@JUDGMENTTAG-ORDER
1. This writ petition is filed by 21 employees who were initially appointed by the management of the Andhra Pradesh Co-operative Oilseeds
Growers'' Federation Limited (for short ''APOILFED''), the 1st respondent herein and who are presently serving in the establishments of Sri
Vijayavardhani Co-operative Oilseeds Growers'' Union Limited, Beechpally and Sri Krishna Devaraya Co-operative Oilseeds Growers'' Union
Limited, Piler, respondents 2 and 3 respectively. The petitioners have sought for a writ of mandamus declaring that they continue to be the
employees of the APOILFED only and not of any other body or employer including respondents 2 and 3, and that they are entitled to all the
benefits of employment under APOILFED including seniority and parity of salary and service benefits on par with the employees who are presently
serving in the establishment of APOILFED.
2. The background facts that led to filing of the writ petition be stated briefly as under : APOILFED, the first respondent herein, was established
during the year 1983 with financial assistance of National Dairy Development Board (for short ''NDDB'') under the scheme called ""Operation
Golden Flow"" with an objective of increasing the productivity of edible oilseeds in the Andhra Pradesh State to bridge the gap between demand
and supply of edible oils. To achieve the goal, the APOILFED initiated organisation of Primary Oilseeds Growers'' Societies at the village level and
recruited field staff for organising the societies giving training to the farmers on improved package of practices. For the purpose of production of
edible oils, the APOILFED undertook the responsibility of organising and developing Oilseeds Co-operative Societies and to manage them if
necessary and train them to purchase and process locally produced edible oilseeds from the growers and generally to undertake all measures for
increasing the productivity of such oilseeds.
3. The petitioners were recruited in various cadres in the establishment of APOILFED in the years 1983, 1984 and 1985 after going through the
recruitment procedure prescribed by the Service Rules. The respondents 2 and 3 Unions were not in existence when the petitioners were
recruited. The respondents 2 and 3 Unions were formed to give effect to an undertaking given by the Government of Andhra Pradesh to the
NDDB in an agreement dated 19-3-1987. In terms of the said undertaking, the Government was obliged to form Oilseeds Growers'' Co-
operative Societies and their Regional/Area Unions and a State level Oilseeds Growers Federation to enable them to function in accordance with
the approved bye-laws, to provide Government guarantee for the repayment of long term loan advanced by the NDDB to the APOILFED. The
APOILFED was adopted as the State-level Oilseeds Growers'' Federation. After the above agreement in the year 1987, the Government of
Andhra Pradesh acting through APOILFED and the District administration formed several Primary Oilseeds Growers'' Co-operative Societies, as
a first step in the establishment of three-tier pattern contemplated in the undertaking given by the Government of Andhra Pradesh to the NDDB.
Such Primary Co-operative Societies came into existence between the years 1987 and 1990. After the Primary Co-operative Oilseeds Societies
were formed, the next step in the implementation of the undertaking was carried out by forming the Regional/Area Unions between the years 1990
and 1992. Steps were taken to organise the Unions which would have administrative control over Area Office/Field Offices, and the administrative
control over those offices were made over to the Unions. Respondents 2 and 3 are the two Unions formed by the APOILFED to give effect to
common purpose mentioned in the agreement dated 19-3-1987 executed by the Government of Andhra Pradesh in favour of the NDDB. An
Office order dated 2-5-1992 was issued by which the second respondent Union was allotted the Central Processing Unit, Beechpally and the
Divisional Offices at Gadwal and Khammam along with the Field Offices under their control. Similarly, respondent No.3 Union was allotted the
Vegetable Oil Complex, Ananthapur including the Field Offices under its control. The respondents 2 and 3 were registered under the Co-operative
Societies Act by virtue of the initiative taken by the Government of Andhra Pradesh as provided under the agreement dated 19-3-1987. After the
respondents 2 and 3 were thus constituted, a formal order OO No.P&A/T/ U/Staff/92 dated 2-5-1992 was passed transferring the administrative
control of the staff working in the offices of the Unions to the management of the Unions. The preamble of the above Office Order reads as follows
:
The staff working at present in the following office including Area Office, Field Offices etc. shall stand allotted tentatively to the respective Unions.
They shall be under the full administrative control of the respective Union. These orders shall come into force w.e.f., 1-5-1992
In continuation of the office order dated 2-5-1992, another office order No.GU:MD:1:92 dated 22-7-1992 was issued transferring the
administrative control of the operations, assets to the respective Unions pending finalisations of distribution of assets and liabilities between the
APOILFED and the Unions. The material portion of the above order reads as follows :
In continuation of the earlier order No.P&A/T/U/Staff/92 dated 2-5-1992 it is further ordered that along with full administrative control of the
staff working in the offices mentioned in the earlier order, the administrative control of the operations, assets like plants, machinery, buildings,
furniture etc., (movable and immovable assets) also is transferred to the respective Union pending finalisation of distribution of assets and liability
between the Federation and Union, in due course.
Thereafterwards, a circular No.P&A/Staff/ FED/Unions/92 dated 22-8-1992 was issued by the APOILFED to provide the manpower required
by the Unions by deploying some of the staff from amongst the employees working in the establishment of APOILFED including its Head Office
and Oil Packaging Station at Rajendranagar (R.R. District) and Visakhapatnam. The APOILFED, while so allotting the staff, called for
preferences from the employees for allotment either to the APOILFED or to the second respondent union or to the third respondent Union. The
options so provided to the employees were exercised by all the petitioners-employees, and all of them submitted their first option to work in the
establishment of APOILFED through proper channel. The relevant portion of the circular dated 22-8-1992 dealing with the options to be
exercised by the employees reads as under:
In order to give opportunities to the employees, it has also been decided to call for the options from the employees hitherto under the
Administrative Control of the Federation for consideration for allotment of staff to the Federation and the Unions. Each employee may give 3
options in order of preference for his allotment to any of the organizations, namely, A.P. Co-operative Oilseeds Growers'' Federation Ltd. and its
offices, Shri Vijayavardhani Co-operative Oilseeds Growers'' Union Ltd., Gadwal and Shri Krishna Devaraya Co-operative Oilseeds Growers''
Union Ltd., Piler. However options given by the employees does not confer any right on the employees for allotment either Federation or Unions
or by any particular Union of their choice. Though option will be taken into consideration while making allotments, yet Federation shall have the
right to allot any employee of the Federation to any of the organisations, namely, A.P. Co-operative Oilseeds Growers'' Federation Ltd.,
Hyderabad, Union-1 Shri Vijayavardhani Co-operative Oilseeds Growers'' Union Ltd., Gadwal and Union-11 Shri Krishna Devaraya Co-
operative Oilseeds Growers'' Union Ltd., Piler irrespective of the preferences of the employees.
