Federation Of Karnataka Chambers Of Commerce & Industry Is Not 'State' Under Article 12: High Court

A single judge bench of Justice Krishna S Dixit while dismissing a petition filed by B. L. Shankarappa said,

"An association of persons incorporated or not, may undertake activities very much in public interest, say for example, it may profess to protect the sovereignty & integrity of nation; laudable it is, undoubtedly; however thereby, it does not become a 'State Agency' for the purpose of Part III of the Constitution."

It added, "If an entity is formed with the sole object of giving effect to Part IV Directives that per se does not take it to the precincts of Article 12, inasmuch as the public as such, is not entitled to demand for the implementation of professed objects of the said entity. What is to be seen is, whether the functions of such a body are pregnant with sufficient public law elements as to justify invocation of writ jurisdiction; in the case at hands, the answer to this question is a plain 'NO'."

The petitioner had approached the court against the alleged mismanagement of and undemocratic practices perpetrated in the FKCCI. A direction was sought to the Federation to amend its charter documents and other prayers.

Findings:

The bench at the outset noted that FKCCI is a very old institution having been incorporated as a company in 1938. It is a 'limited company', answering the description u/s 8 of the 2013 Act (Companies Act).

Further, it said there are 3,000 'direct members' and about 2,50,000 'indirect members' drawn from all sectors of trade, commerce & industry, spread all over Karnataka State. It is a member of national bodies like FICCI, ASSOCHAM & OVERSEAS Enterprises.

Then the bench observed, "Merely because the avowed objects of a private body linguistically partake the nature of certain functions which ordinarily governmental bodies do, it does not thereby become a limb or agency of the State." It added "The indicia to become one are different and apparently lacking in the formation, & functioning of FKCCI."

The court also recorded the statement of the counsel for the petitioner that none of the High Courts in the country as yet has held that such Federations (i.e., counterparts of FKCCI) obtaining in other States, do fit into the expression 'other authorities' employed in Article 12.

Further, the bench noted that FKCCI represents over 2.5 lakh members and has a de facto monopoly and it enjoys support & recognition by the State. Similarly, it interfaces with foreign consulates such as the 'Royal Thai Consulate General' or that it interacts with foreign governments on one-to-one basis.

However, it said, "Such things even tall private individuals may undertake. In public law nothing turns out from all that to support petitioners version."

Then it held,

"The professed objectives of FKCCI may have congruity with what our Constitution ordains. Its activities may also have a marked resemblance to what the State & its authorities in public law, are required to do. However, on that basis, if a body of individuals were to be treated as an instrumentality of State, that would strain the writ jurisprudence, as has been developed, precedent by precedent, over the decades."

It also opined that some land & funds have been allotted to the FKCCI by the government or that certain exemption & concessions under the provisions of Income Tax Act, 1961 are selectively made available, does not make the same to fall within the term 'other authorities' employed in Article 12 of the Constitution.

Rejecting the argument of the petitioner that regardless of status of FKCCI as an instrumentality of the State, petitioner can invoke the writ jurisdiction in matters like this, the bench said,

"The law of writs has marched from 'status to function'. Jurisdiction under these Articles extends to adjudging causes of action not necessarily founded on the violation of fundamental rights, is true. However, it is conditioned by another factor namely such causes should be predominantly animated with public law elements."

It added, "The Respondent need not be a 'State' or its 'instrumentality' for the purpose of subjecting its actions to judicial review if, public law elements galore in them. Conversely, writ remedy does not avail even against a State or its instrumentality, should its actions lack required amount of public law elements."

Case Title: B. L. SHANKARAPPA v. FEDERATION OF KARNATAKA CHAMBERS OF COMMERCE AND INDUSTRY (FKCCI) & others

Case No: WRIT PETITION NO.7123 OF 2022

Citation: 2022 LiveLaw (Kar) 402

Date of Order: 30TH DAY OF SEPTEMBER, 2022

Appearance: K.N.PHANINDRA, SENIOR COUNSEL A/W KIRAN B S, ADVOCATE for petitioner; M.N.KUMAR, CGC FOR R2 & R3; B.M.ARUN, ADVOCATE FOR R4; S.S.NAGANAND, SENIOR COUNSEL A/W S.G.PRASHANTH MURTHY, ADVOCATE FOR R5 TO R7. R9 TO R11, R13 TO R21, R23 TO R28 & R30; S.DINESH, ADVOCATE FOR R22 & R29.

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