judgement:
Appeal No. 203 of 1956.
Appeal by special leave from the orders dated January 25, 1955, of the Madras High Court in C.M.P. No. 9335 of 1954 and section R. No. 55247 of 1953.
K. section Krishnaswamy Iyengar, R. Ganapathy Iyer and G. Gopalakrishnan, for the appellant.
C. K. Daphtary, Solicitor General of India and M. section K. Sastri, for the respondent.
Venkatakrishnan and T. M. Sen, for the intervener.
November 28.
The following Judgment of the Court was delivered by GAJENDRAGADKAR J.
This is a plaintiff 's appeal by special leave against the order passed by a Division Bench of the Madras High Court on January 25, 1955, 1023 calling upon him to pay court fees on the valuation of Rs. 15,00,000 both on his plaint and on his memorandum of appeal and it raises some interesting questions of law under the provisions of the Court Fees Act (which will be described hereafter as the Act).
The appellant bad filed Civil Suit No. 311 of 1951 on the Original Side of the Madras High Court.
In this suit be had claimed partition of the joint family, properties and an account in respect of the joint family assets managed by the respondent.
The appellant is the son of Subbiah Chettiar.
His case was that Subbiah had been adopted by Lakshmi Achi in 1922.
Lakshmi Achi was the widow of the undivided paternal uncle of the respondent.
As a result of his adoption Subbiah became a coparcener in his adoptive family and, as Subbiah 's son, the appellant claimed to have a share in the joint family properties and in the assets of the joint family and that was the basis on which a claim for partition and accounts was made by the appellant in his suit.
In the plaint it had been alleged that Subbiah had filed a suit for partition of his share and had obtained a decree in the trial court.
The respondent had taken an appeal against the said decree in the High Court.
Pending the appeal the dispute was settled amicably between the parties and in consideration of payment of a specified sum and delivery of possession of certain sites Subbiah agreed to release all his claims and those of his son, the present appellant, in respect of the properties then in suit.
According to the appellant, this compromise transaction did not bind the appellant and so he claimed to recover his share ignoring the said transaction between his father and the respondent.
The plaint filed by the appellant valued the claim for accounts at Rs. 1,000 under section 7(iv)(f) of the Act and a court fee of Rs. 112 7 0 was paid on the said amount on an ad valorem basis.
In regard to the relief for partition the fixed court fee of Rs. 100 was paid by the appellant under article 17 B (Madras) of Schedule II of the Act.
For the purposes of jurisdiction, however, the appel lant gave Rs. 15,00,000 as the value of his share.
130 1024 It appears that the Registry, on examining the plaint, was inclined to take the view that the plaint should have borne court fee under section 7(v) in respect of the claim for partition.
Since the appellant did not accept this view the matter was referred to the Master of the Court who was the taxing officer under the Madras High Court Fees Rules, 1933.
The Master felt that the issue raised by the Registry was of some importance and so, in his turn, he referred the dispute to the Judge sitting on the Original Side under section 5 of the Act.
This reference was decided by the Chamber Judge Krishnaswamy Naidu J. on October 18, 1951.
The learned judge held that the appellant was not bound to set aside the prior compromise decree between his father and the respondent and that the plaint was governed by article 17 B of Schedule 11.
Accordingly the court fee paid by the appellant in respect of his claim for partition was held to be in order.
In due course the respondent was served and he filed a written statement raising several contentions against the appellant 's claim for partition and accounts.
One of the points raised by the respondent was that the compromise and the release deed executed by the appellant 's father and the decree that was subsequently passed between the parties were fair and bona fide transactions and, since they amounted to a settlement of the disputed claim by the appellant 's father, the plaintiff was bound by them.
Ramaswamy Gounder J. who heard the suit tried the respondent 's contention about the binding character of the compromise decree as a preliminary issue.
The learned judge held that there was a fair and bona fide settlement of the dispute by the appellant 's father acting as the manager of his branch and so the appellant was bound by the compromise decree.
In the result, the appellant 's suit was dismissed on September 22, 1953.
Against this decree the appellant presented his memorandum of appeal on December 1, 1953.
This memorandum bore the same court fees as the plaint.
On examining the memorandum of appeal the Registry again raised the question about the sufficiency of 1025 fees paid by the appellant.
The Registry took the view that the appellant should have paid court fees under section 7(v) of the Act in respect of his claim for partition as the appellant 's claim in substance was a claim for recovery of possession based on title within the meaning of section 7(v).
The matter was then referred to the Master; but, in his turn, the Master again made a reference to the Taxation Judge under section 12(2) of the Act.
Thereupon the learned Chief Justice constituted a Bench of two judges to deal with this reference.
The learned judges who heard the reference did not think it necessary to consider whether section 12 of the Act was applicable to the present appeal.
They dealt with the reference as made under section 5 of the Act.
The appellant urged before the Division Bench that the order passed by Krishnaswami Naidu J. was final since it was an order passed under section 5 of the Act.
The learned judges did not accept this contention.
They held that the record did not show that Krishnaswamy Naidu J. had been nominated by the Chief Justice to.
hear the reference under section 5 either by a general or a special order and so no finality could be claimed for the said order under section 5 of the Act.
On the merits the learned judges agreed with the view taken by Krishnaswamy Naidu J., and held that section 7(v) of the Act was not applicable to the appellant 's claim for partition.
According to the learned judges, neither was article 17 B of Schedule II applicable.
They held that the provisions of section 7(iv)(b) of the Act applied.
That is why the appellant was directed to mention his value for the relief of partition under the said section.
It may be mentioned at this stage that this order became necessary because in the plaint the plaintiff had not specifically mentioned the value for the relief of partition claimed by him.
He had merely stated that for the relief of partition claimed by him he was paying a court fee of Rs. 100 in accordance with Schedule II, article 17 B. All that he had done in the plaint was to value his total claim for jurisdiction at Rs. 15,00,000.
In compliance with this order the appellant valued 1026 his relief to enforce his right to share in the joint family properties in suit at Rs. 50,000, paid the deficit court fee Rs. 1,662 7 0 and re presented his memorandum of appeal in court on May 7, 1954.
That, however, was not the end of the present dispute in respect of court fees.
The Registry raised another objection this time.
According to the Registry, since the appellant had valued his relief in the suit for purposes of jurisdiction at Rs. 15,00,000, it was not open to him to value his relief on the memorandum of appeal under section 7(iv)(b) without an amendment of the valuation made in the plaint.
Since the appellant did not accept this view of the Registry, the matter was again placed before the court for orders.
The appellant then offered to file an application for formal amendment of his plaint by substituting Rs. 50,000, in place of Rs. 15,00,000, for the jurisdictional value of his relief Accordingly the appellant made an application on October 18,1954.
This application was opposed both by the respondent and the Assistant Government Pleader on behalf of the State.
The learned judges who heard this application took the view that if the appellant had given the value in the first instance for purposes of jurisdiction he was precluded from giving a different value at a later stage.
Accordingly it was held that Rs. 15,00,000, which had been mentioned in the plaint as the value of the appellant 's claim for jurisdictional purposes should be treated as the value given by the appellant also for the purposes of court fees under section 7(iv)(b) of the Act.
The result was that the application made by the appellant for a formal amendment of the valuation made in the plaint was rejected.
The learned judges also purported to exercise their jurisdiction under section 12(2) of the Act and directed that the appellant should pay deficit court fees on the basis of Rs. 15,00,000 not only on his memorandum of appeal but also on his plaint.
It is this order which has given rise to the present appeal.
The first point which Shri Krishnaswamy Ayyangar has raised before us on behalf of the appellant is that the order passed by the learned Chamber Judge on 1027 October 18, 1951, is final under section 5 of the Act.
By this order the learned Chamber Judge had held that the plaint filed in the present suit did not attract the provisions of section 7(v) of the Act and that the proper court fee to be paid was determined by article 17 B of Schedule II of the Act.
Since the appellant had paid the fixed court fee of Rs. 100, under this latter provision, no objection could be taken on the ground that sufficient court fee had not been paid.
If this order bad really been passed under section 5 of the Act it would undoubtedly be final.
