PETITIONE<NAME>: COMMISSIONE<NAME> OF INCOME-TAX, <NAME> Vs. <NAME>ESPONDENT: SI<NAME> <NAME>UKUMC<NAME>AND MANNALAL & CO. DATE OF JUDGMENT: 20/07/1970 BENC<NAME>: <NAME>, J.C. BENC<NAME>: <NAME>, J.C. <NAME>, K.S. CITATION: 1971 AI<NAME> 383 1971 SC<NAME> (2) 846 1970 SCC (2) 352 CITATO<NAME> INFO : <NAME>F 1992 SC 66 (17) <NAME> 1992 SC 197 (17) ACT: Income-tax Act , 1922, S. 26-A --Partnership including two partners representing interest of same <O<NAME>G>--If can be registered--Whether members of <O<NAME>G> suffer from any disability from entering into contract inter-se. <NAME>EADNOTE: <NAME> and his son <NAME> were two out of the five partners of the respondent firm and represented the interest of a <NAME>indu undivided family. The Income-tax Officer granted registration of the firm under s. 26A of the Income-tax Act, 1922. In 1954-55, he declined to grant such registration. The Appellate Assistant Commissioner confirmed his order on the ground that two coparceners could not represent the interest of the <O<NAME>G> in a partnership. The <ORG> reversed this order and the <NAME>igh Court, upon a reference of the question whether the respondent firm could be granted' registration, answered it in the affirmative. On appeal to this Court, <NAME>ELD : Dismissing the appeal, That a partnership in which two members of a coparcenary represent same beneficial interest of an <O<NAME>G>, may be validly registered under the Income Tax. [648 C-D] <NAME>am Lax an <CITATION> . 66 I.T.<NAME>. 613, P. K, P. S. Pichappa Chittiar & Ors. v. Chokalingam Pillai & Ors. A.I.<NAME>. (1934) P.C. 192 and <CITATION> . 39 I.T.<NAME>. 202, referred to. The Indian Contract Act imposes no disability upon members of a <NAME>indu undivided family in the matter of entering into a contract inter se or with a stranger. A member of a <NAME>indu undivided family has the same liberty of contract as any other individual : it is restricted only ill the manner and to the extent provided by the Indian Contract Act .[648 <NAME>] It is now settled law that in considering an application for registration of a firm, the Income-tax Officer is not concerned to determine in whom the beneficial interest in the share in the partnership vests. [649 <CITATION> . 55 I.T.<NAME>. 651 and Commissioner of income- <CITATION> . 55 I.T.<NAME>. 660, referred to. JUDGMENT:

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1774 of 1969.

Appeal from the judgment and order dated February 12, 1965 of <ORG> in Misc. Civil Case No. 112 of 1963.

<NAME>, <NAME> and <NAME>, for the appellant.

<NAME>, <NAME>, <NAME> and <NAME>, for the respondent.

The Judgment of the Court was delivered by <NAME>, J. A firm styled Sir <ORG> was formed under a deed dated July 16, 1948 to carry on the business of "managing and selling agents" of <ORG> Sir <NAME> and his son <NAME> were two of the five partners of the firm. They represented the interest of the Hindu undivided family of Sir <NAME> and his sons. On March 31, 1950 the property of the Hindu undivided family was partitioned and the interest of the family in the partnership was taken over by a private limited company styled Sir Sarupchand <NAME> Ltd. For the assessment years 1950-51, 1951-52, 1952-53 and 1953- 54 the Income-tax Officer granted registration of the firm under s. 26A of the Indian Income-tax Act, 1922. In 1954-55 the Income-tax Officer declined to grant registration. In appeal the Appellate Assistant Commissioner confirmed the order on the ground that two coparceners could not represent the interest of the Hindu undivided family in a partnership. The <ORG> reversed the order. They held that Sir <NAME> and his son <NAME> were partners in the firm on behalf of the Hindu undivided family and there was nothing in law which prevented two or more coparceners of a Hindu undivided family representing the family from entering into a partnership with a stranger or strangers. At the instance of the Commissioner of Income-tax the following question was referred by the <ORG> :

"Whether in the facts and circumstances of the case the firm <ORG> and <ORG> could be granted registration under s. 26A of the Act ?"

