Supreme Court of India
JATYA PAL SINGH & ORS.versusUNION OF INDIA & ORS.
- Citation
- 2013 INSC 264
- Decided
- 17 April 2013
- Disposal
- Dismissed
- Bench
- S S NIJJAR
Holding
TCL is neither a "State" nor an "other authority" under Article 12 and does not perform a public function; therefore, the writ petitions are not maintainable and the appeals are dismissed.
Summary
The appellants, former employees of the Overseas Communication Service (OCS), were transferred to Videsh Sanchar Nigam Limited (VSNL) and later to Tata Communications Limited (TCL) after the government's disinvestment. They challenged the termination of their services, arguing that VSNL/TCL was a "State" or "other authority" under Article 12 of the Constitution and that it performed a public function, making it amenable to writ jurisdiction under Article 226. The Supreme Court examined the shareholding pattern (the Government held only 26.12% of TCL) and applied the tests from Ramana Dayaram Shetty to determine state control, concluding that the Government did not have sufficient control over TCL. The Court also held that the functions performed by TCL were commercial in nature and did not constitute a public function. Consequently, the writ petitions were not maintainable and the appeals were dismissed.
Issues considered
- Whether VSNL/TCL, with the Government of India holding 26.12% shares, qualifies as a "State" or "other authority" within the meaning of Article 12 of the Constitution.
- Whether VSNL/TCL performs a public function or public duty that would render it amenable to writ jurisdiction under Article 226.
- Whether the termination of the appellants' services violates contractual assurances under the share‑holding agreement and, if so, whether a writ is the appropriate remedy.
Legislation cited
Subjects
Article 12Article 226public functionstate corporationwrit jurisdictionemployee terminationdisinvestmentVSNLTata Communications Limitedshareholdingcontractual rights
Judgment
[2013] 2 S.C.R. 970
A JATYA PAL SINGH & ORS.
v.
UNION OF INDIA & ORS.
{Civil Appeal No. 2147 of 2010)
APRIL 17, 2013
B
[SURINDER SINGH NIJJAR AND ANIL R. DAVE, JJ.]
CONSTITUTION OF IND/A, 1950:
c Arts. 12 and 226 - Writ petitions before High Court by
employees of VSNL (renamed TCL) challenging termination
of their services - Held: Are not maintainable - Government
of India holding only 26.12% shares of TCL, would not be in
control of affairs of TCL - TCL cannot be said to be 'other
0 authority' within Art. 12 - Merely because TCL is performing
the functions which were initially performed by OCS would not
be sufficient to hold that it is performing a public function -
The functions performed by VSNUTCL are not of such nature
which could be said to be a public function - Therefore, High
E Court of Delhi and High Court of Bombay were fully justified
in rejecting the claim of appellants that TCL would be
amenable to writ jurisdiction of High Court by virtue of the
'other authority' within the purview of Art. 12 - Human Rights
Act, 1998 - s.6(3)(b).
F The appellants, in C.A. No. 3933 of 2013 and C.A. No.
2147 of 2010, who had joined the service of the
Government of India in the Ministry of Telecommunication
known as Overseas Communication Service (OSS), and
were subsequently absorbed in Videsh Sanchar Nigam
G Limited (VSNL), filed writ petitions before the High Court
of Bombay, challenging the termination of their services
by the respondents. The writ petitions were dismissed in
limine by the Division Bench. In the writ petitions filed
before the Delhi High Court by former employees of
H 970
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 971
ORS.
VSNL, tl'te single Judge accepted the preliminary A
objection that the writ petitions were not maintainable, as
VSNL was neither a State within the meaning of Art.12 of
the Constitution of India nor was it performing any public
function. Their Lette.rs Patent Appeals were also
dismissed by the Division Bench of the High Court. Writ 8
Petition· No. 689 of 2007 was filed by Videsh Sanchar
Nig$m Scheduled Castes/Tribes Employees Welfare
samiti
. '
.
I
~he questions for consideration before the Court
were: (i) Whether inspite of the Government of India C
holding only 26.97% shares in VSNL/TCL, would it still
fall in the definition of State or other authority within the
. '.
ambit of Art.12 of the Constitution; and (ii) Whether VSNU
TCLl"is performing a public function/public duty," and as
such, would be amenable to writ jurisdiction of High D
Court under Art. 226 of the Constitution. .
Dismissing the appeals and the writ petition, the
Court
HELD: 1.1. It is significant to note that Ministry of E
Communication took a decision to convert its OCS
Department into a Public Sector Corporation (PSC)
known as VSNL. Eventually, from the date the OCS
employees were transferred to VSNL on deputation basis
· without deputation allowance on foreign service terms, F
they ceased to be government servants. It is, thus, patent
that the appellant accepted the absorption voluntarily.
Therefore, it can not; be said that the appellants even
after absorption in VSNL, continued to enjoy the
protection available to the.m in the OCS as goverriment G
servants. [para 10 and 45] [979-E-F; 996-G-H; 997-A]
1.2 Subsequent to the dis.investment in 2002, the
name of VSNL being a Tata Group Company was
changed to "Tata Communications Limited" (TCL). Since H
972 SUPREME COURT REPORTS [2013) 2 S.C.R.
A 13.2.2002, Government of India holds only 26.12 %
shares of TCL. Therefore, it can be safely concluded that
on the basis of the shareholding, the Government of India
would not be in control of the affairs of TCL. [para 18 and
39] [983-F-G; 992-G; 993-A]
B 1.3 TCL cannot be said to be 'other authority' within
Art. 12 of the Constitution of India. The share holding of
Union of India would not satisfy test principles 1 and 2
in the case of Ramana Dayaram Shetty *. On perusal of
the facts, it would be evident that test No.3 would also
C not be satisfied as TCL does not enjoy a monopoly status
in ILDS. So far as domestic market is concerned, there 1
is open competition between the numerous operators,
like, MTNL, Airtel, Idea, Aircel, etc. Again in view of the 4th
test, it cannot be said that the Government of India
D exercises deep and pervasive control in either the
management or policy making of TCL which are purely
private enterprises. It may also be noticed that, in fact,
even Government Companies like MTNL and BSNL are
competitors of TCL, in respect of ILDS. [para 43-44] [995-
E E-H; 996-A]
Ramana Dayaram Shetty vs. International Airport
=
Authority of India 1979 (3) SCR 1014 (1979) 3 SCC 489;
Pradeep Biswas v. Indian Inst. of Chemical Biology 2002 (3)
F SCR 100 =2002 (5) sec 111 - relied on.
1.4 Therefore, this Court is of the firm opinion that the
High Court of Delhi and the High Court of Bombay were
fully justified in rejecting the claim of the appellants that
TCL would be amenable to writ Jurisdiction of the High
G Court by virtue of the 'other authority' within the purview
of Art. 12 of the Constitution. [para 44] [996-A-B]
1.5 It can also not be said that the activities of TCL
are in aid of enforcing the fundamental rights under Art.
H 21-A of the Constitution. The recipients of the service of
JATYA PAL SINGH & ORS. v. UNION OF INDIA& 973
ORS.
the telecom service voluntarily enter into a commercial · A
agreement for receipt and transmission of information.
