Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

ACIT, Circle 12 (1) , Bangalore Versus M/s. Menzies Aviation Bobba (Bangalore) Pvt. Ltd. And Vica-Versa

2015 (11) TMI 401 - ITAT BANGALORE

Eligibility for deduction under section 80IA - whether the Bangalore International Airport Ltd. [BIAL] is a statutory body u/s 80IA(4)(i) of the Act? - Held that:- As considering the constitution of BIAL, the shares of different parties in the said company and it is a statutory body as it is discharging statutory functions of the Government. - Decided in favour of assessee. - ITA No. 1160/Bang/2012, M.P.No.19/Bang/2014 - Dated:- 5-10-2015 - Smt. P. Madhavi Devi, Judicial Member And Shri Jason P. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

galore International Airport Ltd. [BIAL] is a statutory body u/s 80IA(4)(i) of the Act in view of the Judgment of the Hon ble Karnataka High Court in the case of M/s. Flemingo Dutyfree Shops P. Ltd., in W.P.No.14215 of 2006 dated 19.12.2008. It was subsequently brought to the notice of this Tribunal that the Revenue has also filed M.P.No.20/Bang/2014 stating that this Tribunal had held that the activity carried on by the assessee is infrastructure development under section 80IA(4), but as far as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aring. 3. At the time of hearing, the learned counsel for the assessee submitted that after going through the details furnished by the assessee, this Tribunal held that the activity carried on by the assessee is infrastructure development, but since the major shareholders in BIAL are not Government authorities, it is not a statutory authority and therefore the deduction u/s 80IA(4) is not allowable. He submitted that the Hon'ble High Court of Karnataka in the case of M/s. Flemingo Duty Free .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lemingo Duty Free Shops Pvt. Ltd. against the Union of India, the Airport Authority of India and the Bangalore International Airport Ltd., along with 2 other private parties as respondents. The said case came be filed by the petitioner therein on the ground that it was not issued the tender document to bid for a shop in the BIAL premises though BIAL is a statutory authority and was supposed to call for open tenders. The writ petition was filed challenging the above inaction. The Civil Aviation D .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oner from the competition. Before the Hon'ble High Court, BIAL had filed an affidavit stating that majority of the Board of Directors are private partners who constitute majority of the shareholders and the Board of Directors and therefore the petition filed against it, is not maintainable as it is neither a State or instrumentality of a State or a body discharging public duties for the purpose of Article 12 of the Constitution of India to exercise powers of the court under Article 226 of th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Companies Act and is not created by any statutory body or law. It was held that though it is constituted as per the policy of the Central Government, it cannot be said to be statutory body as required under section 80IA(4) of the Act with its public-private partnership. We find that the Hon ble High Court of Karnataka in the case of M/s. Flemingo Duty Free Shops Pvt. Ltd., cited (supra) has also considered the constitution of BIAL, the shares of different parties in the said company and has co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e petitioner against the second respondent, at para-6 it is stated that it is responsible for installations and maintenance of operations of Air Track services (ATS) consisting of Communication Navigation Surveillance (CNS) and Air Track Management (ATM) service and it is responsible for management of the said services and such services are mandatorily required to be provided by it. 14. Further at para 7 it is stated that, it has no role in the day to day management of BIAL. The decisions which .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9.4 of the shareholders agreement are required to be brought before the Board of BIAL if such process are brought before it, the same will be discussed in the Board of the BIAL provided that the same are in its interest and not adversely affecting the interest of the respondent. Further it is stated that the decision regarding disqualification of the petitioner was not discussed and passed by the Board of the Directors of BIAL. Therefore, the second respondent was neither involved in the decisi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

dia. Further it is contended in the statement of objections that as per the request made by the Managing Director of the petitioner, the 4th respondent met him on 12.09.2006, which fact is established by e-mail sent by the business development and marketing Manager of AERI, which is venture partner of the petitioner with whom it submitted EOI to BIAL. In the said e-mail it has made it clear that AERI respects the decision taken by BIAL regarding its exclusion of the consortium consisting of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