<ORG> answered the question in the affirmative. The Commissioner of Income-tax has appealed to this Court with certificate granted by <ORG>. <CITATION> .(1) this Court observed :

"A Hindu undivided family is x x x x a "person" within the meaning of the Indian Income-tax Act : it is however not a juristic person for all purposes, and cannot enter into an agreement of partnership with either (1) 66 I.T.R. 613.

another undivided family or individual. It is open to the manager of a joint Hindu family as representing the family to agree to, become a partner with another person. The partnership agreement in that case is between the manager and the other person, and by the partnership agreement no member of the family except the manager acquires a right or interest in the partnership. The junior members of the family may make a claim against the manager for treating the income or profits received from the partnership as a joint family asset, but they cannot claim to exercise the rights of partners nor be liable as partners."

This position in law was not disputed on behalf of the Commissioner. But it was urged that since two members of a coparcenary represented in the firm the same beneficial interest of a Hindu undivided family, and since they were incompetent to enter into a contract inter se, the partnership agreement could not be registered. There is no substance in that contention. In <NAME> & Ors. v. <NAME>) <ORG> obsered, approving the observations made in Mayne's Hindu Law (9th Edn.) at p. 398 to the following effect "Where a managing member of a joint family enters into a partnership with a stranger the other members of the family do not ipso facto become partners in the business so as to clothe them with all the rights and obligations of a partner as defined by the Indian contract Act, in such a case the family as a unit does not become a partner, but only such of its members as in fact enter into a contractual relation with the stranger the partnership will be governed by the Act." It is clearly enunciated that one or more members of a Hindu undivided family may enter into a contractual relation in the nature of a partnership with a stranger and they qua the stranger become partners. The view expressed by <ORG> was approved by this Court in <NAME> & Anr. v. commissioner of Income-tax, Bombay North, Kutch and Saurashtra, Ahmedabad & Anr. (2). The Indian Contract Act imposes no disability upon members of a Hindu undivided family in the matter of entering into a ,contract inter se or with a stranger. A member of a Hindu undivided family has the same liberty of contract as any other individual : it is restricted only in the manner and to the extent provided by the Indian Contract Act . Partnership is under s. 4 (1) A.I.R. (1934) P.C. 192.

(2) 39 I.T.R. 202.

<NAME>

of the Partnership Act the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all : if such a relation exists, it will not be invalid merely because two or more of the persons who have so agreed are members of a, Hindu undivided family. It is now settled law that in considering an application for registration of a firm, the Income-tax Officer is not concerned to determine in whom the beneficial interest in the share in the partnership vests: <CITATION> .('); <CITATION> .('). In our judgment, <ORG> was right in answering the question in the affirmative.

The appeal fails and is dismissed with costs.

R.K.P.S. Appeal dismissed. (1) 55 I.T.R. 651. (2) 55 I.T.R. 660.


JUDGMENT <NAME>. J.

1. This appeal under Clause 15 of the Letters Patent is directed against the order dated December 6, 1988 passed by a learned Judge of this Court issuing a Rule Nisi and an interim injunction on a petition under Article 226 of the Constitution of India filed by <ORG> ('Association' for short) and its five members. Facts relevant for the purpose of disposal of the appeal are as under.

2. <ORG> ('<ORG>' for short) is a <ORG> incorporated under the Indian Companies Act , 1913, with the liability of its members limited by shares, having its registered office at 3-A Shakespeare Sarani, Calcutta and carries on business at, amongst other places, Andul Road, Howrah where it has one of its factories. The <ORG> is engaged in the business of, amongst others, manufacture of iron and steel materials. The <ORG> is managed and controlled by a Board of Directors, which include two nominee Directors, one nominated by <ORG> and the other by <ORG>. The work-force of the <ORG> in its factory at Howrah includes a category of staff called Junior Management Staff whose duties are primarily supervisory in nature. They have an Association of their own called <ORG>.

3. On October 28, 1987 the Company declared a lock-out of the factory at Howrah on the ground, inter alia, that workmen employed in its various divisions had resorted to illegal strike. Though the Junior Management Staff were kept outside the purview of the lock-out, the Company did not pay their salaries from November, 1987 onwards, on the plea that there was acute shortage of funds, though earlier assurances were given that salaries would be paid soon.

4. The <ORG> and its six members (hereinafter collectively referred to as the 'Writ Petitioners') thereupon filed the writ petition on September 23, 1988, wherein they have contended, inter alia, that the Company has a sound financial base and sufficient funds to pay its employees. Inspite thereof, the Company taking advantage of the prolonged lock-out and the financial strait of the members of <ORG>, is luring them to a Voluntary Retirement Scheme. The writ petitioners have further alleged that the Company's management has been coercing the members of the <ORG> individually to voluntarily retire or face termination of service. Accordingly, they have sought for various reliefs, as detailed in the petition, through issuance of appropriate Writs against the Company.