All the employees of the Federation and its different offices including those employees whose Administrative control has recently been transferred
to the Unions in this office order P&A/T/U/ Staff/92 dated 2-5-1992 are requested to give their option, if so desire by 15-9-1992. In case no
option is received from any employee, Federation shall allot him to any of the organisations mentioned above at its discretion.
4. Although none of the petitioners opted to serve in the establishment of the Unions as a first preference, office orders were issued in the month of
October, 1993 transferring the petitioners to the Unions. When the petitioners were transferred to Unions, the Unions did not have separate set of
rules and regulations governing terms and conditions of service of their employees, and therefore, by virtue of the condition incorporated in the
transfer orders issued by the APOILFED in the month of October, 1993 the petitioners continued to be governed by the rules and regulations
framed by the APOILFED. After the APOILFED transferred the petitioners to the Unions in the month of October, 1993, the managements of the
Unions did not issue any office orders appointing the petitioners as their employees in the respective cadres. When the matter stood thus, since the
APOILFED transferred the petitioners to the Unions against their wish, the petitioners submitted representations to the Chairman and Managing
Director of the APOILFED pointing out the irregularities committed by the managements of APOILFED in the matter of allotting its employees to
the Unions and requesting the management of the APOILFED to retain them as its staff. A representation made by the first petitioner herein,
namely, Sri M. Tirupathi Reddy dated 2-12-1993 to the Chairman and Managing Director of the APOILFED reads as under :
To
The Chairman and
Managing Director,
A.P. Co-op. Oilseeds Growers''
Federation Ltd.,
9th Floor, Parisrama Bhavan,
Hyderabad.
Respected Sir,
Sub:--Request for protest of allotting Regional union-Regarding.
I, M. Tirupathi Reddy, working as Executive (Accounts) would like to bring the following few facts to your kind notice for consideration.
I have joined as a Procurement and Input Assistant in A.P. Oil Federation on 1-7-1983. In the meantime, got promotion and joined as Executive
(Accounts) on 17-7-1989. Since then I have been serving for more than 10 years in this organisation. Recently I was served a circular informing
that I have been allotted to Regional Union-I (Gadwal).
Based on the NDDB guidelines the Federation of two-tier structure is converting into three-tier structure and asked me to submit my option for
allotting my services to regional unions. Based on the Federation request I have opted my first two options to Federation only third option given to
the Regional Union-I. It was told that my option letter was duly considered for allotting the Union. But I am not able to understand that how my
first two options were not considered. If more options were received for Federation, the seniority must have been taken as criteria for allotting. But
the Management totally ignored seniority and options.
It is very clear that the allotment is done based on the present place of work. Ultimately, who are working in the Federation jurisdiction have got
advantage, moreover we are losing seniority, options and rural service.
The Federation specifically mentioned, the staff who were recruited after 1989, the recruited staff has to work in the regional Unions. But some of
the above staff were allotted to Federation deviating the orders issued, which indicates that the Management has not considered, the pre-
mentioned rules. However, we are again praying to the Hon''ble Chairman and Managing Director to kindly examine my case sympathetically and
giving me a chance by allotting Federation based only seniority and option letter, for which act of kindness I shall be ever grateful to you.
Thanking you Sir,
Yours faithfully,
Sd/-
(M. Tirupathi Reddy)
Executive (Accounts)
CPU, Beechpally
Post Box No.3, Gadwal.
There was no response to the representations of the petitioners. When the matter stood thus, on 15-6-1995 the first petitioner was issued with
office order posting him, on deputation, at Oil Process Station (OPS) Rajendranagar and accordingly, the first petitioner reported at the Oil
Processing Station, Rajendranagar. On 22-8-1996, he was served with an office order by the management of APO1LFED ""repatriating"" him to
the Gadwal Union on expiry of the period of deputation with the APOILFED. The first petitioner alarmed by the above order made enquiries in
the administrative department of APOILFED regarding his official status through his letter dated 11-11-1996, and he was orally informed that he
was treated to be an employee of the 2nd respondent Union, and not an employee of APOILFED. Thereafterwards, the first petitioner submitted
letters addressed to the Managing Director of APOILFED and its Manager (P&A) asserting that he is still an employee of the APOILFED and
not the Union, and since there was no response from the management of APOILFED, this writ petition was filed on 18-11-1996 praying for the
reliefs already noted above.
5. In response to Rule Nisi, the management of APOILFED, the first respondent herein, has filed counter-affidavit and additional counter-affidavit.
The petitioners too have filed replies to the counter-affidavits. The petitioners as well as the management of APOILFED have filed large number of
material papers in support of their respective claims. In the counter-affidavits of the first respondent, certain preliminary objections are raised
regarding maintainability of the writ petition while opposing the writ petition on merit. They are :
(i) APOILFED is not a ''State'' within the meaning of that term as defined under Article 12 of the Constitution nor in authority for the purpose of
issuance of appropriate writ or order under Article 226 of the Constitution of India, and therefore, the present writ petition is misconceived and is
liable to be dismissed in limine:
(ii) A single writ petition on behalf of 21 employees is not maintainable;
(iii) Writ petition is liable to be dismissed on the ground of laches;
(iv) The petitioners are guilty of acquiescence and waiver. The petitioner acquiesced in the action of the APOILFED in transferring the petitioners
to the establishments of the Unions and they did not care to assail the validity of allotment/transfer orders issued in the year 1993, and therefore, at
this distance of time the petitioners cannot be permitted to make any grievance against their transfers to the Unions;
(v) Writ petition is liable to be dismissed in limine inasmuch as it is hit by principle of res-judicata. In WP No.19500 of 1993 filed by the A.P. Co-
operative Oilseeds Growers'' Federation Employees'' Union the same relief as prayed for in the present writ petition was sought.