isions of the Shareholders Agreement (hereinafter in short referred to as S.H.A. ) with G.O.K. dated 23.01.2002 entered between the BIAL and State promoters which makes abundantly clear that BIAL is not a Government company as defined u/s 617 of the Companies Act, 1956, as it has been either established or constituted or created by any law enacted by either the Parliament or the State Legislature. Under clause 9.1(ii) of the S.H.A., the Directors representing the promoters constitutes the majori .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ween the parties besides under clause 7.4 of S.H.A. provides promoters the right to induct other investors. On a careful perusal of the provisions of S.H.A. it makes amply clear that neither the U.O.I. nor G.O.K. exercise their pervasive control over the management or affair of the BIAL. 17. The BIAL has also entered into a Concession Agreement (in short referred to as C.A. ) dated 5th July, 2004 with the Ministry of Civil Aviation, Governemtn of India, pursuant to Article 3 at Clause-3.1 sub-cl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

vileges granted to BIAL for the purpose of development and maintenance of infrastructural facilities required to be provided in the airport and facilities for commercial activities at the airport, award of duty-free shops according to the power of attorney of the Company is with the authority of the Manager of the company, therefore it is purely a management decision in the day-to-day affairs of the BIAL. Having regard to the right of the management of the airport under the C.A., the activities .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Article 10.4 of C.A. BIAL itself is liable to make payment of tax under relevant laws applicable to it. Therefore, it is submitted by it that, it does not exercise any government or sovereign functions as per the C.A. in its favour under the agreement. As per Clause 18.13.1 and 18.13.2 of Article 18 of the C.A., it stipulates that execution of the agreement constitutes private and commercial acts rather than public or governmental acts and no sovereign immunity will be claimed by the GOI in res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

mely A.A.I. and KSIIDC both together holding only 26% of the share holding of the BIAL. As per clause 3.3 of Article 3 of C.A. regarding payment of concessional fee by the BIAL to GOI which clearly indicates the fact that it is not carrying on or exercising any governmental function and further it is stated that there is no master and servant relationship either between the Central or State Government and the employees of the BIAL and they are not governed by service rules applicable to the empl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is factually incorrect. The GoK under the State Support Agreement (hereinafter in short referred to as S.S.A.) dt.20.01.2005 provides loan to BIAL which is repayable by it in accordance with the provisions of the agreement, it has no way substantially financed the activity of BIAL which is repayable by it in accordance with the provisions of the agreement, it has no way substantially financed the activity of BIAL. The land referred to by the petitioner in the petition is concerned, the KSIIDC vi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

herefore, it is stated that the writ petition is liable to be dismissed at the threshold itself on the ground of its maintainability. 19. The BIAL further submits that in the C.A., it is entitled to make available duty free shops and other amenities in the airport. In this view of the matter, it had called for E.O.I. by 26.07.2006 in respect of five packages, which consisted of (i) retail package and (ii) Food and Beverage (F & B) Package 1, F & B Package 2 and F & B Package 3. Claus .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ail outlets in the international departure zone. At the time of submitting EOI, petitioner did not raise an objection about clause 3.2 of EOI with regard to short listing of maximum five parties. Therefore, it is not open for it to turn round and object for the same in this writ petition. 20. The BIAL further submits that pursuant to the invitation for EOIs., totally seven companies submitted their EOIs. on fair and just evaluation being done by it, the EOI of petitioner among others was rejecte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on 01.09.2006 itself regarding the decision on the results of EOIs and the letter was written by the 4th respondent on the same date. On 01.09.2006 the Managing Director of the petitioner has written to the 4th respondent requesting him to re-look into the matter. However, it is stated that having regard to the evaluation of this EOIs. made by the BIAL, petitioner does not qualify for issuance of the tender documents and the other short-listed member in evaluation undertaken by the BIAL is not q .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

making a grievance is not tenable in law. The allegation made against the respondents 3 and 4 in this petition for first time is an afterthought only to make out a case for grant of the reliefs sought for by it, therefore, the allegations made by the petitioner against them is misconceived, hence not sustainable in law. Further, the allegations made in the writ petition has been denied as totally baseless and unfounded. The 4th respondent categorically denies any personal interest regarding Swis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

