Full Judgement
M/S Zee Telefilms Ltd. & Anr Vs. Union of India & Ors [2005] Insc 72 (2 February 2005)
S.N. Variava & S.B. Sinha
W I T H SPECIAL LEAVE PETITION (CIVIL) NO.20186 OF 2004 S.B. SINHA, J:
The matter calls for an authoritative pronouncement as to whether the Board of Control for Cricket in India (Board) which is a cricket controlling authority in terms of the ICC Rules answers the description of "Other Authorities" within the meaning of Article 12 of the Constitution of India.
BACKGROUND FACTS:
The First Petitioner is one of the largest vertically integrated media entertainment groups in India. The Board, the second Respondent herein, is a Society registered under the Tamil Nadu Societies Registration Act which is said to be recognized by the Union of India, Ministry of Youth Affairs and Sports. The Third and Fourth Respondents are President and Secretary respectively of the Second Respondent. The Fifth Respondent, "ESPN Star Sports", known as "ESS" is a partnership firm of the United States of America having a branch office in Singapore. The Sixth Respondent is a firm of Chartered Accountants which was engaged by Board in relation to the tender floated on 07.08.2004. Pursuant to or in furtherance of a notice inviting tender for grant of exclusive television rights for a period of four years, several entertainment groups including the Petitioners and the Fifth Respondent herein gave their offers. For the purpose of this matter, we would presume that both the Petitioners and the said Respondent were found eligible therefor. The First Petitioner gave an offer for an amount of US $ 260,756,756.76 (INR equivalent to Rs.12,060,000,000/- (Rupees twelve thousand sixty million only - @ INR 46.25/US $) Or US $ 281,189,189.19 (INR equivalent to Rs.13,005,000,000/- (Rupees thirteen thousand five million only - @ INR 46.25/US $).
Upon holding negotiations with the First Petitioner as also the Fifth Respondent, the Board decided to accept the offer of the former; pursuant to and in furtherance whereof a sum of Rs. 92.50 crores equivalent to US $ 20 millions was deposited in the State Bank of Travancore. In response to a draft letter of intent sent by the Board, the First Petitioner agreed to abide by the terms and conditions of offer subject to the conditions mentioned therein.
The Fifth Respondent in the meanwhile filed a writ petition before the Bombay High Court which was marked as Writ Petition (L) No. 2462 of 2004. The parties thereto filed their affidavits in the said proceeding. In its affidavit, the Board justified its action in granting the contract in favour of the First Petitioner. The matter was taken up for hearing on day to day basis.
Arguments of the Fifth Respondent as also the First Petitioner had been advanced. On 21.9.2004, however, the Board before commencing its argument stated that it purported to have cancelled the entire tender process on the premise that no concluded contract was reached between the parties as no letter of intent had therefor been issued. The First Petitioner, however, raised a contention that such a concluded contract in fact had been arrived at. The Fifth Respondent, in view of the statements made by the counsel for the Board, prayed for withdrawal of the writ petition, which was permitted.
On the same day i.e. on 21.9.2004 itself, the Board terminated the contract of the First Petitioner stating :
"In the larger interest of the game of cricket and due to the stalemate that has been created in the grant of Television Rights for the ensuing Test Series owing to litigation and as informed before the Hon'ble High Court at Bombay this day, the Board of Control for Cricket in India (BCCI) hereby cancels the entire process of tender by invoking Clause 5.3, 5.4 (c) and 5.4 (d) of the invitation to tender (ITT) dated 7 August, 2004, the terms of which were accepted and acknowledged by you.
The Security in the form of Bank Guarantee and/or money deposited by you is being returned immediately." WRIT PETITION:
The order of the Board dated 21.9.2004 terminating the contract is in question in this writ petition contending that the action on the part of the Board in terminating the contract is arbitrary and, thus, violative of Article 14 of the Constitution of India.
In the writ petition, the Petitioners have, inter alia, prayed for setting aside the said communication as also for issuance of a writ of or in the nature of mandamus commanding upon the Board to act in tems of the decision arrived on 5.9.2004.
REFERENCE:
By an order dated 27.9.2004, a three-Judge Bench of this Court referred the matter to a Constitution Bench stating :
"These petitions involve a question related to the interpretation of the Constitution of India which will have to be heard by a Bench not less than 5 Judges as contemplated under Article 145(3) of the Constitution.
Place this matter before Hon'ble the Chief Justice for further orders.
Since the matter involved requires urgent consideration, we request the Chief Justice to place this matter before the Constitution Bench for further orders on 28.9.2004.
We direct the Attorney General to take notice on behalf of first respondent. The petitioner shall take steps to serve respondent no.6 dasti. The same shall be served today indicating that the matter will be heard tomorrow."
PRELIMINARY ISSUE:
On commencement of hearing, Mr. K.K. Venugopal, learned Senior Counsel appearing on behalf of the Second Respondent raised an issue as regard maintainability of the writ petition on the premise that the Board is not a 'State' within the meaning of Article 12 of the Constitution of India.
The said issue having been treated as a preliminary issue, the learned counsel were heard thereupon. This judgment is confined to the said issue alone.
PLEAS OF THE PARTIES:
Writ Petitioners:
The factors pleaded by the writ petitioners herein which would allegedly demonstrate that the Board is an authority that would be subject to the constitutional discipline of Part III of the Constitution of India, are as under :
"a. It undertakes all activities in relation to Cricket including entering into the contracts for awarding telecast and broadcasting rights, for advertisement revenues in the Stadium etc.
b. The team fielded by the BCCI plays as "Indian Team" while playing One Day Internationals or Test Matches it cannot be gainsaid that the team purports to represent India as a nation, and its wins are matters of national prestige. They wear uniform that carries the national flag, and are treated as sports ambassadors of India.
c. The sportsmen of today are professionals who devote their life to playing the game. They are paid a handsome remuneration by the BCCI for their participation in the team. Thus, they are not amateurs who participate on an honorary basis. Consequently they have a right under Article 19(1)(g) to be considered for participation in the game. The BCCI claims the power to debar players from playing cricket in exercise of its disciplinary powers. Obviously, it is submitted, a body that purports to exercise powers that impinge on the fundamental rights of citizens would constitute at least an "authority" within the meaning of Art. 12 of the Constitution it can hardly contend that it has the power to arbitrarily deny players all rights to even be considered for participation in a tournament which they are included as a team from "India".
d. This Hon'ble Court has already, by its interim orders., directed a free to air telecast of the matches that were played in Pakistan in which a team selected by the Respondent BCCI participated. This was done, it is respectfully submitted, keeping in view the larger public interest involved in telecasting of such a sport. Surely, the regulatory body that controls solely and to the exclusion of all others, the power to organize such games, and to select a team that would participate in such games is performing a public function that must be discharged in a manner that complies with the constitutional discipline of Part III of the Constitution.
