) is rendered by a Division Bench ofthis very Court. - {

12. In Ajay Hasia Versus Khalid Mujib, the Apex Court culled out six criteria as laid down in the judgment of Ramana, Dayaram Shetty Versus the International Airport Authority of India & Ors. to determine whether a concern\ is an instrumentality or agency ofthe State. These are thefollowing:- -7 ' 1. "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way: „,, ' \ towards indicating that the corporation is an instrumentality or agency ofGovernment." '

2. "Where thefinancial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would r- afford some indica:tion of the corporation being impregnated withgovernmentalcharacter.", 3^ "Itmay also be a relevantfactor.....whether the corporation enjoys monopoly status which, is the State conferred or State ^. protected."

4. "Existence of " deep andpervasive State control may afford an indication that the Corporation is a State agency or instrumentality:"

5. "Ifthefunctions ofthe corporation ofpublic importance and closely related to governnientalfunctions, itwould be a relevant ' factor in classifying the corporation as an instrumentality or • agency ofGovernment.". -6: "Specifically, if a department of Govt. is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation. being an instrumentality or, ' agency ofGovernment."^ • -

13. These tests still hold thefield. The decision ofthe Supreme Court in Ajdy Hasia (supra) and later M.C.Mehta versus Union of India reiterate the same position. It follows frorri^ this that, name does not matter. Thefact that an authority is a Company registered under the Companies Act or under' the Societies Registration Act or 'aState Cooperative Societies Act', alone will, - not be determinative. Each case will turn on its own peculiar facts. What normally matters is the facts surrounding the constitution, functioning, control and management ofa society. ' Control will include financial control. Keeping these aspects in ^ view a Full Bench ofthis Court held the Indra Gandhi National _ Centrefor Arts as a "State" within the meaning ofArticle 12 of. the Constitution ofIndia, in Sanghi Technologies Private Ltd. versus Union ofIndia. In Sri Kona seema Cooperative Central Bank Ltd. versus N.S.Raju reported in 1990 A.P.I71, a Full Bench of the Andhra Pradesh High Court found that a Bank registered under the Cooperative Societies Act was not discharging any functions ofpublic importance or which could - ' be said to be governmental. It was held not to be a "State".. Similarly, after examining dll relevant facts the National - Consumers; Cooperative Federation, was held to be not a "State" in Ramu Ram Sahni versus N.C.C.F. reported in 1991 M.P. 63'. This Court also held NCCF not to be a "State" for purposes ofArticle 12 ofthe Constitution ofIndia in J.S. Arneja (supra). - •:, V,, 14.

NAFED does riot meet any ofthe criteria laid down by the. Supreme Court which have been noted above. Admittedly, the, Government is not holding any share capital ofNAFED. It also cannot be said that any financial assistance is provided by the, Government which meets almost all the entire' expenditure of > NAFED. There is no state control, much less "deep and ' pervasive" state control. Moreover by no stretch ofimagination it can be said that functions ofNAFED are closely related tb governmentalfunctions. One may also refer to thejudgment of the Supreme Court in the case of Chander Mohan Khanna/ Versus NCERT.. While holding NCERT as not "State" or _ "instrumentality" or an "agehcy" of the State, following pertinent observations were made by the Supreme Court: "3. Article 12 should not be stretched so as to bring in every autonomous body'which has some nexus with the government within the s weep ofthe expression "State".. A wide enlargement of the meaning must be tempered by a wise limitation. It must riot be lost sight ofthat in the modern concept of Welfare State, independent -institution, corporation and agency are generally subject to State control. The State control doesnot render such bodies as "State" under Article 12. The State control, however

I. y vast and pervasive is not determinative. The financial. contribution by the State is also not conclusive. The combination of State aid coupled with an unusual degree 'of control over the management and policies of the body, and ' rendering of an important public service being the obligatory functions of the State may largely point out that the body, is "State". If the government operates behind a corporate veil, carrying out governmental activity and governmentalfunctions of vital public importance, there may be little dijficulty in.. identifying the body as "State" within, of Article 12 of the r - 1 - ^• I;.•„. ' Constitution. ''^; •• i « A • o. " '4.' - That apart,. assuming that, the respondent Naifed is not a l^tate within -the meaning of Artible 12 ofthe Constitution of India;the question y/^ould, arise I > idia. The-answer in that •; regard must be Tey' Jf the respondent'Nd.2'is discharging any"pubHc, duty. - ' or^a poisitiye obH^ of-a-pubhc n^^ ahd/oi; the Te?p6nd^nt No.2'is'. '::. -under a liability to.discharge any function under any statute to compel itto' ', 3 ' perform such statutory fiinction. The writ petitions have been filed byfthe^ V,,; / petitionefsrchallenging their transfer/teriiiinatidn respectively.. v - ', ~ i 5., It is not-the case of the petitioners that the impugned action of the. •. '; Fespondeht;No.2/is in yioktiqn pf any; provisions;of ^^ StatutQ^^^^^.,^4. -Rules of a\Society'registered; under the iSocieties.Registratipn Act are not •,; ' ':, statutory in,,V. Gbnstitufion ofIndia. Ifthat be sOi in the absenceofany public law elembnt- ^ ^ > in the.reliefs s6ughV% the petitioners and alsd keeping in view^the judgment >-, > ''''^1' ofthe Comin KKSaxena v. J[Cip_ (2015) 4see,^^6^^. ^, V r - para 49, the Supreme Court has held as under, the petitions shah not.bey. " - -;;maii^tairiable.'^ 'r-.- ' '"S ' - '%9..There is'yetanothervery signifipant aspectwhich neMs to: /; t •, be highlighted at thisjuncture. Even ifa bodyperformingpublic 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 writjurisdiction. In The Praga tools,, Corporation v. Shri C.A. Imaniial & Ors.[ll], 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 ofa private character. That wa^ a case where the concerned employee was seeking reinstatement to an office. "

6. I also note, this Court has dismissed two writ petitions against Nafed •on the same-ground being W.P.(C) No, 5000/2015 Donald Masih v. National Agricultural Cooperative Marketing Federation ofIndia Ltd. (Nafed) and W.P'(C) No. 8295/2015 Sunil Rawat v. National Agricultural Cooperative Marketing Federation ofIndia Ltd. The writ petitions are dismissed. The petitioners are at Uberty to approach appropriate forum, ''. ' • seeking redressal oftheir grievance in accordance with law. No costs. CM No. 27645/2017 in W.P.rO 6645/2017 (for stay) CM No. 28077/2017 in W.P.rCYNo. 6745/2017 (for stay) Dismissed as infructuous." k-i

V. KAMESWAR RAO, J