Sanjay Singh Rajput vs Senior Vice President Shri T. ...
2022 Latest Caselaw 7817 MP

                 HIGH COURT OF MADHYA PRADESH,
                          AT JABALPUR

              HON'BLE SHRI JUSTICE SANJAY DWIVEDI

                         ON THE 15th OF JUNE, 2022

                      WRIT PETITION No.15828/2015

BETWEEN:-

Sanjay Singh Rajput,
S/o. Shri Mahendra Singh Rajput,
Aged about 26 years,
Assistant Manager Bharat Oman Refineries Ltd.
Bina District Sagar (M.P.)
R/o. Pathar Mohalla, Shiv Chowk,
Ganj Basoda, District vidisha (M.P.)

                                                      ....PETITIONER

(REPRESENTED BY SHRI SHANTANU CHOURASIYA, ADVOCATE)

AND

1.   Senior Vice President Shri T. Somnath
     (Human Resources BORl Township)
     Bina District Sagar (M.P.)
2.   Shri R.S. Krishan Shankar Vice President
     Human Resources BORL Township,
     Bina District Sagar (M.P.)
3.   Managing Director BORL Township,
     Bina District Sagar (M.P.)
4.   Bharat Oman Refineries Ltd. A
     Company Promoted by Bharat
     Petroleum Corporation Ltd.
     Mumbai (M.H.)
5.   Bharat Petroleum Corporation Ltd.
     Mumbai (M.H.)
                                                     ...RESPONDENTS

                                    -:-       2   -:-
                                                                      W.P.No.15828/2015


(RESPONDENTS NO.1 TO                     4       REPRESENTED   BY    SHRI        UTTAM
MAHESHWARI, ADVOCATE)


Reserved on : 03.03.2022
Delivered on : 15.06.2022

                                     (O R D E R)

Invoking Article 226 of the Constitution of India, the petitioner has

filed this petition questioning the legality, validity and propriety of the order of his

termination from service.

2. Over the course of pendency of the petition, a reply has been filed by

the respondent raising a preliminary objection with regard to maintainability of the

petition.

3. The preceding order-sheet dated 16.10.2015 does reflect that the

learned counsel for the petitioner was asked to address on the question of tenability

of the petition as direction is being sought against the action of respondent No.4, a

limited company registered under the Companies Act, 1956. Thereafter, on

15.09.2020 it was redirected that the petitioner has to first establish as to how the

petition is tenable before this Court.

4. The learned counsel for the parties argued on the question of

maintainability of the petition with a clear understanding that if ultimately it is

found that the petition is maintainable then only it shall be heard on merits.

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W.P.No.15828/2015

5. The necessary facts of the case in brief are that the petitioner who is a

B.Tech (Electronics & Communication Branch) graduated in 2010 batch, appointed

as Management Trainee w.e.f. 06.12.2012 with certain terms and conditions. The

appointment has been given by respondent No.4/Company i.e. Bharat Oman

Refineries Limited (BORL). The Company was incorporated on 25.02.1994 in

pursuance to joint venture agreement (JVA) between Bharat Petroleum Corporation

Limited i.e. Maharatna Public Sector Undertaking and a Union Government

Company run by the Board which comprises of ex-officio Government Officers.

BORL is financially, functionally and administratively controlled, managed and

operated by the Union Government through BPCL. As per the petitioner,

respondent No.4/Company is promoted by BPCL, having 49% share while the

share of respondent No.4 is 25% and remaining shares are of Madhya Pradesh

Government. The petitioner, therefore, is claiming that BPCL has full control over

respondent No.4/Company and as such amenable to writ jurisdiction of this Court.

The appointment was given by respondent No.4/Company to the

petitioner by issuing appointment order Annexure-P/1. The said appointment

contained a condition that only after satisfactory performance, the petitioner would

be absorbed as Assistant Manager. The petitioner was initially appointed for a

period of one year and after completion of said period, it was further extended for a

period of three months from 05.12.2013 to 05.03.2014 with a stipulation that after

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W.P.No.15828/2015

completing the said extended period of training, if the petitioner's performance is

found satisfactory, his services would be confirmed as Assistant Manager in the

Company w.e.f. 06.03.2014. Vide order dated 01.07.2015, the petitioner was issued

a notice informing him that though he is confirmed as Assistant Manager and was

under probation for a period of one year effective from 06.03.2014, but petitioner's

performance was not found satisfactory, therefore, the period of probation has been

extended upto 30.09.2015 asking the petitioner to improve his performance during

the extended period of probation otherwise his services would be liable to be

terminated.

On 15.07.2015 a letter was issued to the petitioner informing that the

petitioner was involved in breach of conduct as defined under BORL Conduct,

Disciplinary and Appeal Rules. Since, the matter was being investigated through an

enquiry, the petitioner was put under suspension during pendency of enquiry. The

petitioner although submitted reply to the notice issued but it was not found

satisfactory, therefore, an Enquiry Committee was constituted for conducting

enquiry and to prove the charges levelled against the petitioner.