If the events organized are public events, then it is submitted that the body that is the controlling authority of such public events would surely be subject to the discipline of Art. 14 and 19 of the Constitution.
e. It is also submitted that even domestically, all representative cricket can only be under its aegis. No representative tournament can be organized without the permission of BCCI or its affiliates at any level of cricket.
f. The BCCI and its affiliates are the recipients of State largesse, inter alia, in the form of nominal rent for stadia. It is submitted that the BCCI is performing one of the most important public functions for the country with the authorization and recognition by the Govt. of India, is amenable to the writ jurisdiction of this Hon'ble Court under the provisions of the Constitution of India." Union of India:
Union of India contends that the Board is a State. In support of the said plea an affidavit affirmed by Deputy Secretary to the Government of India, Ministry of Youth Affairs and Sports has been filed. A large number of documents have also been filed to show that the Board had all along been acting as a recognized body and as regard international matches has always been seeking its prior permission. The Board had also been under the administrative control of the Government of India.
Board:
In support of its plea that it is not a 'State', the Second Respondent in its Counter Affidavit asserted:
"(a) Board of Control of Cricket in India, the Respondent No.2 is an autonomous non-profit making Association limited and restricted to its Members only and registered under the Tamil Nadu Societies Registration Act. It is a private organization whose objects are to promote the game of Cricket. Its functions are regulated and governed by its own Rules and Regulations independent of any statute and are only related to its members. The Rules and Regulations of the Respondent no.2 have neither any statutory force nor it has any statutory powers to make rules or regulations having statutory force.
(b) The Working Committee elected from amongst its members in accordance with its own Rules controls the entire affairs and management of the Respondent No.2.
There is no representation of the Government or any Statutory Body of whatsoever nature by whatever form in the Respondent No.2. There exists no control of the Government over the function, finance, administration, management and affairs of the Respondent No.2.
(c) The Respondent No.2 does not discharge or perform any public or statutory duty.
(d) The Respondent no.2 receives no grant of assistance in any form or manner from the Government in this context. It may be stated that in a writ petition in the case of Rahul Mehra vs. Union of India in the Hon'ble High Court at Delhi. "Union of India" filed Affidavits stating categorically that there is no Government control of any nature upon the Board of Control for Cricket in India and as it does not follow the Government Guidelines which have been consolidated and issued under the title "Sports India Operation Excellence" vide Circular No.F.1-27/86-DESK-1 (SP- IV) dated 16th February, 1988 issued by the Department of Youth Affairs and Sports, Government of India has neither extended any financial assistance to the Board of Control for Cricket in India nor has any relationship of whatsoever nature with it and no financial assistance is also extended for participation of any tournament, competition or otherwise organized by the Respondent No.2. Copies of the said Affidavits are annexed hereto as Exhibits "A" and "B" respectively.
(e) The Respondent no.2 organizes cricket matches and/or tournaments between the Teams of its Members and with the Teams of the members of International Cricket Council (ICC) which is also an autonomous Body dehors any Government control.Matches that are organized are played at places either belonging to Members in India or at the places of either belonging to its Members of ICC only. Only when for the purpose of organizing any match or tournament with foreign participants, the Respondent no.2 requires normal and scheduled permissions from the Ministry of Sports for travel of foreign teams, it obtains the same like any other private organization, particularly in the subject matter of foreign exchange. The Respondent No.2 is the only autonomous sporting body which not only does not obtain any financial grants but on the contrary earns foreign exchange.
(f) Organizing Cricket Matches and/or Tournaments between the Teams of the Members of the Respondent No.2 and/or with the co-members of International Cricket Council cannot be said to be a facet of public function or government in character. No monopoly status has been conferred upon the Respondent No.2 either by Statute or by the Government. Any other body could organize any matches on its own and neither the Respondent no.2 nor the Government could oppose the same. As a matter of fact, number of cricket matches including International matches are played in the Country which have nothing to do with the Respondent No.2. Respondent No.2 has no monopoly over sending teams overseas for the game of cricket and to control the entire game of cricket in India.
Matches which are sanctioned or recognized by the ICC are only known as Official Test matches or One day International Matches. Respondent no.2 is entitled to invite teams of other members of ICC or send teams to participate in such matches by virtue of its membership of ICC." ESS :
Although, as noticed hereinbefore, ESS itself filed a writ petition before the Bombay High Court on the ground that the same was violative of Article 14 of the Constitution, it now contends that although a writ petition under Article 226 of the Constitution before the High Court would be maintainable but not one under Article 32 thereof as the Board is not a 'State'.
SUBMISSIONS OF THE LEARNED COUNSEL:
Mr. K.K. Venugopal, the learned senior counsel appearing in support of the preliminary issue would submit that as the Board does not come within the purview of any of the six legal tests laid down by this Court in Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology and Others [(2002) 5 SCC 111], it would not be a `State'. Our attention, in this behalf, has been drawn to paragraphs 25, 27, 30, 31, 38, 42 to 45, 48, 49, 50, 51, 52 to 55 of the said judgment . It was contended that the Board is an autonomous body and the Central Government does not have any control thereover either financially or administratively or functionally. It was urged that neither the Central Government gives any monetary grant nor nominates any member in the Governing Body of the Board nor has anything to do with its internal affairs. It was pointed out by the learned counsel that even the Union of India had agreed before the Bombay High Court that the Board had the exclusive telecasting rights as owner of the events. The Board furthermore does not exercise any sovereign or governmental functions; Mr. Venugopal would argue that furthermore the Board has not even been recognized by the Union of India nor has it any role to play as regard framing of its rules and regulations.