Section 5 of the Act provides for procedure in case of difference as to necessity of court fee.
In cases where a difference arises between an officer whose duty it is to see that any fee is paid under Chapter III and a suitor as to the necessity of paying the fee or the amount thereof, it has to be referred to the taxing officer whose decision thereon shall be final.
This section further provides that if the taxing officer, to whom such difference is referred by the office, is of opinion that the point raised is one of general importance, he can refer the said point to the final decision of the Chief Justice of the High Court or such judge of the High Court as the Chief Justice shall appoint either generally or specially in this behalf; and it is clear that if the Chief Justice or any other judge appointed in that behalf by the Chief Justice decides the matter in question, his decision shall be final.
Unfortunately, however, in the present.
case it has been found by the Division Bench that dealt with this matter subsequently that a search of the record did not show any general or special order which would have justified the exercise of jurisdiction under section 5 by Krishnaswamy Naidu J.
No doubt Shri Krishnaswamy Ayyangar stated before us that the practice in the Madras High Court always was to refer disputes as to proper court fees arising between suitors on the Original Side and the Registry to the Chamber Judge and it was always assumed, says Shri Ayyangar, that the Chamber Judge on the Original Side was appointed generally to deal with such disputes.
It is difficult for us to make any such assumption in dealing with the present suit.
Unless we are satisfied 1028 from the record that Krishnaswamy Naidu J., bad, at the material time, been appointed either generally or specially to act under section 5, it would be difficult to accede to the argument that the order passed by him in the present proceedings is final.
It is frankly conceded that the record does not show any general or special order as contemplated by section 5.
That is why we must hold that the learned judges of the Division Bench were right in refusing to attach finality to the order passed by Krishnaswamy Naidu J.
It is then urged by Shri Krishnaswamy Ayyangar that the learned judges were in error in purporting to exercise their jurisdiction under section 12(2) of the Act when they directed the appellant to pay additional court fees on the plaint on the basis of the valuation of Rs. 15,00,000.
His contention is that section 12 does not apply to the appeals arising from judgments and decrees passed in suits on the Original Side of the Madras High Court.
It is perfectly true that the question about the levy of fees in High Courts on their Original Sides is governed by section 3 of the Act and, if the matter had to be decided solely by reference to the Act, it would not be possible to apply any of the provisions contained in Chapter III of the Act either to the suits filed on the Original Side of the Madras High Court or to the appeals arising from judgments and decrees in such suits.
But it is common ground that, on the plaints filed on the Original Side of the Madras High Court, court fees are leviable under the relevant provisions contained in Chapter III of the Act and the levy of these fees is authorised by O. 11, r.
I of the High Court Fees Rules, 1933.
It is, therefore, necessary to inquire what provisions of the Act have been extended to the suits filed on the Original Side.
The authority and jurisdiction of the Madras High Court in enacting r. I of O. 11 are not in dispute.
What is in dispute before us is the effect of the said rule.
The appellant 's case is that the said rule merely contemplates the levy of certain specified court fees as indicated in the provisions of the Act which are expressly made applicable to the Original Side.
No other provision of the Act, according to the appellant, 1029 can be said to have been extended and so the learned judges were in error in purporting to exercise their jurisdiction under section 12(2).
We are not satisfied that this argument is well founded.
Order II, r.
I reads thus: " O. II, r. 1 of Madras High Court Fees Rules, 1933: Order II.
The fees and commissions set out in Appendix II hereto shall be charged by the Registrar, Sheriff, The Reserve Bank of India and the Imperial Bank of India, as the case may be, upon the several documents, matters and transactions therein specified as chargeable.
The commission chargeable to Government shall be charged by the Reserve Bank of India and credited to Government.
*(To other documents including Memoranda of appeals the Registrar shall apply so far as may be the law for the time being in force relating to court fees, as regards the scale of such fees, the manner of levy of such fees, the refund of such fees and in every other respect, in the manner and to the extent that it is applicable to similar documents filed in original proceedings in a District Court and in appeals from decrees and orders of a District Court).
*Added by R. 0.
C. No. 2219 of 1949.
" It cannot be disputed that as a result of this rule, section 7(iv) (a), (b), (c), (d), (e) and (f) of the Act along with the proviso as well as article 17 B of Schedule II of the Act applied to suits filed on the Original Side of the High Court.
The latter portion of the order which has been added in 1949 obviously makes applicable to the suits and appeals on the Original Side of the High Court provisions of the Act as regards the scale of fees, the manner of their levy and the refund of fees.
It also makes the relevant provisions of the Act applicable in "every other respect".
The words "in every other respect" in the context clearly indicate that section 12 which confers upon the appellate court authority or jurisdiction to examine the question about the 1030 sufficiency or otherwise of the court fees paid not only on the memorandum of appellant but also on the plaint in the suit which comes before the court of appeal is obviously intended to apply.
It would indeed be illogical to apply the relevant provisions of the Act for the levy of court fees on plaints and memoranda of appeal and not to confer jurisdiction on the appropriate court to examine the sufficiency or otherwise of the court fees paid in that behalf.
The power to entertain claims for refund of court fees has been specifically mentioned.
A claim for refund can be validly made, for instance in a case where excess court fee has been paid.
That is why the provisions of sections 13, 14 and 15 had to be applied in terms.
If a litigant is entitled to make a claim for refund of court fees in cases governed by the relevant provisions of the Act, there appears to be no reason why it should not be open to the court to entertain the question about inadequate payment of court fees.
Logically, if excess court fees paid should and can be refunded in these proceedings, inadequate or insufficient court fees paid can and should be dealt with on that footing and orders passed to pay the deficit court fees in such cases.
It is matters of this kind that are clearly covered by the expression "in every other respect" to which we have just referred.
We, therefore, hold that the learned judges below were justified in assuming jurisdiction under sub sections
(1) and (2) of section 12.
Section 12 consists of two parts.
Sub section (1) provides that the question about the proper payment of court fees on the plaint or memorandum of appeal shall be decided by the court in which such plaint or memorandum of appeal is filed.
It also lays down that such decision is final between the parties to the suit.
Sub section (2) confers upon the court of appeal, reference, or revision, jurisdiction to deal with the question of adequacy of court fee paid on the plaint whenever the suit in which such plaint has been filed comes before it and if the court is satisfied that proper court fees have not been paid then it can pass an order requiring the party to pay so much additional fee as would have been payable if the question had been rightly decided 1031 in the first instance.
Since the decision of Krishnaswamy Naidu J. cannot attract the finality mentioned in, section 5 of the Act, it was open to the Division Bench to consider the correctness of the view taken by the learned Chamber Judge; and as they were satisfied that the plaint did not fall under article 17 B of Schedule II, they were entitled to pass appropriate orders under section 12(1) and (2).
The appellant, however, contends that the learned judges were in error in directing him to pay court fees on the basis of the value of Rs. 15,00,000 both on his plaint and on his memorandum of appeal because he argues that this decision is inconsistent with the earlier order that the proper court fees to be paid on the memorandum of appeal had to be determined under section 7(iv)(b) of the Act.
This order has been passed by the Division Bench under section 5 of the Act and it is final between the parties.
This order gives the appellant leave to value his claim for the relief of partition and be exercised his option by valuing it at Rs. 50,000.
The valuation thus made by the appellant in respect of the value of his relief of partition for the payment of court fees should and must be taken to be the valuation even for the purposes of jurisdiction and it is on this valuation alone that the appellant can be justly called upon to pay court fees both on the plaint and on the memorandum of appeal.
The learned judges were, therefore, in error in not allowing the appellant leave to make amendment in the plaint so as to bring the plaint in conformity with the provisions of section 7, sub section
(iv) of the Act.
That in brief is the appellant 's case.
On the other hand, on behalf of the IntervenerAdvocate General of Madras as well as on behalf of the respondent, it was sought to be urged before us that both the plaint and the memorandum of appeal ought to be valued for the purposes of payment of court fees under section 7(v) of the Act.
It is conceded that the question of court fees must be considered in the light of the allegations made in the plaint and its decision cannot be influenced either by the pleas in the 131 1032 written statement or by the final decision of the suit on the merits.
