Sanjay Yadav, J
1. These appeals under Section 2(1) of the M.P. Uchcha Nyayalaya (Khand Nyayapeeth Ko Appeal) Adhiniyam, 2005 are directed against the order
dated 04.12.2017 passed in Writ Petition No.7537/2012.
2. The Writ Appeal No.1004/2018 is by the respondent, whereas, the Writ Appeal No.1693/2018 is by the petitioner.
3. The grievance raised by the respondent is against the direction for reinstatement, whereas, the grievance of the petitioner is against non-grant of
backwages.
4. The controversy emanated from the order dated 28.01.2012 (Annexure P/1) and 28.01.2012 (Annexure P/2); whereby the services of the
petitioners were terminated by the Institution which is a Private Educational Institution.
5. Learned Single Judge found that the services were terminated without adhering to principle of natural justice i.e. without affording the opportunity
of hearing, though they were declared confirmed as per Clause 24(2) of Statute 30. Learned Single Judge overruled the objection as to maintainability
of Writ Petition under Artice 226 of the Constitution.
6. The sole ground on which the Institution has challenged the order is that the petition was not maintainable as the writ of mandamus or of certiorari
is not tenable against a Private Educational Institution qua the dispute between the employer and employee.
7. The objection, as evident, was blushed aside by the learned Single Judge holding:
“… whether a writ petition would be maintainable against a private institution has been considered by this Court in the case of Dr. Pushkar Gupta
(supra). While allowing that writ petition, the Co-ordinate Bench of this Court has relied upon the judgment passed by the Apex Court and has held
that as the institution is involved in a public element of imparting education, therefore, the institution is the “State†within the meaning of Article 12
of the Constitution of India and resultantly writ petition is maintainable.â€
8. Relying on the decision in Ramakrishna Mission & another vs. Kago Kanya and others (2019) SCC Online SC 501, it is urged that a writ would not
lie to enforce purely private law right, even if a body is performing a public duty and is amenable to the exercise of writ jurisdiction.
9. The petitioner has opposed the contentions and has placed reliance on the decision in Ramesh Ahluwalia vs. State of Punjab 7 othes (2012) 12 SCC
331 and Janet Jeyapaul vs SRM University & others (2015) 16 SCC 530 to bring home the submissions that the learned Single was well within its
jurisdiction in entertaining a writ petition even in respect of private contract.
10. In Ramakrishna Mission (supra) it is held:
“27. In VST Industries Ltd. v. VST Industries Workers' Union3, a two judge Bench of this Court held that a mere violation of the conditions of
service will not provide a valid basis for the exercise of the writ jurisdiction under Article 226, in a situation where the activity does not have the
features of a public duty. This Court noted:
“7. In de Smith, Woolf and Jowell's Judicial Review of Administrative Action, 5th Edn., it is noticed that not all the activities of the private bodies
are subject to private law e.g. the activities by private bodies may be governed by the standards of public law when its decisions are subject to duties
conferred by statute or when, by virtue of the function it is performing or possibly its dominant position in the market, it is under an implied duty to act
in the public interest… After detailed discussion, the learned authors have summarised the position with the following propositions:
(1) The test of whether a body is performing a public function, and is hence amenable to judicial review, may not depend upon the source of its power
or whether the body is ostensibly a ‘public’ or a ‘private’ body.
(2) The principles of judicial review prima facie govern the activities of bodies performing public functions.â€
“(3) …In the following two situations judicial review will not normally be appropriate even though the body may be performing a
public function:
(a) Where some other branch of the law more appropriately governs the dispute between the parties. In such a case, that branch of the
law and its remedies should and normally will be applied; and
(b) where there is a contract between the litigants. In such a case the express or implied terms of the agreement should normally
govern the matter. This reflects the normal approach of English law, namely, that the terms of a contract will normally govern the
transaction, or other relationship between the parties, rather than the general law. Thus, where a special method of resolving disputes
(such as arbitration or resolution by private or domestic tribunals) has been agreed upon by the parties (expressly or by necessary
implication), that regime, and not judicial review, will normally govern the dispute.â€
(Emphasis supplied)
32. In Binny Ltd. v. V Sadasivan7, a two judge Bench of this Court noted the distinction between public and private functions. It held thus:
“11. … It is difficult to draw a line between public functions and private functions when they are being discharged by a purely private authority. A
body is performing a “public function†when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by
the public or that section of the public as having authority to do so. Bodies therefore exercise public functions when they intervene or participate in
social or economic affairs in the public interest.â€
34. More recently in K K Saksena v. International Commission on Irrigation and Drainage8, another two judge Bench of this Court held that a writ
would not lie to enforce purely private law rights. Consequently, even if a body is performing a public duty and is amenable to the exercise of writ
jurisdiction, all its decisions would not be subject to judicial review. The Court held thus:
“43. What follows from a minute and careful reading of the aforesaid judgments of this Court is that if a person or authority is “State†within
the meaning of Article 12 of the Constitution, admittedly a writ petition under Article 226 would lie against such a person or body. However, we may
add that even in such cases writ would not lie to enforce private law rights. There are a catena of judgments on this aspect and it is not necessary to
refer to those judgments as that is the basic principle of judicial review of an action under the administrative law. The reason is obvious. A private law
is that part of a legal system which is a part of common law that involves relationships between individuals, such as law of contract or torts.
