Is Private Sector a 'State' under Indian Constitution?, Essays (university) of Economics and Law

Download Is Private Sector a 'State' under Indian Constitution? and more Essays (university) Economics and Law in PDF only on Docsity! Memorial for Petitioner’s Page 1 of 28 TEAM CODE: GODAVARI ADVOCATE P. SIVAJI SHETTY MEMORIAL SIXTH NATIONAL MOOT COURT COMPETITION Before THE HONOURABLE HIGH COURT OF KALYANA WRIT PETITION (WP NO.) ____/2021 Chamber of Private sector ………. Petitioners Versus State of Kalyana………………. Respondents COUNSELS APPEARING ON BEHALF OF THE PETITIONERS Memorial for Petitioner’s Page 2 of 28 Table of contents LIST OF ABBREVIATIONS…………………………………………………….3 INDEX OF AUTHORITIES………………………………………………………4 STATEMENT OF JURISDICTION………………………………………………7 ISSUES PRESENTED ……………………………………………………………9 STATEMENT OF FACTS ……………………………………………………….10 SUMMARY OF PLEADINGS…………………………………………………...12 ARGUMENTS ADVANCED …………………………………………………...14 1. Whether the private sector concerns are state for the purpose of Part III of the constitution…………………………………………………………………………14 2. Whether the Act violates the fundamental right to carry on business…………18 3. Whether the government is estopped from superimposing the Act on the private sector after attracting them to invest in the state with concessions……………21 4. Whether prohibiting the employees from joining political parties including students wings of the political parties is ultravires the Act and also the Constitution. ……………………………………………………………………..24 PRAYER……………………………………………………………………………………27 Memorial for Petitioner’s Page 5 of 28 STATUTES 1. INDIAN EVIDENCE ACT 1872 2. MINES AND MINERALS (DEVELOPMENT AND REGULATION) ACT 1957 3. CENTRAL CIVIL SERVICES CONDUCT RULES 1964 CONSTITUTIONAL PROVISIONS ART. 12 OF THE INDIAN CONSTITUITON OF INDIA ART. 13 OF THE INDIAN CONSTITUITON OF INDIA ART. 14 OF THE INDIAN CONSTITUITON OF INDIA ART. 15 OF THE INDIAN CONSTITUITON OF INDIA ART. 16 OF THE INDIAN CONSTITUITON OF INDIA ART19 OF THE INDIAN CONSTITUITON OF INDIA ART 21 OF THE INDIAN CONSTITUITON OF INDIA ART 38 OF THE INDIAN CONSTITUITON OF INDIA Memorial for Petitioner’s Page 6 of 28 BOOKS DR. J.N. PANDEY, CONSTITUTIONAL LAW OF INDIA (57TH 2020) 4 JUSTICE S.S. SUBRAMANEE, COMMENTARY ON THE CONSTITUTION OF INDIA, ART. 14 (9TH) KUMAR KARTIKEYA’S ART. 12 (1ST 2020) 2 JUSTICE S.S. SUBRAMANEE, COMMENTARY ON THE CONSTITUTION OF INDIA, ART. 13 AND 14 (9TH) 5 JUSTICE S.S. SUBRAMANEE, COMMENTARY ON THE CONSTITUTION OF INDIA, ART. 20-24 (9TH) 3 JUSTICE S.S. SUBRAMANEE, COMMENTARY ON THE CONSTITUTION OF INDIA, ART. 13-19 (9TH) 2 SCC (1997) 1 H.M. SEERVAI, CONSTITUTIONAL LAW OF INDIA (4TH ) 4 SHAKIL AHMAD KHAN, THE INDIAN EVIDENCE ACT, LAW OF EVIDENCE (21ST) WEBSITES 1. WWW.MANUPATRAFAST.COM 2. WWW.SCCONLINE.COM 3. WWW.INDIACODE.NIC.IN 4. WWW.LIVELAW.IN Memorial for Petitioner’s Page 7 of 28 Statement of jurisdiction THE PETITIONERS HAVE APPROCHED THE HONOURABLE HIGH COURT OF KALYANA UNDER ART. 226 AND 227 OF THE INDIAN CONSTITUTION, WHICH READS AS UNDER Power of High Courts to issue certain writs (1) Notwithstanding anything in Article 32 every High Court shall have powers, throughout the territories in relation to which it exercises jurisdiction, to issue to any person or authority, including in appropriate cases, any Government, within those territories directions, orders or writs, including writs in the nature of habeas corpus, mandamus, prohibitions, quo warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part III and for any other purpose (2) The power conferred by clause (1) to issue directions, orders or writs to any Government, authority or person may also be exercised by any High Court exercising jurisdiction in relation to the territories within which the cause of action, wholly or in part, arises for the exercise of such power, notwithstanding that the seat of such Government or authority or the residence of such person is not within those territories (3) Where any party against whom an interim order, whether by way of injunction or stay or in any other manner, is made on, or in any proceedings relating to, a petition under clause ( 1), without (a) furnishing to such party copies of such petition and all documents in support of the plea for such interim order; and (b) giving such party an opportunity of being heard, makes an application to the High Court for the vacation of such order and furnishes a copy of such application to the party in whose Memorial for Petitioner’s Page 10 of 28 Statement of facts Kalyana is a State in the Union of India. It is always referred to as a backward state as it was hit by famine due to its huge patches of fallow and barren lands, hills and irregular rain. The State Government of Kalyana a coalition of three national parties to improve the living conditions of its people adopted a major policy decision which attracted huge investment in myriad sectors by offering lands at subsidised price, free water, exemption from taxes and electricity and mining operations and industrial activities started on a massive scale generating much employment opportunities. An exodus of people from other states of India who came to Kalyana and occupied these jobs and the locals were employed majorly only in clerical, non-skilled and menial