State of U.P. v. Radhey Shyam RaiIn The HonbleSupreme Court Of India

In the matter ofState of U.P. (Appellant)v.Radhey Shyam Rai(Respondent)

Memorandum for the AppellantCOUNSEL FOR APPELLANT(Nitesh Dhankhar)Roll No.- 84 Sem: 3

Hidayatullah National Law University, Raipur

TABLE OF CONTENTS

LIST OF ABBREVIATIONS 3INDEX OF AUTHORITIES 4STATEMENT OF JURISDICTION 5STATEMENT OF FACTS 6ISSUES RAISED 8SUMMARY OF PLEADINGS 9WRITTEN SUBMISSION 10 PRAYER FOR RELIEF 16

LIST OF ABBREVIATIONSParagraph&AndAIRAll India ReporterEdn.EditionEtc.Et Citra.Govt. GovernmentHonble Honorable HC High CourtP. Page NumberSC Supreme CourtSCCSupreme Court Casesv.Versuswwwworld wide web

INDEX OF AUTHORITIESSTATUTUES: Constitution of India, 1950. Constituent Assembly Debates Vol. III and VII.Judicial Decisions: Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722. M.C. Mehta v. Union of India, AIR 1987 SC 1086. Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111. Rajasthan State Electricity Board v. Mohan Lal, (1967) 3 SCR 377. Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489. Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421. University of Madras vs Shantha Bai, AIR 1954 Mad 67.

BOOKS: H.M., Seervai, Constitutional of India (Universal Law Publishing Co.,2005 (4th edn.). M.P. Jain, Indian Constitution (Wadhwa and Co., Nagpur, 2005 (5th edn.)). V.N. Shukla, Constitution of India, (Eastern Book Company, Lucknow, 2008 (11th edn.)). Durga Das Basu, Comparative Constitutional Law, (Lexis Nexis Butterworths, Wadhwa Nagpur,2008 (2nd edn.)).Dictionaries: Concise Oxford Dictionary, 10th. Edn, Oxford University Press, 2002 Garner Bryan, Blacks Law Dictionary, 7th Edn, West Group Publications, 2002.

Websites: www.manupatra.com

STATEMENT OF JURISDICTION

The appellant has approached this Honble Supreme Court of India under Article 133 of the Indian Constitution.

STATEMENT OF FACTS1. Prior to establishment of U.P. Ganna Kisan Sansthan, the Cane Department was imparting training to the Government Officers and the cane-growers. The State Government in order to increase the production of Sugar in the State came to the conclusion that to achieve this target it is necessary to impart knowledge/ training to the cane-growers and connected persons.

2. The Government, therefore, took a policy decision of establishing U.P. Ganna Kisan Sansthan by Government Order dated 17th May, 1975. By another Government Order dated 3rd November 1976 (SCA-III) addressed to the Cane Commissioner, it was provided that training Centers (Shahjahanpur, Muzaffarnagar and Gorakhpur), which were earlier run by Cane Development Department of the Government of U.P. were transferred to the Sansthan.

3. Respondent was appointed in the post of Computer Officer/ Data Processing Officer in Sansthan. The Governing Council of the Sansthan in its meeting held on 28.04.1997 resolved to abolish the posts created and to cancel the appointments made, pursuant whereto the services of the respondent were dispensed with by an order dated 17.05.1997.

4. Feeling aggrieved by the said order dated 17.05.1997, he filed a writ petition before the Lucknow Bench of the High Court of Judicature at Allahabad being Writ Petition No. 869 of 1998 wherein one of the issues raised was whether the Sansthan is a `State' within the meaning of Article 12 of the Constitution of India.

5. The writ petition filed by the respondent came up for consideration before a Division Bench of the High Court. It noticed an earlier decision of another Division Bench of the said Court wherein it was opined that Sansthan is not a `State' within the meaning of Article 12 of the Constitution of India.

6. However, a different view was taken. The question as to whether the Sansthan would answer the description of a `State' within the meaning of Article 12 of the Constitution of India was, referred to a Full Bench of the High Court. The Full Bench held that the Sansthan being an authority would come within the purview of definition of `State' within the meaning of Article 12 of the Constitution of India.

7. It is the order of full bench of High Court, against which the present appeal has been brought to the Honble Supreme Court of India.

ISSUES RAISED

A. Whether the Uttar Pradesh Ganna Kishan Sansthan (for short the Sansthan), a society registered under the Societies Registration Act is a `State' within the meaning of Article 12 of the Constitution of India?

SUMMARY OF PLEADINGS

A. No, the Uttar Pradesh Ganna Kishan Sansthan is not `State' within the meaning of Article 12 of the Constitution of India. The Sansthan is financially independent and state government doesnt have a deep and persuasive control in its management, which clearly takes away Sansthan from purview of definition of State under Art. 12. Also, the function performed by Sansthan is not important public service and does not enjoy a monopoly status.

