Supreme Court clarifies maintainability of writ petition against Institute of Banking Personnel Selection in recruitment dispute (29 April 2019)

Introduction

Date of the Judgment: 29 April 2019
Citation: Civil Appeal No. 4455 of 2019 (Arising out of SLP (C) No.18201 of 2015)
Judges: L. Nageswara Rao, J. and M.R. Shah, J.

Can an organization that conducts recruitment for public sector banks be considered a ‘State’ under Article 12 of the Constitution, making it subject to writ jurisdiction? The Supreme Court of India addressed this question in a case involving the Institute of Banking Personnel Selection (IBPS). The court examined whether IBPS, which conducts recruitment exams for various banks, performs a public duty that would make it amenable to writ jurisdiction.

The two-judge bench of Justices L. Nageswara Rao and M.R. Shah delivered the judgment. Justice L. Nageswara Rao authored the opinion.

Case Background

In 2013, the Institute of Banking Personnel Selection (IBPS) issued an advertisement for the recruitment of Clerks (Clerk-III) in Public Sector Banks. Rajbir Surajbhan Singh, the appellant, participated in the Common Written Examination (CWE) on 01 October 2013 and scored 110 out of 200 marks. He was called for an interview on 14 February 2014.

During the interview, Rajbir submitted a caste certificate dated 28 October 2010, which identified him as belonging to the Ahir community, an Other Backward Class (OBC). He also submitted another certificate dated 29 January 2014, in the prescribed format, stating he belonged to the OBC category and did not fall under the ‘creamy layer’.

The results were announced on 01 April 2014, and Rajbir was informed that his candidature was cancelled because he failed to produce a certificate issued between 01 April 2013 and 31 March 2015, as required by the advertisement. Consequently, he was disqualified from the selection process.

Timeline

Course of Proceedings

Rajbir Singh filed a Writ Petition challenging his disqualification. The High Court dismissed the petition, relying on a previous judgment that held IBPS was not a ‘State’ under Article 12 of the Constitution and did not discharge public functions. The High Court concluded that IBPS was not subject to the writ jurisdiction of the High Court under Article 226 of the Constitution.

Aggrieved by the decision of the High Court, Rajbir Singh filed an appeal before the Supreme Court.

Legal Framework

The primary legal provisions involved in this case are:

• Article 12 of the Constitution of India: Defines the term ‘State’ for the purpose of enforcing fundamental rights. It includes the Government and Parliament of India, the Government and Legislature of each State, and all local or other authorities within the territory of India or under the control of the Government of India.
• Article 226 of the Constitution of India: Grants High Courts the power to issue writs for the enforcement of fundamental rights and for any other purpose.

The court also considered the following statutes:

• Societies Registration Act, 1860: Under which the IBPS is registered.
• Bombay Public Trusts Act, 1950: Under which the IBPS is registered as a public trust.

Arguments

Appellant’s Submissions:

• The Institute of Banking Personnel Selection (IBPS) is an “other authority” under Article 12 of the Constitution due to the deep and pervasive control of the Government.

  • The governing body of IBPS includes representatives from the Reserve Bank of India, the Ministry of Finance, and various public sector banks.
  • A letter dated 20 September 2010 from the Ministry of Finance shows the government’s administrative control over IBPS.

• IBPS discharges public functions by conducting selections for Public Sector Banks, co-operative banks, private banks, and other institutions.

  • IBPS conducts training programs for Public Sector Organizations.
  • IBPS conducts examinations for various institutions, including government departments, Regional Rural Banks, universities, and scholarship examinations.

• Nationalized banks fall under the definition of “State” under Article 12, and IBPS, which conducts selections for these banks, should be subject to writ jurisdiction.

• The Appellant inadvertently submitted the 2010 certificate and should be given an opportunity to be considered for appointment since he is otherwise eligible.

Respondent’s Submissions:

• IBPS is merely an agency that conducts selections for various banks and institutions.

  • IBPS does not receive any aid from the Government and is not administratively controlled by it.

• Conducting examinations for appointments in banks and financial institutions is not a public function.

  • IBPS does not discharge any public duty.

• The Appellant did not participate in the four subsequent selections conducted after 2013, and is therefore not entitled to any relief.

Submissions Table:

Issues Framed by the Supreme Court

The Supreme Court addressed the following issue:

1. Whether a writ petition is maintainable against the Respondent on the ground that it discharges public duty.

Treatment of the Issue by the Court

Authorities

The Court considered the following authorities:

On the definition of ‘State’ under Article 12:

• Ajay Hasia v. Khalid Mujib Sehravardi [1981 (1) SCC 722] – Supreme Court of India: This case laid down tests to determine if a body falls under the definition of ‘State’, emphasizing financial, functional, and administrative control by the government.
• R.D. Shetty v. I.A.A.I. [1979 (3) SCC 489] – Supreme Court of India: This case discussed the concept of ‘State’ and its instrumentalities, focusing on whether the body is an agency or instrumentality of the government.
• Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others [2002 (5) SCC 111] – Supreme Court of India: A 7-judge bench held that to determine if a body is a ‘State’, it must be financially, functionally, and administratively dominated by or under the control of the government.