jobs leading to scuffles between the locals and outsiders locals organised themselves and formed the Kalyana Peoples Welfare Organisation which was a federation of 30 associations from 30 districts in the state in order bring pressure on the State Government to adopt a policy for protection of the interests of the local populace. Kalyana State Equal Opportunity of Employment in Private Sector Act, 2021. The important features of the Kalyana State Equal Opportunity of Employment in Private Sector Act, 2021 are as follows: 1. The preamble of the Act provides that it is an Act to secure the interests of the local people and also to promote the interest of investors by providing for equal opportunities in employment in private sector and to insulate the private sector from political interference. 2. The Act is applicable to private sector companies, societies, trusts, limited liability partnerships, etc which employ more than 20 persons and who have taken any benefit from the state in the form of land at subsidised price, free electricity, free water, exemption from taxes, etc. Memorial for Petitioner’s Page 11 of 28 3. It provides that 50% of the skilled and 80% of the unskilled jobs be reserved for the locals. 4. Persons who have lived in Kalyana for a period of 15 years prior to the date of employment are defined to be local candidates. 5. Skilled jobs are defined to be those jobs that require the applicants to be technically qualified. Further the State Government is authorised to notify a list of skilled jobs to which the Act applies. 6. The provisions of the state laws relating to reservation in public employment shall equally apply to private sector companies, societies, trusts and limited liability partnerships, etc. 7. The private sector has to comply with the requirements of the Act by 2025. 8. In case of failure to comply with the provisions of the Act, the private sector concern has to return the benefit it has received from the government. The State Government through the Kalyana State Equal Opportunity of Employment in Private Sector Rules, 2021 provided that the employees cannot join political parties including students wings of the political parties. Memorial for Petitioner’s Page 12 of 28 Summary of Arguments Issue 1: Whether the private sector concerns are “state” for the purpose of part III of the constitution It is humbly presented that Private sector do not come under Art. 12 of the Indian Constitution as the “State” conferred by the Part III of the Indian Constitution. It is very well presented in the Art. What should be included in the same. Private sector and any concerned body under private sector do not come under the definition of the “State” given in the Part III of the Constitution. Issue 2: Whether the Act that is enacted by the state government of Kalyana violates fundamental right to carry on any business It is submitted that the Act that is enacted by the state government of Kalyana violates fundamental right to carry on any business. The Constitution of India guarantee every citizen right to practice any profession, or to carry on any occupation, trade or business provided by Art 19 (1)(g). Issue 3: Whether the government is estopped from superimposing the Act on the Private sector after attracting them to invest in the state with concessions. It is most humbly submitted that the government is estopped from superimposing the Act on the Private sector after attracting them to invest in the state with concessions. The state allure the Private sector with the subsidies, but the promise was not retained by the government. Issue 4: Whether the rule prohibiting the employees from joining political parties including wings is ultravires Memorial for Petitioner’s Page 15 of 28 Providing job opportunities was one amongst the procedure to do so. This could not be considered as a governmental function or its mere relevance to the same, leading to only reasoning that Private Sector cannot be considered as ‘State’ under Article 12 conferred to Part III of the Indian Constitution. ➢ Agency or instrumentality In the case of Ajay Hasia v. Khalid Mujib1, Supreme Court laid some “agency or instrumentality” test where in if the conditions are clarified, it can be included as “the state”. 1) The government holds the entire share capital of the body; it goes a long way towards indicating that the body is an instrumentality of the government. 2) The entire expenditure of the body is dependent or incurred on the financial assistance provided by the government, it may indicate that the governmental character has been impregnated in the body. 3) Monopoly status is one of the relevant factors where it has been conferred by the state. 4) State may control the said body through deep and pervasive method which surely indicates that the body is state instrumentality. 