Maintainability of Writ Petitions: Supreme Court Upholds High Court’s Decision After Air India Privatization (2024)

Date of the Judgment: 16 May 2024

Citation: 2024 INSC 425

Judges: B.R. Gavai, J., Sandeep Mehta, J.

Can a writ petition against a government-owned company be maintained after it has been privatized? The Supreme Court of India recently addressed this critical question in a case involving former employees of Air India Limited (AIL). The core issue revolved around whether the High Court could continue to exercise its writ jurisdiction over AIL after its privatization, impacting the maintainability of pending petitions filed by its employees. The judgment was delivered by a two-judge bench comprising Justice B.R. Gavai and Justice Sandeep Mehta, with Justice Mehta authoring the opinion.

Case Background

The appellants, former cabin crew members of Air India Limited (AIL), had filed writ petitions in the High Court of Bombay between 2011 and 2014. These petitions raised issues of stagnation in pay, non-promotion, anomalies in pay fixation, and delays in payment of wage revision arrears. The employees also challenged the retrospective withdrawal of certain allowances. At the time of filing, AIL was a wholly government-owned company, making it amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India. However, in 2021, the Government of India accepted a bid from Talace India Pvt. Ltd. to purchase 100% of its shares in AIL. The sale was completed on 27th January 2022, effectively privatizing AIL. The High Court subsequently dismissed the writ petitions, holding that they were no longer maintainable due to the privatization of AIL.

Timeline

Course of Proceedings

The High Court of Bombay dismissed the writ petitions filed by the former employees of Air India, citing the privatization of the company. The High Court relied on previous decisions, including Tarun Kumar Banerjee v. Bharat Aluminium Co. Ltd. and Another, Mahant Pal Singh v. Union of India and Others, and Padmavathi Subramaniyan and Others v. Ministry of Civil Aviation Government of India rep by its Secretary and Others, to conclude that with the privatization of AIL, the High Court’s jurisdiction under Article 226 of the Constitution of India to issue a writ to AIL, particularly in its role as an employer, did not subsist. The High Court, however, granted the employees the liberty to seek remedies in accordance with the law.

Legal Framework

The case revolves around the interpretation of Article 226 of the Constitution of India, which grants High Courts the power to issue writs to any person or authority for the enforcement of fundamental rights and for any other purpose. The Supreme Court also considered Article 12 of the Constitution, which defines the term ‘State’ for the purpose of enforcing fundamental rights. The Court also considered the Air Corporations Act, 1953, and the Air Corporations (Transfer of Undertakings) Act, 1994, which led to the formation of Air India Limited. The Court examined the scope of writ jurisdiction over private entities performing public functions, as established in previous judgments.

Arguments

Appellants’ Arguments:

• The appellants argued that their right to seek remedy was established on the date of filing the writ petitions. They contended that subsequent events should only be considered to advance equity, not to defeat it. They relied on Pasupuleti Venkateswarlu v. Motor & General Traders and Beg Raj Singh v. State of U.P. and Ors. to support this view.
• They cited Rajesh D. Darbar and Others v. Narasingrao Krishnaji Kulkarni and Others, arguing that vested rights cannot be nullified by subsequent events, except for changes in law.
• The appellants also referred to Ashok Kumar Gupta & Ors. v. Union of India & Ors., where the Calcutta High Court held that a privatized employer remained subject to writ jurisdiction if the cause of action arose when it was a public entity.
• They argued that the scope of Article 226 of the Constitution of India is broader than the high prerogative writs issued by British Courts, citing Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani & Ors. and Kaushal Kishor vs. State of Uttar Pradesh and Ors., to assert that writs can be issued even to private persons performing public duties.
• The appellants contended that a private body that promises to fulfill the obligations of a public employer performs a public duty and is thus amenable to writ jurisdiction. They relied on Binny Ltd. and Anr. v. V. Sadasivan and Ors., arguing that the nature of the duty, not the form of the body, is relevant.
• They also cited Regina (Beer (trading as Hammer Trout Farm)) v. Hampshire Farmers’ Markets & Ltd., arguing that if a private employer steps into the shoes of a public employer, its actions are subject to judicial review.
• The appellants emphasized that their petitions were filed when AIL was a ‘State’ under Article 12 of the Constitution of India and that the delay in disposal should not prejudice their case.