Dr. A.M. Singhvi, learned Senior Counsel appearing on behalf of the Third Respondent herein, would supplement the arguments of Mr. Venugopal contending that the activity of a body like Board does not involve any public duty or public function and although its action is public in nature, the same would not amount to a governmental action. Reliance, in this connection, has been placed on R. vs. Football Association Ltd, ex parte Football League Ltd. [1993 (2) AER 833] and R. vs. Disciplinary Committee of the Jockey Club, ex parte Aga Khan [1993 (2) AER 853].
The leaned counsel has also drawn our attention to a decision of this Court in Federal Bank Ltd. vs. Sagar Thomas and Others [(2003) 10 SCC 733].
According to Dr. Singhvi, there exists a distinction between Articles 32 and 226 of the Constitution of India. Reliance in this behalf has been placed on a decision of this Court in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Others vs. V.R. Rudani and Others [(1989) 2 SCC 691].
Mr. Soli J. Sorabjee, the learned Senior Counsel appearing on behalf the fifth Respondent, would contend that the nature of the function of the concerned authority plays an important role in determining the question and only where the function is governmental in nature or where the authority is vested under a statute, it would attract the definition of "other authorities" within the meaning of Article 12 of the Constitution and not otherwise. The learned counsel would, however, submit that in Aga Khan (supra), the Court of Appeal has accepted that there may be some cases where the judicial review would be maintainable. Drawing our attention to a decision of this Court in G. Bassi Reddy vs. International Crops Research Institute and Another [(2003) 4 SCC 225], the learned counsel would urge that Board does not fulfil the tests laid down therein.
Mr. Harish Salve, learned Senior Counsel appearing on behalf of the Writ Petitioners, on the other hand, would take us through the Memorandum and Articles of Association of the Board as also the rules and regulations framed by it and contend that from a perusal thereof it would be manifest that it exercises extensive power in selecting players for the Indian National team in the international events. The Board, also exercises stringent disciplinary powers over players, umpires, members of the team and other officers. It is the contention of Mr. Salve that the activities of the Board in effect and substance are governmental functions in the area of sports. An exclusive right has been granted to it to regulate the sport in the name of the country resulting in exercise of functions of larger dimension of public entertainment. When a body like the Board has received recognition from the Union of India to allow it to represent India as a country, its character must be held to have changed from private body to a public authority. It was submitted that the players put on colours of National Flag on their attire.
Because of the nature of its actions the International Cricket Council has recognized the Board not in its capacity as a cricket playing club but as a representative of India, a cricket playing country. By its disciplinary action, Mr. Salve would argue, the Board may debar a player from representing the country as a result whereof his fundamental right under Article 19(1)(g) of the Constitution of India would be affected. He would submit that the Board, therefore, is not an autonomous body discharging a private function only and in fact it deals with sporting events of the country. The learned counsel would argue that the Board acts strictly in terms of the foreign policy of the country as it refused to recognize a player who played in South Africa, as apartheid was being practiced therein which was consistent with India's foreign policy. It was further submitted that the cricket match between India and Pakistan could be held only with the permission of the Union of India as and when the relationship between the two countries improved.
Mr. Salve, therefore, submits that the Board is a 'State' within the meaning of Article 12 of the Constitution of India as:
(i) it regulates cricket;
(ii) It has a virtual monopoly;
(iii) it seeks to put restrictions on the fundamental rights of the players and umpires to earn their livelihood as envisaged under Article 19(1)(g) of the Constitution of India;
(iv) The cricket events managed by the third Respondent have a definite concept, connotation and significance which have a bearing on the performance of individual players as also the team as a national team representing the country in the entire field of cricket.
Mr. Mohan Parasaran, learned counsel appearing on behalf of Union of India would contend that the functions of the Board are of public importance and closely related to governmental functions. Functions of the Board, the learned counsel would urge, also control free speech rights of citizens within a public forum which is essentially a governmental function. 276 F.3d 550.
CONSTITUTIONAL DEVELOPMENT:
Our Constitution is an ongoing document and, thus, should be interpreted liberally. Interpretation of Article 12, having regard to the exclusive control and management of sport of cricket by the Board and enormous power exercised by it calls for a new approach. The Constitution, it is trite, should be interpreted in the light of our whole experience and not merely in that of what was the state of law at the commencement of the Constitution.
[See Missouri vs. Holland (252 US 416 (433) and Kapila Hingorani vs. State of Bihar [(2003) 6 SCC 1]. 2003 (6) SC 37] while referring to an amendment made in U.K. in relation to a provision which was in pari materia with Section 118 of the Indian Succession Act, 1925, this Court observed:
"...The constitutionality of a provision, it is trite, will have to be judged keeping in view the interpretive changes of the statute effected by passage of time." Referring to the changing scenario of the law and having regard to the declaration on the right to development adopted by the World Conference on Human Rights and Article 18 of the United Nations Covenant on Civil and Political Rights, 1966, this Court held:
"It is trite that having regard to Article 13(1) of the Constitution, the constitutionality of the impugned legislation is required to be considered on the basis of laws existing on 26th January, 1950, but while doing so the court is not precluded from taking into consideration the subsequent events which have taken place thereafter.
It is further trite that that the law although may be constitutional when enacted but with passage of time the same may be held to be unconstitutional in view of the changed situation.
Justice Cardoze said :
"The law has its epochs of ebb and flow, the flood tides are on us. The old order may change yielding place to new; but the transition is never an easy process".