The function performed by VSNUTCL cannot be put on .
the same pedestal as the function performed by private
institution in imparting education to children. [para 52]
[1001-B-D] B
2.1 Merely because TATA Communication Limited is
performing the functions which were initially performed
by OCS would not be sufficient to hold that it is
performing a public: function. The functions performed by C
VSNUTCL are not of such nature which could be said to
be a public function. Undoubtedly, these operators
provide a service to the subscribers. The service. is
available upon payment of commercial charges. [para 47-
48] [998-A-B, C-D]
D
Steel Authority of India Ltd. & Ors. vs. National Union
Waterfront Workers & Ors. 2001 (2) Suppl. SCR 343 = 2001
(7) sec 1 - referred to.
Air India Statutory Corporation vs. United Labour Union E
=
& ors. 1996 (9) Suppl. scR 579 1997 (9) sec 377 -
stood overruled ..
2.2 The functions performed by VSNUTCL examined
on the touchstone of the factors enumerated in s.6(3)(b)
of the Human Rights Act 1998 cannot be declared to be F
the performance of a public function. The State has
divested its control by transferring the functions
performed by OCS prior to 1986 on VSNL/TCL. [para 50)
[999-F-G]
G
2.3 In order for it to be held that the body is
performing a public function, the appellant would have
to prove that the body seeks to achieve some collective
benefit for the public or a section of public and accepted
by the public as having authority to do so. In the instant H
974 SUPREME COURT REPORTS [2013] 2 S.C.R.
A case, all telecom operators are providing commercial
service for commercial considerations. Such an activity
in substance would be no different from any other
amenity which facilitates the dissemination of information
or DATA through any medium. [para 52) [1000-G-H; 1001-
B A-BJ
Binny Ltd. vs. Sadasivan 2005 (2) Suppl. SCR 421 =
(2005) 6 SCC 657; Federal Bank Ltd. vs. Sagar Thomas and
Ors. 2003 (4) Suppl. SCR 121 =2003 (10) sec 733;
C and Dwaikanath vs. Income-tax Officer, Special Circle, D-
ward, Kanpur & Anr. 1965 (3) SCR 536 ·referred to.
Commentary on Judicial Review of Administrative Action
(Fifth Edn.) by de Smith, Woolf & Jowell in Chapter 3 para
0.24 ·referred to.
D
Andi Mukta Sadguru Shree Muktaji Vandas Swami
Suverna Jayanti Mahotsav Smarak Trust & Ors. vs.
V.R.Rudani & Ors. 1989 (2) SCR 697 =
(1989) 2 SCC 691 •
held inapplicable.
E 3. In the instant appeals, the claim of the appellants
is that their services have been wrongly terminated by
VSNLITCL in breach of the assurances given by the
Government of India and VSNL in clause 5.13 of the share ·
holding agreement. A perusal of the aforesaid
F documents, however, would show that VSNL had merely
promised not to retrench any employee who had come
from OCS for a period of two years from 13.2.2002. Such
a condition, would not clothe the same with the
characteristic. of a public duty which the employer was
G bound to perform. The employees had· individual
contracts with the employer. In case the employer is
actually in breach of the contract, the appellants are at
liberty to approach the appropriate forum to enforce.their
rights. [para 53 and 54) [1001-G-H; 1002-B-C] ·
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 975
ORS.
Delhi Science Forum vs. Union of India 1996 (2) SCR A
767 =1996 (2) SCC 405; Appeal of South Africa in Mittal
Steel South Africa Limited (previously known as /SCOR
Limited) vs. Mondli Shadrack Hlatshwayo, case No.326 of
2005 decided by Supreme Court of South Africa on
31.8.2006; Secretary, Ministry of Information and B
Broadcasting vs. Cricket Association of Bengal (1995) 2 SCC
122; Unni Krishnan J.P. & Ors. vs. State of Andhra Pradesh
& Ors. 1993 (1) SCR 594 = 1993 (1) SCC 645 ; Zee
Te/efilms Ltd. vs. Union of India 2005 (1) SCR 913 = 2005
(4) SCC 649; Ramesh Ahluwalia vs. State of Punjab & Ors. c
2012 (12) SCC 331; Al/ India /TDC Workers Union & Ors. v.
/TDC & Anr. 2006 (8) Suppl. SCR 127 = 2006 (10) sec 66;
G. Bassi Reddy vs. International Corps Research Institute
2003 (1) SCR 1174 = 2003 (4) SCC 225; Ba/co Employees
Union vs. Union of India & Ors. 2001 (5) Suppl. SCR 511 = D
2002 (2) SCC 333; Agricultural Produce Market Committee
vs. Ashok Harikunj & Anr. 2000 (3) Suppl. SCR 379 = 2000
(8) SCC 61; Radhakrishna Agarwal vs. State of Bihar 1977
(3) SCR 249 = 1977 (3) SCC 457; Kulchinder Singh vs.
Hardaya/ Singh Brar 1976 (3) SCR 680 = 1976 (3) SCC 828; E
and Praga Tools Corp. vs. C.A. /manual & Ors. 1969 (3) SCR
773 = 1969 (1) sec 585 • cited
Case Law Reference:
1996 (2) SCR 767 cited para 25
f.
1996 (9) Suppl. SCR 579 stood overruled para 25
2005 (2) Suppl. SCR 421 referred to para 26
2003 (4) Suppl. SCR 121 referred to para 26
G
case No.326 of 2005 decided by Supreme Court
of South Africa on 31.8.2006 cited para 26
(1995) 2 sec 122 cited para 27
H
976 SUPREME COURT REPORTS [2013) 2 S.C.R.
A 1989 (2) SCR 697 held inapplicable para 27
1993 (1) SCR 594 cited para 27
2005 (1) SCR 913 cited para 32
2012 (12) sec 331 cited para 32
B
2006 (8) Suppl. SCR 127 cited para 33
2003 (1) SCR 1174 cited para 33
2001 (5) Suppl. SCR 511 cited para 33
c
2000 (3) Suppl. SCR 379 cited para 33
1979 (3) SCR 1014 relied on para 39
2002 (3) SCR 100 relied on para 33
D 1977 (3) SCR 249 cited para 36,
1976 (3) SCR 680 cited para 36
1969 (3) SCR 773 cited para 36
E 2001 (2) Suppl. SCR 343 referred to para 39 _
1965 (3) SCR 536 referred to para 50
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
2147 of 2010.
F
From the Judgment and order dated 08.09.2009 of the
High Court of Judicature at Bombay in Writ Petition No. 2652
of 2007.
WITH
G Civil Appeal No. 3933 of 2013.
Civil Appeal No. 425 of 2012.
W.P. (C) No. 689 of 2007.
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 977
ORS.
Civil Appeal No. 5740 of 2012. A
Triloki Nath Razdan, P.P.N. Razdan, Dr. Krishan Singh
Chauhan, Ajit Kumar Ekka, Chand Kiran, Kartar Singh, D.N.
Ray, Amit Mahajan, Navin Chawla, Abhishek Kumar Jha for the
Appellants. B
C.U. Singh, Mahesh Agarwal, Rishi Agrawala, E.C.
Agrawala, Ankur Saigal, Ankur, R.K. Rathore, Baldev Ateya (for
D.S. Mahra), Arvind Kumar Sharma for the respondents.
The Judgment of the Court was delivered by c
SURINDER SINGH NIJJAR, J. 1. Leave granted in
SLP© No.4619 of 2011.