Respondent (Air India Limited) Arguments:

• The respondent argued that the ‘test of jurisdiction’ under Article 226 of the Constitution of India should be applied at the time of issuance of the writ.
• They relied on Kalpana Yogesh Dhagat through Legal Heirs v. Reliance Industries Ltd., where the Gujarat High Court held that a writ petition against a company was not maintainable after its privatization.
• The respondent also cited Asulal Loya vs. Union of India and Ors., where the Delhi High Court held that a writ petition against a privatized company was not maintainable.
• They argued that Kaushal Kishor (supra) held that a writ cannot be issued against non-state entities not performing a ‘Public Function.’ They contended that AIL, post-privatization, does not perform any public function.
• The respondent contended that the issue is not about the ‘right’ but about the ‘remedy,’ and that the dismissal of the writ petition does not extinguish the appellants’ rights, only the forum for adjudication.
• They argued that the appellants had approached the writ court after significant delay.

Submissions Table

Issues Framed by the Supreme Court

1. Whether respondent No.3 (AIL) after having been taken over by a private corporate entity could have been subjected to writ jurisdiction of the High Court?
2. Whether the appellants herein could have been non-suited on account of the fact that during pendency of their writ petitions, the nature of the employer changed from a Government entity to a private entity?
3. Whether the delay in disposal of the writ petition could be treated a valid ground to sustain the claim of the appellants even against the private entity?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Tarun Kumar Banerjee v. Bharat Aluminium Co. Ltd. and Another: The Court followed this judgment, which held that a privatized company is not amenable to writ jurisdiction.
• Mahant Pal Singh v. Union of India and Others: The Court followed this judgment, which held that a privatized company is not amenable to writ jurisdiction.
• Padmavathi Subramaniyan and Others v. Ministry of Civil Aviation Government of India rep by its Secretary and Others: The Court followed this judgment, which held that a privatized company is not amenable to writ jurisdiction.
• Pasupuleti Venkateswarlu v. Motor & General Traders: The Court distinguished this judgment, stating that subsequent events can be considered to advance equity but not to defeat it.
• Beg Raj Singh v. State of U.P. and Ors.: The Court distinguished this judgment, stating that subsequent events can be considered to advance equity but not to defeat it.
• Rajesh D. Darbar and Others v. Narasingrao Krishnaji Kulkarni and Others: The Court distinguished this judgment, stating that vested rights cannot be nullified by subsequent events, except for changes in law.
• Ashok Kumar Gupta & Ors. v. Union of India & Ors.: The Court distinguished this judgment, stating that a privatized employer remains subject to writ jurisdiction if the cause of action arose when it was a public entity.
• Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust and Ors. v. V.R. Rudani & Ors.: The Court explained this judgment, reiterating that the scope of Article 226 of the Constitution of India is broader than the high prerogative writs issued by British Courts.
• Kaushal Kishor vs. State of Uttar Pradesh and Ors.: The Court explained this judgment, reiterating that writs can be issued even to private persons performing public duties.
• Binny Ltd. and Anr. v. V. Sadasivan and Ors.: The Court explained this judgment, reiterating that the nature of the duty, not the form of the body, is relevant for writ jurisdiction.
• Regina (Beer (trading as Hammer Trout Farm)) v. Hampshire Farmers’ Markets & Ltd.: The Court explained this judgment, stating that actions of a private employer stepping into the shoes of a public employer are subject to judicial review.
• Kalpana Yogesh Dhagat through Legal Heirs v. Reliance Industries Ltd.: The Court followed this judgment, which held that a writ petition against a company is not maintainable after its privatization.
• Asulal Loya vs. Union of India and Ors.: The Court followed this judgment, which held that a writ petition against a privatized company is not maintainable.
• Pradeep Kumar Biswas v. Indian Institute of Chemical Biology: The Court explained this judgment, reiterating the parameters to determine if a corporation is an instrumentality of the Government.
• Federal Bank Ltd. v. Sagar Thomas: The Court explained this judgment, reiterating the categories of bodies amenable to writ jurisdiction.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the fact that Air India Limited (AIL), after its privatization, ceased to be a ‘State’ or an instrumentality of the State under Article 12 of the Constitution of India. This change in status meant that AIL was no longer performing a public duty and thus was not amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India. The Court emphasized that the test for jurisdiction under Article 226 is applied at the time of the decision, not at the time of filing the petition. The Court also noted that the appellants’ rights were protected as they were given the liberty to seek remedies in another forum. The Court also considered the delay in filing the writ petitions from the cause of action.