WRITTEN SUBMISSIONISSUE A The Uttar Pradesh Ganna Kishan Sansthan is not `State' within the meaning of Article 12 of the Constitution of India. Art. 12 of the Constitution of India states unless the context otherwise requires, the state includes the Govt. and Parliament of India and the Govt. and the Legislature of each of the states and all local or other authorities within the territory of India or under the control of Govt. of India.[footnoteRef:2] [2: The Constitution of India, 1950.]

So, the State as provided under Article 12 of the Constitution has four components: 1. The Government and Parliament of India- Government means any department or institution of department. Parliament shall consist of the President, the House of People and Council of States2. The Government and Legislature of each State- State Legislatures of each consist of the Governor, Legislative Council and Legislative Assembly or any of them.3. Local Authorities within the territory of India- Local Authority means (i) Power to make rules, bye- laws, regulations, notifications and statutory orders. (ii) Power to enforce them. 4. Other Authorities- Other Authorities refers to authorities other than local authorities working (i) Within the territory of India or; (ii) Outside the territory of India.[footnoteRef:3] [3: Constituent Assembly Debates Vol. III and VII. Available at (Last Accessed on 13th Oct 2013, 10.03 p.m.) 164.100.47.132/LssNew/constituent/debates.html and 164.100.47.132/LssNew/constituent/vol7p21.pdf]

It is humbly submitted that the Sansthan in question is not a local authority, as Sansthan does not have power to make laws or regulations and does not have any power to enforce such laws. So, Sansthan will come under the definition of State under Article 12 only & only if it falls under the definition of other authorities, which has not happened in the present case.

The law defining State under Art. 12 has been developed a lot by judicial interpretations. It is humbly submitted that, we need not dilate on the development of law in this regard in view of the decisions rendered by this Court beginning from Rajasthan State Electricity Board v. Mohan Lal[footnoteRef:4] to Ajay Hasia v. Khalid Mujib Sehravardi.[footnoteRef:5] [4: (1967) 3 SCR 377.] [5: (1981) 1 SCC 722.]

The appellant would further like to draw the attention of court towards a Seven - Judge Bench decision of this Supreme Court of India in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology[footnoteRef:6] where the following tests for the purpose of determining the nature of activities which would make the body come within the definition of `State' have been laid down by this Court: [6: (2002) 5 SCC 111.]

(i) Formation of the body(ii) Objects and functions(iii) Management and control(iv) Financial aid, etc.

The dicta of Mathew, J. in Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi [footnoteRef:7] is also concurrent with the dicta of Pradeep Kumar Biswas[footnoteRef:8] case, which has propounded four indicia: [7: (1975) 1 SCC 421.] [8: Supra note 5.]

(1) State financial support plus an unusual degree of control over the management and policies[footnoteRef:9] [9: (1975) 1 SCC p. 454, 96.]

(2) Another factor is whether the operation is an important public function[footnoteRef:10] [10: (1975) 1 SCC p. 454, 97.]

(3) Function is of such public importance and so closely related to governmental functions, then even the presence or absence of State financial aid might be irrelevant[footnoteRef:11] [11: Id.]

(4) The ultimate question is, for whose benefit was the corporation carrying on the business?[footnoteRef:12] [12: (1975) 1 SCC p. 458, 111.]

[A.1] Sansthan is financially independent and is not an instrumentality of government.It is humbly submitted that the Supreme Court in Ramana Dayaram Shetty v. International Airport Authority of India[footnoteRef:13] has stated the following conditions for corporation to be an instrumentality or agency of Government - [13: (1979) 3 SCC 489.]

1. if the entire share capital of the corporation is held by Government[footnoteRef:14] [14: (1979) 3 SCC p. 507, 14.]

2. where financial assistance of State meets almost entire expenditure of the corporation[footnoteRef:15] [15: (1979) 3 SCC p. 508, 15.]

3. whether the corporation enjoys monopoly status (State conferred or State protected)[footnoteRef:16] [16: Id.]

4. Existence of deep and pervasive State control[footnoteRef:17] [17: Id.]

5. functions are of public importance & closely related to Governmental functions[footnoteRef:18] [18: (1979) 3 SCC p. 509, 16.]

It is further submitted that as per the provisions of the Memorandum of Association, the Governing Council has all the powers to carry out and manage the affairs of the U.P. Ganna Kisan Sansthan, which may pay all the expenditures, incurred in promoting and registering the U.P. Ganna Kisan Sansthan as a society. The State Government sanctioned a grant of 50% of the total expenditure for creation of the U.P. Ganna Kisan Sansthan & continued to give grant from 1975 to 1995[footnoteRef:19]. 50% assistance of State does not meet almost entire expenditure of the corporation. Also, from 1995 till date the financial assistance is given to the Sansthan from the Sugar Fund Committee.[footnoteRef:20] Hence, Sansthan does not satisfy conditions for corporation to be an instrumentality or agency of Government laid down by Honble Supreme court in R.D. Shettys Case.[footnoteRef:21] [19: Annexure- 7 of Appellants submission to Honble Allahabad High court in Radhey Shyam Rai vs State Of U.P. Writ Petition No. 869 [SB] of 1998.] [20: Annexure- 8 Id.] [21: Supra note 12.]