5. When the writ petition was presented before the learned Trial Judge on September 23, 1988, directions were issued for filing affidavits. Thereafter, when the petition came up for hearing preliminary objections as to its maintainability were raised on behalf of the <ORG> on the grounds, that no writ lay against the <ORG> and even if such writ lay the reliefs sought for in the petition could not be granted as they were for enforcement of a contract of employment. After hearing the parties, the learned Trial Judge issued a Rule Nisi as prayed for and passed an interim order. Aggrieved thereby, the <ORG> has filed the appeal.

6. Before us also, the threshold questions about the maintainability of the writ petition and the reliefs sought for therein were raised and argued at length. First, it was contended on behalf of the appellant that by no stretch of imagination could it be said that the Company answered to the definition of 'State' within the meaning of Article 12 of the Constitution of India so as to make it amenable to the writ jurisdiction of <ORG>. The other contention was that a contract of employment, which the writ petitioners were seeking to enforce, could not be executed through issuance of Writs.

7. In elaborating the first contention, it was submitted on behalf of the <ORG> that <ORG>, through its various decisions, had laid down the tests for ascertaining whether a <ORG> was an instrumentality or agency of the <ORG> so as to answer to the description of 'other authorities', and for that matter 'State' within the meaning of the Article 12 of the Constitution of India and if the status of the <ORG> was scrutinised in the light of the above tests it would be found, that none of them stood satisfied. Consequently, it was argued that no writ would lie against the <ORG>. Though a number of cases of <ORG> dealing with the above question were cited at the <ORG> during the hearing of the appeal, we would, to avoid restatements and prolixity, refer to a few of them. The first of the cases which requires to be considered in this respect is that of <CITATION> (1981-I-LLJ-103), which was decided by its Constitution Bench. In that case, the question -arose whether <ORG>, which was a society registered under the Jammu & Kashmir Registration of Societies Act , 1898 was an authority within the meaning of Article 12 of the Constitution of India. In answering the question,' the <ORG> observed (pp. 112-113):

"The tests for determining as to when a corporation can be said to be an instrumentality or agency of <ORG> may now be culled out from the judgment in <ORG> case (1979-II-LLJ-217). These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression 'other authorities', it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the <ORG> within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in <ORG> case as follows:

(1) "One thing is clear that if the entire share capital of the corporation is held by <ORG>, it would go a long way towards indicating that the corporation is an instrumentality or agency of <ORG>."

(2) "Where the financial assistance of the <ORG> 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 <ORG> conferred or <ORG> protected."

(4) "Existence of deep and pervasive <ORG> Control may afford an indication that the corporation is a <ORG> agency or instrumentality".

(5) "If the functions of the corporation are of public importance ahd 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 <ORG> is transferred to a corporation, it would be a strong factor supportive of the inference of the corporation being an instrumentality or agency of <ORG>."

If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of <ORG>, it would, as pointed out in <ORG> case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12."

Applying the above tests in the facts of that case, the Court found that the Society which managed <ORG> at Srinagar was a 'State' under Article 12. The above quoted tests have been quoted with approval and followed by <ORG> in the latest cases of <CITATION> (1988-I-LLJ-3-41) and <ORG> v. Defence Minister-cum-Chairman BOG, <ORG> (1989-I-LLJ-263).

8. In the earlier case of <NAME> v. <ORG> (1981-I-LLJ-79) the above tests were quoted with approval. It was pointed out by <ORG> that the finale was reached when their cumulative effect was assessed and once the body was found to be an instrumentality or agency of the <ORG>, the further conclusion emerged that it was 'State' and subject to the same constituional limitations as <ORG>. In <NAME> case (supra), it was similarly observed that it was not necessary that all the tests should be satisfied for reaching the conclusion either for or against holding an institution to be 'State' and in a given case, some of the features might emerge so boldly and prominently that a second view might not be possible, but there might be other cases where the matter would be on the border line and it might be difficult to take one view or the other outright. When judged in the light of the above tests, keeping in view the observation made by <ORG> in the case of <NAME> (supra) in the passage quoted earlier that "the tests were neither clinching nor conclusive but they were merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression 'other authorities', it must be realised that it should not be stretched so far as to bring in every autonomous body which had some nexus with the <ORG> within the sweep of the expression" (exphasis supplied), the conclusion is inevitable that the appellant-Company cannot be brought within the meaning of 'State' under Article 12 of the Constitution.

