TMI Blog2017 (4) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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. - W.P. No. 19726 of 2015 - - - Dated:- 6-10-2016 - B.S. Patil, J. Shri H.S. Gururaj Rao, Sr. Counsel, Harikrishna S. Holla, Advocate, for the Appellant. Shri J. Sagar, Assts., A. Murali, Advocate, for the Respondent. ORDER Petitioner was appointed as Senior Director (Advanced Services) in Respondent No. 1 - Cisco Systems (India) Private Limited on 15-5-2012. Respondent No. 1 is a Company incorporated under the provisions of the Companies Act, 1956. It is a private limited company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 agency of the State. The Central Government was earlier operating export processing zones and free trade zones. Later, the export processing zones we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain 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 to its acquisition to better economic stability of the country. He, therefore, urges that as the respondent-Company is expected to earn foreign exchange, it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Paragraphs 31 to 34 of the judgment have been particularly brought to the notice of the Court to contend that though in Zee Telefilms Limited case, the Apex Court found that BCCI w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, 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 which is then recognized by all concerned and applauded by the entire nation including at times by the highest of the dignitaries when they win tournaments and bring laurels home. Those d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 termination of service of its officer. 23. The Apex Court in Zee Telefilms Limited and Another v. Union of India and Others - (2005) 4 SCC 649, stated that Article 12 must receive a purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 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. The Board to whom the proposal would be forwarded would consider the same and communicate the same to the Government. Thereafter, as per Section 4 of SEZ Act, the developer concerned is required to follow c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould 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 country. But, that is not the criteria to decide whether the body is engaged in discharging public functions. 33. As already referred to above, the Apex Court in the case of Board of Control for Cricket in India v. Cricke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 between them, unless a public law element is involved and hence, in such cases, redressal has to be sought under civil law or under labour laws. The Apex Court while dealing with the meaning of the expression public law has made reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lletins 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 office. 41. It is, therefore clear that 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 it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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