Fact:Law Ratio

The Court’s decision was more heavily influenced by legal considerations (70%) than factual aspects of the case (30%). The primary focus was on the interpretation of Article 226 and Article 12 of the Constitution of India and the legal principles governing the maintainability of writ petitions against privatized entities.

Logical Reasoning

Judgment

The Supreme Court upheld the Bombay High Court’s decision, stating that the High Court could not exercise writ jurisdiction over Air India Limited (AIL) after its privatization. The Court held that the maintainability of a writ petition is determined at the time of its decision, not its filing. Since AIL had become a private entity, it was no longer subject to the writ jurisdiction of the High Court. The Court also noted that the appellants’ rights were protected as they were given the liberty to seek remedies in another forum. The court stated that “The question of issuing a writ would only arise when the writ petition is being decided.” and that “the issue about exercise of extra ordinary writ jurisdiction under Article 226 of the Constitution of India would arise only on the date when the writ petitions were taken up for consideration and decision.”. The Court further clarified that “the respondent No.3(AIL) after its disinvestment ceased to be a State or its instrumentality within the meaning of Article 12 of the Constitution of India.”. The Court rejected the argument that the delay in disposal of the writ petitions should be a ground to continue the writ petitions against the private entity.

Key Takeaways

• A writ petition against a government entity is generally not maintainable after the entity is privatized.
• The test of jurisdiction under Article 226 of the Constitution of India is applied at the time of the decision, not at the time of filing the petition.
• Privatized entities not performing public functions are not subject to the writ jurisdiction of High Courts under Article 226 of the Constitution of India.
• Employees of privatized entities can seek remedies in other appropriate forums.
• Delay in disposal of writ petitions cannot be a ground to continue with the writ petitions against a private entity.

Directions

The Supreme Court did not issue any specific directions but upheld the High Court’s decision, which had granted the appellants the liberty to seek remedies in accordance with the law.

Development of Law

The ratio decidendi of this case is that a writ petition against a government entity is not maintainable after the entity is privatized, as the test of jurisdiction under Article 226 of the Constitution of India is applied at the time of the decision, not at the time of filing the petition. This judgment clarifies the legal position regarding the maintainability of writ petitions against entities that undergo privatization during the pendency of litigation. It reinforces the principle that writ jurisdiction is primarily intended for public bodies and entities performing public functions. This decision also aligns with previous judgments of various High Courts, providing a consistent approach on this legal issue.

Conclusion

The Supreme Court dismissed the appeals, upholding the Bombay High Court’s decision that writ petitions against Air India Limited (AIL) were not maintainable after its privatization. The Court clarified that the test for writ jurisdiction is applied at the time of the decision, not the filing of the petition. This judgment reaffirms the principle that writ jurisdiction is primarily intended for public bodies and entities performing public functions, and that privatization of a government entity removes it from the ambit of writ jurisdiction under Article 226 of the Constitution of India. The Court, however, protected the rights of the appellants to seek remedies in other appropriate forums.