5) Moreover, if the body performs such functions which are of public importance considering its relevancy with governmental functions, it may be a relevant factor in determining the state instrumentality. Private sectors that were set up in the state of Kalyana were offered many exemptions and subsidies but, they were not provided with entire capital. It should be noted that the first condition raises the question if the entire capital was held by the government. It was the Private Sector which holds the share capital or its investors, not the government. Thus, failing to qualify the first condition of the said test. 1 Ajay Hasia Etc. V. Khalid Mujab Sehravardi & Ors. Etc. 1981 AIR 487 Memorial for Petitioner’s Page 16 of 28 Second, the condition brings forth the query if the government bore all the expenditure providing the financial assistance to the private sector. According to the facts, it is nowhere mentioned if government did provide funds to the Private sector set in the State of Kalyana. Despite some dispensation given by the government, it was those Private sectors who incurred the expenditure wholly. The private companies or the organisation that were initiated in the state of Kalyana were not provided any capital by the government. They accumulate their share capital through various investors which are stakeholders in the Private sector. Accordingly, it is comprehensible that there are no governmental functions as it does not qualify the specified condition. Third, the given condition requires the private sector to have monopoly status that is provided by the state. The state of Kalyana did not confer any monopoly status to the Private sector. If any monopoly status is given to the private sector, it would lead to surge prices in the State and the people of Kalyana as not being capable enough to afford would successfully result to more inferiority between the people of the state of Kalyana. Thus, there is no Monopoly status given to any industry by the government of the state of Kalyana. Companies under Private sector is controlled by Companies Act 2013 which is a statutory body. The Government only have control to a certain extent over the Private Sector. Private sector which are set up in the State of Kalyana are not controlled by the government, but by the act. There is no extensive control of the government in the organisations of Private sector. The major decisions in the organisation are taken by the Board of Directors in the Private sector. Employee recruitment process and inter alia are performed by the management of the Private sector. Thus, inadequacy to fulfil the condition as the State of Kalyana do not have intensive control over the Private sector settled there. Memorial for Petitioner’s Page 17 of 28 There is no governmental function involved in the private sector as providing jobs was a procedure for their own motive of profit. State function tends to be always public welfare over any profit or gain. But, in the private sector benefit of the people is not the sole motive but gain returned by the investment. Private sectors do have social responsibility as a function but it is not mandatory for them to do so. It is arrived by the test and its applicability that, private sector in the state of Kalyana private sectors do not come under “state” conferred by the Part III of the Indian constitution as there is no instrumentality between state or any agency of government. Thus, private sector concerns are state for the purpose of Part III of the constitution. Memorial for Petitioner’s Page 20 of 28 Evils sought to be remedied by the law, its extent and urgency, evil that government trying to end here is the unemployment and income disparity between people. This unemployment would not come to an end until there is enough education imparted by the government. These evil extent to interference by the political party and ultravires of the Constitution of India. How far the restriction is or not proportionate to the evil, the restriction is not proportionate to the evil as the it was unemployment not the outsider. Restrictions were imposed on giving jobs to outsiders which are not proportionate to the evil that was sought and Prevailing conditions at the time. In the case of Laxmi Khansari v. State of U.P.4 “Another important test that has been laid down by this court is that restriction should not be excessive or arbitrary and the court must examine the direct and immediate impact of the restrictions on the rights of the citizens and determine if the restriction is in larger public interest while deciding the question that they contain the quality of reasonableness.” It is important to test if the restrictions are not excessive or arbitrary. But the restrictions imposed on the private sector by the State of Kalyana in the form of act is excessive then it ought to be and it is arbitrary. The rights of the citizen that are infringed should be for a larger public interest. The rights that were infringed in the case of Kalyana were not a part of public interest. The public interest was not restricting outsiders to get a job nut to give more job opportunities and better technical skills to the people of Kalyana. Thus, it could be said that the Act is not reasonable and the Right of the private sector to carry on business is violated. 