Securities Exchange Board of India vs Franklin Templeton Trustees Services Pvt Ltd & others . Writ Appeal 399/2020 and connected matters decided on 24 October 2020.
Judgment Link: http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/345451/1/WA399-20-24-10-2020.pdf
HELD: Para 236. A writ petition under Article 226 of the Constitution of India may be maintainable against a private body discharging public duty or positive obligation of public nature. A writ of mandamus can be issued against a person or a body under a liability to discharge any function under any statute, to compel it to perform such a statutory function. If a private body or person violates the statutory provisions of the statute such as the Industrial Disputes Act, Minimum Wages Act, Factories Act, laws relating to environment, a writ would certainly be issued for compliance with those statutory provisions.
237. We may go back to the decision of the Apex Court in the case of Binny Ltd., and another –vs- V. Sadasivan and others (supra) wherein, in paragraph 11, the Apex Court held thus: “11. Judicial review is designed to prevent the cases of abuse of power and neglect of duty by public authorities. However, under our Constitution, Article 226 is couched in such a way that a writ of mandamus could be issued even against a private authority. However, such private authority must be discharging a public function and the decision sought to be corrected or enforced must be in discharge of a public function. The role of the State expanded enormously and attempts have been made to create various agencies to perform the governmental functions. Several corporations and companies have also been formed by the Government to run industries and to carry on trading activities. These have come to be known as public sector undertakings. However, in the interpretation given to Article 12 of the Constitution, this Court took the view that many of these companies and corporations could come within the sweep of Article 12 of the Constitution. At the same time, there are private bodies also which may be discharging public functions. 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.
238. In the case of Ramakrishna Mission and another –vs- Kago Kunya and others77 the Apex Court has dealt with the question whether Ramakrishna Mission is a State, within the meaning of Article 12 of the Constitution of India. In paragraph 32, the Apex Court held thus: “32. 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.”
240. Thus, from the aforesaid decisions of the Apex Court, the position which emerges is that a writ of mandamus could be issued against any private body or a person discharging a public duty or discharging positive obligation of public nature. If a private body is discharging a public function and the denial of any right is in connection with the public duty imposed on such private body or a person, the public law remedy under Article 226 of the Constitution of India can be invoked. A body is said to be performing a public function or duty when it seeks to achieve collective benefit to the general public or a section of the public and it is accepted by the public or a section of the public having authority to do so. Moreover, a writ may be issued to a private body or private person when they fail to comply with the provisions of any statute which need to be complied with by all concerned, including a private company. This is so because of the language used by Article 226 of the Constitution of India which shows that a writ can be issued to any person or authority. Applying these principles, it can very well be said that a writ of mandamus can be issued against a private body which is not “State” within the meaning of Article 12 of the Constitution provided the above tests are satisfied.
Hence, the High Court under Article 226 of the Constitution can exercise power of judicial review of the action of such a body.
Compiled by S. Basavaraj, Advocate, Daksha Legal
Daksha Legal 