6. The petition was initially filed challenging the action taken by

respondent No.4 proposing enquiry and placing the petitioner under suspension but

during the pendency of petition, final order has been passed confirming the order

dated 06.10.2015.

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W.P.No.15828/2015

7. Respondents No.1 to 4 have filed their reply raising preliminary

objection in respect of tenability of petition mentioning therein that respondent-

Company is not financially, functionally or administratively dominated by or is

under the control of Government and is not a State in terms of Article 12 of the

Constitution of India, therefore, respondent No.4 is not amenable to writ

jurisdiction of this Court and this petition is therefore liable to be dismissed.

8. Heard the counsel for the parties and perused the documents available

on record.

9. Counsel for both the parties have drawn attention of this Court towards

the documents available on record and also placed reliance upon the judgments

substantiating their stand.

10. So far as the counsel for the petitioner is concerned, he has placed

reliance on a decision rendered by Seven-judges Bench of Supreme Court in re

Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and others

(2002) 5 SCC 111 and also on the decision passed by our High Court in

W.P.No.8786/2021 (M/s Shanti Construction v. M/s Aavantika Gas Ltd. & Ors.).

11. The learned counsel for the respondents has also placed reliance upon

the decision in re Pradeep Kumar Biswas (supra) and submitted that the yardstick

laid down by the Supreme Court so as to determine a body falls within the

definition of State as per Article 12 of the Constitution of India. According to

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W.P.No.15828/2015

which, respondent No.4 is not a State and therefore writ petition is not maintainable

before this Court.

12. In case of Pradeep Kumar Biswas (supra), the Supreme Court relying

upon a test formulated in its earlier decision viz. Ajay Hasia v. Khalid Mujib

Sehravardi (1981) 1 SCC 722, has observed as under:-

"27. Ramana [(1979) 3 SCC 489] was noted and quoted with approval in extenso and the tests propounded for determining as to when a corporation can be said to be an instrumentality or agency of the Government therein were culled out and summarised 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 impregnated 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.

40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a

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W.P.No.15828/2015

State within the meaning of Article 12. The question in each case would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State."

13. The counsel for the petitioner during the course of argument had

emphasized that respondent No.4 is the joint venture of BPCL. BPCL is a

government sponsored company and is an undertaking of Union Government

having full financial control over the said company. Shri Chourasiya has submitted

that BPCL though a promoter company of BORL and as per article of association of

BORL, BPCL has a right to appoint a Chairman alongwith four nominee Directors

and in the event of a dead-log BPCL has a right of casting vote. Shri Chourasiya

has also contended that the BPCL through its officers and employees placed in

BORL has deep-rooted control on the day-to-day affairs of the company which is

clearly evident from the speech of Chairman in 21st Annual General Meeting of

BPCL. It is also submitted that BPCL has absolute administrative control over

BORL. As per Shri Chourasiya, both BORL and BPCL have identical trade-mark

and according to him, BORL is instrumentality to State and amenable to writ

jurisdiction.

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W.P.No.15828/2015

14. I have gone through the judgment in the case of Pradeep Kumar

Biswas (supra) laying down the criteria to determine any body to be instrumentality

of State if a body is financially, functionally and administratively dominated by or

under the control of the Government. Such control must be particular to the body in

question and must be pervasive. However, here in this case in a whole article of

association of BORL nowhere it is revealed and none of the provisions indicates

that the Government has any control over the BORL. It is BPCL which is a joint

venture having share in the respondent-Company with a limited rights. Merely

because Chairman is nominated by BPCL among its Directors with their four

members of Board, it does not mean that the Government has direct control over

the BORL. Respective provision i.e. Clause 100-2 further clarifies that Oman Oil

Corporation (OOC) nominated two members of the Board including the Vice-

Chairman. However, if Clause 176 of article of association is seen it is clear that

BPCL shall provide OOC its written no-objection in the form as may be required by

OOC for this purpose. It shows dominating role and feature of OOC in the joint

venture. For ready reference, Clauses 176.1 and 176.2 are reproduced hereinunder:-

176.1 Except as otherwise provided in Articles 175.1 to 175.4 (both inclusive), BPCL hereby irrevocably and unconditionally consents and agrees at all times to consent to OOC, in Associated Companies and/or any of their Affiliates entering into any future ventures, collaborations, tie-up through investment in shares or debentures or technology transfer licences or trade mark licences or investment by whatever name called with any other person or

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W.P.No.15828/2015

entity in India in the same field in which the Company is engaged at the Relevant Time BPCL, shall provide OOC its written no- objection/consent in the form as may be required by OOC for this purpose.

176.2 Except as otherwise provided in Articles 175.1 to 175.4 (both inclusive), the Company hereby irrevocably and unconditionally consents and agrees at all times to consent to OOC, its Associated Companies and/or any of their Affiliates entering into any future ventures, collaborations, tie-up through investment in shares or debentures or technology transfer licences or trade mark licences or investment by whatever name called with any other person or entity in India in the same field in which the Company is engaged at the relevant time. The Company shall provide OOC its written no-objection/consent in the form as may be required by OOC for this purpose.