respondent submits that he was not in favour of any company as alleged by the petitioner and the mere fact that he was an employee of Zurich Airport Authority cannot be a ground for casting aspersions against him. In fact, Zurich Airport never had any share in the 5th respondent company or in any company nor it has any sister company and it never had any major equity ownership in Zurich Airport. The 5th respondent since 2001 is fully owned and controlled by two Italian public listed companies, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y submit that under Article 3 of the C.A., Union of India under sub-clause 3.2.2 of Clause 3.2 has conferred upon BIAL right to grant service providers on such terms and conditions that it may determine as reasonable and appropriate. Therefore, it thought fit to adopt two phase methods in granting major concessions. The evaluation of the EOI was done by BIAL in fair, just and balanced manner and there has been no arbitrariness in the decision making process of the list as alleged in the writ pet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ortium partner AerRianta was rejected from the bid process. The allegation of discrimination is totally denied as unfounded and baseless and further stated that the sole aim of having such a stringent standard was adopted to make sure the best players are alone awarded major concessions. The process of selection has been most transparent and it has not been arbitrary as alleged, in support of the said averments, the BIAL has produced Xerox copies, Annexures-R1 to R8. The respondents have also fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e 5th respondent has filed its statement of counter on 17.09.2007 justifying the process adopted in respect of short listing and awarding contract in its favour, it has submitted that the petitioner has been disabled to invoke the jurisdiction of this Court, it is further submitted that, if, the prayers of the petitioner were considered and granted, the entire process of tender and exclusion of award contract would result in great hardship, extensive loss and prejudice not only to the 5th respon .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the answering respondent submitted final bids, after submission of bids, contract was finally awarded to 5th respondent by BIAL by rejecting the bid of 9th respondent. It is further stated that it is given to understand that the bid submitted by the said respondent was rated next after the bid submitted by the 5th respondent which was declared successful. Further it has also found fault with the criteria followed with regard to evaluation of EOI, as it does not prescribe intelligible criteria. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts No.6, 7 & 8 despite having been selected in the pre-qualification round, did not opt to participate in the tender process for reasons best known to them. Eventually only two bids were left for evaluation and selection of respondent No.3 namely respondent No.5 and respondent No.9 along with its other counter-part Alpha Airports Group. Further it is stated that with regard to the nature of the functions which are being entrusted to it by the first respondent by entering into the concession .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

/public duties and whether is it a State under Article 12 of the Constitution of India ? 2. Whether the nature of duties performed by BIAL at the International Airport and operation of flights is a statutory function under section 12 of Airport Authorities Act, 1994 ? 3. Whether BIAL is amenable to writ jurisdiction under Article 226 of the Constitution for judicial review ? 4. Whether the petitioner has got locus standi to file this writ petition and the writ petition is maintainable ? 5. Wheth .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in favour of 5th respondent is legal and valid in law ? 8. Whether the action of BIAL the award of contract in favour of 5th respondent has affected public interest ? 9. Whether the denial of opportunity to offer financial bid to the 9th respondent requires interference by this Court ? 10. Whether the denial of opportunity to offer financial bid to the 9th respondent requires interference by this Court ? 11. What order ? Point Nos. 1 to 3 : 26. These two points are inter-related and therefore t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Apex Court reported in 1975(1) SCC 421 in the case of SUKHDEV SINGH vs. BHAGATRAM, three Judge Bench decision of the Apex Court reported in 1981 (1) SCC 449 in the case of SOM PRAKASH REKHI vs. UNION OF INDIA & ANR. And the seven Judges Constitutional Bench decision in PRADEEP KUMAR BISWAS vs. INDIAN INSTITUTE OF CHEMICAL BIOLOGY & ORS. Reported in (2002) 5 SCC 111 and other decisions of the Apex Court reported in 1952 SC 1621 @ 1678 para 152 (1963) 1 SCR 773 UJJAM BAI vs. STATE OF UTTAR .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