6. Touching the merits of the matter, the management of APOILFED in its counter-affidavits has maintained that transfer of the petitioners to the
Unions became imperative and a necessity having due regard to the undertaking given by the Government of Andhra Pradesh to the NDDB in the
matter of implementation of three-tier system. It is also maintained that by transferring to the Unions the petitioners arc not prejudiced. It is stated
that the NDDB is a funding agency, and since it had directed the management of APOILFED to implement three-tier structure, i.e., village level
Primary Societies, Regional Unions and State level Federation, the APOILFED was obliged to implement the three-tier structure, and in the
process it became absolutely necessary for the management of APOILFED to transfer its excessive staff to the Unions, and in that view of the
matter, there was no irregularity and illegality on the part of the APOILFED in allotting/transferring the writ petitioners to the respondents 2 and 3
Unions.
7. Arguing for the petitioners, Sri J. Suryanarayana, learned senior Counsel would contend that admittedly, the petitioners were appointed by the
APOILFED in the years 1983 to 1985, and the relationship of employer-employee thus established between the petitioners and the management
of APOILFED was subsequently never severed by any mode known to law, and therefore, the petitioners even and till now continue to be the
employees of the APOILFED only, and they cannot be treated as the employees of the respondents 2 and 3 Unions. Learned senior Counsel
would also maintain that the petitioners would never become employees of the respondents 2 and 3 Unions without their consent, and in the instant
case, admittedly, the petitioners did not give their consent to become employees of the Unions.
8. Sri Vilas V. Afzalpurkar, learned standing Counsel for APOILFED would reiterate and highlight the same contentions taken by the management
of APOILFED in its counter-affidavits and would maintain that the writ petition is liable to be dismissed for more than one reason.
9. Sri A. Jayaprakasa Rao, learned Counsel appearing for the respondents 2 and 3 Unions would support the arguments advanced on behalf of
the APOILFED.
10. Having heard the learned Counsel for the parties the only substantial question that arises for consideration and decision is whether the
petitioners continue to be the employees of APOILFED or they have become the employees of the 2nd and 3rd respondent Unions. Before
dealing with that question, it is appropriate to consider and dispose of the preliminary objections raised by the management of APOILFED.
11. In my considered opinion the question whether the writ petition filed under Article 226 of the Constitution of India is maintainable against the
management of APOILFED is already concluded by the judgment of the Division Bench of this Court dated 6-5-1996 delivered in WA Nos.
1279, 1283 and 1285 of 1995. The above three writ appeals were directed against the judgment of a learned single Judge of this Court dated 14-
8-1995 passed in WP Nos.19250, 19500 of 1993 and WP No.15753 of 1994. In those writ petitions filed by certain NMRs., and the A.P. Co-
operative Oilseeds Growers'' Employees Union seeking the relief of regularisation of the services of NMRs., and also seeking a writ of Mandamus
directing APOILFED not to change the service conditions of employees appointed by it to the disadvantage of the employees, it was contended
by the management of the APOILFED that those writ petitions were not maintainable against it inasmuch as APOILFED is not a ""State"" within the
meaning of Article 12 of the Constitution of India nor could it be treated as an ""authority"" within the meaning of that term occurring in Article 226 of
the Constitution. The learned single Judge upheld the above contention of the management of APOILFED and dismissed the writ petitions.
However, the Division Bench in the aforementioned writ appeals reversed the opinion of the learned single Judge and held that the writ petitions
are maintainable. In Paragraph 8 of the judgment the Division Bench observed as under :
We are of the opinion that the respondents herein are amenable to the jurisdiction of this Court in exercise of its jurisdiction under Article 226 of
the Constitution and a writ petition lies against it.
12. The management of APOILFED preferred Civil Appeal Nos.16889, 16871 and 16903 of 1996 to the Supreme Court against the common
judgment of the Division Bench. As could be seen from the judgment of the Supreme Court dated 28-4-1998 made in the above civil appeals, the
Supreme Court did not upset any of the findings recorded by the Division Bench of this Court but substituted certain directions as suggested at the
Bar by the parties in the place of the directions issued by the Division Bench of this Court in its common judgment dated 6-5-1996 made in WA
Nos.1279, 1283 and 1285 of 1995. It is also relevant to note that CA No. 16903 of 1996 preferred by the management of APOILFED against
the common judgment was withdrawn and the same was dismissed as withdrawn. In fact, the management in the above civil appeals did not
canvass that APO1LFED is not a ""State"" within the meaning of Article 12 or it is not an ""authority"" for the purpose of Article 226 of the
Constitution of India. Therefore, the finding recorded by the Division Bench of this Court in the writ appeals that writ petitions are maintainable
against the APOILFED has become final and the management of APOILFED is bound by that decision. In that view of the matter, there is no
necessity to again deal with the question whether writ petition is maintainable against the management of APOILFED or not under Article 226 of
the Constitution of India. However, the learned Standing Counsel for the APOILFED strenuously contended that since the Supreme Court
superseded the directions given by the Division Bench of this Court and issued separate directions as agreed to by the parties before it, it is
necessary to decide the question afresh on merit. The learned Standing Counsel would also point out that the Division Bench, in fact, did not
decide the question whether the APOILFED could be treated as a ''''State"" within the meaning of that term as defined under Article 12 of the
Constitution of India. It is true that the Division Bench did not decide the question whether APOILFED could be treated as a ""State"" within the
meaning of Article 12 of the Constitution. The Division Bench in Paragraph 7 of the judgment observed thus :
..... We do not propose to express any opinion on the question as to whether the respondents-organisation is a ""State"" or an ""authority"" or an
instrumentality of the State within the meaning of Article 12 of the Constitution of India, as no such opinion is required for the disposal of the writ
petitions.
The Division Bench so observing proceeded to consider the question whether the writ petition filed under Article 226 of the Constitution of India is
maintainable against the management of APOILFED and answered the question positively holding that the APOILFED is an ""authority"" within the
meaning of that term occurring in Article 226 of the Constitution of India. In the above premise, the learned Counsel appearing for both the sides
submitted their arguments quite extensively on the question whether APOILFED could be treated as a ""State"" within the meaning of Article 12 of
the Constitution of India or an ""authority"" within the meaning of that term under Article 226 of the Constitution of India.