15. Likewise Clause 180 deals with Arbitration clause. Clause 180.1

makes it clear that any dispute or difference arises out of or in connection with

interpretation or implementation of IRA, then dispute shall be governed by

Arbitration Rules of Singapore International Arbitration Centre. The appointment of

Arbitrator would be by OOC and BPCL and then these two Arbitrators will appoint

another one. It also indicates that BPCL has no commanding position in a dispute if

any arises. By memorandum dated 04.09.2020 the Government of India, Ministry

of Finance in pursuance to the memorandum issued on 07.03.2020 answered the

queries in which query No.27 and its answer is as follows:-

27 How will the March 2020 increase of BORL presently is a subsidiary of BPCL's shareholder equity in BORL BPCL and hence a state-controlled impact the company and the entity. However, once the Government divestment process, given that this of India divests its shareholding in presumably means that BORL will BPCL, the status of BORL will change

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W.P.No.15828/2015

now be classified as a State- accordingly.

controlled entity.

It demonstrates that BORL was not considered to be a permanent State

instrumentality but it was classified as State Control Entity considering the share of

BPCL in the year 2020. On the contrary, letter dated 15.10.2020 (Annexure-P/22)

wherein the learned counsel for the petitioner made query with regard to account of

investment made by Government of India on its own or through BPCL. The BPCL

has answered that there is no investment into BORL directly by the Government of

India on its own. It clearly reveals that the Government of India has no direct

financial control or relation with the BORL, but it is the BPCL with government

undertaking promoting BORL and as such investing land of 1538.61 acres.

16. There is nothing available on record indicating that the Government

has any control over BORL in the nature of financial, functional or administrative.

It is nowhere available on record to show that a control which is required to

determine a body as a State organisation, that is also not available because as per

the requirement, the control must be pervasive but here in this case no indication

about any type of control of Government over the respondent-BORL. However, the

petitioner has also placed reliance upon a decision of Division Bench of this Court

in the case of M/s. Shanti Construction (supra) in which the Division Bench after

relying upon the case of Pradeep Kumar Biswas (supra) and other cases of

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W.P.No.15828/2015

Supreme Court has determined that M/s Aavantika Gas Limited is a body within the

definition of State. But that judgment does not give any help to the petitioner at this

stage for the reason that in SLP No.19801/2021 preferred against that judgment, the

Supreme Court vide order dated 10.12.2021 stayed the operation of said judgment.

Even otherwise, that judgment and facts involved therein are not similar to the case

in hand because in the said case both the companies of joint venture were

government undertakings i.e. Gas Authority of India Ltd. (GAIL) and Hindustan

Petroleum Corporation Ltd. (HPCL), in which the Division Bench has after taking

note of the existing facts of that case observed the body is financially, functionally

and administratively dominated by or under the control of Government, but here in

this case no such situation exists and no such indication made from the available

documents on record even from the memorandum of association of BORL. The

Division Bench has also observed that the entire shares were held by the bodies

which are State within the meaning of Article 12 of the Constitution but here in this

case the situation is not same because the BPCL a government undertaking has a

limited share. The Division Bench has observed the majority financing or

shareholding is not crucial or determining factor for the purpose of deciding

whether the entity is covered as an authority or instrumentality of the State but even

otherwise considered the significant shareholding and financial involvement of the

Government was sufficient to bring the entity within the ambit of Article 12 of the

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Constitution. But here in this case, BORL has no such situation and nowhere it

reveals that the Government has any control especially the pervasive control over

the BORL. It was limited role of BPCl of appointing Chairman, but nothing more.

It is also not clear as to how BPCL or Government has any financial control over

the BORL. In such a condition, especially the fact that a dispute which is being

raised by the petitioner is not related with public duty but it is a private dispute that

too about termination of service of the petitioner in which enquiry was conducted

and appeal was also preferred but dismissed.

17. In view of the above facts and circumstances and the test laid down by

the Supreme Court in the case of Pradeep Kumar Biswas (supra), I am of the

opinion that the petitioner failed to substantiate that BORL is a State within the

meaning of Article 12 of the Constitution of India and as such the petition filed by

the petitioner challenging his termination order is not maintainable before this

Court.

18. Accordingly, the petition is dismissed on the point of preliminary

objection raised by the respondents with regard to tenability of the petition.

(Sanjay Dwivedi) Judge

SUDESH Digitally signed by SUDESH KUMAR SHUKLA DN: c=IN, o=HIGH COURT OF MADHYA sudesh PRADESH, ou=HIGH COURT OF MADHYA PRADESH, postalCode=482001, st=Madhya Pradesh,

KUMAR 2.5.4.20=1d5e479f08e68eda8f9271dbbe2c4bc 3916264aec736f7c5f5885257f5eeaeb7, pseudonym=70EE703D36E97ABB20BA3C79C9 21929E09400A16,

SHUKLA serialNumber=7D462390C18350EF7C40811B1 2AB45D82AF1259878762BAC356DCFA877F026 54, cn=SUDESH KUMAR SHUKLA Date: 2022.06.17 14:40:57 +05'30'