2. This judgment will dispose of a group of appeals, details
of which are given hereunder, as they raise only one question D
of law:
Proceedings before the Bombay High Court :-
3. Writ Petition No.2139 of 2007 titled as Mahant Pal
Singh vs. Union of India dismissed in limine by the Division E
Bench on 7th September, 2009. Civil Appeal No.3933 of 2013
@ Special Leave Petition (C) No.4619 of 2011 titled as
M.P.Singh vs. Union of India & Ors. has been filed challenging
the aforesaid order of the Division Bench. Writ Petition
No.2652 of 2007 titled as Jatya Pal Singh & Ors. vs. Union of F
India & Ors. was dismissed in limine by the Division Bench on
8th September,. 2009 in view of the order dated 7th September,
2009 passed in Writ Petition No.2139 of 2007. The aforesaid
order has been impugned by the appellants (writ petitioners in
the High Court) Jatya Pal Singh & Ors. vs. Union of India & G
Ors. in C.A.No.2147 of 2010.
H
978 SUPREME COURT REPORTS [2013] 2 S.C.R.
A Proceedings in the Delhi High Court :-
4. Ten writ petitions were filed by the former employees of
the Videsh Sanchar Nigam Limited (VSNL). The common
question of law raised in all the appeals relates to the very
B maintainability of the writ petitions. VSNL had raised a
preliminary objection that a writ petition would not be
maintainable against it as it is neither a State within the
meaning of Article 12 of the Constitution of India nor is it
performing any public function. The learned Single Judge
accepted the aforesaid preliminary objection and dismissed the
C writ petitions by judgment and order dated 29th August, 2011·.
Letters Patent Appeal No.924 of 2011 challenging the
aforesaid order was dismissed by the Division Bench on 14th
November, 2011. LPA Nos. 930 of 2011 and 931 of 2011 were
dismissed by the common order dated 15th November, 2011.
D
4A. Only two of the original writ appellants have
approached this Court in the civil appeals against the judgment
of the learned Single Judge and the Division Bench of the Delhi
High Court by way of civil appeals. These are Ram Prakash
E vs. Union of India & Ors. in C.A.No.5740 of 2012 and Vijay
Thakur vs. V.S.N.L. and Anr. in C.A.No.425 of 2012.
5. For the purpose of this order, we shall make a reference
to the facts as pleaded in C.A.No.2147 of 2010. All the
appellants in writ petitions had been working in the Ministry of
F Communication, in particular, Department of Overseas
Communication Service (OCS) from 1st March, 1971 onwards.
Their dates of appointment on various posts are as under :
6. Appellant Nos. 1 and 2 were appointed as Assistant
G Engineer on 16th May 1983 and 1st September, 1983,
respectively. Appellant Nos. 3 and 4 were appointed as Junior
Technical Assistant on 1st March, 1971 and 13th January, 1976
and appellants 5 and 6 were appointed on 8th January, 1980.
During their continuous service with respondent No.1, they had
H earned promotions at due time on merit. They have a clean
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 979
ORS. [SURINDER SINGH NIJJAR, J.]
record of service. Till 31st March, 1986, they were holding A
responsible posts in the OCS.
Background of VSNL:
A) Origin of Overseas Communication Service (in short
OCS)- B
7. On 1st of January, 1947 'Indian Radio and
Telecommunication company Ltd.' a Private Company
operating India's external telecommunication service was taken
over by the Govt. along with its employees on the terms and c
conditions as they had with the private company.
8. The Govt. created a department in ministry of
telecommunication known as Overseas Communication
Service (OCS) that dealt communication of India subjects with
the rest of the world.
0
9. The OCS department of Ministry of telecommunication
continued till 31st of March, 1986.
B) Conversion of OCS into VSNL - E
10. Ministry of Communication took a decision to convert
its OCS Department into a Public Sector Corporation (PSC).
A notification to this effect was issued on 19th March, 1986 and
the Corporation was named as VSNL. Accordingly, w.e.f. 1st
April, 1986, all international telecommunication services of the F
country handled by the Govt. stood transferred to VSNL. All the
employees were deemed to have been transferred to the VSNL
on the existing terms and cond)tions till their case for
absorption or otherwise are decided upon by the. VSNL in
consultation with the cadre controlling authority and other G
concerned Govt. Departments. They were to be· treated on
deputation on Foreign Service to VSNL without deputation
allowance. These employees also were to be treated as though
on the strength of OCS as on 31st March, 1986 till their cases
were finalized by the VSNL. Those who do not opt for H
980 SUPREME COURT REPORTS (2013] 2 S.C.R.
A absorption will be treated as on deputation on foreign service
with the Corporation for a period of 2 years without deputation
allowance. The Corporation (VSNL) would finalise the terms
and conditions for employment in the Corporation within a
period of 12 months or on any specified date as may be
B agreed upon by the Government. It was provided that the
employees will be asked to exercise their option for being
absorbed in the company or otherwise within the stipulated
period. The date of induction of the employees in the
Corporation will be the date from which they have exercised
c the option to be absorbed in the Company with the approval
of the competent authority. The notification also provided that
pensionary and other retirement benefits to the employees on
their absorption in the Corporation will be determined in
accordance with the Department of Pensions and Pensioners
D Welfare O.M. No.4(8)-85-P & PW dated 13th January, 1986
· and as amended from time to time.
11. Thereafter on 11th December, 1989, VSNL issued
STAFF NOTICE on the subject 'Absorption of OCS Employees
in VSNL'. In this notice, it is mentioned that date of absorption
E of OCS employees in the VSNL has been approved by the
Ministry of Communication on 1st January, 1990. It is further
mentioned that accordingly from that date, the OCS employees
transferred to VSNL on deputation basis without deputation
allowance on foreign service terms will cease to be government
F ·servants. The aforesaid notice of absorption including the terms
and conditions of absorption was also issued individually to
each employee. On 5th July, 1989, the Government had issued
Office Memorandum No.4/18/87-P&PW (D) on the subject
'Settlement of Pensionary terms etc. in respect of Government
G employees transferred en masse to Central Public Sector
Undertakings/Central Autonomous Bodies'. Under this, the
employees were given the option to retain the pensionary
benefits available to them under the Government rules or be
governed by the rules of the Public Sector Undertaking/
H Autonomous Bodies. The Government also assured that the
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 981
ORS. [SURINDER SINGH NIJJAR, J.]
employees of the OCS will not be removed by the VSNL unless A
their case was placed before the competent authority in the
Government. Finally, the VSNL absorbed en-masse the
erstwhile employees of OCS with effect from 1st January, 1990.
The solemn promise of not being removed was incorporated
in the Conduct Discipline and Appeal Rules framed by the 8
VSNL in the year 1992. It is pertinent to note here that all the
appellants had opted to join VSNL.
C. Disinvestment
12. Between 1992 and 2000, Government of India C
divested a portion of its share holding in VSNL by sale of equity
to certain funds, banks and financial institutions controlled by
the Government in 1992 a'nd to the general public in 1999.
Thereafter, the company was listed on Indian Stock Exchange.