Albert Campus stated :
"The wheel turns, history changes". Stability and change are the two sides of the same law-coin. In their pure form they are antagonistic poles; without stability the law becomes not a chart of conduct, but a gare of chance: with only stability the law is as the still waters in which there is only stagnation and death." In any view of the matter even if a provision was not unconstitutional on the day on which it was enacted or the Constitution came into force, by reason of facts emerging out thereafter, the same may be rendered unconstitutional." In Liverpool & London S.P. & I Association Ltd. vs. M.V. Sea Success I and Another, (2004) 9 SCC 512, this Court observed:
"Referring to Motor General Traders and Another vs. State of Andhra Pradesh and Others [(1984) 1 SCC 222], Rattan Arya and Others vs. State of Tamil Nadu and Another [(1986) 3 SCC 385] and Synthetics and Chemicals Ltd. and Others vs. State of U.P. and Others [(1990) 1 SCC 109], this Court held: (SCC p. 608, para 49) "There cannot be any doubt whatsoever that a law which was at one point of time constitutional may be rendered unconstitutional because of passage of time. We may note that apart from the decisions cited by Mr. Sanghi, recently a similar view has [JT 2003 (5) SC 1] and John Vallamattom and Constitution of India is an ongoing document. It must be interpreted accordingly.
In Francis Bennion's 'Statutory Interpretation', Fourth Edition at page 762, it is stated:
"It is presumed that Parliament intends the court to apply to ongoing Act a construction that continuously updates its wording to allow for changes since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law.
At page 764, it is commented:
"In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at any future time in such a way as to give effect to the true original intention. Accordingly, the interpreter is to make allowances for any relevant changes that have occurred, since the Act's passing, in law, social conditions, technology, the meaning of words, and other matters. Just as the US Constitution is regarded as 'a living Constitution', so an ongoing British Act is regarded as 'a living Act'. That today's construction involves the supposition that Parliament was catering long ago for a state of affairs that did not then exist is no argument against that construction. Parliament, in the wording of an enactment, is expected to anticipate temporal developments. The drafter will try to foresee the future, and allow for it in the wording."
LEGISLATIVE POWERS:
Although we will advert to various rival contentions raised at the Bar at some details a litter later but suffice it to notice at this stage that encouragement of games and sports is State function in terms of Entry 33 of List II of the Seventh Schedule of the Constitution of India which reads thus:
"33. Theaters and dramatic performances; cinemas subject to the provisions of entry 60 of List 1; sports, entertainments and amusements." The State by reason of a legislative action cannot confer on it extra territorial jurisdiction in relation to sports, entertainment etc. Education, however, is in Concurrent List being Item No.25 of List III. Sport is considered to be a part of Education (within its expanded meaning). Sport has been included in the Human Resource Development as a larger part of education. The Ministry of Youth Affairs and Sports was earlier a department of the Ministry of Human Resource Development. Now a separate Ministry of Youth Affairs and Sports has come into being, in terms of the Allocation of Business Rules.
In Secretary, Ministry of Information & Broadcasting, Government of India and Others etc. vs. Cricket Association of Bengal and Others etc. [(1995) 2 SCC 161], this Court held :
"It may be true that what is protected by Article 19(1)(a) is an expression of thought and feeling and not of the physical or intellectual prowess or skill. It is also true that a person desiring to telecast sports events when he is not himself a participant in the game, does not seek to exercise his right of self-expression. However, the right to freedom of speech and expression also includes the right to educate, to inform and to entertain and also the right to be educated, informed and entertained. The former is the right of the telecaster and the latter that of the viewers. The right to telecast sporting event will therefore also include the right to educate and inform the present and the prospective sportsmen interested in the particular game and also to inform and entertain the lovers of the game. Hence, when a telecaster desires to telecast a sporting event, it is incorrect to say that free- speech element is absent from his right. The degree of the element will depend upon the character of the telecaster who claims the right. An organizer such as the BCCI or CAB in the present case which are indisputably devoted to the promotion of the game of cricket, cannot be placed in the same scale as the business organizations whose only intention is to make as large a profit as can be made by telecasting the game." [Emphasis supplied] It was held that sport is a form of expressive conduct.
We may notice at this juncture that the Union of India in exercise of its executive functions in terms of the Allocation of Business Rules framed under Article 77 of the Constitution of India created a separate Ministry of Youth Affairs and Sports for the said purpose. One of the objects of the Ministry is to work in close coordination with national federations that regulate sports. Keeping in view the fact that the Union of India is required to promote sports throughout India, it, as of necessity is required to coordinate between the activities of different States and furthermore having regard to the International arena, it is only the Union of India which can exercise such a power in terms of Entry 10, List I of the Seventh Schedule of the Constitution of India and it may also be held to have requisite legislative competence in terms of Entry 97, List I of the Seventh Schedule of the Constitution of India.
ARTICLE 12:
Before adverting to the core issues at some length we may take a look at Article 12 of the Constitution of India which reads as under:
"12. In this part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India." In this Article, the 'State' has not been defined. It is merely an inclusive definition. It includes all other authorities within the territory of India or under the control of the Government of India. It does not say that such other authorities must be under the control of the Government of India.
The word 'or' is disjunctive and not conjunctive.
The expression "Authority" has a definite connotation. It has different dimensions and, thus, must receive a liberal interpretation. To arrive at a conclusion, as to which "other authorities" could come within the purview of Article 12, we may notice the meaning of the word "authority".
The word "Other Authorities" contained in Article 12 is not to be treated as ejusdam generis.
In Concise Oxford English Dictionary, 10th Edition, the word 'authority' has been defined as under :
"1. the power or right to give orders and enforce obedience. 2. a person or organization exerting control in a particular political or administrative sphere. 3. the power to influence others based on recognized knowledge or expertise." Broadly, there are three different concepts which exist for determining the question which fall within the expression "other authorities".
(i) The Corporations and the Societies created by the State for carrying on its trading activities in terms of Article 298 of the Constitution wherefor the capital, infrastructure, initial investment and financial aid etc. are provided by the State and it also exercises regulation and control thereover.
(ii) Bodies created for research and other developmental works which is otherwise a governmental function but may or may not be a part of the sovereign function.
(iii) A private body is allowed to discharge public duty or positive obligation of public nature and furthermore is allowed to perform regulatory and controlling functions and activities which were otherwise the job of the government.
There cannot be same standard or yardstick for judging different bodies for the purpose of ascertaining as to whether it fulfills the requirements of law therefor or not.
