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Institute of Banking Personnel Selection (IBPS), Mumbai is not the ‘State’ under Article 12 of Constitution of India (SC)

Institute of Banking Personnel Selection (IBPS), Mumbai is not the ‘State’ under Article 12 of Constitution of India. – by Dr. Kalpeshkumar L Gupta

Rajbir Surajbhan Singh v. The Chairman, Institute of Banking Personnel Selection, Mumbai (SC, Decided on April 29, 2019)

Institute of Banking Personnel Selection (IBPS) conducted Common Written Examination for appointment to posts of clerical cadre in Public Sector Banks on 1/10/2013. Appellant participated in the exam and cleared the written exam. He was called for interview and asked to produce required caste certificate. Result was announced and appellant was informed that his candidature for the exam has been cancelled as he could not produce required certificate at the time of interview.

The Appellant filed a Writ Petition challenging the proceeding dated 01.04.2014 by which he was disqualified from the selection process, for appointment to the post of Clerk, which was dismissed by the High Court as not maintainable. Hence, this appeal.

The High Court relied upon a judgment in Writ Petition (L) No.1042 of 2014 and others to dismiss the Writ Petition filed by the Appellant. The judgment in Writ Petition (L) No.1042 of 2014 pertains to a Common Written Examination conducted by the Respondent for recruitment to the posts of Probationary Officers/Management Trainees in participating organizations i.e. Public Sector Banks. The High Court was of the view that the Respondent was not a State within the meaning of Article 12 of the Constitution of India and there was no public function that was discharged by the Respondent. On said grounds, the High Court opined that the Respondent is not amenable to writ jurisdiction of the High Court under Article 226 of the Constitution of India.

Mr. Gagan Gupta, learned counsel appearing for the Appellant submitted that in the year 1975, Personnel  Selection Service (PSS), a unit of National Institute of Bank Management (NIBM), was constituted with the objective of developing an efficient system for recruitment, promotion, and placement services to Public Sector Banks. Said PSS unit became an independent entity in the year 1994 and came to be known as the Institute of Banking Personnel Selection i.e. the Respondent herein. The Respondent was registered under the Societies Registration Act, 1860 and as a public trust under the Bombay Public Trusts Act, 1950. The Respondent was recognized as a Scientific and Industrial Research Organisation in April, 1984 by the Department of Scientific and Industrial Research, Ministry of Science and Technology, Government of India. The Respondent is also an associate member of the Indian Banks Association. Mr. Gupta submitted that the Respondent would fall under the expression “other authorities” under Article 12 of the Constitution of India as there is deep and pervasive control of the Government over the Respondent. He stated that the governing body of the Respondent-Institute consists of the Executive Director of the Reserve Bank of India; Joint Secretary to the Department of Financial Services, Ministry of Finance, Government of India; Chairman – State Bank of India; the Chairman and Managing Directors of UCO Bank, Bank of India, Central Bank of India, Dena Bank; Chair Professor IIT Mumbai; CEO Indian Institute of Banking and Finance; Chief Executive, Indian Banks Association, Director – National Institute of Bank Management amongst others. He referred to a letter dated 20.09.2010 filed in this Court along with the rejoinder affidavit, written by the Under Secretary to the Ministry of Finance, Government of India to the Director of the Respondent-Institute conveying approval of the Government to the proposal of the Respondent for conducting a Common Recruitment Programme for recruitment of both clerks and officers in Public Sector Banks. He submitted that the document is evidence of the fact of administrative control of the Government of India over the Respondent-Institute. Alternatively, Mr. Gupta advanced an argument that, in any event, the Respondent-Institute discharges public functions and duties and would be amenable to the writ jurisdiction of the High Court. He argued that the Respondent-Institute was set up to cater to the selections made to Public Sector Banks, apart from the selections made for appointment of thousands of candidates to co-operative banks, private banks, central and other financial institutions, public and private enterprises, government departments, Regional Rural Banks, universities, institutions, Certificate and Scholarship Examinations, etc. The Respondent-Institute also conducts training programmes for Public Sector Organisations.

The further submission of the learned counsel for the Appellant is that nationalized banks would fall within the expression “State” under Article 12 of the Constitution of India and the Respondent-Institute which conducts the selections for appointment to Public Sector Banks should be amenable to the writ jurisdiction of the High Court under Article 226 of the Constitution of India. Referring to the facts of the case, learned counsel for the Appellant submitted that he produced the certificate issued in the year 2010 inadvertently. He submitted that non-production of the certificate issued on 29.01.2014 was by mistake and he should be given an opportunity to be considered for appointment to the post of Clerk as he is fully eligible for appointment on the basis of the marks obtained by him.

Mr. Adarsh B. Dial, learned Senior Counsel appearing for the Respondent argued that the Respondent was only an agency conducting the process of selections after being engaged by various nationalized banks and other public institutions/financial institutions. He stated that neither was any aid received by the Respondent from the Government nor was it administratively controlled by the Government. Merely because there were a few members in the governing body representing the Government and the banks, it could not be said that the Government has administrative control over the Respondent. According to the learned Senior Counsel, conducting examinations for appointment to various posts in banks and financial institutions was not a public function. He asseverated that there was no public duty discharged by the Respondent and a Writ Petition under Article 226 of the Constitution of India against the Respondent was not maintainable. He further submitted that after the selection process in which the Appellant participated was completed in the year 2013, there were four selections that were conducted subsequently. The Appellant did not participate in any of those selections and he is not entitled to any relief at this stage.

The question that remains to be answered is whether the Writ Petition is maintainable against the Respondent on the ground that it discharges public duty. This Court in Andi Mukta Sadguru S. M. V. S. S. J. M.S.T. and Ors. v. V.R. Rudani and Ors. held “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. Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 32. Article 226 confers power on the High Courts to issue Writs for enforcement of fundamental rights as well as non-fundamental rights. 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. They may cover any other person or body performing public duty. The form of the body concerned is not very much relevant. What is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or the authority to the affected party. No matter by what means the duty is imposed, if a positive obligation exists, mandamus cannot be denied.”

The relevant questions, according to this Court in K. K. Saksena v. International Commission on Irrigation & Drainage (2015 (4) SCC 670), to be answered for the purpose of deciding whether a Writ Petition is maintainable under Article 226 are:

a)Whether a private body which is a nongovernmental organization partakes the nature of public duty or State action? 
b)Whether there is any public element in the discharge of its functions? 
c) Whether there is any positive obligation of a public nature in the discharge of its functions? 
d)Whether the activities undertaken by the body are voluntary, which many a non-governmental organization perform?

The Respondent-Institute has been set up for the purpose of conducting recruitment for appointment to various posts in Public Sector Banks and other financial institutions. Applying the tests mentioned above, we are of the opinion that the High Court is right in holding that the Writ Petition is not maintainable against the Respondent. Conducting recruitment tests for appointment in banking and other financial institutions, is not a public duty. The Respondent is not a creature of a statute and there are no statutory duties or obligations imposed on the Respondent.

This Court in Federal Bank v. Sagar Thomas (2003) 10 SCC 733 case held that a Writ Petition under Article 226 of the Constitution is not maintainable against a scheduled bank on the ground that the business of banking does not fall within the expression “public duty”. 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. There is no positive obligation, either statutory or otherwise on the Respondent to conduct the recruitment tests. 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.

The appeal is dismissed.