In 1997, the Government of India sold some of its equity D
holdings by issuing Global Depository Receipts (GDRs)
following which VSNL was li$ted on the London Stock
Exchange. On 15th August, 2000, VSNL became first Public
Sector Undertaking of India to be listed on the New York Stock
Exchange through conversion of underlying GDRs to American E
Depository Receipts (ADRs). However on 13th February, 2002,
Government of India which till then held 52.97% of shares in
VSNL, divested 25% shares in favour of Panatone Finvest
Limited, (comprising of 4 companies of the Tata Group) and
1.85% in favour of its employees after following due process F
in accordance with its disinvestment policy. This brought the
share holding of the Government of India to 26.12 %. Tata
Group also made a. public offer for acquiring a further 20% of
the share capital of the VSNL, from the public in terms of SEBI
(Substantial Acquisition of Share and Takeover) Regulations G
1997. Consequently, the total holding of the Tata Group in VSNL
increased to 44.99 % of the paid up share capital in 2002.
Presently, Tata Group holdings in VSNL is about 50.11 %.
13. As per the share holding agreement and share
purchase agreement, the Government of India mandated the H
982 SUPREME COURT REPORTS [2013] 2 S.C.R.
A Tata Group to ensure that none of the employees should be
retrenched for a period of one year. Clause 5.13 of the
aforesaid agreement was as under :-
"5.13 Employees.
B (a) Notwithstanding anything to the contrary in this
Agreement, the Strategic Partner shall not cause the
Company to retrench any of the employees of the
Company for a period of 1 (one) year from the closing other
than any dismissal or termination of employees of the
C company from their employment in accordance with the
applicable staff regulations and standing orders of the
Company or applicable law."
14. It appears that the Tata Group by a letter dated 14th
April, 2002 to ensure that the morale of the present employees
D of the VSNL is maintained at a high level and that they continue.
to deliver their best performance, decided that it shall cause
VSNL not to retrench any of the employees of VSNL for a
period of two years from 13th February, 2002.
E 15. On 5th February, 2004, VSNL was granted a non
exclusive licence by the Government of India pursuant to the
disinvestment. Clause (1) of the non exclusive licence reads as
under:-
"1. In view of the fact that the LICENSEE is the
F INCUMBENT OPERATOR and in consideration of the
payments including LICENCE FEE and due performance
of all the terms and conditions mentioned in the
SCHEDULE on the part of the LICENSEE, the Licensor
does, hereby grant, under Section 4 of the Indian Telegraph
G Act, 1885, on a non-exclusive basis, this Licence to
establish, install, operate and maintain INTERNATIONAL
LONG DISTANCE SERVICE on the terms and conditions
contained in the SCHEDULE and ANNEXURES
appended to this LICENCE AGREEMENT." (emphasis
H added)
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 983
ORS. [SURINDER SINGH NIJJAR, J.] _
16. Prior to disinvestment, VSNL enjoyed the monopoly in A
respect of international long distance service (ILDS), which
ceased with effect from 5th February, 2004. Thereafter other
telecom licensees like Reliance, Airtel, Idea, Aircel, HFCL and
even Government companies like MTNL and BSNL became
competitors in respect of ILDS. B
17. It appears that on 16th July, 2007 and 4th October,
2007, the services of 20 managerial employees were
terminated after paying them 3 months' salary in lieu of notice.
The aforesaid termination was said to have been effected in
terms of Clause 1.6 of the appointment letter which reads as
c·
under:
"1.6 After confirmation, your appointment may be
terminated by either side at any time by giving three
months notice in writing. VSNL however, reserve the right D
of terminating your services forthwith or before expiry of
the stipulated period of notice of 3 months by making
payment to you of a sum equivalent to the pay and
allowances for the period of notice or unexpired portion
thereof. The decision of the management shall not be E
question."
18. The orders of termination issued to the aforesaid 20
employees were identical. Meanwhile on 28th January, 2008,
subsequent to the disinvestment in 2002, the name of VSNL
being a Tata Group Company was changed to "Tata
F
Communications Limited". Ten writ petitions were filed by the
employees before the Delhi High Court and 2 writ petitions were
filed before the Bombay High Court challenging the orders of
termination. On 29th August, 2011, learned Single Judge of the
Delhi High Court vide common order dismissed the 10 writ G
petitions, as not maintainable against TCL, the reconstituted
entity of VSNL after disinvestment. The aforesaid ordef was
challenged by four of the writ appellants in LPA which was
dismissed by separate orders on 14th November, 2011, 15th
H
984 SUPREME COURT REPORTS [2013) 2 S.C.R.
A November, 2011 and 17th February, 2012. Out of the said four
persons Ram Prakash and Vijay Thakur have filed Civil Appeal
No.5740 of 2012 and Civil Appeal No. 425 of 2012 before this
Court.
B 19. As noticed earlier, Division Bench of the Bombay High
Court also dismissed the writ petitions by order dated 7th
September, 2009 and 8th September, 2009 against which the
appellant herein have filed Special Leave Petition (C) No. 4619
of 2011 and Civil Appeal No. 2147 of 2010.
C Submissions:
20. We have heard the learned counsel for the parties.
21. Mr. T.N. Razdan, learned counsel for the appellants has
D submitted that VSNL cannot be said to have become an
absolute private entity after Union of India sold its 25% shares
out of 52.97% to Panatone Finvest Ltd. Union of India still holds
26.97% shares in VSNL. Other Government Companies hold
17.35 % shares in VSNL. Therefore, VSNL cannot be said to
E be not amenable to the writ jurisdiction. Furthermore, VSNL is
under the complete control of Telecom Regulatory Authority of
India (TRAI) Act, 1997 and the Telegraph Act, 1948. Therefore,
the_ writ petition would lie in cases where the services of the
employees were terminated in breach of the rules governing
F the service conditions of the employees. Referring to the share
holding pattern in VSNL, it is claimed that Union of India is the
single large shareholder holding 26.12% shares in VSNL. It is
further the case of the appellant that Panatone Finvest Ltd.
having stepped into the shoes of erstwhile shareholder and is
G bound by the commitments and obligations, rights and liabilities
arising from the sale/purchase of shares.
22. Dr. K.S. Chauhan, learned counsel, also reiterated the
aforesaid submissions. In addition, he submitted that Central
Government still has pervasive control over the VSNL/TCL. The
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 985
ORS. [SURINDER SINGH NIJJAR, J.]
strategic partner i.e. Panatone Finvest Limited/TATAs have A
been bound by the Government agreement in relation to
divestment of the 25% stakes, and there is a further condition
that if the strategic partner wish to sell its stakes in the VSNU
TCL, it is not free for the strategic partner to sell off the same
in the open market, but the shares can be sold off back to the B
Government only. It clearly, according to learned counsel,
buttresses the fact that the Government consider the function/
activity so sacrosanct and of such public importance that it
does not wish to alter the nature. of the functions of VSNUTCL.
However, there is no such condition precedent in the agreement c
with the other telecommunication companies which are merely
service providers. Thus, both the learned counsel h~ve
reiterated the submission that VSNL would be covered by the
term "other authority" within the scope and ambit of Article 12.