The argument, however, is that if all the material allegations contained in the plaint are fairly construed and taken as a whole it would appear that the plaintiff has been ousted from the enjoyment of the properties in suit and his claim for partition in substance is a claim for possession of . the suit properties and as such falls within the provisions of a. 7, sub section
(v) of the Act.
The question about proper court fees leviable on plaints in which Hindu plaintiffs make claims for partition under varying circumstances has given rise to several conflicting decisions in the High Courts of India.
We are, however, not called upon to consider the point as to whether section 7(v) would apply to the present suit or whether the present suit would fall under section 7(iv)(b).
In our opinion, the decision of the Division Bench of the Madras High Court that the memorandum of appeal should be taxed for the purposes of court fee under section 7(iv)(b) of the Act is final under the provisions of s.5 of the Act and it cannot be reopened at this stage.
It may be that when the Division Bench of the Madras High Court considered this matter under reference made by the Master under section 5, the respondent was not heard.
Normally the dispute between the litigant and the Registry in respect of court fees arises at the initial stage of the presentation of the plaint or the appeal and the defendant or the respondent is usually not interested in such a dispute unless the question of payment of court fees involves also the question of jurisdiction of the court either to try the suit or to entertain the appeal.
There is no doubt that the question about the adequacy of the court fees leviable on the appellant 's memorandum of appeal was properly referred by the Master to the learned Chief Justice of the Madras High Court and has been decided by the Division Bench of the said High Court in pursuance of the requisite order made by the Chief Justice in that behalf.
In such a case, the decision reached by the Division Bench must be held to be final under section 5 of the Act.
That is why we have not allowed the merits of this order to be questioned in the present 1033 appeal.
We must, therefore, deal with the appellant 's contention on the basis that the court fees on his memorandum of appeal must be levied under section 7(iv) (b) of the Act.
The question which still remains to be considered is whether the Division Bench was justified in directing the appellant to pay court fees both on the plaint and on the memorandum of appeal on the basis of the( valuation for Rs. 15,00,000.
In our opinion, the appellant is justified in contending that this order is erroneous in law.
Section 7, sub section
(iv)(b) deals with suits to enforce the right to share in any property on the ground that it is joint family property and the amount of fees payable on plaints in such suits is "according to the amount at which the relief sought is valued in the plaint or memorandum of appeal.
" Section 7 further provides that in all suits falling under section 7(iv) the plaintiff shall state the amount at which the value of the relief is sought.
If the scheme laid down for the computation of fees payable in suits covered by the several sub sections of section 7 is considered, it would be clear that, in respect of suits falling under sub section
(iv), a departure has been made and liberty has been given to the plaintiff to value his claim for the purposes of court fees.
The theoretical basis of this provision appears to be that in cases in which the plaintiff is given the option to value his claim, it is really difficult to value the claim with any precision or definiteness.
Take for instance the claim for partition where the plaintiff seeks to enforce his right to share in any property on the ground that it is joint family property.
The basis of the claim is that the property in respect of which a share is claimed is joint family property.
In other words, it is property in which the plaintiff has an undivided share.
What the plaintiff purports to do by making a claim for partition is to ask the court to give him certain specified properties separately and absolutely on his own account for his share in lieu of his undivided share in the whole property.
Now it would be clear that the conversion of the plaintiff 's alleged undivided share in the joint family property into his separate 1034 share cannot be easily valued in terms of rupees with any precision or definiteness.
That is why legislature has left it to the option of the plaintiff to value his claim for the payment of court fees.
It really means that in suits falling under section 7 (iv)(b) the amount stated by the plaintiff as the value of his claim for partition has ordinarily to be accepted by the court in computing the court fees payable in respect of the said relief.
In the circumstances of this case it is unnecessary to consider whether, under the provisions of this section, the plaintiff has been given an absolute right or option to place any valuation whatever on his relief.
What would be the value for the purpose of jurisdiction in such suits is another question which often arises for decision.
This question has to be decided by reading section 7 (iv) of the Act along with section 8 of the Suits Valuation Act.
This latter section provides that, where in any suits other than those referred to in Court Fees Act section 7, para. 5, 6 and 9 and para.
10 cl.
(d), court fees are payable ad valorem under the Act, the value determinable for the computation of court fees and the value for the purposes of jurisdiction shall be the same.
In other words, so far as suits falling under section 7, sub section
(iv) of the Act are concerned, section 8 of the Suits Valuation Act provides that the value as determinable for the computation of court fees and the value for the purposes of jurisdiction shall be the same.
There can be little doubt that the effect of the provisions of section 8 is to make the value for the purpose of jurisdiction dependent upon the value as determinable for computation of court fees and that is natural enough.
The computation of court fees in suits falling under section 7 (iv) of the Act depends upon the valuation that the plaintiff makes in respect of his claim.
Once the plaintiff exercises his option and values his claim for the purpose of court fees, that determines the value for jurisdiction.
The value for court fees and the value for jurisdiction must no doubt be the same in such cases; but it is the value for court fees stated by the plaintiff that is of primary importance.
It is from this value that the value for jurisdication must be determined.
The result is that it is the amount at 1035 which the plaintiff has valued the relief sought for the purposes of court fees that determines the value for jurisdiction in the suit and not vice versa.
Incidentally we may point out that according to the appellant it was really not necessary in the present case to mention Rs. 15,00,000 as the valuation for the purposes of jurisdiction since on plaints filed on the Original Side of the Madras High Court prior to 1953 there was no need to make any jurisdictional valuation.
The plaintiffs failure to state the amount at which he values the relief sought is often due to the fact that in suits for partition the plaintiff attempts to obtain the benefit of article 17 B of Schedule II in the matter of payment of court fees.
Where the plaintiff seeks to pay the fixed court fee as required by the said article, he and his advisers are apt to take the view that it is unnecessary to state the amount for which relief is sought to be claimed for the purposes of court fees and the valuation for jurisdiction purposes alone is, therefore, mentioned.
Often enough, it turns out that the plaint does not strictly attract the provisions of article 17 B of Schedule II and that the court fee has to be paid either under section 7(iv)(b) or under section 7(v) of the Act.
If the court comes to the conclusion that the case falls under section 7(iv)(b) or section 7(iv)(c) ordinarily liberty should be given to the plaintiff to amend his plaint and set out specifically the amount at which he seeks to value his claim for the payment of court fees.
It would not be reasonable or proper in such a case to hold the plaintiff bound by the valuation made by him for the purposes of jurisdiction and to infer that the said valuation should be also taken as the valuation for the payment of court fees.
In this connection we may point out that this is the view taken by the Full Bench decision of the Lahore High Court in Karam Ilahi vs Muhammad Bashir (1).
As we have already indicated section 8 of the Suits Valuation Act postulates that the plaintiff should first value his claim for the purpose of court fee and it provides for the determination of the value for jurisdiction on the basis of such claim.
In our opinion, therefore, the learned judges (1) A.I.R. (1949) Lah.
1036 of the Madras High Court were in error in holding that the valuation for jurisdiction showed in the plaint should be taken to be the valuation for the payment of court fees on the plaint as well as the memorandum of appeal.
In view of their prior decision that the present case fell under section 7(iv)(b), they should have allowed the appellant to amend his valuation for the payment of court fees not only on the memorandum of appeal but also on the plaint.
We must accordingly set aside the order under appeal and direct that the plaintiff should be allowed to state the amount of Rs. 50,000 at which he values the relief sought by him for the purpose of section 7(iv)(b) of the Act.
Shri Krishnaswamy Ayyangar has orally requested us to give him liberty to make the appropriate amendment in his plaint and we have granted his request.
In the result the appeal would be allowed and the appellant directed to pay additional court fees on his plaint on the basis of the valuation of Rs. 50,000 within two months from today.
Since the appellant has already paid adequate court fees on his memorandum of appeal, no further order need be passed in that behalf.
There will be no order as to costs.
Appeal allowed.

dataset_name: IN-Abs

summary:
The computation of Court fees in suits falling under section 7(IV) of the Court Fees Act depends upon the valuation which the plaintiff in his option puts on his claim and once he exercises his option and values his claim, such value must also be the value for purposes of jurisdiction under section 8 of the Suits Valuation Act.