13. In that view of the matter, I think it appropriate to decide the above issue debated before the Court.
14. Article 12 of the Constitution reads as under:
In this part, unless the context otherwise requires, ""the State"" includes the Government and Parliament of India and the Government and the
Legislature of each of the States and all local or other authorities within the territory oflndia or under the control of the Government of India.
Article 12 gives an extended meaning to the words ''the State'' wherever they occur in Part in of the Constitution. Unless the context otherwise
requires, ''the State'' will include not only the Executive and Legislative organs of the Union and the States, but also local bodies (such as municipal
authorities) as well as ''other authorities'', which include the ''instrumentalities or agencies'' of the State, or bodies or institutions which discharge
public functions of a Governmental character. In other words, in a given case even a private body can be treated as a State within the meaning of
Article 12 of the Constitution. The Apex Court, in large number of decisions, in Ajay Hasia and Others Vs. Khalid Mujib Sehravardi and Others, ;
Life Insurance Corporation of India Vs. Escorts Ltd. and Others, , Gujarat State Financial Corporation Vs. Lotus Hotels Pvt. Ltd., , A.L. Kalra
Vs. Project and Equipment Corporation of India Ltd., ; Manmohan Singh Jaitla Vs. Commissioner, Union Territory of Chandigarh and Others, ;
Workmen v. Food Corporation of India AIR 1986 SC 670 Mehta v. Union of India AIR 1987 SC 1036 to cite the few, has laid down the
following tests to determine the question whether a Corporation or a Government company or a private body is an instrumentality or agency of the
State:
(i) Whether the entire share capital is held by the Government;
(ii) Whether the corporation enjoys monopoly status conferred by the State;
(iii) Whether the functions of the Corporation are Governmental functions or functions closely related thereto;
(iv) If a department of the Government has been transferred to the Corporation;
(v) The volume of financial assistance received from the State;
(vi) The quantum of State control;
(vii) Whether any statutory duties are imposed upon the Corporation;
(viii) The character of the Corporation may change with respect to its different functions.
Therefore, the question whether the APOILFED could be treated as a State within the meaning of Article 12 of the Constitution of India has to be
decided by applying the above tests to the facts of this case though the above tests laid down by the Apex Court are not exhaustive.
15. NDDB was initially established by the Government of India as a Co-operative venture in the year, 1965. Subsequently by an Act, Act 37 of
1987, passed by the Parliament, it was given a statutory status along with other body, namely, Indian Dairy Corporation, then functioning in
Gujarat State. By the provisions contained in National Dairy Development Board Act of 1987 (per Section 16(1)(a)), NDDB is entrusted with the
task of improving the production and processing of dairy products and also for improving agriculture based industries involved in oil production
from vegetable sources. NDDB is the main funding agency of APOILFED and it provides for the total outlay, 54% of it being a loan and remaining
46% being a grant. The NDDB determines the structure of APOILFED and the programmes in various phases of their implementation. The
Government of Andhra Pradesh has issued G.O.Rt.No.441 Agricultural and Co-operation (AGRI.II) Department dated 28-5-1996 through its
Principal Secretary directing that the employees of APOILFED are not eligible to bonus. By G.O.Rt.No.2509 (F and A) FP-II dated 26-10-
1989 the Government of Andhra Pradesh appointed a Committee of Officers incharge to manage the affairs of the APOILFED u/s 32(7)(a) of the
A.P. Co-operative Societies Act, 1964 for a period of 6 months with effect from 3-11-1989 or till the elections were held to the Federation,
whichever was earlier. No such elections had ever been held, and the management and affairs of the APOILFED have been carried on by the
Committee nominated by the Government of Andhra Pradesh consisting of the Officers drawn from the service under the State headed by an IAS
Officer designated as Managing Director. By G.O.Ms.No.764 F and A (FP-II) Department dated 8-9-1989 the Government of Andhra Pradesh
has exempted the APOILFED from the market cess. The agreement entered into between the Government of Andhra Pradesh and the NDDB
dated 19-3-1987 also discloses the all-pervasive administrative control of the APOILFED by the Government of Andhra Pradesh as well as by
the NDDB. The agreement states that in order to avail of benefits under the project and to assist the NDDB/Oilseeds and Vegetable Oil-wing in
complying with the various covenants in the project agreement between NDDB and Co-operative League of the United States of America
(CLUSA), the State Government has undertaken several obligations enumerated in the agreement. They include issuance of required notifications
to facilitate the formation of the Oilseeds Growers'' Co-operative Societies, the Regional/Area Unions, if any, and the State Level Co-operative
Oilseeds Growers'' Federation in the project area; to provide Government gaurantee and execute gaurantee deed with NDDB (OVOW) without
levying guarantee fee for repayment of long term loans advanced by the NDDB to APOILFED for implementation of the project; to take
necessary steps to safeguard the provisions that the bye-laws of the APOILFED and the Primary Co-operative Societies could be formulated in
consultation with NDDB in such a manner consistent with the A.P. Co-operative Societies Act, 1964 and the Rules framed thereunder; to ensure
that for a period of five years from the date of agreement, the Board of Directors of the APOILFED is nominated by the Registrar of Co-operative
Societies and such nominated Board should consist of only senior level officials drawn from the service under the Government of Andhra Pradesh;
to nominate, during the currency of the nominate Board, the Chairman and appoint the Managing Director in consultation with NDDB/Oilseeds
and Vegetable Oil-wing and the Managing Director thus appointed shall be in position for a minimum period of three years; not to permit or
promote or recommend any unit or organisation or project in the edible oil-oilseeds sector in the project area which is likely to be detrimental or
inconsistent with the functions and interests of the APOILFED; to provide to the Co-operative Institutions, in the form of equity, land owned by
the Government and required for the project such as for setting up of oils and oilseeds processing facilities, District Farms, Area Agronomic
Centre, Federation/ Regional Area Unions, Central Management facilities etc., and assist for providing electricity, water and other facilities within
the control of the State Government, as may be required for the project; to transfer to the Co-operative Institutions upon terms and conditions
mutually agreed upon between the NDDB/Oilseeds and Vegetable Oil-wing, the Federation and the State Government and satisfactory to Co-
operative League of the United States of America, such edible oil and oilseeds processing plants and other assets for oilseeds production
enhancement programmes of the State Government and/or allied agencies and located in the Project Area; to permit the Co-operative Institutions
full freedom including the right to create posts, fix designations and salaries and other remunerations and to recruit personnel as they fit, however,
subject to the policy; not to oblige the Co-operative Institutions to sell any of their products or the donated edible oil through the public distribution
system or otherwise except in consultation with the APOILFED and NDDB/Oilseeds and Vegetable Oil-wing and even in such an event, the price
shall be fixed as mutually agreed among the above three mentioned organisations; to exempt or reimburse, by way of share capital contribution, the
sale of edible oils/oilseeds from the payment of Central Sales Tax and the State Sales Tax; to exempt the APOILFED from the payment of
purchase tax and market cess on the oilseeds procured; to extend through the APOILFED and societies to the Oilseeds Growers'' in the project
area, all subsidies available from Government for cultivation/ extension of oilseeds available under Central/ State sponsored plans; tc contribute
towards the share capital of the Co-operative Institutions; to undertake reorganisation/ winding up of the defunct or inactive Oilseeds Growers''
Co-operatives in the project area to the extent necessary to promote and to nourish and patter cooperatives; to take any other action as is
necessary and feasible for the successful implementation of the vegetable oil project.