Furthermore, according to Rule 29 and 33, of Memorandum of Association of the Sansthan:

{a} Ganna Sansthan maintains proper accounts and other supporting relevant records to enable it to prepare the annual income and expenditure of accounts and balance sheet in such form, as may be prescribed by the Governing Council,

{b}the investment and the funds of the Sansthan or the interest or income thereof or any part thereof, are kept in the name of the Sansthan in one or more of the scheduled Banks or a Co-operative Bank. Thus, the U.P. Ganna Kisan Sansthan, itself is a Master of maintenance of all the accounts.

In view of Rule 34 the books of accounts of the Sansthan and the Annual statement of accounts is audited and examined by a Chartered Accountant appointed from time to time by the Governing Council. Furthermore, the expenditure incurred in connection with the audit of the accounts of the Sansthan is paid by the Sansthan.

Thus, it is clear that the U.P. Ganna Kisan Sansthan is fully independent in the matter of accounts, and financial control.

[A.2] Sansthan is independent of governments control in its management & working.In Ajay Hasia v. Khalid Mujib Sehrawardi,[footnoteRef:22] the Supreme Court observed that Government may act through natural or judicial person to carry out its function and it is not necessary that it is a creation of a statute. [22: AIR 1981 SC 487.]

This observation was reiterated by Apex Court in the case of M.C. Mehta v. Union of India,[footnoteRef:23] wherein it has been held that:-" What is really to be determined for whether a body is or not "other authority" is who created the body and why- What are its aims and objects, how is it running, the extent of Government financial aid or grant to it and its dependency on the Government and the latter's control over it." [23: AIR 1987 SC 1086.]

In R. D. Shetty v. International Airport Authority of India[footnoteRef:24] the Supreme Court laid down existence of deep and pervasive State control, as test for determining corporation to be an instrumentality or agency of Government. [24: (1979) 3 SCC 489.]

It has been proved earlier that the U.P. Ganna Kisan Sansthan is fully independent in the matter of accounts and financial control. As far as the employees of the Sansthan are concerned, they are governed by the provisions of U.P. Ganna Kisan Sansthan Service Rules, which came into force from 1.4.1979. Rule 15 of the Service Rules provides that in case of any dispute pertaining to the service rules, the decision of the Chairman would be final. As per Rule 16, necessary alterations or relaxation in the Rules can be made by the Governing Council.

Moreover, the Management of the Sansthan is competent to fix pay structure of employees and officers of the Sansthan without seeking any approval of the State Government. In 1979 when the Sansthan drafted the Service Rules and referred it to the State Government for approval, the State Government refused to interfere. Similarly, the State Government refused to interfere in the matter of pay scale of the employees of the Ganna Kisan Sansthan. This all reflects that the "Sansthan" is an independent body having its own rules and regulations.

[A.3]Functions Carried by Sansthan are not governmental or sovereign functions.In University of Madras vs Shantha Bai[footnoteRef:25], the Madras High Court evolved the principle of ejusdem generis i.e. of the like nature. It means those authorities are covered under the expression other authorities which perform governmental or sovereign functions. [25: AIR 1954 Mad 67.]

Following the same principle, in Sukhdev vs Bhagatram[footnoteRef:26] , LIC , ONGC ANDIFC were held to be State as performing very close to governmental or sovereign functions. The court said the Corporations are State when they enjoy (i) Power to make regulations; (ii) Regulations have force of law. Furthermore in this case, Hon'ble Supreme Court has laid down the guidelines for identifying a Corporation or Agency to be a "State" within the meaning of Article 12. A factor, which might be considered, is whether the operation is an important public function. [26: (1975) 1 SCC 449.]

If the objects incorporated in the Memorandum of Association of the Uttar Pradesh Ganna Kisan Sansthan, are viewed keeping the aforesaid guidelines, it would be evident that the Sansthan was setup for establishing, running and maintaining a training institute, including facilities of boarding and lodging for the benefit of Cane Growers and the personnel in Cane Development by giving them upto date practical knowledge about scientific ways of sugarcane cultivation and management, and for that purpose, several other steps are to be taken. So, basically, it was for the interest of the Cane Growers and development of Sugarcane.

The function of Sansthan was a purely a economic activity where only Cane growers were given training and were charged for lodging and boarding, which is not a important public function. Also, Sansthan doesnt enjoy power to formulate rules or does not have any legal force for such rules, clearly depicting function of Sansthan to be non-governmental & non-sovereign too.

So, Sansthan is not covered under the expression other authorities for the purpose of Art. 12.

PRAYER FOR RELIEFTherefore in the lights of the facts stated, authorities cited, arguments advanced, the petitioner humbly requests the Honble Court to adjudge and declare that:-1. The appeal be admitted.2. The Uttar Pradesh Ganna Kishan Sansthan is not `State' within the meaning of Article 12 of the Constitution of India.

And, pass any order or decree in the favor of the petitioner as the Court may deem fit in the lights of Justice, Equity & Good Conscience.

All of which is most humbly prayed.

COUNSEL ON BEHALF OF APPELLANT 17th Oct. 2013NITESH DHANKHAR

Memorandum on Behalf of Appellant Page 2