Therefore, even if writ petition would be maintainable against an authority, which is “State†under Article 12 of the Constitution, before issuing
any writ, particularly writ of mandamus, the Court has to satisfy that action of such an authority, which is challenged, is in the domain of public law as
distinguished from private law.â€
35. Thus, even if the body discharges a public function in a wider sense, there is no public law element involved in the enforcement of a private
contract of service.
36. Having analysed the circumstances which were relied upon by the State of Arunachal Pradesh, we are of the view that in running the hospital,
Ramakrishna Mission does not discharge a public function. Undoubtedly, the hospital is in receipt of some element of grant. The grants which are
received by the hospital cover only a part of the expenditure. The terms of the grant do not indicate any form of governmental control in the
management or day to day functioning of the hospital. The nature of the work which is rendered by Ramakrishna Mission, in general, including in
relation to its activities concerning the hospital in question is purely voluntary.
37. Before an organisation can be held to discharge a public function, the function must be of a character that is closely related to functions which are
performed by the State in its sovereign capacity. There is nothing on record to indicate that the hospital performs functions which are akin to those
solely performed by State authorities. Medical services are provided by private as well as State entities. The character of the organisation as a public
authority is dependent on the circumstances of the case. In setting up the hospital, the Mission cannot be construed as having assumed a public
function. The hospital has no monopoly status conferred or mandated by law. That it was the first in the State to provide service of a particular
dispensation does not make it an ‘authority’ within the meaning of Article 226. State governments provide concessional terms to a variety of
organisations in order to attract them to set up establishments within the territorial jurisdiction of the State. The State may encourage them as an
adjunct of its social policy or the imperatives of economic development. The mere fact that land had been provided on a concessional basis to the
hospital would not by itself result in the conclusion that the hospital performs a public function. In the present case, the absence of state control in the
management of the hospital has a significant bearing on our coming to the conclusion that the hospital does not come within the ambit of a public
authority.
38. It has been submitted before us that the hospital is subject to regulation by the Clinical Establishments (Registration and Regulation) Act 2010.
Does the regulation of hospitals and nursing homes by law render the hospital a statutory body? Private individuals and organizations are subject to
diverse obligations under the law. The law is a ubiquitous phenomenon. From the registration of birth to the reporting of death, law imposes obligations
on diverse aspects of individual lives. From incorporation to dissolution, business has to act in compliance with law. But that does not make every
entity or activity an authority under Article 226. Regulation by a statute does not constitute the hospital as a body which is constituted under the
statute. Individuals and organisations are subject to statutory requirements in a whole host of activities today. That by itself cannot be conclusive of
whether such an individual or organisation discharges a public function. In Federal Bank (supra), while deciding whether a private bank that is
regulated by the Banking Regulation Act, 1949 discharges any public function, the court held thus:
“33. …in our view, a private company carrying on banking business as a scheduled bank, cannot be termed as an institution or a company carrying
on any statutory or public duty. A private body or a person may be amenable to writ jurisdiction only where it may become necessary to compel such
body or association to enforce any statutory obligations or such obligations of public nature casting positive obligation upon it. We don't find such
conditions are fulfilled in respect of a private company carrying on a commercial activity of banking. Merely regulatory provisions to ensure such
activity carried on by private bodies work within a discipline, do not confer any such status upon the company nor put any such obligation upon it
which may be enforced through issue of a writ under Article 226 of the Constitution. Present is a case of disciplinary action being taken against its
employee by the appellant Bank. The respondent's service with the Bank stands terminated. The action of the Bank was challenged by the respondent
by filing a writ petition under Article 226 of the Constitution of India. The respondent is not trying to enforce any statutory duty on the part of the
Bank…â€
(emphasis supplied)
39. Thus, contracts of a purely private nature would not be subject to writ jurisdiction merely by reason of the fact that they are structured by statutory
provisions. The only exception to this principle arises in a situation where the contract of service is governed or regulated by a statutory provision.
Hence, for instance, in K K Saksena (supra) this Court held that when an employee is a workman governed by the Industrial Disputes Act, 1947, it
constitutes an exception to the general principle that a contract of personal service is not capable of being specifically enforced or performed.â€
11. In view whereof, the decision in Ramesh Ahluwalia (supra) and Janet Jeyapaul (supra) relied by learned counsel for the petitioners are of no
assistance.
12. When the impugned order dated 04.12.2017 passed in Writ Petition No.7537/2012 is tested on the anvil of the decision in Ramakrishna Mission
(supra), it cannot be given the stamp of approval. Consequently, it is set-aside. The Writ Petition No.7537/2012 filed by the petitioners is dismissed
being not maintainable. The petitioners are, however, at liberty to invoke jurisdiction of a Civil Court for redressal of their grievance. No costs.
13. Since we have set-aside the order passed in Writ Petition No.7537/2012, challenge to the same by the petitioner against non-grant of backwages is
rendered redundant. Accordingly, Writ Appeal No.1693/2018 is dismissed.
14. Writ Appeal No.1004/2018 is disposed of in above terms.