16. All the provisions noted above unmistakably show that the affairs of the APOILFED are quite extensively controlled and managed by the State
Government and the NDDB, which is a statutory authority, though the APOILFED functions as a Cooperative Society. APOILFED is certainly an
extended arm of the State and thus an instrumentality of the State or an ""authority"" as mentioned in Article 12 of the Constitution, if the Court were
to apply the several tests evolved by the Supreme Court to determine the question whether a body or a corporation is a ""State"" within the meaning
of Article 12 of the Constitution.
17. Alternatively, there is no difficulty to hold that APOILFED is amenable to the writ jurisdiction of the High Court under Article 226 of the
Constitution.
18. Clause (1) of Article 226 of the Constitution reads as under:
Notwithstanding anything in Article 32, every High Court shall have power, throughout the territories in relation to which it exercises jurisdiction,
to issue to any person or authority, including in appropriate cases any Government, within those territories directions, orders or writs, including
writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari, or any of them, for the enforcement of any of the rights
conferred by part 111 and for any other purpose.
The term ""authority"" used in Article 226, in the context, must receive a liberal meaning unlike the term under Article 12. Article 12 is relevant only
for the purpose of enforcement of fundamental rights under Article 32 of the Constitution. Article 226 confers power on the High Courts to issue
writs not only for enforcement of fundamental rights but also for enforcement of non-fundamental rights. The words, ""any person or authority"" used
in Article 226, are, therefore, not confined only to instrumentalitives of the State. These words may also cover any other person or body
performing public duty. As quite often said and reiterated by the Apex Court and this Court, the form of the body concerned is not very much
relevant and what is relevant is the nature of the duty imposed on the body. The Supreme Court in Andi Mukta Sadguru Shree Muktajee Vandas
Swami Suvarna Jayanti Mahotsav Smarak Trust and Others Vs. V.R. Rudani and Others, , was pleased to observe that the duty must be judged
in the light of positive obligation owed by the person or authority to the affected party, and that no matter by what means the duty is imposed, if a
positive obligation exists mandamus cannot be denied.
19. The Apex Court in Rohtas Industries Ltd. and Another Vs. Rohtas Industries Staff Union and Others, , had to say about the expansive and
extraordinary power of the High Court in the following words:
9. The expansive and extraordinary power of the High Courts under Article 226 is as wide as the amplitude of the language used indicates and so
can affect any person - even a private individual - and be available for any (other) purpose - even one for which another remedy may exist. The
amendment to Article 226(1-A) reiterates the targets of the writ power as inclusive of any person by the expressive reference to ''the residence of
such person''. But it is one thing to affirm the jurisdiction, another to authorise its free exercise like a bull in a china shop. This Court has spelt out
wise and clear restraints on the use of this extraordinary remedy and High Courts will not go beyond those wholesome inhibitions except where the
monstrosity of the situation or other exceptional circumstances cry for timely judicial interdict or mandate. The mentor of law is justice and a potent
drug should be judiciously administered. Speaking in critical retrospect and portentous prospect, the writ power has, by and large, been the
people''s sentinel on the qui vive and to cut back on or liquidate that power may cast a peril to human rights. We hold that the award here is not
beyond the legal reach of Article 226, although this power must be kept in severely judicious leash"".
20. In The Praga Tools Corporation Vs. Shri C.A. Imanual and Others, . The Apex Court observed as under:
It is, however, not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A
mandamus can issue, for instance, to an official of a society to compel him to carry out the terms of the statutes under or by which the society is
constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A
mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities.
The term ''authority'' used in Article 226, in the context, must receive a liberal meaning unlike the term in Article 12. Article 12 is relevant only for
the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue writs for enforcement of
the fundamental rights as well as non-fundamental rights. The words ''any person or authority'' used in Article 226 are, therefore, not to be confined
only to statutory authorities and instrumentalities of the State. They may cover any other person or body performing public duty. The form of the
body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of
positive obligation owned by the person or authority to the affected party. No matter by what means the duty is imposed, if a positive obligation
exists mandamus cannot be denied.
21. In the same decision the Supreme Court also quoted the following observation of Professor De Smith with approval.
... To be enforceable by mandamus a public duty does not necessarily have to be one imposed by statute. It may be sufficient for the duly to have
been imposed by charter, common law, custom or even contract"".
22. In a recent judgment, the Supreme Court, in Uttar Pradesh State Co-operative Land Development Bank Limited v. Chandra Bhan Dubey, ,
after considering important and relevant decisions on the point, opined about the scope and the power of the High Court under Article 226 of the
Constitution as under:
... To understand the explicit language of the article, it is not necessary for us to rely on the decision of the English Courts as rightly cautioned by
the earlier Benches of this Court. It does appears to us that Article 226 while empowering the High Court for issue of orders or directions to any
authority or person, does not make any such difference between public functions and private functions. It is not necessary for us in this case to go
into this question as to what is the nature, scope and amplitude of the writs of Habeas corpus, Mandamus, Prohibitions, Quo warranto and
Ccrtiorari. They are certainly founded on the English system of jurisprudence. Article 226 of the Constitution also speaks of directions and orders
which can be issued to any person or authority including, in appropriate cases, any Government. Under clause (1) of Article 367, unless the
contest otherwise requires, the General Clauses Act, 1897, shall, subject to any adaptations and modifications that may be made therein under
Article 372, apply for the interpretation of the Constitution as it applies for the interpretation of an Act of the Legislature of the Dominion of India.