Nature of the Functions performed by the VSNL:- D
23. According to Mr. Razdan, the right to communication
is a facet of freedom of speech and expression under Article
19(1) (a) of the Constitution of India. The Government of India
is duty bound to provide uninterrupted Telecommunication E
Services to enable its citizen to effectively exercise the
aforesaid right. This public duty was being provided through one
of the departments i.e. Department of Telecommunication, in
particular, the OCS. The same function was subsequently
oerformed by the VSNL, a wholly owned government F
enterprises, till disinvestment. Even after disinvestment, VSNL
continues to perform the same functions by connecting its
subscribers to their receivers in India as well as abroad. VSNL
performs the aforesaid functions under license in terms of
Section 4 of Indian Telegraph Act, 1948. Being the licensee,
VSNL is under the control of TRAI for all its activities of ILDS. G
After disinvestment, VSNL has spread its ILDS activities to 52
locations and has increased the strength of its employees from
3000 to 7000. It has been located in prime areas in all the cities
like Delhi, Pune, and Kolkata. The aforesaid land belongs to H
986 SUPREME COURT REPORTS [2013] 2 S.C.R.
A Union of India and is in the possession of VSNL. Union of India
is the licensor of all the lands, assets, equipment machine and
tools under the license of VSNL. Land belonging to Union of
India is worth lakhs of crores of rupees. In the face of this, the
High Court would not have concluded that Government of India
B has no control over the activities of VSNL.
24. This submission was also reiterated by Dr. K.S.
Chauhan, learned counsel. Dr. Chauhan, in addition to the
aforesaid arguments, submitted that Respondents herein have
. C monopoly over the international communication, as VSNLffCL
is the gateway of the world. VSNL can communicate worldwide
for India which facility is not available to any other
communication company. Companies, such as Vodafone etc.,
are only transferring speech whereas VSNL is providing value
added service. It provides EMER Set service to Defence
D Forces including Merchant Navy. VSNL/TCL is specially
catering to the requirement of the President and Prime Minister
of India for preparation of hotline, etc. Further, learned counsel
submitted that even a private function which is performed for
public benefit would be a public function. He submitted that in
E the case of Delhi Science Forum vs. Union of lndia 1 that
telecommunication has been internationally recognized as a
public utility of strategic importance. Therefore, it cannot be said
that VSNL is not performing public functions.
F 25. The High Court, it was submitted, was unduly
influenced by the fact that the VSNL does not enjoy a
monopolistic character. Further more, it was wrongly held that
services provided by other telecom operators are no different
to the service provided by VSNL. Mr. Razdan further submitted
G that the High Court has failed to distinguish the expression 'other
authority' as defined in Article 12 of the Constitution of India from
that of 'any person or authority' in Article 226 of the Constitution.
In fact, the High Court totally ignored the submission that the
definition of other authority would now have to be seen by taking
H 1. (1996 (2) sec 405.
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 987
ORS. [SURINDER SINGH NIJJAR, J.]
into account the mixed economy of State and the private A
enterprises. The High Court, however, confined itself only to the
issue as to whether VSNL after disinvestment is State within
Article 12 of the Constitution. He submitted that it is important
to have a re-look at the definition of State/other authorities
under Article 12 of the Constitution. In view of the present set B
up of mixed economy i.e. where the State is in partnership with
semi-government/private corporations that take over the
Government companies in part or full. In support of his
submission, he relies on the judgment of this Court in the case
of Air India Statutory Corporation vs. United Labour Union & c
Ors. 2
26. Dr. Chauhan further submitted that when the
Government, in the exercise of its executive power by way of a
policy decision, creates an entity or divests its functions, which
may have a bearing upon the Fundamental Rights, in favour of 0
a private body or transfer of public entity to a private body, in
such an eventuality, the functions earlier discharged by the
Government cannot be termed as purely a private function. He
submitted that realizing the necessity to promote, protect and
enjoyment of human rights, including the right to freedom of E
expression, on the internet and in other technologies, the U.N.
Human Rights Council has passed a resolution with regard to
the same. Similarly, the right to telecommunication (Overseas),
a service exclusively provided by Government of India before
disinvestment has the public law element and, therefore, nature F
of work performed by VSNL/TCL continued to remain the
same. He submits that the functions performed by VSNL would
satisfy all the tests for determining whether a function is a public
function provided under the Human Rights Act, 1998. Learned
counsel has submitted that it is necessary to look at the nature G
of the public functions which have been transferred. He submits
that the meaning of public function would have to be determined
by taking into account the effect of transfer of the public function
from a public body to a private body. Learned counsel submitted
2. (1997 (9) sec 377) H
988 SUPREME COURT REPORTS [2013] 2 S.C.R.
A that in view of the above, it can be safely concluded that VSNL
is performing a public function. He relied on the observations
made by this Court in the case of Binny Ltd. vs. Sadasivan 3•
Besides, he relied on the judgment of this Court in Federal
Bank Ltd. vs. Sagar Thomas and Ors. 4 Learned counsel also
B relied on a judgment of the Supreme Court of South Africa in
Appeal of South Africa in Mittal Steel South Africa Limited
(previously known as /SCOR Limited) vs. Mondli Shadrack
Hlatshwayo, rendered in case No.326 of 2005 on 31st August,
2006.
c 27. Another submission made by Mr. Razdan is that the
High Court has wrongly held that the functions performed by
VSNL are not sovereign functions and, therefore, it cannot be
said to be performing public functions. He submitted that the
so called dichotomy between sovereign and non-sovereign
D functions of the State does not really exist. The question that
whether a particular function of the State is a sovereign function
depends on the nature of the power and manner of its exercise.
Relying on the judgment of this Court in Secretary, Ministry of
Information and Broadcasting vs. Cricket Association of
E Benga/5 , he submitted that airwaves or frequencies are public
property. Their use has to be controlled and regulated by a
public authority in the interest of the public and to prevent the
invasion of their rights. The right to impart and receive
information is a species of the right of freedom of speech and
F expression guaranteed under Article 19(1 )(a) of the
Constitution. Therefore, it cannot be said that VSNL is not
performing a public function. Learned counsel also relied on the
judgment of this Court in Andi Mukta Sadguru Shree Muktaji
Vandas Swami Suvema Jayanti Mahotsav Smarak Trust &
G Ors. vs. V.R.Rudani & Ors. 6 • Learned counsel has also placed
reliance on the judgment of this Court in Unni Krishnan J.P. &
3. c2005) 6 sec 657.
4. (2003) 10 sec 733.
5. (1995) 2 sec 122.
H 6. (1989) 2 sec 691.
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 989
ORS. [SURINDER SINGH NIJJAR, J.]
Ors. vs. State of Andhra Pradesh & Ors. 7• A
Employees Structure:
28. It was also submitted by Mr. Razdan that the
Government had assured that the employees of the OCS will
not be removed by the VSNL unless their case was placed 8
before the competent authority in the Government. The solemn
promise of not being removed was incorporated in the Conduct
Discipline and Appeal Rules framed by the VSNL in the year
1992.
c
29. According to the appellants, the employees of the
VSNL fall into three categories which are as under :
(a) The employees that were transferred to VSNL by
notification dated 19th March, 1986 i.e. erstwhile employees D
of OCS.
(b) The employees who are recruited directly under the
VSNL Recruitment and Promotion Rules, 1983 dated 21st May,
1993, subject to the rules of Conduct Discipline and Appeal
Rules of 1992 framed by VSNL. E
(c) The employees recruited after the disinvestment on
· 13th February, 2002. The employees of TATA are guided by
TATA Conduct Rules. It is pointed out that VSNL was granted
a licence by the Ministry of Communication for short distance F
service and long distance service. International Long Distance
Service (ILDS) was granted by the Department of
Telecommunication, Government of India under Section 4 of the
Indian Telegraph Act. The licences of VSNL for ILDS which
expired on 31st March, 2004 has been re-granted for another G
20 years.