In Pradeep Kumar Biswas (supra), a Seven-Judge Bench held :
"That an "inclusive" definition is generally not exhaustive is a statement of the obvious and as far as Article 12 is concerned, has been so held by this Court (Ujjam Bai v. State of U.P., AIR 1962 SC 1621: (1963) 1 SCR 778 at 968). The words "State" and "authority" used in Article 12 therefore remain, to use the words of Cardozo (Benjamin Cardozo : The Nature of the Judicial Process), among "the great generalities of the Constitution" the content of which has been and continues to be supplied by courts from time to time." [See also Black Diamond Beverages and Another vs. Commercial Tax Officer, Central Section, Assessment Wing, Calcutta and Others (1998) 1 SCC 458] What is necessary is to notice the functions of the Body concerned. A `State' has different meanings in different context. In a traditional sense, it can be a body politic but in modern international practice, a State is an organization which receives the general recognition accorded to it by the existing group of other States. Union of India recognizes the Board as its representative. The expression "other authorities" in Article 12 of the Constitution of India is 'State' within the territory of India as contradistinguished from a State within the control of the Government of India. The concept of State under Article 12 is in relation to the fundamental rights guaranteed by Part-III of the Constitution and Directive Principles of the State Policy contained in Part-IV thereof. The contents of these two parts manifest that Article 12 is not confined to its ordinary or constitutional sense of an independent or sovereign meaning so as to include within its fold whatever comes within the purview thereof so as to instill the public confidence in it.
The feature that the Board has been allowed to exercise the powers enabling it to trespass across the fundamental rights of a citizen is of great significance. In terms of the Memorandum of Association even the States are required to approach the Board for its direction. If the Constitution Bench judgment of this Court in Sukhdev Singh & Ors. vs. Bhagatram Sardar Singh [(1975) 1 SCC 421] and development of law made therefrom is to be given full effect,. it is not only the functions of the Government alone which would enable a body to become a State but also when a body performs governmental functions or quasi-governmental functions as also when its business is of public importance and is fundamental for the life of the people. For the said purpose, we must notice that this Court in expanding the definition of State did not advisedly confine itself to the debates of Constitutional Assembly. It considered each case on its own merit. In Sukhdev Singh (supra), Mathew, J. stated that even big industrial houses and big trade unions would come in the purview thereof. While doing so the courts did not lose sight of the difference between the State activity and the individual activity. This Court took into consideration the fact that new rights in the citizens have been created and if any such right is violated, they must have access to justice which is a human right. No doubt, there is an ongoing debate as regard the effect of the globalization and/or opening up of market by reason of liberalization policy of the Government as to whether that the notion of sovereignty of the State is being thereby eroded or not but we are not concerned with the said question in this case. "Other authorities", inter-alia, would be there which inter alia function within the territory of India and the same need not necessarily be the Government of India, the Parliament of India, the Government of each of the States which constitute the Union of India or the legislation of the States.
Article 12 must receive a purposive interpretation as by reason of Part III of the Constitution a charter of liberties against oppression and arbitrariness of all kinds of repositories of power have been conferred the object being to limit and control power wherever it is found. A body exercising significant functions of public importance would be an authority in respect of these functions. In those respects it would be same as is executive government established under the Constitution and the establishments of organizations funded or controlled by the Government. A traffic constable remains an authority even if his salary is paid from the parking charges inasmuch as he still would have the right to control the traffic and anybody violating the traffic rules may be prosecuted at his instance.
It is not that every body or association which is regulated in its private functions becomes a 'State'. What matters is the quality and character of functions discharged by the body and the State control flowing therefrom.
In Daniel Lee (supra), it was held:
"The OAC's functionally exclusive regulation of free speech within.a public forum, is a traditional and exclusive function of the State"
DEVELOPMENT OF LAW:
The development of law in this field is well-known. At one point of time, the companies, societies etc. registered under the Indian Companies Act and Societies Registration Act were treated as separate corporate entities being governed by its own rules and regulations and, thus, held not to be 'States' although they were virtually run as department of the Government, but the situation has completely changed. Statutory authorities and local Mohan Lal & Ors. - (1967) 3 SCR377.
This court, however, did not stop there and newer and newer principles were evolved as a result whereof different categories of bodies came to be held as State.
The concept that all public sector undertakings incorporated under the Indian Companies Act or Societies Registration Act or any other Act for answering the description of State must be financed by the Central Government and be under its deep and pervasive control has in the past three decades undergone a sea change. The thrust now is not upon the composition of the body but the duties and functions performed by it. The primary question which is required to be posed is whether the body in question exercises public function.
In Sukhdev Singh (supra), a Constitution Bench of this Court opined that the expression 'other authority' should not be read on the touchstone of the principle of 'ejusdem generis'.
Mathew, J. in his concurring but separate judgment raised a question as to for whose benefit the Corporations were carrying on the business and in answering the same came to the conclusion that the Respondents therein were 'States' within the meaning of Article 12 of the Constitution of India. [SCC para 109].
It was observed that even big companies and trade unions would answer the said description as they exercise enormous powers.
In UP State Cooperative Land Development Bank Ltd. v. Chandra Bhan Dubey & Ors. [AIR 1999 SC 753], the land development bank was held to be a State. This Court upon analyzing various provisions of Act and the rules framed thereunder observed:
"20It is not necessary for us to quote various other sections and rules but all these provisions unmistakably show that the affairs of the appellant are controlled by the State Government though it functions as a cooperative society and it is certainly an extended arm of the State and thus an instrumentality of the State or authority as mentioned under Article 12 of the Constitution." However, when the law provides for a general control over a business in terms of a statute and not in respect of the body in question, it would not be a 'State'. [See Federal Bank Ltd. (supra) K.R. Anitha and Others vs. Regional Director, ESI Corporation and Another [(2003) 10 SCC 303] and Bassi Reddy (supra)].