Person"" u/s 2(42) of the General Clauses Act shall include any company or association or body of individuals, whether incorporated or not. The
Constitution is not a statute. It is a fountain head of all the statutes. When the language of Article 226 is clear, we cannot put shackles on the High
Courts to limit their jurisdiction by putting an interpretation on the words which would limit their jurisdiction. When any citizen or person is
wronged, the High Court will step into protect him, be that wrong be done by the State, an instrumentality of the State, a Company or a Co-
operative Society or Association or body of individuals, whether incorporated or not, or even an individual.. Right that is infringed may be under
Part III of the Constitution or any other right which the law validly made might confer upon him. But then the power conferred upon the High
Courts under Article 226 of the Constitution is so vast, this Court has laid down certain guidelines and self-imposed limitations have been put there
subject to which the High Courts would exercise jurisdiction, but those guidelines cannot be mandatory in all circumstances.
23. There is no need to refer to and consider large number of other decisions of the Apex Court and High Courts on the point in deciding whether
the APOILFED could be treated as an ""authority"" under Article 226 of the Constitution. As pointed out supra, the opinion handed down by a
Division Bench of this Court in WA Nos.1279, 1283 and 1285 of 1995 that APOILFED is amenable to jurisdiction of the High Court under
Article 226 of the Constitution of India has become final. In view of the fact that the control of the State Government and the NDDB on the
APOILFED is all-pervasive structurally, financially and functionally, APOILFED should be treated as an authority for the purpose of Article 226
also besides it being an instrumentality of the State under Article 12 of the Constitution. Therefore, I hold that APOILFED is an instrumentality and
agency of the State under Article 12 of the Constitution and it is an ""authority"" under Article 226 of the Constitution and it is amenable to writ
jurisdiction of this Court under Article 226 of the Constitution of India.
24. There is no merit in the contention of the learned Standing Counsel for the APOILFED that a single writ petition on behalf of 21 employees is
not maintainable, and each petitioner shall pay a separate set of Court fee. It is relevant to note that the cause of action to file the writ petition as
regards all the petitioners is common. The cause of action is the refusal of the Management of APOILFED to treat the petitioners as its employees.
Since the writ petition is grounded on a common cause of action and since common relief is sought by all the petitioners, a single set of Court fee
on behalf of the petitioners is sufficient.
25. There is also no merit in the contention of the learned Standing Counsel for the APOILFED that the writ petition is liable to be dismissed on
the ground of laches. There is absolutely no delay on the part of the petitioners in filing the present writ petition. It is true that transfer orders were
issued transferring the petitioners-employees to the respondents 2 and 3 Unions in the year 1993, but those transfer orders did not terminate the
employer-employee relationship established between the APOILFED and the petitioners when they were recruited in various cadres during the
years 1983, 1984 and 1985. It is also relevant to note that even before the Management of APOILFED issued transfer/ allotment orders in the
year 1993, the petitioners were serving in the unions on deputation basis, and at no point of time the petitioners were told that they ceased to be
the employees of APOILFED. Only the letter dated 22-8-1996 issued by the Manager (P and A) repatriating the first petitioner to the Gadwal
Union impliedly gave an impression that the first petitioner was treated as an employee of the second respondent union, and the first petitioner,
without any loss of time, submitted a letter dated 11-11-1996 to the Management of the APOILFED to know from it whether he was being
treated as its employee or not, and since there was no response to the letter, the present writ petition was filed on 18-11-1996. In that view of the
matter, dismissing the writ petition on the ground of laches does not arise. For the above same reasons, the contention of the Management of the
APOILFED that the petitioners are guilty of acquiescence and waiver has to be rejected and it is accordingly rejected. The petitioners were never
told at any point of time that they ceased to be the employees of the APOILFED, and on their transfers to the Unions, they became the employees
of the Unions before the writ petition was filed in this Court. Secondly, it is trite to state that the petitioners would never become the employees of
the 2nd and 3rd respondent Unions without their consent and willingness.
26. There is also no merit in the contention of the learned Standing Counsel for the APOILFED that the writ petition is liable to be dismissed in
limine inasmuch as it is hit by principle of res judicata. This contention is based on the asserted fact that the earlier WP No.19500 of 1993 was
filed by the Andhra Pradesh Co-operative Oilseeds Growers'' Federation Employees'' Union and in that writ petition also a direction was sought to
the Management of APOILFED not to effect changes in the service conditions of the employees appointed by it to the disadvantage of the
employees, and continue to treat them as employees of the APOILFED wherever they are with all consequential and attendant benefits. The
management claims that the present writ petitioners are also the members of the Andhra Pradesh Co-operative Oilseeds Growers'' Federation
Employees'' Union. This factual assertion is denied by the petitioners in their reply to the counter-affidavit. The management of APOILFED has not
produced any independent evidence or proof to establish that the writ petitioners herein are also the members of Andhra Pradesh Co-operative
Oilseeds Growers'' Federation Employees'' Union, and WP No. 19500 of 1993 was filed on behalf of them also. On the other hand, it is claimed
by the petitioners that WP No. 19500 of 1993 was filed on behalf of NMRs. and not on behalf of regularly appointed employees. Thus all the
preliminary objections raised by the management of APOILFED are devoid of merits and liable to be rejected and accordingly those objections
are rejected.