purpose of invoking jurisdiction of this Court under Article 226 of the Constitution of India. AIR 1995 SC 1811 BIG OF INDIA Vs. CONSUMER EDUCATION & RESEARCH CENTRE & ORS. Para 23 at page 1820, paras 26-27 at page 1021; 1989(2) SCC 691 Paras 17,18,19 at PAGE 699-700 Para 22 at Pg. 701 ANADI MUKTA SADGURU SHREE MUKTAJEE VANDAS SWAMI SUVARNA JAYANTI MAHOTSAV SMARAK TRUST & ORS Vs. V.S.K. RUDANI & ORS. BINNY LTD., & ANR. Vs. SADASIVAN & ORS. 2005 (6) SCC 657 Paras 10 & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther the learned Sr. Counsel submitted that the functions which are being carried on by the BIAL are public functions/statutory duties in view of Section 12 of the A.A.I.A. Act. Therefore, it is a State within the meaning of Article 12 of the Constitution of India and therefore, it is amenable to writ jurisdiction of this Court under Article 226 of the Constitution. 28. The above contentions are rebutted by learned Senior Counsel Sri R.N. Narasimha Murthy on behalf of respondents 3 and 4 placing .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n the basis of the lease deed entered between KSIIDC and BIAL dated 30.04.2005 to establish a private airport at Devanahalli to assist the 2nd respondent to render technical, financial and other assistance in terms of the lease deed and the concession agreement. The object of establishing BIAL and the nature of the project are explicitly mentioned. Though it is an airport in terms of section 2(b) of the A.A.I.A. Act, lease of land is permissible under section 12-A(1) of the A.A.I.A. Act by the K .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he enumerated functions of the Airport Authority as provided under section 12 of the A.A.I.A. Act. Therefore, the learned Sr. Counsel submitted that the decision in PRADEEP KUMAR BISWAS paras 40, 43, 45 and 47 would with all force apply in support of BIAL, management and control of the airport absolutely vests with BIAL. As per the terms and conditions of the shareholders agreement, particularly clause-5 pertaining to business of the company and clauses 7(2)(a) and 7.3 percentage of share holdin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t at a board meeting, the directors who are present may appoint an acting chairman for the purpose of Board meeting. As per clause 9.2(vii) regarding decisions of the board, it shall be made on simple majority with the written consent of each private promoter and each of state promoters in relation to matters enumerated in clause 9.4, clause- 10 pertains to Project Implementation. Clause-18 Terms of the agreement and Termination. Clause 18.5 relates to private promoter s material breach and its .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be at any stretch of imagination termed as public duties/functions, much less statutory in nature. Therefore, contention urged on behalf of the petitioner BIAL is a State as defined under Article 12 is wholly untenable. It is not a State in terms of Article 12 of the Constitution. 29. Merely because Chapter V-A, Section 28-A of the A.A.I.A. Act is applicable to the premises of the Airport for the purpose of eviction of unauthorized occupants from that premises, it cannot be construed by this Co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and contended that the agreements entered into between the State of Karnataka - BIAL, KSIIDC - BIAL and Union of India - BIAL are for rendering statutory fundamental duties by establishing the international airport at Bangalore. The functions that are carried on by BIAL in the international airport on the basis of those agreements are supplementary to the fundamental statutory duties required to be discharged both by first and second respondent. Therefore, BIAL is a State amenable to writ juris .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ataka Stamp Act, 1957 for registration of the lease deed executed between BIAL and KSIIDC for establishment of international airport, the KIADB has transferred the lands covered therein to KSIIDC and in turn in favour of BIAL. The registration fee of ₹ 25.33 crores is exempted by giving 100% concession under notification dated 15.04.2005. In view of this, the lands acquired by the State Government in favour of Karnataka Industrial Areas Development Board (in short referred to as KIADB ) fo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

public purpose. As per the explanation of section 28 of the A.A.I.A. Act, for removal of doubts, it is declared that for the purpose of aforesaid clause, airport includes private airport. The benefit of Chapter V-A of the A.A.I.A. Act is incorporated in the Concession agreement to evict the unauthorized occupants from the premises of BIAL. (ii) We are required to examine the nature of functions and duties performed by BIAL. It is necessary for this Court to extract air traffic service , air tran .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