9. Admittedly, the <ORG> is incorporated under the Indian Companies Act , 1913 and 73.23 % of its equity share capital are held by individuals and other limited Companies, including some foreign Companies and the balance 26.77% shares are held by financial institutions. It is common knowledge that in the normal course of their business, financial institutions advance money to entrepreneours and established undertakings, some of them on the condition that a portion of such loans might be converted into equity capital. Besides, the financial institutions make purchase of shares in the market as business investments. The acquisition and holding of only 26.77% shares of the <ORG> by the financial institutions through such routine business transactions cannot certainly satisfy the first two tests laid down by <ORG>. Mr. <NAME>, appearing for the writ petitioners, in his usual fairness, conceded that not only the above two tests, but the fifth and sixth tests were also not satisfied in the facts of the instant case. He, however, asserted that the third and fourth tests stood satisfied in respect of the appellant <ORG>. According to Mr. <NAME>, as the <ORG> was engaged in a core industry like steel and iron and was one of the largest undertakings in that field, it could certainly be said to be holding a monopoly status. Even if we, for our present purposes, accept the fact that the <ORG> enjoys a monopoly status, still then the third test would not stand satisfied as such status has to be '<ORG> conferred or <ORG> protected'. As there is no material on record to even indicate far less prove, the above ingredient, the contention of Mr. <NAME> in this regard must be negatived.

10. To bring home his contention that the fourth test stood conclusively satisfied, in the instant case, Mr. <NAME> strongly relied upon the determination of <ORG> in the case of <CITATION> . It will be necessary, therefore, to refer to and deal with the case of MC. <NAME> (supra) at length.

11. On December 4, 1985, a major leakage of oleum gas took place from one of the units of <ORG> and <ORG> in Delhi. This leakage affected a large number of persons, both amongst the workmen and the public, and an Advocate practising in <ORG> of Delhi died on account of inhalation of oleum gas. Hardly had the people got out of the shock of this disaster when, within two days, another leakage, though this time a minor one, took place as a result of escape of oleum gas from the joints of a pipe. Applications were, thereafter filed by <ORG> and <ORG> in <ORG> for award of compensation to the persons who had suffered harm on account of escape of oleum gas. As those applications for compensation raised a number of issues' of great Constitutional importance, the Bench of the three Judges which was hearing the applications forwarded them to a larger Bench of five Judges. One of the questions which arose for consideration at the time of hearing was whether Article 21 of the Constitution was available against <ORG> declared industrial policies, was ultimately intended to be carried out by shares and which was engaged in an industry vital to public interest and with potential to affect the life and health of the people. On behalf of the applicants, it was contended that Article 21 was available as <ORG> was carrying on an industry which, according to the <ORG>'s own declared industrial policies, was ultimately intended to be carried out by itself, but instead of the <ORG> immediately embarking on that industry, <ORG> was permitted to carry it on under the active control and regulation of the <ORG>. Special emphasis was laid on behalf of the applicants on the regulatory mechanism provided under the Industries (Development and Regulation) Act , 1951, where industries are included in the schedule if they vitally affect public interest. It was pointed out that regulatory measures were also to be found under the Environment Act , 1986 and other allied legislations. Reliance was also placed upon the fact that sizeable aid in loans, lend and other facilities were granted by the <ORG> to <ORG> in carrying on the industry. Taking aid of the American <ORG> Action doctrine, it was also argued on behalf of the applicants that private activity, if supported, controlled or regulated by the <ORG> might get so entwined with <ORG>al activity as to be termed <ORG> action and it would then be subject to the same constitutional restraints on the exercise of power as the <ORG>.

12. In controverting the above contentions, it was submitted on behalf of Shriram that control or regulation of a private corporation's functions by the <ORG> under general statutory Law, such as the Industries (Development and Regulation) Act , 1951 was only in exercise of police power of regulation by the <ORG> and such regulation did not convert the activity of the private corporation into that of the <ORG>. It was contended that control which deemed a <ORG> an agency of the <ORG>, must be of the type where the <ORG> controlled the management policies of the <ORG>, whether by sizeable representation on the board of management or by necessity of prior approval of the <ORG> before any new policy of management was adopted, or by any other mechanism.

13. In order to deal with the rival contentions, <ORG> traced that part of the development of Article 12 where it embarked on the path of evolving criteria by which a <ORG> could be termed 'other authority' under Article 12. In doing so, the <ORG> considered its earlier decisions and quoted with approval the tests laid down in <ORG> case (supra) as applied in <NAME> case (supra) and the observations made in the latter. The <ORG> then pointed out that the controversy as to whether the manner in which a <ORG> was brought into existance had any relevance to the question whether it was <ORG> instrumentality or agency was set at rest in the case of <NAME> (supra). The <ORG> further pointed out that a <ORG> might be a Statutory <ORG> created by a statute or it might be a society registered under the Societies Registration Act or a <ORG> formed under the Companies Act : any such <ORG> would come within the ambit of Article 12 , if it was found to be an instrumentality or agency of the <ORG> on proper assessment of the relevant factors.