The brief factual matrix of case:
30. Civil Appeal No.2147 of 2010 pertains to the group of
7. (1993) 1 sec 645. H
990 SUPREME COURT REPORTS (2013) 2 S.C.R.
A employees detailed in category 'a' above. The appellants in
C.A.No.425 of 2012 are from category 'b'. In C.A.No.2647 of
2010, the VSNL terminated the services of appellants 2, 3, and
4 on 13th July, 2007 and those of appellants 1, 5, and 6 on 16th
July, 2007. The termination letter of appellant Nos. 2, 3, and 4
B is issued by Vice President while as those of appellant Nos. 1
and 5 is issued by the Chief Officer Global operation. The
termination order of appellant No.6 is issued by the Chief
International Facilities Officer.
31. According to the appellants, none of these officers
C were either competent or authorised officers to terminate the
services of appellants in terms of Conduct Discipline and
Appeal Rules of VSNL. Similarly, in C.A.No.421 of 2012, the
services of the appellants were terminated by the Vice
President without any authority of law. Challenging the order of
D the Division Bench in C.A.No.2147 of 2010, it is submitted that
the Division Bench has erroneously held that the service rules
governing the appellants do not have any statutory force and
the status of the rules of a contract between the employer and
the employee. The High Court failed to appreciate the issue
E raised in the writ petition that VSNL has breached the
fundamental rules and regulations contained in its Conduct
Discipline and Appeal Rules, 1992 which had the force of law.
It was also pointed out that the Corporation (VSNL) being in
partnership with Union of India is duty bound to uphold the rule
F of law. Learned Counsel submitted that the aforesaid judgment
is liable to be set aside on the short ground that it is cryptic
and non-speaking.
32. This submission was also reiterated by Dr.K.S.
Chauhan, learned counsel. He submitted that the powers of the
G High Court under Article 226 is much wider than the powers of
this Court under Article 32 of the Constitution of India. He relied
on the Constitution Bench judgment of this Court in Zee
Telefilms Ltd. vs. Union of lndia 8 • In this case, the activities of
Board of Cricket Control of India were held to be akin to public
H a. 2oos (4) sec 649.
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 991
ORS. [SURINDER SINGH NIJJAR, J.]
duties or State functions. On the basis of the above, he A
submitted that when a private body exercises public functions
even if it is not a State, the aggrieved person would have a
remedy by way of a writ petition under Article 226. Dr. Chauhan
relied on a judgment of this Court in Ram~sh Ahluwalia vs.
State of Punjab & Ors. in C.A.No.6934 of 2012 decided on B
13th September, 2012.
33. In response, Mr. C.U. Singh, learned senior counsel
appearing for the respondent has submitted that the tests for
determining as to whether a particular body would fall within the C
definition of State or other authority have been well defined by
this Court in a number of judgments. Therefore, there is no
scope for enlarging the time tested definitions rendered by this
Court. In support of the submissions, he relied on All India
/TDC Workers Union & Ors. v. /TDC & Anr. 9; Pradeep Biswas
v. Indian Inst. of Chemical Bio/ogy10 ; G.Bassi Reddy vs. D
International Corps Research lnstitute 11 ; Ba/co Employees
Union vs. Union of India & Ors. 12 ; Agricultural Produce Market
Committee vs. Ashok Harikunj & Anr. 13
34. On the basis of the tests laid down in the aforesaid E
judgments, learned counsel submitted that VSNL is not a State
or other authority under Article 226 of the Constitution.
Therefore, both the High Courts have correctly held that the writ
petitions would not be amenable against the VSNL.
35. Learned senior counsel then submitted that TCL F
erstwhile VSNL is not performing a public function or a
mandatory public duty and, therefore, would not be amenable
to the writ jurisdiction of the High Court under Article 226 of the
Constitution. In support of the submission, learned counsel
G
e. 2000 c10) sec 66.
10. 2002 (5) sec 111.
11 . ..2003 (4) sec 225.
12. 2002 (2) sec 333.
13. 2000 ca> sec 61. H
992 SUPREME COURT REPORTS [2013) 2 S.C.R.
A relied on G. Bassi Reddy (supra), and Binny Ltd. (supra).
36. He further submitted that without prejudice to the
aforesaid two submissions, so far as employmenUservice
contract is concerned, a writ petition would not be maintainable.
The appellants would have to first exhaust the · alternative
8
remedies available. In support of this submission, he relied on
Radhakrishna AgaTWal vs. State of Bihar14; Binny Ltd. (supra),
Kulchinder Singh vs. Hardayal Singh Brar15 and Praga Tools
Corp. vs. C.A. lmanua/ & Of'S. 16
C 37. ln view of the above, learned senior counsel submitted
that all these appeals deserve to be dismissed.
38. We have considered the submissions made by the
learned counsel for the parties. In essence, learned counsel for
0 the appellants have made only two submissions -
(i) That inspite of the Government of India holding only
26.97 % shares in VSNL now TCL, it would still fall in the
definition of State or other authority within the ambit of Article
12 of the Constitution.
E
(ii) Even if it is held that VSNL/TCL is a purely private
entity, it would be amenable to the writ jurisdiction of the High
Court under Article 226 of the Constitution of India as it is
performing a public functionfpublic duty.
F
39. We are unable to accept the aforesaid submissions. ·
We have earlier set out in detail the manner in which the--
function which was earlier being performed by OCS which were
gradually transferred with effect from 1st April, 1986 to VSNL.
Since 13th February, 2002, Government of India holds only
G 26.12 % shares of TCL. Therefore, it can be safely concluded
that on the basis of the shareholding, the Government of India
14. 1911 (3) sec 457.
15. [1976 (3) sec 8281
H 16. [1969 (1) sec 585.J
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 993
ORS. [SURINDER SINGH NIJJAR, J.]
would not be in control of the affairs of TCL. In order for TCL to A
be declared as a State or other authority within the meaning of
Article 12 of the Constitution of India, it would have to fall within
the well recognized parameters laid down in a number of
judgments of this Court. In the case of Pradip Kumar Biswas
(supra), a Seven Judge Bench of this Court considered the B
question as to whether Indian Institute of Chemical biology
would fall within the definition of State or other authority under
Article 12. Ruma Pal, J. speaking for the majority considered
the manner in which the aforesaid two expressions have been
construed by this Court in the earlier cases. The tests c
propounded for determining as to when the Corporation will be
said to be an instrumentality or agency of the Government as
stated, Ramana Dayaram Shetty vs. International Airport
Authority of lndia 17 were summarized as follows :
"(1} One thing is clear that if the entire share capital of the D
corporation is held by Government, it would go a long way
towards indicating that the corporation is an instrumentality
or agency of Government. (SCC p. 507, para 14)
(2) Where the financial assistance of the State is so much E
as to meet almost entire expenditure of the corporation, it
would afford some indication of the corporation being
impregnated with governmental character. (SCC p. 508,
para 15)
F
(3) It may also be a relevant factor ... whether the
corporation enjoys monopoly status which is State-
conferred or State-protected. (SCC p. 508, para 15)
(4) Existence of deep and pervasive State control may
afford an indication that the corporation is a State agency G
or instrumentality. (SCC p. 508, para 15)
(5) If the functions of the corporation are of public
importance and closely related to governmental functions,
11. (1979) 3 sec 489. H
994 SUPREME COURT REPORTS [2013) 2 S.C.R.
A it would be a relevant factor in classifying the corporation
as an instrumentality or agency of Government. (SCC 'p.