imate or inanimate, whether such service relates to a single flight or series of flights. Section 2(nn) reads : 2(nn) private airport means an airport owned developed or managed by - (i) Any person or agency other than the Authority or any State Government. OR (ii) Any person or agency jointly with the Authority or any State Government or both where the share of such person or agency as the case may be in the assets of the private airport is more than fifty percent. 12. Functions of the Authorit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ts, or against in the establishment of private airports by rendering such technical, financial or other assistance which the Central Government may consider necessary for such purpose. (b) plan, procure, install and maintain navigational aids, communication equipment, beacons and ground aids at the airports and at such locations as may be considered necessary for safe navigation and operation of aircrafts; (c) provide air safety services and search rescue facilities in coordination with other ag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f passengers and other persons at the airports and civil enclaves; (i) Make appropriate arrangements for watch and ward at the airports and civil enclaves; (j) Regulate and control the plying of vehicles, and the entry and exist of passengers and visitors, in the airports and civil enclaves with due regard to the security and protocol functions of the Government of India; (k) Develop and provide consultancy, construction or management services, and undertake operations in India and abroad in rel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssary or convenient for, or may be incidental to, the exercise of any power or the discharge of any functions conferred or imposed on its by this Act; (p) Perform any other function considered necessary or desirable by the Central Government for ensuring the safe and efficient operation of aircraft to, from and across the air space of India; (q) Establish training institutes and workshops; (r) Any other activity at the airports and the civil enclaves in the best commercial interests of the Autho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o institute any proceeding in respect of duty or liability to which the Authority or its Officers or other employees would not otherwise be subject. (iii) As per Section 4 of the Air Craft Act, 1934 (in short referred to as A.C Act) the first respondent has got power to make Rules as per the 1944 Convention dated 07.12.1944 in relation to International Civil Aviation signed at Chikago. Section 5.A of A.C. Act confers powers upon the Director General of Civil Aviation or other Officer specially e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ease deed, the terms and conditions regarding constitution of Board of Directors, Appointment of Chairman, Managing Director, BIAL is established. It may be a private airport but nevertheless the provisions of Air Craft Act, Rules framed thereunder and Airport Authorities Act are applicable to it. Though the establishment of airport and its maintenance as per the agreements referred to supra is entrusted to BIAL, it has to discharge the above statutory functions/duties under Section 12-A of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ional Bench (Seven Judges Bench) of the Apex Court in UJJAM BAI vs. STATE OF UTTAR PRADESH reported in AIR 1962 SC 1621 @ 1678 para 152 has held as hereunder : 152. In the first place, it has to be pointed out that the definition is only inclusive which itself is apt to indicate that besides the Government and the Legislature there might be other instrumentalities of State action which might be comprehended within the expression State … Again, Article 12 winds up the list of authorities f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

up under a statute for the purpose of administering the laws made by the Parliament or by the State including those vested with the duty in make decisions in order to implement those laws. (vi) The Apex Court in SUKHDEV SINGH & ORS. Vs. BHAGATRAM SARDAR SINGH RAGHUVANSHI reported in (1975) 1 SCC 421 at 440, para 39, 449 para 82, 452 paras 93 & 98 after referring to its various decisions and Halsbury s Laws of England has held thus, the relevant paras reads as hereunder: 39. A public aut .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es that the executive power of the Union and State extends to the carrying on of any business or trade. As I said, the question for consideration is whether a public corporation set up under a special statute to carry on a business or service which Parliament thinks necessary to be carried on in the interest of the Nation is an agency or instrumentality of the State and would be subject to the limitations expressed in Article 13(2) of the Constitution. A State is an abstract entity. It can only .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n in various ways other than by direct financial assistance. It may give the organization the power of eminent domain, it may grant tax exemptions, or it may give monopolistic status for certain purposes. All these are relevant in making an assessment whether the operation is private or savours of State section-(25). See generally: The meaning of State Action, LX Columbia Law Rev 1083. Institutions engaged in matters of high public interest or performing public functions are by virtue of the nat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ional Airport Authority case has laid down the law as hereunder: 11. We may point out that it is immaterial for this purpose whether the corporation is created by or under a statute. The test is whether it is an instrumentality or agency of the State and not as to how it has been created. The inquiry has to be not as to how the juristic person is born out why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government Company .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of expression authority in Article 12. (viii) The Seven Judge Bench decision of the Apex Court in PRADEEP KUMAR BISWAS vs. INDIAN INSTITUTE OF CHEMICAL TECHNOLOGY case reported in (2002) 5 SCC 111 after considering it .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is concerned, has been so held by this Court in Ujjani Bai vs. State of U.P. (AIR 1962 SC 1621). The words 'State' and 'Authority' used in Article-12 therefore remain, to use the words of Cardozo (Benjamin Cardozo : The Nature of the Judicial Process), among "the great generalities of the Constitution", the content of which has been and continues to be supplied by Courts from time to time. 10. Keeping pace with this broad approach to the concept of equality under Artic .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

red and noted that despite the fact that each of the Corporations ran on profits earned by it nevertheless the structure of each of the Corporations showed that the three Corporations represented the 'voice and hands' of the Central Government. The Court came to the conclusion that although the employees of the three Corporations were not servants of the Union or the State, "these statutory bodies are 'authorities' within the meaning of Article-12 of the Constitution". .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