14. In the light of the above principles of law, the <ORG> proceeded to examine whether a Private Corporation such as <ORG>, which was engaged in the manufacture of chemicals and fertilisers, came within the ambit of Article 12 so as to be amenable to the discipline of Article 21. For that purpose, the <ORG> first examined <ORG> Industrial Policy Resolutions of 1948 and 1956 and then the Industries (Development and Regulation) Act , 1951 enacted to carry out the objectives of the policy, resolutions. On such examination, the <ORG> found that the industry of 'Chemicals and Fertilisers' was specified in the First Schedule of the above Act as it was deemed by the <ORG> to be an industry of vital public interest, whose public import necessitated that the activity should be ultimately carried out by the <ORG> itself, though in the interim period with <ORG> support and under the <ORG> control, Private Corporations might also be permitted to supplement the <ORG> effort. The <ORG> next took notice of fact that the Industries (Development and Regulation) Act , 1951 made the activities of an undertaking engaged in an industry scheduled therein subject to extensive and detailed control and supervision by the <ORG> and even empowered the <ORG> to take over and manage such undertaking if after investigation held under the Act it was found that its affairs were being managed in a manner detrimental to public interest. The <ORG> also took notice of the fact that <ORG> was required to obtain licences, under the Factories Act and Delhi Municipal Act and was subject to extensive environment regulation under the Water (Prevention and Control of Pollution) Act , 1974 and Air (Prevention and Control of Pollution) Act , 1981, that is, all such activities which could jeopardise public interest. The <ORG> next observed that such functional control was of special significance as it was the potentiality of the fertiliser Industry to adversely affect the health and safety of the community and its being impregnated with public interest which perhaps dictated the policy decision of the <ORG> to ultimately operate this industry exclusively and invited functional control. The <ORG> next took note of the fact that, along with the extensive functional control, <ORG> received sizeable assistance in the shape of loans and overdrafts running into several crores of rupees through various agencies. It was men said by the <ORG>, "Moreover, <ORG> is engaged in the manufacture of Caustic soda, Chlorine etc. Its various units are set up in a single complex surrounded by thickly populated colonies. Chlorine gas is admittedly dangerous to human life and health. If the gas escapes either from the storage tank or from the filled cylinders or from any other point in the course of production, the health and well-being of the people living in the vicinity can be affected. Thus, <ORG> is engaed in an activity which has the potential to invade the right to life of large sections of people."

15. The Court then posed the question whether those factors were comulatively sufficient to bring Shriram within the ambit of Article 12 and observed "Prima, facie it is arguable that when the <ORG>'s power as economic agent, economic enterpreneur and allocator of economic benefits was subject to the limitations of fundamental rights vide <CITATION> ; <CITATION> ; <CITATION> (supra) and <NAME> v. <ORG> of Jammu and Kashmir (1980) 3 S.C.R. 1388 , why should a private corporation under the functional control of the <ORG> which is hazardous to the health and safety of the community and it is imbued with public interest and which the <ORG> ultimately proposes to exclusively run under its industrial policy, not be subjected to the same limitations. But we do not propose to decide this question and make any definite pronouncement upon it for reasons which we shall point out later in the course of this judgment". That the Court did not propose to decide the questions has been reiterated in paragraph 30 of the judgement with the following words:

"But we do not propose to decide finally at the present stage whether a private corporation, like <ORG>, would fall within the scope and ambit of Article 12 because we have not had sufficient time to consider and reflect on the question in depth."

16. The <ORG> then proceeded to deal with the other question raised in the case and after answering the same, observed in paragraph 33 that since it was not deciding the question as to whether <ORG> was an authority within the meaning of Article 12 so as to be subjected to the I discipline of the fundamental right under Article 21 , it did not think it would be justified in setting up a special machinery for investigation of the claims for compensation made by those who alleged that they had been victims of oleum gas escape.

17. A detailed and careful reading of the above case clearly indicates that <ORG>, in no uncertain terms, stated that it was not deciding the question as to whether a private corporation could be made amenable to the discipline of fundamental rights. In other words, even though the <ORG> mooted the question whether a <ORG>, like <ORG>, could be included within the ambit of Article 12 , it did not answer the same. It cannot, therefore, be said that <ORG> has expressed any opinion on the subject as to be binding upon us either as obiter or ratio decidendi.