The value for purposes of Court fee, therefore, determines the value for purposes of jurisdiction in such a suit and not vice versa.
1022 Where, therefore, the Court finds that the case falls under section 7(IV)(b) of the Court Fees Act, and the plaintiff has omitted to specifically value his claim, liberty should ordinarily be given to him to amend his plaint and set out the amount at which he wants to value his claim.
The value put for purposes of jurisdiction which cannot be binding for purposes of Court fee, and must be altered accordingly Karam Ilahi vs Muhammad Bashir, A.I.R. (1949) Lah.
116, referred to.
Consequently, in the present case where the Division Bench of the Madras High Court was of the opinion that section 7(IV)(b) of the Court Fees Act applied but nevertheless held that the valuation given in the plaint for purposes of jurisdiction should be taken to be the valuation for purposes of court fee and directed the appellant to pay court fees both on the plaint and the memorandum of appeal on that basis, its order was set aside and the appellant allowed to pay court fees on the amount at which he valued his relief.
Held further, that 0. 11, r. 1 of the High Court Fees Rules, 1933, framed by the Madras High Court clearly indicates, that section 12 of the Court Fees Act applies to the Original Side of the Madras High Court and it was, therefore, open to the Division Bench in a reference to assume jurisdiction and pass appropriate orders thereunder.
In the absence of any evidence on the record to show that he had either generally or specially been empowered by the Chief justice in this behalf, the Chamber judge sitting on the Original Side of the Madras High Court has no jurisdiction under section 5 Of the Court Fees Act to pass a final order thereunder.


judgement:
ION: Civil Appeal No. 495 of 1984.
From the Judgment and order dated 1.11.1983 of the Delhi High Court in L.P.A. No. 160 of 1983.
P. P. Rao and A. Mariaputham for the Appellant.
Dr. Anand Prakash, D.N. Dwivedi, Mrs. Anil Katiyar, C.V. Subba Rao, Vineet Kumar and Deepak K. Thakur for the Respondents.
The Judgment of the Court was delivered by RANGANATH MISRA, J.
This appeal by special leave calls in question the judgment of a Division Bench of the Delhi High Court in a Letters Patent Appeal upholding the decision of a learned Single Judge rejecting the writ petition of the appellant.
The appellant was an employee of the Institute of Constitutional and Parliamentary Studies (hereafter referred to as ICPS for short) and in a disciplinary action he was dismissed from service by order dated 17th November, 1982.
When he assailed the order in a writ petition before the High Court, the question whether lCPS was 'State ' within the meaning of Article 12 of the Constitution came for consideration as the major issue arising in the matter.
The learned Single Judge dismissed the writ petition by holding that the employer was neither an agency nor an instrumentality of the Government and did not constitute 'State ' within the meaning of Article 12 and, therefore, was not subject to the writ jurisdiction of the High Court.
The appeal against the judgment of the learned Single Judge was dismissed on 1st November, 1983.
In course of hearing of the appeal Dr. Anand Prakash appearing for ICPS fairly stated that whether the Institute be 'State ' or not within the meaning of Article 12 of the Constitution, the employer 264 was prepared to give a fresh opportunity to the appellant to meet the charges so as to dispel from his mind the feeling that he has not been given reasonable opportunity to defend himself.
Ordinarily, with that concession the impugned order entailing the dismissal of the employee and the judicial determination against the appellant should have been set aside and the matter should have gone before the enquiry officer for affording reasonable opportunity to the appellant of being heard against the charges.
Dr. Anand Prakash, however, invited us to enter into the merits of the issue as to whether ICPS constitutes 'State ' within the constitutional meaning of the term The Union of India which appears before us through counsel also wanted that the question should be decided.
Thereupon we suggested to the appellant who was till then appearing in person to get represented through counsel so that the matter could be appropriately argued on his behalf also.
He has been rendered suitable assistance by the Supreme Court Legal Aid Committee and Mr. P.P.Rao, Senior Counsel, has appeared on his behalf.
The main question for consideration now, therefore, is whether ICPS is 'State '.
For appropriate consideration of this question it is necessary to look into the constitution of the body, the purpose for which it has been created, the manner of its functioning including the mode of its funding and the broad features which have been found by this Court in several decisions to be relevant in the matter of determining a dispute of this type.
Article 12 of the Constitution provides an inclusive definition of the term 'State ' by saying: "In this part, unless the context otherwise requires, 'the State ' includes the Government and Parliament of India and the Government and the State Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.
" obviously ICPS can become 'State ' only if it is found to be an authority within the territory of India or under the control of the Government of India.
ICPS, respondent No.2, is a society registered under the Societies Registration Act, 21 of 1860, and was registered on 9th March, 1965.
As would appear from its Memorandum of Association, the foundation members were 19 in number 13 being members besides a President and five Vice Presidents.
The first President of the Soci 265 ety was the then Speaker of the Lok Sabha.
The five Vice Presidents were the then Minister of Railways, Minister of Law and Social Security Minister of Communication and Parliamentary Affairs, a former (Chief Justice of India and a former Attorney General of India.
Dr. L.N. Singhvi, then a member of the Lok Sabha, was its Executive Chairman.
The Public Trustee in the Department of Company Affairs and Insurance in the Ministry of Finance was the Director and a member of the Lok Sabha was the Society 's Treasurer.
The then Minister of Cultural Affairs in the Ministry of Education along with three members of the Lok Sabha, a Senior Advocate of the Supreme Court, a member of the Rajya Sabha, the then Vice Chancellor of Rajasthan University.
the respective Secretaries of the Lok Sabha and the Rajya Sabha Secretariat and the Secretary in the Ministry of Law were its Members.
The registered office of the Society was initially located within the Parliament House but was later on shifted to the Vithalbhai Patel House, Rafi Marg, New Delhi .
The objects of the Society inter alia were: ( I) to promote and provide for constitutional and Parliamentary studies with special reference to comparative studies in constitutional systems of various countries and working of the Indian Constitution and parliamentary and governmental institutions in their various aspects; (2) to undertake study of courses and fundamental research relating to developments in constitutional law, conventions and practices, parliamentary procedure, legislative drafting, trends in judicial interpretation and allied matters; (3) to organise inter alia training programmes in constitutional problems and matters of current parliamentary importance; (4) to set up a legislative research and reference service for the benefit of all interested members of the Union Parliament and State Legislature irrespective of their party affiliations; (5) to undertake and provide for the publication of a journal and of research papers and of books and brochures with a view to disseminate democratic values and to foster broad based civic education and awareness, and in particular, to pro.
mote study of constitutional and parliamentary affairs; 266 (6) to establish and maintain libraries and information services to facilitate the study of constitutional and parliamentary subjects and spread information in regard thereto; (7) to invite as and when feasible, scholars who may or may not be members of the Society, to take advantage of the facilities offered by the Society and to benefit the Society by their knowledge and experience; and (8) to institute appropriate fellowships, offer prizes and arrange scholarships and stipends in furtherance of the objects of the society.
The Memorandum permitted the Society to accept gifts, donations and subscriptions of cash and securities and of any property either movable or immovable.
The rule classifies the members under heads like Founder Members, Life Members, Honorary Members, ordinary Members, Corporate Members and Associate Members.
ordinary membership, according to the Rules, would extend to Members of Parliament or of any State Legislature or those who have been or are members of the Judiciary or advocates of the Supreme Court or the High Courts or persons employed in public service or persons engaged in teaching of study of social sciences particularly of Political Science, Law or subjects related thereto.
In the category of Honorary Members were the President, the Vice President and the Prime Minister of India.
Though the Memorandum permitted receipt of gifts and donations from outside, it is not disputed that the main source of income of the society has been the annual Central Government grant.
We think it appropriate at this stage to turn attention to judicial precedents to find out as to what should be the test to be applied for determining when on institution like respondent No.2 would be treated as 'other authorities ' under Article 12 of the Constitution.