This leads us to the substantial question that arises for consideration and decision in this writ petition. The question is whether the writ petitioners
are the employees of the APOILFED or whether they ceased to be the employees of APOILFED and have become the employees of
respondents 2 and 3 Unions. It is well settled position in law that a right to the service of an employee cannot be the subject matter of transfer by
an employer to a third party without the employees consent. In Nokes v. Doncaster Amalgamated Collieries Limited (1940) 3 AM. ER 549 where
an order was made u/s 154 of the Companies Act, 1929 transferring all the assets and liabilities of a company to another company, Lord Viscount
Simon L.C., speaking for the House of Lords held that such an order did not mean that contracts of service between the appellant and transferor-
company also stood transferred. The principle that even in cases where the services of an employee are lent to a third party temporarily for a
particular work, the employee still remains the employee of the employer is illustrated in Denham v. Midland Employees Mutual Assurance Limited
(1955) 2 QB 437 . In Mersey Docks and Harbour Board v. Coggins and Griffth (Liverpool) Limited 1947 AC 1 P.17 where a businessman
joined a partnership firm and took his personal staff into the firm, it was held, his staff could not be made the staff of the firm without the consent of
the other partners. It may be that in certain cases, it is possible to say in common parlance that an employee has different employers, as and when
the employer, in pursuance of a contract between him and a third party, lends or hires out the services of his employee to that third party for a
particular work. In Century Insurance Company Limited v. Northern Ireland Road Transport Board 1942 AC 509 it was held, such an
arrangement, however, does not effect a transfer of the contract of service between the employer and his employee, but only amounts to a transfer
of the benefit of his services. In such cases where a third party engages another person''s employee it is the general employer who is normally liable
for the tortuous acts committed by the employee and his liability is not affected by the existence of a contract between him and the third party
under which the services of the employee are lent or hired out for a temporary period to such third party. The above noted four English cases were
cited by the Supreme Court with approval in Manager, Pyarchand Kesarimal Ponwal Bidi Factory Vs. Omkar Laxman Thange and Others, .
27. It is a general rule that contracts ofpersonal service contemplate that the person employed has been selected with reference to individual skill,
competence and other qualifications, and it is, therefore, of the essence of the contract that the contracting party is entitled to personal
performance, and, in default thereof, is entitled to treat the contract as at an end. By reason of this rule, it has been said that contracts of personal
service are not assignable. In Nokes ''s case (supra) it was held that the assignment of contracts of personal service is not included in a general
assignment of all the property of a company about to be dissolved to a new company formed for the purpose of taking over the business of that
company.
28. In Jestamani Gulabrai Dholkia and Others Vs. The Scindia Steam Navigation Company, Bombay and Others, , it was held that the benefit of a
contract entered into by A to render personal service to B cannot ''be transferred by B to C without A''s consent, and that, however, a contract of
service may be transferred by a statutory provision.
29. In Pyarchand''s case (supra) the appellant-firm was conducting a number of bidi factories at various places in Vidharba including the one at
Kamptee. Its head office was also situated there. The factory at Kamptee and the head office have always been treated as separate entities though
owned by the same firm. Consequently, the head office was registered under the Central Provinces and Berar Shops Establishments Act, 1947
and the factory at Kamptee was registered under the Factories Act. The factory had also its own standing orders certified under the Central
Provinces and Berar Industrial Disputes Settlement Act, 1947. The first respondent-Sri O.L. Thenge was originally employed in the factory at
Kamptee. Two or three years thereafter he was directed to work at the head office and worked therein for about six years prior to the impugned
order of dismissal passed against him by the Munim of the head office. Aggrieved by the said order the first respondent filed an application u/s 16
of the CP and Berar Industrial Disputes Settlement Act alleging that the said order was incompetent and illegal. The application was opposed by
the appellant-firm contending that the dismissal order has not been passed by it as the owner ofthe said factory and, therefore, the application was
misconceived. The Assistant Commissioner dismissed the application holding that the first respondent at the material time was not the employee in
the factory, but was employed in the firm''s head office. He relied on the fact that the head office and the factory had separate rules, that the first
respondent used to sign his attendance in the register of the head office, that he was being paid his salary by the head office, and lastly, that his
name was not on the muster roll of the factory. He also found that whereas the staff of the head office was governed by the C.P. and Berar Shops
and Establishments Act, the factory was governed by the C.P. and Berar Industrial Disputes Settlement Act. Against the dismissal of his
application the first respondent filed a revision application before the Industrial Court, Nagapur. The Industrial Court dismissed the application
holding that the only question raised before it was whether the first respondent was the employee of the head office and that being purely a
question of fact, he could not interfere with the finding of fact arrived at by the Assistant Commissioner. Respondent No.1 thereafter filed a writ
petition in the High Court challenging the said orders. The High Court held that it was possible in law for an employer to have various
establishments where different kinds of work would be done, in which case an employee in one establishment would be liable to be transferred to
another establishment. But the High Court observed that unless it was established that the employment of respondent No.l in the factory was legally
terminated it could not be assumed, merely because he was directed to work in the head office that his employment was changed and the head
office was substituted as his employer in place of the said factory. As the order passed by the Assistant Commissioner was not clear on this
question, the High Court remanded the case for disposal according to law. Being aggrieved by the judgment of the High Court the appellant-
factory preferred civil appeal to the Supreme Court under Article 136 of the Constitution. The Supreme Court while dismissing the civil appeal and
affirming the judgment of the High Court in Paragraph 8 observed thus:
A contract of service being thus incapable of transfer unilaterally, such a transfer of service from one employer to another can only be effected by
a tripartite agreement between the employer, the employee and the third party, the effect of which would be to terminate the original contract of
service by mutual consent and to make a new contract between the employee and the third party. Therefore, so long as the contract of service is
not terminated, a new contract is not made as aforesaid and the employee continues to be in the employment of the employer. Therefore, when an
employer orders him to do a certain work for another person, the employee still continues to be in his employment. The only thing that happens in
such a case is that he carries out the orders of master. The employee has the right to claim his wages from the employer and not from the third
party to whom his services are lent or hired. It may be that such third party may pay his wages during the time that he has hired his services, but
that is because of his agreement with the employer. That does not preclude the employee from claiming his wages from the employer. The hirer
may also exercise control and direction in the doing of the thing for which he is hired or even the manner in which it is to be done. But if the
employee fails to carry out his directions he cannot dismiss him and can only complain to the employer. The right of dismissal vests in the
employer"".
30. In General Officer Commanding-in-Chief and Another Vs. Dr. Subhash Chandra Yadav and Another, , the Supreme Court upheld the
contention of the respondent therein that his services under the Cantonment Board is not a Centralised service or a service at a State-level; the
transfer of an employee from one Cantonment Board to another would mean the termination of appointment of the employment of the employee in
the Cantonment Board from which he is transferred and a fresh appointment in the Board where he is so transferred, and such a course of action is
impermissible in law without the consent of the concerned employee. In the same decision it was further held that in any event, one body cannot
transfer its employees to another body even within the same State unless the services of the employees of these two bodies are under a Centralised
or a State-level service placing reliance on the decision of the Supreme Court in Om Prakash Rana Vs. Swarup Singh Tomar and Others, .