18. Mr. <NAME>, however, submitted that even if it was held that <ORG> did not make any decision on the point, still then the observations made by it would have a persuasive effect. Accordingly, Mr. <NAME> submitted that from the observations made therein, he could successfully argue that the appellant-company was an intrumentality or agency of the <ORG>. We are unable to persuade ourselves to rely upon the observations of <ORG> referred to earlier for, in making the same, it was largely influenced by the fact that Shriram was engaged in an activity which was dangerous to life and health and had the potential to invade the right of large sections of people.

19. It is of course true that the appellant-Compahy, like <ORG>, is engaged in an industry which comes under the purview of the first schedule to the Industries (Development and Regulation) Act , 1951 and as such, the <ORG> has powers to assume management and control of the Company if it is found that its affairs are being managed in a manner detrimental to public interest. In other words, the <ORG> has the regulatory control over the affairs of the Company through various legislations. But in our view, such control cannot be said to be "deep and pervasive <ORG> control" so as to satisfy the fourth test. In the case of <CITATION> (1975-I-LLJ-399), Justice <NAME> pointed out that a mere finding of the <ORG> control was also not determinative of the question whether a <ORG> was an instrumentality or agency of the <ORG>, since a <ORG> had considerable measures of control under its police power over all types of business operations and it was not possible to assume that panoply of law and authority of a <ORG> under which people carry on ordinary business or their private affairs or own property, each enjoying equality in terms of legal capacity, would be extraordinary assistance. The learned judge next observed that a finding of <ORG> financial support plus an unusual degree of control over the management and policies might lead one to characterize an operation as <ORG> action. While on this point, we may, even at the risk of repetition, remind ourselves of the observation made in the case of <NAME> (supra) that the six tests were to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression 'other authorities' it must be realised that it could not be stressed so far as to bring other autonomous body which has some nexus with the <ORG> within the sweep of the expression; a wide enlargement of the meaning must be tempered by a wise limitation.

20. If merely on the basis of the facts that a Company incorporated under the Companies Act is running a business in any of the industries appearing in the first schedule of the Industries (Development and Regulation) Act , 1951 and that for running its business it has obtained loans from financial institution for which such institution has placed a Director in <ORG>, an inference that it is an instrumentality or agency of the Government has to be drawn, then in that case a private limited company carrying on business in cigarettes, which also finds place in the first Schedule of the above Act, with <ORG> loan would have to be called an instrumentality or agency of the <ORG>. Widening of the scope of Article 12 to such an extent will not only be unwise but unjustified also.

21. In view of our above discussion, we must hold that by no stretch of imagination can the appellant-Company be said to be an instrumentality or agency of the <ORG> so as to bring it within the ambit of Article 12 of the Constitution of India. The first point raised on behalf of the appellant must, therefore, succeed. In view of that success, the other point raised on behalf of the appellant in support of the appeal need not be gone into.

22. In the result, the appeal succeeds and the same is hereby allowed. The impugned order is hereby set aside and the Rule issued on the writ application is discharged. There will be no order as to costs.


JUDGMENT <NAME>, J.

1. The respondent <NAME> filed an application for execution of a final decree in a partition suit. The appellant filed objections under Section 47 of the Code of Civil Procedure By an order dated January 20, 1967 the Subordinate Judge, Delhi, dismissed the objections. It is common case before us that under the relevant Civil Rules and Orders the Subordinate Judge, Delhi, was not required to draw up a formal expression of the decision under Section 47 as a decree. On March 17, 1967 the appellant filed on appeal against this order in <ORG>. Alongwith the memorandum of appeal she filed a plain copy of the order and an application praying that the appeal be entertained without a certified copy of the order. In the application she stated that one had applied for a certified copy of the order but the same was not ready and that she would file the certified copy as soon as it would be ready and available to her. She added, that she wanted urgent interim relief and would be seriously prejudiced if she waited for a certified copy. She also filed an application for stay of execution. On the same date a Bench of <ORG> admitted the appeal, granted an interim stay and directed issue of notice to the respondents. The attention of the Court was not drawn to the fact that a certified copy of the order had not been filed nor was the application for dispensing with the certified copy moved and an order obtained thereon. The appeal was registered as Execution First Appeal No. 86 of 1967. The appellant diligently prosecuted the appeal. On October 25, 1967 the respondents raised an objection that the appeal was incompetent as a certified copy of the order under appeal had not been filed. On November 3, she filed an application for condonation of the delay in filing the copy under Section 5 of the limitation Act. On November 6, she obtained a certified copy and on the same day she filed it in court. On December 22, 1967 <ORG> held that as the memorandum of appeal was not accompanied by a certified copy of the order, the appeal was incompetent, and that there was no sufficient ground for condoning the delay in filing the copy. Accordingly <ORG> dismissed the appeal and the application under Section 5 of the Limitation Act. The present appeal has been referred after obtaining special leave from this Court.