The first in point of time is the Constitution Bench judgment in the case of Rajasthan State Electricity Board, Jaipur vs Mohan Lal & Ors., ; Bhargava, J. who delivered the main judgment observed: "the meaning of the word 'authority ' given in Webster 's Third New International Dictionary, which can be applicable, is a "public administrative agency or corporation having quasi governmental powers and authorised to 267 administer a revenue producing public enterprise." This dictionary meaning of the word 'authority ' is clearly wide enough to include all bodies created by a statute on which powers are conferred to carry out governmental or quasi governmental functions.
The expression "other authorities" is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the control of the Government of India; and we do not see any reason to narrow down this meaning in the context in which the words 'other authorities ' are used in Article l 7 of the Constitution In Smt.
Ujjam Bai vs State of Uttar Pradesh, Ayyangar, J. had observed: "Again Article 12 winds up the list of authorities falling within the definition by referring to 'other authorities ' within the territory of India which cannot obviously be read as ejusoem generis with either the Government and the Legislatures or local authorities.
The words are of wide amplitude and capable of comprehending every authority created under a statute and functioning within the territory of India or under the control of the Government of India.
Shah, J., as he then was, added a note to the leading Judgment of Bhargava and observed: "I am unable, however, to agree that every constitutional or statutory authority on whom powers are conferred by law is 'other authority ' within the meaning of Article 12.
The expression 'authority ' in its etymological sense means a body invested with power to command or give an ultimate decision, or enforce obedience, or having a legal right to command and be obeyed.
In determining what the expression 'other authority ' in Article 12 connotes, regard must be had not only to the sweep of fundamental rights over the power of the authority, but also to the restrictions which may be imposed upon the exercise of certain fundamental rights (e.g., those declared by Article 19) by the authority.
Fundamental rights within their allotted fields trans 268 cend the legislative and executive power of the sovereign authority.
But some of the important fundamental rights are liable to be circumscribed by the imposition of reason able restrictions by the State.
The true content of the expression 'other authority ' in Article 12 must be deter mined in the light of this dual phase of fundamental rights.
In considering whether a statutory or constitutional body is an authority within the meaning of Article 12, it would he necessary to bear in mind not only whether against the authority fundamental rights in terms absolute are intended to be anforced, but also whether it was intended by the Constitution makers that the authority was invested with the sovereign power to impose restrictions on very important and basic fundamental freedoms.
In my judgment, authorities, constitutional or statutory invested with power by law but not sharing the sovereign power do not fall within the expression 'State ' as defined in Article 12.
Those authorities which are invested with sovereign power, i.e., power to make rules or regulations and to administer or enforce them to the detriment of citizens and others fall within the definition of 'State ' in Article 12, and constitutional or statutory bodies which do not share that sovereign power of the State are not, in my judgment, 'State ' within the meaning of Article 12 of the Constitution.
Two cases, the First of Sabhajit Tewary vs Union of India & Ors., and the other of Sukhdev Singh & Ors vs Bhagatram Sardar Singh Raghuvanshi & Anr., l 19 were disposed of by the same Constitution Bench on February 21, 1975.
In both these cases, the true meaning of Article 12 of the Constitution fell for consideration.
Sabhajit Tewary 's case was one where the status of the Council of Scientific and Industrial Research was examined.
This Court took note of the fact that the Council was a society registered under the Societies Registration Act.
Under Rule 3, the Prime Minister of India was the ex officio President of the Society and under Rule 30 the governing body consisted of persons appointed by the Government of India representing the administrative ministry under which the Council of Scientific and Industrial Research is included and the Ministry of Finance.
The Court also took note of the manner in which the affairs of the Society including funding were conducted.
Ray, CJ.,in the brief judgment that the 269 Court delivered in the case observed: A "Extracting the features as aforesaid, it was contented that these would indicate that the Council of Scientific and industrial Research was really an agency of the Government.
This contention is unsound.
The society does not have a statutory character like the oil and Natural Gas Commission, or the Life Insurance Corporation or Industrial Finance Corporation.
It is a society incorporated in accordance with the provisions of the Societies Registration Act.
The fact that the Prime Minister is the President or that the Government appoints nominees to the governing body or that the Government may terminate the membership will not establish anything more than the fact that the Government takes special care that the promotion, guidance and cooperation of scientific and industrial research, the institution and functioning of specific researches, establishment or development and assistance to special institutions or departments of the existing institutions for scientific study of problems affecting particular industry in a trade, the utilisation of the result of the researches conducted under the auspices of the Council towards the development of industries in the country are carried out in a responsible manner.
This Court has held in Praga Tools Corporation vs C.A. Imanual & Ors., ; ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., and in S.L. Aggarwal vs General Manager, Hindustan Steel Ltd., ; that the Praga Tools Corporation, Heavy Engineering Mazdoor Union and Hindustan Steel Ltd. are all companies incorporated under the Companies Act and the employees of these companies Act and the employees of these companies do not enjoy the protection available to Government servants as contemplated in Article 311.
The companies were held in these cases lo have independent existence of the Government and by the law related to corporations.
These could not be hold to be departments of the Government.
" The ratio of this decision has been fully relied upon by the High Court in dismissing the claim of the appellant.
270 In Sukhdev Singh 's case (supra) the leading judgment was delivered also by Ray, CJ.
Two questions fell for consideration ( l) whether an order of.
removal from service contrary to Regulations would enable the employee to a declaration against the statutory corporation of continuance in service or would it end up in claim for damages only and (2) whether the employee of a statutory corporation is entitled to claim protection of Articles 14 and 16 against the Corporation.
The Court, therefore, straight went into the question as to whether statutory corporations were authorities within the meaning of Article 12.
As a fact, three corporations being the oil and Natural Gas Commission, the Life Insurance Corporation and the Industrial Finance Corporation were before the Court and each one of them had been set up under a special statute.
At page 641 of the Reports, the learned Chief Justice pointed out: "In the background of the provisions of the three Acts under consideration, the question arises as to whether these Corporations can be described to be authorities within the meaning of Article 12 of the Constitution . " At page 642 of the Reports the conclusion was reached to the effect that "these statutory bodies are 'authorities ' within the meaning of Article 12 of the Constitution.
" We are really concerned with what Mathew J., added to the judgment He observed: "The test propounded by the majority is satisfied so far as the oil and Natural Gas Commission is concerned as section 25 of the oil and Natural Gas Commission Act provides for issuing, binding direction to third parties not to prevent the employees of the Commission from entering upon their property if the Commission so directs.
In other words, as section 25 authorises the Commission to issue binding directions to third parties not to prevent the employees of the Commission from entering into their land and as disobedience of such directions is punishable under the relevant provision of the Indian penal Code since those employees are deemed to be pubic servants under section 21 of the Indian Penal Code by virtue of section 27 of the Act, the Commission is an 'authority ' within the meaning of the expression 'other authorities ' in Article 12 271 Though this would be sufficient to make the commission a 'State ' according to the decision of this Court in the Rajasthan Electricity Board case (supra), there is a larger question which has a direct bearing so far as the other two corporations are concerned, viz., whether, despite the fact that there are no provisions for issuing binding directions to third parties the disobedience of which would entail penal consequences, the corporations set up under statutes to carry on business of public importance of which is fundamental to the life of the people can be considered as 'State ' within the meaning of Article 12.
" Mathew, J. referred to the precedents and other authorities from England, France and United States and at page 654 of the Reports stated: "The ultimate question which is relevant for our purpose is whether such a corporation is an agency or instrumentality of the government for carrying on a business for the benefit of the public.
In other words, the question is, for whose benefit was the corporation carrying on the business? When it is seen from the provisions of that Act that on liquidation of the corporation, its assets should be divided among the shareholders, namely, the Central and State governments and others, if any, the implication is clear that the benefit of the accumulated income would go to the Central and State Governments.
Nobody will deny that an agent has a legal personality different from that of the principal.
The fact that the agent is subject to the direction of the principal does not mean that he has no legal personality of his own . . .
The crux of the matter is that public corporation is a new type of institution which has sprung from the new social and economic functions of government and that it therefore does not neatly fit into old legal categories.
Instead of forcing it into them, the later should be adapted to the needs of changing times and conditions.