private operation in various ways other than by direct financial assistance. It may give the organization the power of eminent domain, it may grant tax exemptions, or it may give monopolistic status for certain purposes. All these are relevant in making an assessment whether the operation is private or savours of State action. See generally: The meaning of State Action, LX Columbia Law Rev 1083. Institutions engaged in matters of high public interest or performing public functions are by virtue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or formed under the Societies Registration Act, 1860. Neither the form of the Corporation, nor its ostensible autonomy would take away from its character as 'State' and its constitutional accountability under Part III vis-a-vis the individual if it were in fact acting as an instrumentality or agency of Government. 40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia vs. Khalid (1981) 1 SCC 722 at 736 para 9 are not a rigid set of principles so that if a body .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

merely regulatory whether under statute or otherwise, it would not serve to make the body a State. 41. Coming now to the facts relating to CSIR, we have no doubt that it is well within the range of Article-12, a conclusion which is sustainable when judged according to the tests judicially evolved for the purpose. 98. Simply by holding a legal entity to be an instrumentality or agency of the State it does not necessarily become an authority within the meaning of 'other authorities' in Ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

en there must exist some other statute conferring on the entity such powers. In either case, it should have been entrusted with such functions as are governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence governmental. Such authority would be the State, for, one who enjoys the powers or privileges of the State must also be subjected to limitations and obligations of the State. It is this strong statutory flavour and cle .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ests are laid down in para-40 that the Body must be financially, functionally and administratively dominated under the control of Government and such control must be particular to the Body in question and must be pervasive. No doubt, in that case after referring to some tests from Ajay Hasia case, it is held that BCCI is not State and it is not created by statute and no part of its capital is held by the Government. Practically no financial assistance is given by the Government to meet the whole .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rnment-owned corporation. It is an autonomous body. (x) The decision of Ujambai referred to supra having regard to changing socio-economic policies in India and variety of methods by which Governmental functions are performed by which the Government carries on trade or business by a society, corporation etc., the functions that would be carried on by BIAL is an instrumentality of the State under Article 12 of the Constitution of India. The statutory body-second respondent may be empowered to div .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arking building and was refusing to serve solely on the ground that he was a negro, the relevant para of the law laid down reads thus: Only by sifting facts and weighing circumstances can the non-obvious involvement of the State in private conduct be attributed its true significance. The land and building were publicly owned. As an entity, the building was dedicated to public uses in performance of the Authority s Essential Governmental Functions . Addition of all these activities, obligations a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted to place its power, property and prestige behind the admitted discrimination. The State has so far insinuated itself into a position of interdependence with Eagle that it must be recognised as a joint participant in the challenged activity, which on that account, cannot be considered to have been so purely private as to fall outside the scope of the Fourteenth Amendment… what we hold today is that when a State leases public property in the manner and for the purposes shown to have bee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