2. Two questions arise in this appeal. First, was the appeal from the order disposing the objections under Section 47 incompetent in view of the fact that the memorandum of appeal was not accompanied by certified copy of the order appealed from? Second, whether the delay in filing the appeal should be condoned under Section 5 of the Limitation Act?

3. Section 2(2) of the Code of the Civil Procedure defines "decree". Unless there is anything repugnant in the subject or context "decree" means "the formal expression of an adjudication which so far as regards the <ORG> expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 47 or Section 144 ..." It is because the determination of any question within Section 47 is a decree that the appellant could file an appeal from the order under Section 96 of the Code. Order 41 Rule 1 of the Code provides that every appeal shall be preferred in the form of a memorandum signed by the appellant or his pleader "and the memorandum shall be accompanied by a copy of the decree appealed from and (unless the appellate court dispenses therewith) of the judgment on which it is founded". Under Order 41 Rule 1 the appellate court can dispense with the filing of the copy of the judgment but it has no power to dispense with the filing of the copy of the decree. A decree and a judgment are public documents and under Section 77 of the Evidence Act only a certified copy may be produced in proof of their contents. The memorandum of appeal is not validly presented, unless it is accompanied by certified copies of the decree and the judgment.

4. The contention of Mr. <NAME> is that a decree is the formal expression of the adjudication and that where, as in this case, no formal decree is drawn up, the determination under Section 47 is a judgment and the <ORG> having admitted the appeal must be presumed to have dispensed with the filing of the copy of the judgment. In this connection he drew our attention to Section 2(2) , 33 and Order 20 Rules 1, 4, 6. We are unable to accept these contentions. We are not satisfied that the High <ORG> dispensed with the filing of the copy of the order under Section 47 . Admittedly, the High <ORG> did not pass any express order to that effect. It may be that in a proper case such an order may be implied from the fact that the High <ORG> admitted the appeal after its attention was drawn to the defect. (See <ORG> v. <NAME>). But in the present case the High <ORG> was not aware of the defect and did not intend to dispense with the filing of the copy.

5. Moreover an order under Section 47 is a decree, and <ORG> had no power to dispense with the filing of a copy of the decree. Ordinarily a decree means the formal expression of an adjudication in a suit. The decree following the judgment and must be drawn up separately. But under Section 2(2) , the term "decree" is deemed to include the determination of any question within Section 47 . This inclusive definition Of decree applies to Order 41 Rule 1. In some courts, the decision under Section 47 is required to be formally drawn up as a decree and in that case the memorandum of appeal must be accompanied by a copy of the decree as well as the judgment. But in some other Courts no separate decree is drawn up embodying the adjudication under Section 47 . In such a case, the decision under Section 47 is the decree and also the judgment, and the filing of a certified copy of the decision is sufficient compliance with Order 41 Rule 1. As the decision is the decree, the appeal is incompetent unless the memorandum of appeal is accompanied by a certified copy of the decision. Our attention was drawn to the decision in <NAME> v. <NAME> and <NAME>. (2) Where <NAME> seems to have held that where no formal decree was prepared in the case of a decision under Section 47 the appellant was not required to file a copy of the order with the memorandum of appeal. We are unable to agree with this ruling. The correct practice was laid down in a Kamala Devi v. <NAME> (3) where <NAME> observed:--

"Now it frequently happens that in cases of execution proceedings, though there is a judgment, an order, that is, the formal expression of the decision is not drawn up. In such cases the concluding portion of the judgment which embodies the order may be treated as the order against which the appeal is preferred. In such a case it would be sufficient for the appellant to attach to his memorandum of appeal a copy of the judgment alone, and time should run from the date of the judgment. Where, however, as in the case before us, there is a judgment stating the grounds of the decision and a separate order is also drawn up embodying the formal expression of the decision, copies of both the documents must be attached to the memorandum, and the appellant is entitled to a deduction of the time taken up in obtaining copies thereof."

6. We hold that the memorandum of appeal from the <ORG> dated January 20, 1967 should have been accompanied by a certified copy of the order and in the absence of the requisite copy the appeal was defective and incompetent.

