DINESH KUMAR BEHERA Vs. ORISSA SPONGE IRON LTD

JUDGEMENT

(1.) PETITIONER challenges the order of termination dated April 25, 1989 passed by the functionaries of the Orissa Sponge Iron Limited (hereinafter referred to as the 'company' ).

(2.) THE primary ground of challenge is that Rule 10 (a) of the Executives' Service Conditions of the Company in purported exercise of which the order of termination has been passed is unsustainable in law. According to the petitioner, the rule confers unbridled and arbitrary power to terminate service of an employee. Further the termination was without any reason and/or basis. The Company questions maintainability of application on the ground that it is not "state" within the meaning of Article 12 of the Constitution of India, 1950 (in short, the 'constitution') and, therefore, not amenable to the writ jurisdiction of this Court. Additionally it is submitted that the rule in question is legal and suffers from no infirmity.

(3.) SINCE the question relating to maintainability of the writ application has been raised, we shall deal with that aspect first with reference to the fact situation as portrayed by the parties. The petitioner's stand in short is that the prospectus issued by the Company at the time of issue of equity shares, clearly shows that it is covered by Article 12. The share-holding position as available from the annual report up to September 24, 1987, according to him, shows that more than 50% of the paid up share capital was owned by the Government/government sponsored financial institutions which are State within the meaning of Article 12 of the Constitution. More than 20% shares are also owned by several corporate bodies. So far as constitution of the Board of Directors is concerned, it is asserted that the State of Orissa has deep and pervasive control over the management of the affairs of the Company. The Company in the counter-affidavit has asserted that no share capital of the Company is held or owned by any State or Central Government and/or State Governments; the Company is a non-Government Company and not a Government company in terms of Section 617 of the Companies Act, 1956; it does not enjoy any monopoly status which is State conferred or State protected; and the Managing Director and other Directors of the Company are not appointed by the Governor of Orissa. There is no form of control of the Government of Orissa in the day-to-day management of the Company. In short, the company's case is that it is not an instrumentality of the State so as to bring it within the meaning and expression of "other authority" appearing in Article 12 of the Constitution.