Madon, J. in Central Inland Water Transport Corporation Limited and questioned : - "Should then our courts not advance with the times ? Should they still continue to cling to outmoded concepts and outworn ideologies ? Should we not adjust our thinking caps to match the fashion of the day? Should all jurisprudential development pass us by, leaving us floundering in the sloughs of 19th century theories ? Should the strong be permitted to push the weak to the wall ? Should they be allowed to ride roughshod over the weak? Should the courts sit back and watch supinely while the strong trample underfoot the rights of the weak ? It was opined :
"26. The law exists to serve the needs of the society which is governed by it. If the law is to play its allotted role of serving the needs of the society, it must reflect the ideas and ideologies of that society. It must keep time with the heartbeats of the society and with the needs and aspirations of the people. As the society changes, the law cannot remain immutable. The early nineteenth century essayist and wit, Sydney Smith, said : 'When I hear any man talk of an unaltelrable law, I am convinced that he is an unalterable fool." The law must, therefore, in a changing society march in tune with the changed ideas and ideologies" Pradeep Kumar Biswas (supra) and Bassi Reddy (supra) were recently considered in Gayatri De vs. Mousumi Cooperative Housing Society Ltd. and Others [(2004) 5 SCC 90], wherein a mandamus was issued against a Cooperative Society on the ground that the order impugned therein was issued by an "administrator" appointed by the High Court who had also no statutory role to perform.
In Chain Singh vs. Mata Vaishno Devi Shrine Board & Anr. [2004 (8) SCALE 348], it was contended that a religious board was a 'State'.
Although Mata Vaishno Devi Shrine Board was constituted under a statute, it was per se not a State actor. It was observed that the decisions of this Court in Bhuri Nath and Others vs. State of J & K and Others [(1997) 2 SCC 745] requires reconsideration in the light of the principles laid down in Pradeep Kumar Biswas (supra).
In Virendra Kumar Srivastava vs. U.P. Rajya Karmachari Kal. Nigam and Another [2004 (9) SCALE 623], a Division Bench of this Court while applying the tests laid down in Pradeep Kumar Biswas (supra) observed that there exists a distinction between a 'State' based on its being a statutory body and a one based on the principles propounded in the case of Ajay Hasia & Ors. vs. Khalid Mujib Sehravardi & Ors. [(1981) 1 SCC 722] Recently a Division Bench of the Rajasthan High Court in Santosh 39) issued a direction to Pepsi Company and Coca-Cola and other manufacturers of carbonated beverages or soft drinks to disclose the composition and contents of the product including the presence of the pesticides and chemicals on the bottle, package or container, as the case may be, observing :
"In view of the aforesaid discussion we hold that in consonance with the spirit and content of Article 19(1)(g) and 21 of the Constitution the manufacturers of beverages namely Pepsi-Cola & Coca-Cola and other manufacturers of beverages and soft drinks, are bound to clearly specify on the bottle or package containing the carbonated beverages or soft drink, as the case may be, or on a label or a wrapper wrapped around it, the details of its composition and nature and quantity of pesticides and chemicals, if any, present therein." Pepsi Company and Coca-Cola are multinational companies. They are business concerns but despite the same this Court in Hindustan Coca- Cola Beverages (P) Ltd. vs. Santosh Mittal & Ors. [2004 (10) SCALE 360] by an order dated 6.12.2004 dismissed the Special Leave Petitions, stating:
"Mr. Harish N. Salve, learned senior counsel appearing for the petitioner in SLP(C) No. 24266-24268/2004 and Mr. Arun Jaitley, learned senior counsel appearing for the petitioners in SLP(C) Nos. 24413/2004 and 24661- 24663/2004 state that the petitioners will be advised to approach the High Court to seek clarification of exactly what kind of disclosure the High Court requires them to make. We record the statement and dismiss the special leave petitions giving liberty to the petitioners to approach the High Court for that purpose. In case the petitioners feel aggrieved by the order passed by the High Court on the clarification application, the dismissal of these special leave petitions will not come in their way in challenging the said order.
We may, however, place on record that the learned senior counsel for the petitioners intended to argue larger constitutional issues touching Articles 19 and 21 of the Constitution which have not been raised on a second thinking and we leave them open to be decided in some other appropriate case.
Though the special leave petitions are dismissed, but the operation of the order dated 3.11.2004 passed by the High Court suspending the operation of its judgment for six weeks, is extended by another two weeks from today." The expansion in the definition of State is not to be kept confined only to business activities of Union of India or other State Governments in terms of Article 298 of the Constitution of India but must also take within its fold any other activity which has a direct influence on the citizens. The expression "education" must be given a broader meaning having regard to Article 21A of the Constitution of India as also Directive Principles of the State Policy. There is a need to look into the governing power subject to the fundamental Constitutional limitations which requires an expansion of the concept of State action.
Constitutions have to evolve the mode for welfare of their citizens.
Flexibility is the hallmark of our Constitution. The growth of the Constitution shall be organic, the rate of change glacial. (See R. Stevens, the English Judges: Their Role in the Changing Constitution (Oxford 2002), p. xiii) [Quoted by Lord Woolf in 'The Rule of Law and a Change in the Constitution, 2004 Cambridge Law Journal 317] A school would be a State if it is granted financial aid. (See Jiby P. and Anr. 2002 (2) ALD 827) An association performing the function of Housing Board would be performing a public function and would be bound to comply with Human Rights Act, 1998. [See Poplar Housing and Regeneration Community by a private body may not. [See R (on the application of Heather and others) v. Leonard Cheshire Foundation and another (2002) 2 All ER 936] A school can be run by a private body without any State patronage. It is permissible in law because a citizen has fundamental right to do so as his occupation in terms of Articles 19(1)(g) and 26.
But once a school receives State patronage, its activities would be State activities and thus would be subject to judicial review. Even otherwise it is subjected to certain restrictions as regard its right to spend its money out of the profit earned. [See T.M.A. Pai Foundation and Others vs. State of Karnataka and Others (2002) 8 SCC 481 and Islamic Academy of 697].
Tests or the nature thereof would vary depending upon the fact of each case.
We must, however, remember that only because another authority would be an agency or instrument of the State, the same would not mean that there exists a relationship of "Principal and Agent" between the Government of the State and the Corporation or the society. Only its actions of promoting the sport making a law of cricket for the entire country, representing the country in international forum, appointing India's representative and the all pervasive control over players, managers and umpires are State actions.