I do not think there is any basis for the apprehension expressed that by holding that these public corporations are 'State ' within the meaning of Article 12, the employees of these corporations would become government servants.
I also wish to make it clear that I express no opinion on 272 the question whether private corporations or other like organisations, though they exercise power over their employees which might violate their fundamental rights, would be 'State ' within the meaning of Article 12.
" Then comes the case of Ramana Dayaram Shetty vs The International Airport Authority of India & Ors., ; The question before the Court was whether the International Airport Authority of India was 'State ' within the meaning of Article 12 so as to be subjected to enforcement of fundamental rights against it.
Examining this aspect, Bhagwati, J., as he then was spoke for the three Judge Bench thus: "Now it is obvious that the government which represents the executive authority of the State , may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of judicial persons to carry out its functions.
In the early days, when the Government had limited functions it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge governmental functions, which were of traditional vintage.
But as the tasks of the government multiplied with the advent of the welfare State, it began lo be increasingly felt that the frame work of civil service was not sufficient to handle the new tasks which were often of specialised and highly technical character.
The inadequacy of the civil service to deal with these new problems came to be realised and it became necessary to force a new instrumentality or administrative device for handling these new problems.
It was in these circumstances and with a view to supplying this administrative need that the public corporation came into being as the third arm of the Government.
As early as 1819 the Supreme Court of the United States in Mac Cullough v .
Maryland, (4 Wheat 315) held that the Congress has power to charter corporations as incidental to or in aid of governmental functions and , as pointed out by Mathew J., in Sukhdev vs Bhagat Ram, (supra) such federal corporations would ex hypothesi be agencies of the Government.
In Great Britain too, the policy of public administration through separate corporations was gradually evovled and the conduct of basic industries through giant corporations has now become a permanent feature 273 of public life.
So far as India is concerned, the genesis of the emergence of corporations as instrumentalities or agencies of Government is to be found in the Government of India Resolution on Industrial Policy dated with April, 1948 where it was stated inter alia that 'management of state enterprises will as a rule be through the medium of public corporation under the statutory control of the Central Government who will assume such powers as may be necessary to ensure this. ' It was in pursuance of the policy envisaged in this and subsequent resolutions on Industrial policy that corporations were created by Government for setting up and management of public enterprises and carrying out other public functions.
Ordinarily, these functions could have been carried out by Government departmentally through service personnel, but the instrumentality or agency of the corporations was resorted to in these cases having regard to the nature of the task to be performed.
The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities.
If the Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through the instrumentality or agency of corporations should equally be subject to the same limitations.
But the question is how to determine whether a corporation is acting as instrumentality or agency of Government.
It is a question not entirely free from difficulty.
" It was again pointed out in the same case that: "A corporation may be created in one of two ways.
It may be either established by statute or incorporated under a Law such as the or the .
Where a corporation is wholly controlled by Government not only in its policy making but also in carrying out the functions entrusted to it by the law establishing it or by the Charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of Government . " 274 The Court further stated: "But the public nature of the function, if impregnated with governmental character or 'tied or ent wined with government ' or fortified by some other additional factor may render the corporation an instrumentality or agency of Government.
Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference.
It will thus be seen that there are several factors which may have to be considered in determining whether a corporation is an agency or instrumentality of Government.
We have referred to some of these factors and they may be summarised as under: whether there is any financial assistance given by the State, and if so, what is the magnitude of such assistance whether there is any other form of assistance, given by the State, and if so whether it is of the usual kind or it is extraordinary, whether there is any control of the management and policies of the corporation by the State and what is the nature and extent of such control, whether the corporation enjoys State confer red or State protected monopoly status and whether the functions carried out by the corporation are public functions closely related to governmental functions This particularisation of relevant factors is however not exhaustive and by its very nature it cannot be, because with increasing assumption of new tasks growing complexities of management and administration and the necessity of continuing adjustment in relations between the corporations and Government calling for flexibility, adapt ability and innovative skills, it is not possible to make an exhaustive enumeration of the tests which would invariably and in all cases provide an unfailing answer to the question whether a corporation is governmental instrumentality or agency.
At page 1052 of the Reports the Court proceeded to consider whether International Airport Authority of India could be said to be an 'authority ' falling within the meaning of 'State ' in Article 12.
The constitution of the body, the manner of filling it up? Government 's power of control in the matter of appointment of members and termination of membership were utilised as tests for examining whether 275 the Airport authority was 'State '.
After referring to the special A aspects, the Court observed: "It will be seen from these provisions that there are certain features of the respondent which are eloquent and throw considerable light on the true nature of the first respondent.
In the first place, the Chairman and Members of the first respondent are all persons nominated by the Central Government and the Central Government has also the power to terminate their appointment as also to review them in certain specified circumstances.
The Central Government is also vested with the power to take away the management of any airport from the first respondent and to entrust it to any other person or authority and for certain specified reasons, the Central Government can also supersede the first respondent.
The Central Government has also power to give directions in writing from time to time on questions of policy and these directions are declared binding on the first respondent.
" Reference was made to the case of Sabhajit Tewary (supra).
Bhagwati, J. referring thereto stated : "This decision does not lay down any principle or test for the purpose of determining when a corporation can be said to be an authority.
If at all, any test can be gleaned from the decision, it is whether the corporation is really an agency of the Government." and ultimately it was held that the Authority was 'State ' under Article 12.
This case clearly approves the treatment of the matter by Mathew, J. in Sukhdev Singh 's case (supra).
The two Judge Bench in the case of Managing Director, Uttar Pradesh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpayee, ; was cited but we do not consider it necessary to refer to the same.
On the other hand reference to the two later decisions of this Court may be more useful.
Those are Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc.
; , of a Constitution Beocll and the other is Som Prakash Rekhi vs Union of India & Anr., ; being a three Judge Bench decision.
It is pertinent to indicate that both the judgments were delivered on November 13, 1980.
276 In Ajay Hasia 's case an Engineering College was also a Society registered under the Jammu & Kashmir Registration of Societies Act, l898, and the question that fell for consideration was whether it was an authority within the meaning of Article 12.
The Court found that the Memorandum of Association of the Society in clause (3) set out the objects for which the Society was incorporated and they included among other things establishment of the college with a view to providing instructions and research in such branches of engineering and technology as the college may think fit and for the advancement of learning and knowledge in such branches.
Reference was made to the Memorandum of Association, the objects and the powers of the State Government to make appointments and to the fact that the State government with the approval of the Central Government had the power to take such action and to issue such directions as are necessary in respect of all matters relating to the functioning of the college as noticed in the review of the activities.
the Court also took note of the fact that the founding members of the society were enumerated in clause (9) of the memorandum and they were the Chairmen to be appointed by the State Government with the approval of the Central Government, two representatives of the State Government, one representative of the Central Government, two representatives of the All India Council for Technical Education to be nominated by the Northern Regional Committee, one representative of the University of Jammu & Kashmir, one nonofficial representative of each of the Punjab, Rajasthan, UttarPradesh and Jammu & Kashmir States and to be appointed by the respective Governments in consultation with the Central Government and the principal who shall also be the ex officio Secretary.
The rules of the Society were referred to with a view to finding out the details of functioning.
Sabhajit Tewary 's case was referred to and distinguished and the tests laid down in the International Airport Authority 's case (supra) were approved.
Ultimately the Court summarised the position as under: " The tests for determining as to when a corporation can be said to be an instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority 's case.
These tests ate not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution because while stressing the necessity of a wide meaning to be placed on the expression 'other authorities '.
it must be realised that it should not stretched so far as to bring in 277 every autonomous body which has some nexus with the Government within the sweep of the expression.
A wide enlargment of the meaning must be tempered by a wise limitation.
We may summarise the relevant tests gathered from the decision in the International Airport Authority 's case as follows: (1) "one thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of (Government (2) "Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being inpregnated with governmental character. " (3) "It may also be a relevant factor whether the corporation enjoys monopoly status which is State conferred or State protected." (4) "Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality." (5) "If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government.
(6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government.
" The Court thereafter proceeded to say: "We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute.
The test is whether it is an instrumentality 278 or agency of the Government and not as to how it is created.
The inquiry has to be not as to how the juristic person is born but why it has been brought into existence.