31. In Jawaharlal Nehru University Vs. Dr. K.S. Jawatkar and Others, , the Centre of Post-graduate studies was set up at Imphal by Jawaharlal
Nehru University as an activity of the University. To give expression to that activity, the University setup and organised the Centre at Imphal and
appointed a teaching and administrative staff to man it. The respondent was appointed and confirmed as Assistant Professor at the Centre.
Subsequently the Centre was transferred to the Manipur University. The Syndicate of the Jawaharlal Nehru University provided for the transfer of
the Centre to the Manipur University. It was resolved that the Jawaharlal Nehru University for Postgraduate Studies would cease to exist as such
and the Divisions of the Centre would become the Divisions of the Manipur University and function accordingly. It was further resolved that the
members of the faculty employed by the Jawaharlal New University, Centre of Postgraduate Studies, Impal, immediate before its merger into the
University would on and from that date become members of the staff of the Manipur University. Dealing with the validity of the above resolution of
the Jawaharlal Nehru University by force of which the respondent stood transferred to the service under the Manipur University, the Supreme
Court was pleased to observe as under:
The Centre represented an activity of the Jawaharlal Nehru University the teaching and administrative staff must be understood as employees of
the J.N. University. In the case of the incumbent there could be no doubt whatever that he was and continues to be, an employee of the Jawaharlal
Nehru University. There was also no doubt that his employment could not be transferred by the Jawaharlal Nehru University to the Manipur
University without his consent, notwithstanding any statutory provision to that effect whether in the Manipur University Act or elsewhere. The
contract of service entered into by the incumbent was a contract with the Jawaharlal Nehru University and no law can convert that contract into a
contract between the incumbent and the Manipur University without simultaneously making it, either expressly or by necessary implication, subject
to the incumbent''s consent. When the Manipur University Act provides for the transfer of the services of the staff working at the Centre of Post-
graduate Studies, Imphal, to employment in the Manipur University, it must be construed as a provision enabling such transfer of employment but
only on the assumption that the employee concerned was a consenting party to such transfer. It makes no difference that the incumbent was not
shown in the list of Assistant Professors of the Jawaharlal Nehru University or that the provision was not indicate in its budget; that must be
regarded as proceeding from an erroneous conception of the status of the incumbent. No employee could be transferred, without his consent, from
one employer to another. The consent may be express or implied"".
32. From the above discussion, it is quite clear that a contract of service being incapable of transfer unilaterally, a transfer of service from one
employer to another can only be effected by a tripartite agreement between the employer, the employee and the third party, the effect of which
would be to terminate the original contract of service and to make a new contract between the employee and the third party. So long as the
contract of service is not terminated, creating a new contract with the third party does not arise. In the instant case, admittedly, there is no tripartite
agreement between the petitioners, APOILFED and the respondents 2 and 3 Unions to terminate the contract of employment of the petitioners
with the APOILFED, and for entering into new contracts of employment with the respondents 2 and 3 Unions. On the other hand, even according
to the pleadings of the APOILFED, the petitioners were ''transferred'' to the respondents 2 and 3 Unions. It is an admitted position that in the year
1993 the Management of APOILFED issued allotment/transfer orders transferring the petitioners to the establishment of the 2nd and 3rd
respondents Unions completely ignoring the wishes of the petitioners. It is also significant and relevant to note that even in the Circular No.P and
A/Staff/FED/Unions/92 dated 22-8-1992 issued by the Managing Director of the APOILFED, the management asserted that it has right and
discretion to allot any of its employee to one of the three organisations, namely, Andhra Pradesh Co-operative Oilseeds Growers'' Federation
Limited, Hyderabad, Union-I: Shri Vijayavardhani Co-operative Oilseeds Growers'' Union Limited and Union-II: Shri Krishna Devaraya Co-
operative Oilseeds Growers'' Union Limited irrespective of the preferences of the employees. The relevant portion of the Circular reads as under:
Though option will be taken into consideration while making allotments, yet Federation shall have the right to allot any employee of the Federation
to any of the organisations, namely, Andhra Pradesh Co-operative Oilseeds Growers'' Federation Limited, Hyderabad, Union-I Shri
Vijayavardhani Co-operative Oilseeds Growers'' Co-operative Oilseeds Growers'' Limited, Gadwal and Union-II Shri Krishna Devaraya Co-
operative Oilseeds Growers'' Union Limited, Piler irrespective of the preferences of the employees"".
33. Thus, I conclude that the relationship of employment established between the petitioners and the management of the APOILFED during the
years 1983, 1984 and 1985 is not yet severed or determined by any mode known to law. Similarly, there is no contract of employment between
the petitioners and the management of respondents 2 and 3 Unions. Transfer/ allotment of the petitioners to the establishments of respondents 2
and 3 Unions are against the wishes of the petitioners. The petitioners at no point of time gave their consent to severe the relationship of
employment with the APOILFED and to become the employees of the respondents 2 and 3 Unions. The resultant position is that the petitioners, in
law, continue to be the employees of the APOILFED and there is no relationship of employer-employee between the petitioners and the
respondents 2 and 3 Unions.
34. In the result and for the foregoing reasons, I make the following Order:
(i) Writ petition is allowed with costs. Advocate fee is fixed at Rs.5,000/-(Rupees five thousand).
(ii) It is declared that the petitioners are the employees of the Andhra Pradesh Co-operative Oilseeds Growers'' Federation Limited, Hyderabad-
first respondent in the writ petition.
(iii) The first respondent is directed to treat the petitioners as its employees only and extend all service benefits, pecuniary or otherwise, on par with
its other employees.
(iv) If the petitioners were denied any service benefit or benefits on the ground that they were not the employees of the APOILFED after their
transfer to the respondents 2 and 3 Unions in the year 1993, then, the first respondent-Federation is directed to undo such injustice done to the
petitioners and to extend all permissible service benefits including seniority and promotion, pay-scales and allowances, etc.
(v) This order, however, shall not come in the way of the first respondent on the one hand and the respondents 2 and 3 Unions on the other hand
in arriving at a tripartite settlement with the consent and involvement of the petitioners and the similarly circumstanced other employees to settle the
disputes among them amicably.