Thus, all autonomous bodies having some nexus with the Government by itself would not bring them within the sweep of the expression 'State'.
Each case must be determined on its own merits.
Let us for determining the question have a look at the relevant decisions rendered in different jurisdictions.
INDIAN CASE LAW:
Pondicherry & Anr. [(1964) 1 SCR 656], it was held that the expressions "under the control of the Government of India" do not qualify the word "territory" and the expressions "under the control of the Government of India" and "within the territory of India" are distinct.
Mathew, J. in Sukhdev Singh (supra) referring to various authorities observed:
"In so far as public corporations fulfill public tasks on behalf of government, they are public authorities and as such subject to control by government." (SCC Para 87) International Airport Authority of India and Others [(1979) 3 SCC 489] laying down the factors which would enable the Court to determine as to whether a company or a society would come within the purview of "other authorities". [SCC paras 16, 18, 19 & 20].
In Ajay Hasia (supra), Sukhdev Singh (supra) and Ramana Dayaram Shetty (supra) were noticed with approval. [SCC Paras 8, 14 & 15]. See also Som Prakash Rekhi vs. Union of India and another [(1981) 1 SCC 449] The conflict between Ajay Hasia (supra) and Sabhajit Tewary vs. Union of India and Others [(1975) 1 SCC 485] has been resolved in Pradeep Kumar Biswas (supra) by overruling Sabhajit Tewary (supra) and, thus, there does not exist any conflict. The principles laid down in Ajay Hasia (supra) are not rigid ones and, thus, it is permissible to consider the question from altogether a different angle.
It is interesting to note that Bhagwati, J. in Ramana Dayaram Shetty Metropolitan Edison Company [42 L.Ed. (2d) 477] as against the majority opinion of Rehnquist, J. which was specifically noticed in M.C. Mehta and Another vs. Union of India and Others [(1987) 1 SCC 395]. [SCC para 29] Union and Others [(1997) 9 SCC 377], (since overruled on another point) in Workers and Others [(2001) 7 SCC 1] this Court deliberated upon the distinction between the Private Law and Public Law. [SCC para 26].
FOREIGN CASE LAW:
UNITED KINGDOM was entitled to issue licence enabling the persons to train horses meant for races. The Respondent's application for grant of licence was rejected on the ground that she was a woman. The action of the Club which was otherwise a private club was struck down holding that it exercises the function of licensing authority and controls the profession and, thus, its actions are required to be judged and viewed by higher standards. It was held that it cannot act arbitrarily.
In Greig & Others vs. Insole & Others [1978 (3) All ER 449], a Chancery Division considered in great details the rules framed by the ICC as also the Test and County Cricket Board of United Kingdom. The question which arose therein was as to whether the ICC and consequently the TCCB could debar a cricketer from playing official cricket as also county cricket only because the plaintiffs therein, who were well-known and talented professional cricketers and had played for English County Club for some years and tests matches, could take part in the World Series Cricket which promoted sporting events of various kinds. another [1987 (1) All ER 564] the Court exercised the power of the judicial review over a private body.
The grounds on which judicial review was given are:
(a) The Panel, although self-regulating, do not operate consensually or voluntary but had imposed a collective code on those within its ambit;
(b) The Panel had been performing a public duty as manifested by the government's willingness to limit legislation in the area and to use the Panel as a part of its regulatory machinery. There had been an "implied devolution of power" by the Government to the Panel in view of the fact that certain legislation presupposed its existence.
(c) Its source of power was partly moral persuasive. Such a power would be exercised under a statute by the Government and the Bank of England.
Lloyd LJ. in his separate speech opined :
"On the policy level, I find myself unpersuaded. Counsel for the panel made much of the word 'self-regulating'.
No doubt self-regulation has many advantages. But I was unable to see why the mere fact that a body is self- regulating makes it less appropriate for judicial review.
Of course there will be many self-regulating bodies which are wholly inappropriate for judicial review. The committee of an ordinary club affords an obvious example. But the reason why a club is not subject to judicial review is not just because it is self-regulating.
The panel wields enormous power. It has a giant's strength. The fact that it is self regulation, which means, presumably, that it is not subject to regulation by others, and in particular the Department of Trade and Industry, makes it not less but more appropriate that it should be subject to judicial review by the courts." (Emphasis supplied) [See also Aston Cantlow, Wilmcote and Billesley Parochial Church In Poplar Housing and Regeneration Community Association Ltd. of the defendant therein by a housing association known as Poplar Housing and Regeneration Community Association from one of the premises violated the provisions of the Human Rights Act. Lord Woolf CJ upon considering the provisions thereof as also a large number of decisions held that the Association discharges public function stating:
"The emphasis on public functions reflects the approach adopted in judicial review by the courts and text books since the decision of the Court of Appeal (the judgment of Lloyd LJ) in R v Panel on Take-overs and Mergers, ex p Datafin plc (Norton Opax plc intervening) [1987] 1 All ER 564, [1987] QB 815. (ii) Tower Hamlets, in transferring its housing stock to Poplar, does not transfer its primary public duties to Poplar. Poplar is no more than the means by which it seeks to perform those duties" [Emphasis supplied] Donoghue (supra) was, however, distinguished in Leonard Cheshire Foundation (supra) holding that the respondent therein having regard to its activities did not perform any public function. [See also R (on the application of West) v. Lloyd's of London, (2004) 3 All ER 251] Despite the same it was held that a judicial review cannot be refused at the threshold.
Tests evolved by the courts have, thus, been expanded from time to time and applied having regard to the factual matrix obtaining in each case.
Development in this branch of law as in others has always found differences.
Development of law had never been an easy task and probably would never be.
A different note, however, was struck in Football Association Ltd. (supra) and Aga Khan (supra).
In Football Association Ltd. (supra), the Football Association was the governing authority for football and all clubs had to be affiliated to it. With a view to facilitate the top clubs breaking away from the Football league, the Association declared void certain rules of the League and made it difficult for the clubs to terminate their relationship with it. The League sought judicial review wherein an argument of exercise of monopoly for the game by the Association was advanced but Rose, J. held that it was not susceptible to judicial review.