7. The next question is whether the delay in filing the certified copy or, to put it differently, the delay in re-filing the appeal with the certified copy should be condoned under Section 5 of the Limitation Act, If the appellant makes out sufficient cause for the delay, the <ORG> may in its discretion condone the delay. As laid down in <NAME> v. <NAME> (4) " section 5 gives the <ORG>s a discretion which in respect of jurisdiction is to be exercised in the way in which judicial power and discretion ought to be exercised upon principles which are well understood; the words "sufficient cause" receiving a liberal construction so as to advance substantial justice when no negligence nor inaction nor want of bonafides is importable to the appellant."

8. The record discloses that the appellant made repeated attempts to obtain a certified copy of the order. She is a pardanashin lady and her affairs were managed by her husband <NAME> and sometimes by her son <NAME>. On March 2, 1967 she applied for a certified copy of the order under appeal. The application distinctly stated that she wanted a copy of the order dated January 20, 1967 dismissing her objections. The application bore the serial number 17542. The copying department supplied to her a copy of another order passed by the <ORG> on the same date dismissing <NAME> objections to the appellant's application for execution. The mistake is solely attributable to the negligence of the copying department. In her affidavit the appellant stated that the application for a copy dated February 17, 1967 was in respect of the order dismissing <NAME> objections. This statement is not correct, but it may well be that having got a certified copy of the order dismissing <NAME> objections she believed that she had applied for a copy of that order.

9. On March 2, 1967 the appellant's son <NAME> made another application for a certified copy of the order. He got the certified copy on March 10. In paragraph 6 of the petition for condonation of delay the appellant stated that <NAME> did not give her the copy and this statement was corroborated by <NAME> in his supporting affidavit. In paragraph 9 she stated that <NAME> had misplaced the copy and due to fear of reprimand he did not inform her or her husband, <NAME>'s affidavit is silent on this point. But the affidavits sufficiently establish that the appellant did not receive the certified copy from <NAME>. Had she received the copy there is no reason why she would not have filed it along with the memorandum of appeal on March 17, 1967.

10. On March 20, 1967 the appellant filed another urgent application for a certified copy of the order dated January 20, 1967 and also copies of two other orders dated February 17, 1967 and May 13, 1966. On this application bearing serial number 19461 <ORG> made a note on March 23, 1967 that the orders dated February 17, 1967 and May 13, 1966 were not found and the applicant should be asked to indicate the file whereon the orders were. It is surprising that <ORG> should have asked the appellant to give this clarification. If the <ORG> found difficulty in finding the orders, it should have contacted the officer-in charge of the records who would have secured the orders for them. The note did not indicate why a copy of the order dated January 20, 1967 was not being supplied. The next note on the application dated March 27, indicates that the application was returned to the appellant. From the next note dated April 11, it appears that the clerk-in-charge, copying <ORG>, directed that the application be filed. We may safely presume that before April 11, the application was re-submitted by the appellant to <ORG>. There is nothing to show that the clarification asked for was not supplied by the appellant. The <ORG> took no further action on the application and made no effort to supply the certified copies to the appellant. No ground was given by the <ORG> for not supplying a certified copy of the order dated January 20, 1967. The tune for filing the appeal expired on April 20, 1967. On October 25, 1967 the respondents took the objection for the first time that the appeal was incompetent. Before that date, the record of <ORG> including the Original order appealed from had been received by <ORG>. On October 27, 1967 the appellant made another application for a certified copy and on November 6, 1967 as soon as she received the copy she filed it in Court. The appellant made repeated attempts to procure a certified copy. The failure of <ORG> to supply the copy inspite of those applications contributed largely to the unfortunate delay in filing it. The appellant cannot be held responsible for the laches of <ORG>. Once her son actually got the copy but she never received it. The appellant could have filed another copy before November 6, 1967 had it been supplied to her by <ORG>. We are inclined to accept the statement that she was under the bona fide impression that the certified copy was not ready, and that is why it was not supplied to her by <ORG>. It is not a case where it is possible to impute to the appellant want of bona fides or such inaction or negligence as would deprive her of the protection of Section 5 of the Limitation Act. We are therefore inclined to allow her application under Section 5 and to condone the delay in re-filing the appeal with a certified copy of the order.

11. In the result, we allow the appeal. The application filed by the appellant under Section 5 of the Limitation Act is allowed and the order of <ORG> dismissing Execution First Appeal No. 86 of 1967 is set aside. The appeal is remanded to <ORG> so that it may deal with and dispose of the appeal on the merits. There will be no order as to the costs of the appeal in this Court.