509, para 16)
(6) 'Specifically, if a department of Government is
B transferred to a corporation, it would be a strong factor
supportive of this inference' of the corporation being an
instrumentality or agency of Government. (SCC p. 510,
para 18)"
. 40. The aforesaid ratio in Ramana Dayaram Shetty
C (supra) has been consistently followed by this Court, as is
evident from paragraph 31 of the judgment in Biswas (supra).
Para 31 reads as under :
"31. The tests to determine whether a body falls within the
o definition of "State" in Article 12 laid down in Ramana with
the Constitution Bench imprimatur in Ajay Hasia form the
keystone of the subsequent jurisprudential superstructure
judicially crafted on the subject which is apparent from a
chronological consideration of the authorities cited."
E 41 :The subsequent paragraphs of the judgment noticed
the efforts made to further define the contours within which to
determine; whether a particular entity falls within the definition
of other authority, as given in Article 12. The ultimate conclusion
of the Constitution Bench are recorded in paragraph 39-and
F 40 as under:-
"39. Fresh off the judicial anvil is the decision in Mysore
Paper Mills Ltd. v. Mysore Paper Mills Officers' Assn.
which fairly represents what we have seen as a continuity
G of thought commencing from the decision in Rajasthan
· Electricity Board in 1967 up to the present time. It held that
a company substantially financed and financially controlled
by the Government, managed by a Board of Directors
nominated and removable at the instance of the
Government and carrying on important functions of public
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 995
ORS. [SURINDER SINGH NIJJAR, J.]
interest under the control of the Government is "an A
authority" within the meaning of Article 12.
40. The picture that ultimately emerges is that the tests
formulated in Ajay Hasia are not a rigid set of principles so that
if a body falls within any one of them it must, ex hypothesi, be 8
considered to be a State within the meaning of Article 12. The
question in each case would be - whether in the light of the
cumulative facts as established, the body is financially,
functionally and administratively dominated by or under the
control of the Government. Such control must be particular to
the body in question and must be pervasive. If this is found then C
the body is a State within Article 12. On the other hand, when
the control is merely regulatory whether under statute or
otherwise, it would not serve to make the body a State."
42. In view of the aforesaid authoritative decision of the D
Constitution Bench {Seven Judges), it would be wholly
unnecessary for us to consider the other judgments cited by the
learned counsel for the parties.
43. If one examines the facts in the present case on the E
basis of the aforesaid tests, the conclusion is inescapable that
TCL cannot be said to be other authority within Article 12 of
the Constitution of India. As noticed above, the share holding
of Union of India would not satisfy test principles 1 and 2 in the
case of Ramana Dayaram Shetty (supra).
F
44. On perusal of the facts, it would be evident that test
No.3 would also not be satisfied as TCL does not enjoy a
monopoly status in ILDS. So far as domestic market is
concerned, there is operi competition between the numerous
operators, some of which have been enumerated earlier G
namely, MTNL, Airtel, Idea, Aircel, etc. This brings us to the 4th
test and again we are unable to hold that the Government of
India exercises deep and pervasive control in either the
management or policy making of TCL which are purely private
enterprises. We may also notice that in fact even Government H
996 SUPREME COURT REPORTS [2013) 2 S.C.R.
A Companies like MTNL and BSNL are competitors of TCL, in
respect of ILDS. We are, therefore, of the firm opinion that the
High Court of Delhi and the High Court of Bombay were fully
justified in rejecting the claim of the appellants that TCL would
be amenable to writ jurisdiction of the High Court by virtue of
B the other authority within the purview of Article 12 of the
Constitution of India.
Is TCL performing a public function :-
45. It has been noticed earlier that ILDS functions, prior to
C 1986, were being performed by OCS, a Department of Ministry
of Communications. VSNL was incorporated under the Indian
Companies Act, 1956 as a wholly owned Government company
to take over the activities of erstwhile OCS with 'effect from 1st
April, 1986. The employees of erstwhile OCS continue to work
D for VSNL on deputation till 1st January, 1990. However, as
noticed earlier, an option was given in 1989 to the pre 1986
employees for permanent absorption in VSNL. It was made
clear to all the employees that they would be permanently
absorbed in VSNL upon resigning from the Government of
E India. It was also made clear that these employees had the
choice to remain as Government employees but they would be
transferred to surplus staff cell of Government of India for re-
deployment against the vacancies in other government offices.
It is an accepted fact before us that all the appellants opted to
F be absorbed in VSNL. They were, in fact, absorbed in VSNL
with effect from 1st January, 1990. In the staff notice issued on
11th December, 1989, it was also made clear that OCS
employees transferred to VSNL on deputation basis without
deputation allowance on foreign service terms will cease to be
G government servants. It is, therefore, patent that the appellant
accepted the absorption voluntarily. Therefore, it would be
difficult to accept the submission of the learned counsel for the
appellants that even after absorption in VSNL, the appellants
continued to enjoy the protection available to them in the OCS
as government servants. The appellants have, however, sought
H
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 997
ORS. [SURINDER SINGH NIJJAR, J.]
to rely on the memorandum No.4/18/87-P &PWD dated 5th A
July, 1989 of the Department of Pension and Pensioners'
Welfare, Government of India. In the said letter, certain
safeguards have been granted to ex-OCS employees which are
as under:
B
"Dismissal/removal from the service of a public sector
undertaking/autonomous body after absorption for any
subsequent misconduct shall not amount to forfeiture of his
retirement benefits for the service rendered in the Central
Government. Also in the event of Dismissal/removal of a
transferred employee from the public sector undertaking/ C
autonomous body the employee concerned will be allowed
protection to the extent that the administrative Ministry/
Department will review such order before taking a final
decision."
D
46. In our opinion, the aforesaid condition would make no
difference to the legal status of the appellants within VSNL. It
was only an assurance that the rights to pension which had
already accrued to them on the basis of their service in OCS
shall be protected. Undoubtedly, this assurance was accepted E
by VSNL on 1st May, 1992. It was, in fact, incorporated in the
rules governing the service conditions of these employees in
VSNL. It is a matter of record that with effect from 13th
February, 2002, the shareholding of Government of India is.
26.97 %. Soon thereafter, the total shareholding of TATA Group f
in VSNL increased to 44.99% of the paid up share capital in
2002. It is also an accepted fact that shareholding of the TATA
Group in VSNL is 15.11%. It is also noteworthy that since 2002,
VSNL was a TATA Group Company and accordingly on 28th
January, 2008 its name was changed to 'TATA Communication G
Limited". In our opinion, the aforesaid facts make it abundantly
clear that the Government of India did not have sufficient interest
in the control of either management or policy making functions
of TATA Communication Limited.
H
998 SUPREME COURT REPORTS [2013) 2 S.C.R.
A 47. Merely because TATA Communication Limited is
performing the functions which were initially performed by OCS
would not be sufficient to hold that it is performing a public
function. It has been categorically held in the case of Ramana
Dayaram Shelly (supra) if only the functions of the Corporation
B are of public importance and closely related to Government
functions, it would be a relevant factor in classifying the
Corporation as an instrumentality or agenci of the
Government.