In Aga Khan (supra), the applicant was an owner of the racehorses and, thus, made himself bound to register with the Jockey Club. His horse was disqualified although it had won a major race whereafter he sought judicial review. The Court of Appeal opined that the Club could not be Greyhound Racing Club Ltd.' [1983] 1 WLR 1302 in preference to Datafin (supra). The Court therein, however, acknowledged that the Club regulated a national activity. Sir Thomas Bingham M.R., however, opined therein that if it did not regulate the sport then the government would in all probability be bound to do so.
It was held that private power although may affect the public interest and livelihood of many individuals but a sporting body would not be subject to public law remedy. One of the factors which appears to have influenced the court in arriving at the said decision was that if these bodies are deemed to fall within the public law then "where should we stop"? It is interesting to note that despite the same it held that judicial review would lie in certain areas.
We with great respect to the learned Judges do not find ourselves in agreement with the aforementioned views for the reasons stated in the later part of this judgment. Chancery Division and Court of Appeal, in our opinion, were not correct in not applying the law laid down in Jockey Club (supra) and Datafin (supra) to the sporting bodies.
In Football Association (supra) and Aga Khan (supra) earlier decisions were not followed. We have noticed that when an action of such a body infringed the right of work of a citizen or was in restraint of trade, the same had been struck down by the English Courts. In England, there are statutory rights; but in India a right to carry on an occupation is a fundamental right. Right to work although is not a fundamental right but a right to livelihood is in terms of Article 21 of the Constitution of India. This Court, it may be recorded, need not follow the decisions of the English Courts. [See Liverpool & London S.P. & I Association Ltd. (supra)] A CRITIQUE OF ENGLISH DECISION IN FOOTBALL ASSOCIATION (SUPRA) AND AGA KHAN (SUPRA) Michael J. Beloff in his article 'Pitch, Pool, Rink, Court? Judicial Review in the Sporting World' reported in 1989 Public Law 95 while citing several instances as to when no relief was granted in case of arbitrary action on the part of such strong and essential sport bodies advocated for a judicial review stating:
"As for the argument that the sports bodies know best, experience may perpetuate, not eliminate error; and Wilberforce J. indicated in Eastham that the rules of sporting bodies cannot be treated as the Mosaic or Medan law.
It is, I suspect, the floodgates argument that is the unspoken premise of the Vice-Chancellarial observations, the fear that limited court time will be absorbed by a new and elastic category of case with much scope for abusive or captious litigation. It is an argument which intellectually has little to commend it, and pragmatically is usually shown to be ill-founded.
For it is often the case that, once the courts have shown the willingness to intervene, the standards of the bodies at risk of their intervention tend to improve. The threat of litigation averts its actuality.
There is therefore no reason why the field of sport cannot define law's new, or at any rate next, frontier; and if Britain can no longer head the world in sport itself, perhaps it can do so in sporting litigation. Members of the bar, on your marks!" (Emphasis supplied) P.P. Craig in his Administrative Law at page 817 noticing the aforementioned judgments and upon enumerating the reasons therefor, observed:
"There is no doubt that people will differ as to the cogency of these reasons. The line drawn by the cases considered within this section has, not surprisingly, been contested. Pannick has argued that the exercise of monopolistic power should serve to bring bodies within the ambit of judicial review. To speak of a consensual foundation for a body's power is largely beside the point where those who wish to partake in the activity will have no realistic choice but to accept that power. Black has argued that the emphasis given to the contractual foundations for a body's power as the reason for withholding review are misplaced. She contends that the courts are confusing contract as an instrument of economic exchange, with contract as a regulatory instrument. She argues further that the reliance placed on private law controls, such as restraint of trade and competition law, may also be misplaced here. Such controls are designed for the regulation of economic activity in the market place, and they may not be best suited to control potential abuse of regulatory power itself." (Emphasis added)
SCOTLAND:
Association Limited [1965 SLT 171], a Scottish Court held the Council with regard to its nature of function to the effect that it can impose fine or expel a member would be amenable to judicial review. If they attempt to exercise upon a member a power or authority which he by becoming a member did not give them, i.e., acting ultra vires or if by so acting they have done him injury, he will not be precluded from seeking redress, nor the Court of law hold themselves precluded from giving him redress. It was emphasized that in a case of this nature they are bound by the rules of natural justice.
NEW ZEALAND:
NZLR 159, the Court noticed the factors which carry weight in entertaining judicial review, stating inter alia :
"2. As the wrong body argument fails, the sole issue is whether the New Zealand (179) Union has acted against its objects of promoting, fostering and developing the game. This cannot be dismissed as only a matter of internal management or administration; it goes to fundamentals.
3. In its bearing on the image, standing and future of rugby as a national sport, the decision challenged is probably at least as important as if not more important than any other in the history of the game in New Zealand.
4. The decision affects the New Zealand community as a whole and so relations between the community and those, like the plaintiffs, specifically and legally associated with the sport. Indeed judicial notice can be taken of the obvious fact that in the view of a significant number of people, but no doubt contrary to the view of another significant number, the decision affects the international relations or standing of New Zealand.
5. While technically a private and voluntary sporting association, the Rugby Union is in relation to this decision in a position of major national importance, for the reasons already outlined. In this particular case, therefore, we are not willing to apply to the question of standing the narrowest of criteria that might be drawn from private law fields. In truth the case has some analogy with public law issues. This is not to be pressed too far. We are not holding that, nor even discussing whether, the decision is the exercise of a statutory power although that was argued. We are saying simply that it falls into a special area where, in the New Zealand context, a sharp boundary between public and private law cannot realistically be drawn." It was opined that the petitioner therein had the necessary standing to seek judicial review. The Court observed that the floodgate argument advanced against entertaining judicial review could not be accepted as the case was so special that the argument carries even less conviction than it is usually apt to do when invoked against some moderate advance in the common law.
AUSTRALIA:
[(1998) 72 ALJR 208], Kirby J. noticed that in the arena of liability of public authority declaring the limits of the common law liability of the public authority has been criticized as unsatisfactory and unsettled, as lacking foreseeable and practical outcomes and as operating ineffectively and inefficien