blacks - and that no segregation could be permitted in view of the 14th amendment as it was a public park , the relevant portion reads thus :- What is private and what is State action is not always easy to determine. Conduct that is formally private may become so entwined with governmental policies or so impregnated with a governmental character as to become subject to constitutional limitations placed upon State action. Under the circumstances of this case, we cannot but conclude that the publ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ne whether a given factual situation falls within the variety of individual state relationships … The dispositive question in any state-action case is not whether any single fact or relationship presents a sufficient degree of state involvement, but rather whether the aggregate of all relevant factors compels a binding of state responsibility. It is not enough to examine seriatim each of the factors upon which a claimant relies and to dismiss each individually as being insufficient to sup .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es. Respondent s actions are sufficiently intertwined with those of the State, and its termination of service provisions are buttressed by state law, to warrant a holding that respondent s actions in terminating this house-holder s service were state action for the purpose of giving federal jurisdiction over respondent under 42 USCs. 1983. (xiv) From the aforementioned legal principles laid down by the Constitutional Benches of the Supreme Court and American Law, the doctrine of State Action wou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Clause 7.1 of Clause 7 of S.S.A. dated 20.01.2005. The relevant clause reads as hereunder : 7.1. Airport Operation and Maintenance : BIAL shall operate and maintain the Airport in accordance with Good Industry Practice. BIAL shall at all times comply with Applicable Laws in the operation and maintenance of the Airport and shall maintain, keep in good operating repair and condition, the Airport, in accordance with the Operation and Maintenance Plan, an indicative outline of which is as set out in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Airport. If any operation, maintenance, repair or other works necessitate interrupting or suspending the landing or taking-off of any aircraft, or the closure of the Airport, for any period of time, BIAL shall, except in case of an emergency, give to the DGCA and to all affected users of the Airport such prior written notice thereof as the DGCA may from time to time reasonably require. (xv) Section 22-A of the A.A.I.A. Act empowers the 2nd respondent to levy and collect development free from em .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ions of Chapter-V-A of the A.A.I.A. Act from the ambit of Rent Control Act from the premises leased to BIAL is that the Government while dealing with the citizens in respect of its property, would not act for its own purpose as a private landlord but would act in public interest. In this regard, the Constitutional Bench of the Apex Court at para 69 in the case of ASHOKA MARKETING LTD. & ANR. Vs. PUNJAB NATIONAL BANK & ORS. after referring to its earlier decision in the case of DWARAKADAS .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ve been treated separately and distinctly from other landlords on the assumption that they would not act as private landlords, must be judged by that standard. (xvii) The assistance provided by both the Union of India and State Government and other statutory authorities in permitting BIAL to establish and maintain BIAL at Devenahalli, without which the airport could not have been established, and ₹ 250 crores provided to BIAL by the Government of Karnataka under the State Government and ca .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s any airport being set-up within 150 kms from BIAL. (xviii) Even if it is not an entity and State under Article 12 of the Constitution of India, the actions of BIAL are subject to judicial review under Article 226 of the Constitution of India. In this regard, learned Sr. Counsel for petitioner has rightly placed reliance upon the decisions reported in 1976(2) SCC 82 @ para 9 in the case of ROHTAS INDUSTRIES vs. ROHTAS INDUSTRIES STAFF, 1991 (1) SCC 171, 1995 (5) SCC 1811, 2003(4) SCC 225 @ 237 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s maintenance. (xix) The word person is with avowed object deliberately used in Article 226 of the Constitution of India, which may be a natural person or juridical person such as Government, Private or Public Limited company, society, body, corporation etc., who will perform public functions/duties in the public interest. They are all amenable to judicial review power of this Court to the legal principle enunciated by the Apex Court in the above referred cases. (xx) Further as per the decisions .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

performing statutory, public functions and duties. The form of the body is not relevant for the purpose of exercise of power of this Court under Article 226 of the Constitution of India. What is relevant is the nature of functions or duties imposed upon such person and performed by it. As per the development of law, Prof. D. Smith, whose statement is extracted in Anadi Muktas case at paras 17-23, it is stated thus : The words any person or authority used in Article 226 are, therefore, not to be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duty to have imposed charter, common law, custom or even contract . We share this view. (xxi) In Unnikrishnan s case, after referring to Anadi Mukta and Drawakanath cases, it is held at paragraphs 81 and 83 as under: 81. As a sequel to this, an important question arises: what is the nature of functions discharged by these institutions ? They discharge a public duty. If a student desir .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

In spite of it, if the emphasis is on the nature of duty on the same principle it has to be held that these educational institutions discharge public duties. Irrespective of the institutions receiving aid it should be held that it is a public duty. The absence of aid does not detract from the nature of duty. (xxii) The learned Sr. Counsel for the petitioner has placed reliance upon the following decisions of the Apex Court wherein the scope of Article 226 is laid down by the Apex Court in BASI R .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

medy not only under the ordinary law but also under the Constitution by way of a writ petition under Article 226. Lastly referring to the case of BINNY LTD. vs. SADASIVAH reported in (2005) 6 SCC 657 para 11 reported in (2005) 4 SCC 649 @ 682 para 33 it has held that Article 226 is couched in such a way that a writ of mandamus could be issued even against a private authority… discharging a public function….A body is performing a public function when it seeks to achieve some collect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on as it being the member of the consortium of AerRianta, he has placed strong reliance upon the petition averments contending that the petitioner has entered into consortium agreement with AerRianta International cpt, which is a company incorporated under the laws of Ireland to obtain contract for running duty free retail business with BIAL and the said company is dedicated to International Division of the Dublin Airport Authority. It was the first to start duty free retailing business in the w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version