The corporation may be a statutory corporation created by a statute or it may be a Government Company or a company formed under the or it may be a society registered under the or any other similar statute.
Whatever be its genetical origin, it would be an 'authority ' within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors.
The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression 'authority ' in Article 12.
" At pages 99 and 100 of the Reports, the Constitution Bench referred to the facts of the particular case and came to hold that the society was an instrumentality or agency of the State.
In Som Prakash Rekhi 's case (supra) at page 137 of the Reports, Krishna Iyer, J. referred to the five tests and concluded by saying that: "The finale is reached when the cumulative effect of all the relevant factors above set out is assessed and once the body is found to be an instrument or agency of Government, the further conclusion emerges that it is 'State ' and is subject to the same constitutional limitations as Government At page 138 the criticism against the conclusions reached in the c, Airport Authority 's case was taken note of and the learned Judge observed: "There is no doubt that Bhagwati, J. broadened the scope of State under Article 12 and according to Shri G.B. Pai the observations spill over beyond the requirements of the case and must be dismissed as obiter.
" 279 Pathak, J., as he then was, added a brief note to the judgment by A saying: "I must confess to some hesitation in accepting the proposition that the Bharat Petroleum Corporation Limited is a 'State ' within the meaning of Article 12 of the Constitution.
But in view of the direction taken by the law in this Court since Ramana Dayarama Shetty vs International Airport Authority I find I must lean in favour of that conclusion.
I would have welcomed a wider range of debate before us on the fundamental principles involved in the issue and on the implications flowing from the definition in the of a 'Government Company '? but perhaps a future case may provide that.
" We have thus the tests available in the two decisions to be applied to the facts of the case in hand for determination as to whether ICPS is 'State ' within the meaning of Article 12.
There are two more cases to which brief reference may now be made B.S. Minhas vs Indian Statistical Institute & Ors., ; and P.K. Ramachandra Iyer & Ors.
vs Union of India & Ors.
, ; The case of the Indian Statistical Institute is also of a society registered under the .
The Court found that the entire money required for funding the Institute was provided by the Central Government and even if any other money was to be received by the Institute it could be done only with the approval of the Central Government and the accounts of the Institute were to be submitted to the Central Government for its scrutiny and satisfaction.
The Society had to comlpy with all directions as may be issued by the Central Government. 'The control of the Central Government was deep and pervasive and, therefore, it was an instrumentality of the Central Government and as such was an authority within the meaning of Article 12 of the Constitution.
ln coming to this conclusion, the Court relied upon the tests indicated in the International Airport Authority 's case as also in the case of Ajay Hasia.
In Ramchandra Iyer 's case, the question for consideration was whether the Indian Council of Agricultural Research (ICAR) was a set up within the meaning of Article 12 of the Constitution.
ICAR is also a Society registered under the .
The Court found that when it was set up, it was an attached office of the 280 Government of Tndia and had not undergone any change when it got transferred into a Society.
Applying the tests indicated in International Airport Authority case as also the case of Ajay Hasia, the Court came to the conclusion that there was little doubt that it was an instrumentality or agency of the State.
It further stated: "ICAR came into existence as an integral department of the Government of India and later on became an attached office of the Central Government.
The composition of the ICAR as evidenced by Rule 3 could not have been more governmental in character than any department of the Government.
" It is time to turn to the facts of the present case to find out as to what the conclusion should be when the tests formulated by the several cases of this Court referred to above are applied.
There cannot indeed be a strait jacket formula.
It is not necessary that all the tests should he satisfied for reaching the conclusion either for or against r holding an institution to be 'State '.
In a given case some of the features may emerge so boldly and prominently that a second view may not be possible.
There may yet be other cases where the matter would be on the border line and it would be difficult to take one view or the other outright.
Our struggle for independence which spread over a century bore fruit in 1947.
During the long period of struggle, the British Government following the pattern of the democratic system prevailing in their own country had patronised the evolution of a process of self government.
The Government of India Act of 1935 which was a positive improvement on the previous Acts had introduced provincial autonomy and the Indian Independence Act, 1947, adopted that pat tern of Government.
Even the Constitution which the people of India gave unto themselves in 1949 and which came into force from the 26th of January, 1950, followed that pattern, of course, with considerable modifications.
Thus when we became independent a democratic pattern had evolved in this country through more or less an historical process.
Soon the princely States disappeared by a process of merger and the Constitution ultimately came to have a federal base the federating States as the units and the federation at the Centre.
Democracy pre supposes certain conditions for its successful working.
It is necessary that there must be a deep sense of understanding, mutual confidence and tolerance and regard and acceptance 281 Of the views of others.
In the early years of freedom, the spirit of sacrifice and a sense of obligation to the leadership that had helped the dream of freedom to materialise had been accepted.
The emergence of a new generation within less than two decades of independence gave rise to a feeling that the people 's representatives in the Legislatures required the acquisition of the appropriate democratic bias and spirit.
ICPS was born as a voluntary organisation to fulfil this requirement.
At the inception it was certainly not a governmental organisation and it has not been the case of the parties in their pleadings nor have we been told at the bar during the long arguments that had been advanced that the objects of ICPS are those which are a State obligation to fulfil.
The Society was thus born out of a feeling that there should be a voluntary association mostly consisting of Members of the two Houses of Parliament with some external support to fulfil the objects which were adopted by the Society.
To Start with, the Society was accommodated in the Parliament House but in due course it shifted out.
The President of India inaugurated the Society.
Very appropriately the Speaker of the Lok Sabha became its first President and three Ministers, a former Chief Justice of India and a former Attorney General joined as its Vice Presidents.
Some of the public officers were also associated in the administrative set up of the Society.
Individual Members of Parliament and the corporate body known as Parliament are certainly two different concepts.
Services of some of the employees of Parliament were lent to the Society.
While Article 12 refers to Parliament as such, a few Members of Parliament cannot be considered as Parliament so as to constitute that body as referred to in Article 12.
The Speaker and the Ministers who joined as Vice Presidents of the Society were there in their individual capacities and not as Ministers, though designations were indicated.
In the category of Vice Presidents, Executive Chairman, Treasurer and members, there were many people who were really not a part of Government as such and some of them did not belong to Parliament.
The objects of the Society were not governmental business but were certainly the aspects which were expected to equip Members of Parliament and the State Legislatures with the requisite knowledge and experience for better functioning.
Many of the objects adopted by the Society were not confined to the two Houses of Parliament and were intended to have an impact on society at large.
The Memorandum of the Society permitted acceptance of gifts, 282 donations and subscriptions.
There is material to show that the Ford Foundation, a US based Trust had extended support for some time.
Undoubtedly, the annual contribution from the Government has been substantial and it would not be wrong to say that they perhaps constitute the main source of funding, Yet some money has been coming from other sources.
In later years, foreign funding came to be regulated and, therefore, it became necessary to provide that without Government clearance like any other institution, ICPS was not to receive foreign donations.
No material has been placed before us f the stand that the Society was not entitled to receive Contributions from any indigenous source without Government sanction.
Since Government money has been coming, the usual conditions attached to Government grants have been applied and enforced.
If the society 's affairs were really intended to be carrier on as a part of the Lok Sabha or Parliament as such, the manner of functioning would have been different.
The accounts of the Society are separately maintained and subject to audit in the same way as the affairs of societies receiving Government grants are to be audited.
Government usually impose certain conditions and restrictions when grants are made.
No exception has been made in respect of the Society and the mere fact that such restrictions are made is not a determinative aspect.
Considerable attempt has been made by Mr. Rao, learned counsel for the appellant, to show that in the functioning of the Society there is deep and pervasive control of government.
We have examined meticulously the correspondence and the instances where control was attempted to be exercised or has, as a fact, been exercised but these again are features which appear to have been explained away We were taken through the report submitted by the Tripathi Committee which had been set up to suggest changes in the set up and affairs of the Society.
The report and the steps taken on the basis of the report are also not material which can be taken to be indisputable features for reaching the conclusion one way or the other.
We were shown the correspondence by the Minister of Law with the Executive Chairman of the Society.