On the maintainability of writ petitions against private bodies:

• Andi Mukta Sadguru S.M.V.S.S.J.M.S.T. and Ors. v. V.R. Rudani and Ors. [1989 (2) SCC 691] – Supreme Court of India: This case held that a writ petition is maintainable against a private body if it performs a public duty, and the term ‘authority’ under Article 226 has a broader meaning than under Article 12.
• Zee Telefilms Ltd. v. Union of India [2005 (4) SCC 649] – Supreme Court of India: This case discussed the scope of public duty and whether a private body performing such duty is subject to writ jurisdiction.
• Janet Jeyapaul v. SRM Universities and Others [2015 (16) SCC 530] – Supreme Court of India: This case dealt with the maintainability of writ petitions against private universities, focusing on the nature of the functions performed.
• K. K. Saksena v. International Commission on Irrigation & Drainage [2015 (4) SCC 670] – Supreme Court of India: This case clarified that a writ petition is not maintainable against a body that voluntarily undertakes activities without any statutory or public character.
• G. Bassi Reddy v. International Crops Research Institute [2003 (4) SCC 225] – Supreme Court of India: This case held that research and training programs on a voluntary basis are not considered a public duty.
• Federal Bank v. Sagar Thomas [2003 (10) SCC 733] – Supreme Court of India: This case held that a private company carrying on banking business as a scheduled commercial bank cannot be termed as an institution or a company carrying on any statutory or public duty.

On the nature of public duty:

• Regina v. Panel on Take-Overs and Mergers, Ex parte Datafin PLC and Another [1987] 1 Q.B. 815 (C.A.) – Court of Appeal: This case held that if a duty is a public duty, the body in question is subject to public law.
• Reg. v. Criminal Injuries Compensation Board, Ex. Parte Lain [1967] 2 Q.B. 864, D.C. – Divisional Court: This case emphasized that the nature of power is an important facet to decide whether a dispute pertains to public law or private law.

Authorities Table:

Judgment

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

How each authority was viewed by the Court?

• The Court relied on Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Others [2002 (5) SCC 111]* to determine whether the body is financially, functionally and administratively dominated by or under the control of the Government.
• The Court referred to Andi Mukta Sadguru S. M. V. S. S. J. M.S.T. and Ors. v. V.R. Rudani and Ors. [1989 (2) SCC 691]* to emphasize that the term ‘authority’ used in Article 226 of the Constitution of India, must receive a liberal meaning unlike the term “other authorities” in Article 12 and that the words “any person or authority” used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State.
• The Court relied on Regina v. Panel on Take-Overs and Mergers, Ex parte Datafin PLC and Another [1987] 1 Q.B. 815 (C.A.)* to state that if the duty is a public duty, then the body in question is subject to public law.
• The Court referred to Federal Bank v. Sagar Thomas [2003 (10) SCC 733]* to emphasize that a private company carrying on banking business as a scheduled commercial bank cannot be termed as an institution or a company carrying on any statutory or public duty.
• The Court relied on K. K. Saksena v. International Commission on Irrigation & Drainage [2015 (4) SCC 670]* to emphasize that the activities were voluntarily undertaken by the Respondents and there was no obligation to discharge certain activities which were statutory or of public character.

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the following factors:

• The lack of deep and pervasive control by the Government over IBPS.
• The absence of statutory duties or obligations on IBPS to conduct recruitment tests.
• The voluntary nature of IBPS’s activities in conducting selection processes for banks.
• The fact that conducting recruitment tests for banking and financial institutions is not considered a public duty.

Fact:Law Ratio

Logical Reasoning:

The Court considered whether IBPS was a ‘State’ under Article 12 of the Constitution. It examined the level of government control over IBPS and concluded that IBPS was not under the deep and pervasive control of the government. The Court also considered whether IBPS was performing a public duty. It held that conducting recruitment tests for banks and financial institutions is not a public duty. The Court noted that IBPS was not created by a statute and had no statutory obligations. The Court also considered the fact that the activity of conducting selections was voluntary in nature.

The Court considered the submission of the Appellant that he had inadvertently submitted the 2010 certificate. However, the Court did not find that a reason to grant relief to the Appellant.

The Court observed,
“As the activity of the Respondent of conducting the selection process for appointment to the banks is voluntary in nature, it cannot be said that there is any public function discharged by the Respondent.”

The Court further stated,
“There is no positive obligation, either statutory or otherwise on the Respondent to conduct the recruitment tests.”

The Court concluded,
“For the reasons above, we are of the considered opinion that the Respondent is not amenable to the Writ Jurisdiction under Article 32 or Article 226 of the Constitution of India.”

There was no dissenting opinion.

Key Takeaways

• Private bodies conducting recruitment for banks are generally not subject to writ jurisdiction under Article 226 of the Constitution of India.
• To be considered a ‘State’ under Article 12, an organization must be under deep and pervasive control of the government.
• Conducting recruitment tests for banks and financial institutions is not considered a public duty.
• Candidates aggrieved by the recruitment process of such bodies may not have recourse to writ jurisdiction.

Directions

No specific directions were given by the Supreme Court in this judgment.

Specific Amendments Analysis

There is no discussion of any specific amendments in this judgment.

Development of Law

The ratio decidendi of this case is that the Institute of Banking Personnel Selection (IBPS) is not amenable to writ jurisdiction under Article 226 of the Constitution of India. The Court clarified that IBPS is neither a ‘State’ under Article 12 nor does it perform a public duty, as its activities are voluntary and not mandated by statute. This decision reinforces the principle that private bodies are not subject to writ jurisdiction unless they meet specific criteria of being a ‘State’ or performing public functions.

Conclusion

The Supreme Court dismissed the appeal, holding that the Institute of Banking Personnel Selection (IBPS) is not amenable to writ jurisdiction under Article 226 of the Constitution of India. The Court concluded that IBPS is not a ‘State’ under Article 12, nor does it perform a public duty. The Court emphasized that conducting recruitment tests for banks and financial institutions is a voluntary activity and not a public duty.