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Report No. 145

15.11. The aspect of management.-

One of the aspect on which emphasis has been placed while arguing for amendment of Article 112, is that of maintaining a quality of management on public sector undertakings. It has been particularly emphasised that these undertakings, when dealing with contracts or the relationship of employment, should be allowed to be conducted with efficiency and speed and these objectives often come to be thwarted by reason of the present interpretation of Article 12, which makes them subject to judicial scrutiny and throws open the possibility of litigation and subject to judicial scrutiny which obstructs the smooth conduct of their business.

On a careful consideration of the matter, it appears to us that there are several answers to this objection. In the first place, we are not certain if the fact that writ jurisdiction can be invoked necessarily obstructs smooth functioning in every case. It is undisputed that such jurisdiction has been exercisable ever since the commencement of the Constitution against acts of the Central Government and the State Government and its officers and authorities. There has not been any serious grievance made that the jurisdiction has come in the way of expeditious disposal of governmental business in dealing with commercial transactions.

Railways and Posts and Telegraphs are noteworthy; examples of commercial or semi-commercial activities directly carried on by the Government, and we are not aware of any serious complaints made by the concerned Departments in this regard. Secondly, if the grant of stay orders in writ petitions against public sector undertakings (on the bass of the alleged violation of a fundamental right) does occasionally suspend completion of the particular transaction, one has to balance against it the higher values sought to be protected by insistence on compliance with certain constitutional norms.

We shall revert to this aspect later. Thirdly, public sector undertakings may themselves have to invoke writ jurisdiction, say, against another public sector undertaking and then some of the benefits of the right to equality and other fundamental rights would be realized. Finally, so far as the element of reasonableness is concerned, it is possible that the courts may spell out such a requirement, not merely on the basis or constitutional rights (as they have done so far, because the provisions were there), but also in the light of the implications of statutory interpretation.

In this connection, attention may be drawn to the fact that even in countries like England where, as yet, no fundamental rights have been written in the Constitution, courts are, as a matter of administrative law, slowly taking the view that statutory action, particularly action which affects the rights of citizens, should be marked by a reasonable approach. Even if Article 12 is amended so as to confine it to Government authority, courts can still take the same view in regard to public undertakings as a matter of statutory interpretation.

Article 12 of the Constitution and Public Sector Undertakings Back

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