Undoubtedly the Minister has tried to exercise his authority as the controlling department of Government in the matter of making the grant.
As we have already pointed that itself may not be a conclusive feature.
We have several cases of societies registered under which have been treated as 'State ' but in each of 283 those cases it would appear on analysis that either governmental business had been undertaken by the Society or what was expected to be the public obligation of the 'State ' had been undertaken to be performed as a part of the Society 's function.
In a Welfare State, as has been pointed out on more than one occasion by this Court, Governmental control is very pervasive and in fact touches all aspects of social existence.
ln the absence of a fair application of the tests to be made, there is possibility of turning every non governmental society into an agency or instrumentality of the State.
That obviously would not serve the purpose and may be far from reality.
A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion.
Having given our anxious consideration to the facts of this case, we are not in a position to hold that ICPS is either an agency or instrumentality of the State so as to come within the purview of 'other authorities ' in Article 12 of the Constitution.
We must say that ICPS is a case of its type typical in many ways and the normal tests may perhaps not properly apply to test its character.
While we were referring to the cases in an earlier part of our judgment, we have noticed the caution indicated by this Court that even if some institution becomes 'State ' within the meaning of Article 12, its employees do not become holders of civil posts so as to become entitled to the cover of Article 311.
They would, however, be entitled to the benefits of Part III of the Constitution.
It is unnecessary to examine the appellant 's case keeping Articles 14 and 16 of the Constitution in view as on the concession of Dr. Anand Prakash the proceedings will have to reopen.
Before we part with this case, we must indicate what reliefs the appellant would be entitled to.
Now that the order of the dismissal is set aside and the proceedings have been restored to the stage of enquiry, the appellant shall be deemed to have been restored to service.
The appellant would have become entitled to the normal relief available in such a situation.
He should be deemed to be in service and we do not agree with Dr. Anand Prakash that his suspension should continue.
His suspension which had merged into dismissal has been vacated.
It shall, however, be open for the employer to make any direction as is deemed appropriate in that behalf in future.
The appellant, therefore, becomes entitled to the salary for the past period subject to his satisfying the authorities that he has not earned any other income during that period.
The appellant shall be given reasonable opportunity by the enquiring officer to meet the charges 284 and the enquiry shall be completed with in four months.
The appellant has personally assured us in Court that he will fully cooperate in the enquiry.
The enquiry officer shall allow inspection to the appellant of all records relevant to the enquiry.
We make no order as to costs.
S.L. Appeal disposed of.

summary:
% The appellant, an employee of the Institute of Constitutional and Parliamentary Studies (I.C.P.S., for short), was dismissed from service by order dated November 17, 1982, as a result of disciplinary action.
He challenged the dismissal order by a writ petition before the High Court.
The question whether the I.C.P.S. was a 'State ' within the meaning of Article 12 of the Constitution arose for consideration as a major issue in the matter before the High Court.
A Single Judge of the High Court dismissed the petition, holding that the employer was neither an agency nor an instrumentality of the government and did not constitute 'State ' as above said, and, therefore, was not subject to the writ jurisdiction of the High Court.
The appeal against that judgment of the Single Judge was dismissed by the Division Bench of the High Court.
Aggrieved by the decision of the High Court, the appellant moved this Court by special leave.
Disposing of the appeal, the Court, ^ HELD: In the course of hearing, Dr. Anand Prakash, counsel for the I.C.P.S., respondent No. 2, stated that whether the Institute be 'State ' or not within the meaning of Article 12 of the Constitution, the employer was prepared to give a fresh opportunity to the appellant to meet the charges against him.
With that concession, the order of dismissal, etc.
passed against the appellant should have been set aside and the matter should have gone before the enquiry officer, but Dr. Anand Prakash as also counsel for the Union of India invited the Court to decide the issue as to whether the I.C.P.S. constituted 'State ' within the constitutional meaning of the term.
[263H; 264A C] The main question for consideration then was whether I.C.P.S. was a 'State '.
I.C.P.S. could become 'State ' only if it was found to be an authority within the territory of India or under the control of the Government of India.
[264D,G] 261 I.C.P.S. is a registered society.
The emergence of a new generation within less than two decades of independence gave rise to a feeling that the people 's representatives in the Legislatures required the acquisition of the appropriate democratic bias and spirit.
I.C.P.S. was born as a voluntary organisation to fulfil this requirement.
The Speaker of the Lok Sabha was its first President.
Three Ministers, a former Chief Justice of India and a former Attorney General joined as its Vice Presidents.
Some of the public officers were associated in its Administrative set up.
Services of some employees of Parliament were lent to it.
While Article 12 refers to Parliament as such, a few members of Parliament cannot be considered as Parliament so as to constitute that body as referred to in Article 12.
The Speaker and the Ministers who joined as Vice Presidents of the Society were there in their personal capacities and not as Ministers, etc.
There were many people in the category of Vice President, Executive Chairman, Treasurer and members, who were not a part of the Government, and some of them did not belong to Parliament.
[281A F] The objects of the Society were not governmental business.
Many of the objects of the Society were not confined to the two Houses of Parliament and were intended to have an impact on Society at large.
[281G H] The Memorandum of the Society permitted acceptance of gifts, donations and subscriptions.
No material was placed before the Court for the stand that the Society was not entitled to receive contributions from any indigenous source without government sanction.
Since government money has been coming, the usual conditions attached to government grants have been applied and enforced.
If the Society 's affairs were really intended to be carried on as a part of the Lok Sabha or Parliament as such, the manner of functioning would have been different.
The accounts of the Society are subject to audit as the affairs of the Societies receiving government grants are.
Government imposes conditions and restrictions when grants are made, and the Society is also subject to the same, and the mere fact that such restrictions are made is not a determinative aspect.[281H; 282 A D] There are registered societies which have been treated as 'State ', but in the case of each of them, either governmental business had been undertaken by the Society or what was expected to be the public obligation of the 'State ' had been undertaken to be performed as a part of the Society 's function.
[282H; 283A] 262 Having given anxious consideration to the facts of the case, the Court is not in a position to hold that I.C.P.S. is either an agency or an instrumentality of the State so as to come within the purview of other authorities"in Article 12 of the Constitution.
I.C.P.S. is a case of its type typical in many ways and normal tests may, perhaps, not properly apply to test its character.
Even if some institution becomes 'State ' within the meaning of Article 12, its employees do not become holders of Civil posts so as to become entitled to the cover of Article 311 of the Constitution.
They would, however, be entitled to the benefits of Part III of the Constitution.
It is unnecessary to examine the appellant 's case, keeping Articles 14 and 16 of the Constitution in view, as, on the concession of counsel for I.C.P.S., the proceedings would have to re open.
[283C E] In the result, the appellant would be entitled to the following reliefs.
The order of dismissal set aside and the proceedings restored to the stage of enquiry.
[283F] The appellant shall be deemed to have been restored to service and he would become entitled to normal relief available in such a situation.
He should be deemed to be in service and his suspension would not continue.
His suspension, which had merged into dismissal is vacated.
It shall, however, be open to the employer to make any direction as is deemed appropriate in that behalf in future.
[283F G] The appellant becomes entitled to salary for the past period subject to his satisfying the authorities that he had not earned any income during that period.
[283H] The appellant shall be given a reasonable opportunity by the enquiring officer to meet the charges and the enquiry shall be completed within four months.
[283H; 284A] The enquiry officer shall allow inspection to the appellant of all records relevant to the enquiry.
[284B] Rajasthan State Electricity Board, Jaipur vs Mohan Lal and Ors.
, ; ; Smt.
Ujjam Bai vs State of Uttar Pradesh, [1963] l SCR 778; Sabhajit Tewary vs Union of India Sardar Singh Raghuvanshi & Anr.
, ; ; Ramana Dayaram Shetty vs The 263 International Airport Authority of India & Ors., ; ; Managing Director, Uttar Pradesh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpayee, ; ; Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & Ors. etc.
; , ; Som Prakash Rekhi v Union of India and Anr., ; ; B.S.Minhas vs Indian Statistical Institute & Ors., ; and P. K Ramachandra Iyer and Ors.
vs Union of India and Ors.