48. As noticed above, the functions performed by VSNU
C TCL are not of such nature which could be said to be a public
function. Undoubtedly, these operators provide a service to the
subscribers. The service is available upon payment of
commercial charges. Learned counsel for the appellants had
placed strong reliance on the judgment of this Court in Air India
D Statutory Corporation (supra). However, the aforesaid judgment
is of no assistance to the appellants as it was subsequently
overruled by a Constitution Bench in Steel Authority of India
Ltd. & Ors. vs. National Union Waterfront Workers & Ors. 18•
Dr. K.S. Chauhan had also relied on the Human Rights Act,
E 1998 (Meaning of Public Function) Bill which sets out the factors
to be taken into account in determining whether a particular
function is a public function for the purpose of sub-section (3)(b)
of Section 6 of the aforesaid Act. Section (1) enumerates the
following factors which may be taken into account in
F determining the question as to whether a function is a function
of public nature.
"(a) the extent to which the state has assumed responsibility
for the function in question ;
G (b)the role and responsibility of the state in relation to the
subject matter in question ;
(c) the nature and extent of the public interest in the function
in question ;
H 1a. (2001 (7) sec 1)
JATYA PAL.: SINGH & ORS. v. UNION OF INDIA & 999
ORS. [SURINDER SINGH NIJJAR, J.]
(d) the nature and extent of any statutory power or duty in A
relation to the function in question ;
(e) the extent to which the state, directly or indirectly,
regulates, supervises or inspects the performance of the
function in question ;
B
(f) the extent to which the state makes payment for the
function in question ;
(g) whether the function involves or may involve the use of
statutory coercive powers ; c
(h) the extent of the risk that improper performance of the
function might violate an individual's Convention right.
Performance of public function by private provider •
D
49. For the avoidance of doubt, for the purposes of Section
6(3)(b) of the Human Rights Act 1998, a function of a public
nature includes a function which is required or enabled to be
performed wholly or partially at public expense, irrespective of-
(a) the legal status of the person who performs the function, E
or
(b) whether the person performs the function by reason of
a contractual or other agreement or arrangement".
F
50. In our opinion, the functions performed by VSNL/TCL
examined on the touchstone of the aforesaid factors cannot be
declared to be the performance of a public function. The State
has divested its control by transferring the functions performed
by OCS prior to 1986 on VSNL/TCL. Dr. Chauhan had also G
relied on Binny Ltd. (supra) wherein this Court reiterated the
observations made by this Court in Dwarkanath vs. Income-
tax Officer, Special Circle, D-ward, Kanpur & Anr. 19 , it was
observed that :
19. (1965 (3) SCR 536. H
1000 SUPREME COURT REPORTS [2013) 2 S.C.R.
A "It is difficult to draw a line between the public functions
and private functions when it is being discharged by a
purely private authority. A body is performing a "public
function" whE,m it seeks to achieve some collective benefit
for the public or a section of the public and is accepted
B 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."
51. This Court also quoted with approval the Commentary
C on Judicial Review of Administrative Action (Fifth Edn.) by de
Smith, Woolf & Jowell in Chapter 3 para 0.24 therein it has
been stated as follows :
"A body is performing a "public function" when it seeks to
D 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.
E
Public functions need not be the exclusive domain
of the state. Charities, self-regulatory organizations and
other nominally private institutions (such as universities, the
Stock Exchange, Lloyd's of London, churches) may in
reality also perform some types of public function. As Sir
F John Donaldson M.R. urged, it is important for the courts
to "recognize the realities of executive power" and not
allow "their vision to be clouded by the subtlety and
sometimes complexity of the way in which it can be
exerted." Non-governmental bodies such as these are just
G as capable of abusing their powers as is government."
52. These observations make it abundantly clear that in
order for it to be held that the body is performing a public
function, the appellant would have to prove that the body seeks·
H to achieve some collective benefit for the public-or a section
JATYA PAL SINGH & ORS. v. UNION OF INDIA & 1001
ORS. {SURINDER SINGH NIJJAR, J.]
of public and accepted by the public as having authority to do A
so. In the present case, as noticed earlier, all telecom operators
are providing commercial service for commercial
considerations. Such an activity in substance is no different from
the activities of a bookshop selling books. It would be no
different from any other amenity which facilitates the B
dissemination of information orDATA through any medium. We
are unable to appreciate the submission of the learned counsel
for the appellants that the activities of TCL are in aid of
enforcing the fundamental rights under Article 21(1)(a) of the
Constitution. The recipients of the service of the telecom service c
. voluntarily enter into a commercial agreement for receipt and
transmission of information. The function performed by VSNU
TCL cannot be put on the same pedestal as the function
performed by private institution in imparting education to
children. It has been repeatedly held by this Court that private 0
. education service is in the nature of sovereign function which
is required to be performed by the Union of India. Right to
education is a fundamental right for children upto the age of 14
as provided in Article 21A. Therefore, reliance placed by the
learned counsel for the appellants on the judgment of this Court
in Andi Mukta (supra) would be of no avail. In any event, in the E
aforesaid case, this Court was concerned with the non-payment
of salary to the teachers by the Andi Mukta Trust. In those
circumstances, it was held that the Trust is duty bound to make
the payment and, therefore, a writ in the nature of mandamus
was issued. Mr. C.U.Singh, senior counsel relied on Binny Ltd. F
(supra) in support of the submissions that VSNUTCL is not
performing a public function. In our opinion, fhe observations
made by this Court in the aforesaid judgment are fully
applicable in the facts and circumstances of this case.
G
53. In these appeals, the claim of the appellants is that their
services have been wrongly terminated by VSNUTCL in breach
of the assurances given by the Government of India and VSNL
in clause 5.13 of the share holding agreement. If that be so,
H
1002 SUPREME COURT REPORTS (2013] 2 S.C.R.
A they would be at liberty to seek redress by taking recourse to
the normal remedies available under law.
54. A perusal of the aforesaid documents, however, would
show that VSNL had merely promised not to retrench any
employee who had come from OCS for a period of two years
8
from 13th February, 2002. Such a condition, in our opinion,
would not clothe the same with the characteristic of a public duty
which the employer was bound to perform. The employees had
individual contacts with the employer. In case the employer is
C actually in breach of the contract, the appellants are at liberty
to approach the appropriate forum to enforce their rights.
55. We see no merit in the appeals and the same are
accordingly dismissed.
0 Writ Petition No.689 of 2007 -
56. This writ petition has been moved by the VSNL
Scheduled Castes/Tribes employees Welfare Samiti (Regd.)
(Petitioner No.1) and Scheduled Castes and Schedule Tribes
Employees Welfare Association of VSNL (Regd.)-Petitioner
E No.2.
57. The prayer in this writ petition is inter alia for the
issuing a writ in the nature of mandamus directing the official
respondents to safeguard the fundamental rights of the
F members of the appellant as per the undertaking given on 16th
March, 2001, 9th October, 2001 and 3oth April, 2002. For the
reasons already stated in the earlier part of the judgment
relating to the civil appeals, we are unable to entertain the
present writ petition. In our opinion, it is not maintainable and
G accordingly dismissed.
R.P. Appeals & Writ Petition dismissed.
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