4 Laxmi Khandsari v. State of U.P. 1981 AIR 873 Memorial for Petitioner’s Page 21 of 28 3. Whether act violates the fundamental right to carry on business ➢ Estoppel by the government The policy made by the state of Kalyana in order to attract the private sector was a promissory that was made in the form of a guideline for the welfare of the people. As given in the Preamble of act, it is clearly specified that the act was made to insulate the private sector from political interference. But the act itself abridges that promise. The government tried to allure the private sector to the state with many exemptions and subsidies. But they failed to retain the same by enacting an act restricting private sector to choose their quality of employees they plan to recruit. The State government didn’t illuminate the list of Skilled jobs and took the authority to notify regarding the same, but the difficulty here is if the government have enough proficiency to do so. Further, the state government did not give precision with reference to Skilled jobs and what is comprised in the same, leaving the private sector in dilemma. When referring to, AP Dairy Development Corp Federation v. B Narsimha Reddy5 cited that “The govt. like any other party, cannot be allowed to approbate and reprobate. The govt. has inherent power to promote the general welfare of the people and in order to achieve the said goal, the state is free to exercise its sovereign powers of legislation to regulate the conduct of its citizen to the extent that their rights shall not stand abridged.” The right of the private sector to carry on business is abridged due to this act. Art 19(1)(g) clearly specifies that a person has the right to carry out trade and 5 AP Dairy Development Corp Federation v. B Narsimha Reddy (2011) 9 SCC 286 Memorial for Petitioner’s Page 22 of 28 profession. But this act would abbreviate and violate Art 19(1)(g). On the basis of exemptions and subsidies that were promised by the state private sector prompted to invest and set industries in the state of Kalyana. Infringement of art 19(1)(g) is the restriction to the exercise of sovereign powers by the government. The state extended its powers of legislation by infringing Art 19(1)(g). The freedom to carry or trade and business which is granted by the constitution is violated by the act which is enacted by the state Government of Kalyana. Moreover, the state government of Kalyana tried to restrict Privatization which is essential for the welfare of the people. This act tries to consider every sector under government which would lead to red tapism and bureaucracy. ➢ Promise by the government The government of Kalyana is bound by the promise. They gave assurance to the Private sector that they would receive all exemptions in order to bring in huge investment. But, the act of Kalyana State Equal Opportunity of Employment in Private Sector Act, 2021 did not abide to that promise as it interferes within the establishment of the Private sector. The following are the essentials to make any promise binding on the Government: 1. The State makes the promise within the ambit of law. 2. There is an intention to enter into a legal relationship. 3. The other party must do an act in furtherance of that promise or is forbidden to do anything. The given conditions give direction to clarify if there is promise that is bound by the government. According to the facts, the state of Kalyana did make a promise of giving subsidies to the Private sector and intended to enter into a legal relationship for the purpose of investment in the state to increase job opportunities. Memorial for Petitioner’s Page 25 of 28 ➢ Exceptions of the Art 19(1)(c) support joining of employees The Exceptions to Art. 19(1)(c) are given in Art. 19(1)(4) which reads that, nothing in subclause (c) shall affect the operation of any existing law in so far as it imposes, or prevents the state from making any law imposing, the interest of; 1. Sovereignty and Integrity of India: To safeguard the sovereignty of the country the freedom to form association can be restricted. This freedom will also be restricted if it causes any disturbance or affects the oneness of the country. 2. Public Order: To maintain safety, public peace, order and tranquillity of the country, the right to form association can be restricted. 3. Morality: This freedom can be restricted if any of the individual’s activities involve indecency or obscenity. These exceptions make it understandable what are the reasonable restriction to formation of association. It is restricted to form an association if it affects the Sovereignty and Integrity of India. Accordingly, when it is said about the Private sector in the Kalyana there is affect in the sovereignty or integrity of the country. Peace and order are not distressed by joining any political party. In fact, the act disrupts the order of the state as it leads to more chaos amongst the people who are outsiders and localities. There is no sign of any indecency when it comes to joining the political parties. The students join the political party according to their interest and learn. This rule not only abridges right to join an association but implied right to choose any profession. ➢ Rule for government servant cannot be applied Exception to join any political party applies to government servant. But the employees of private sector are not considered under government servant. Thus, the private sector employees of the state of Kalyana can join any political parties same Memorial for Petitioner’s Page 26 of 28 applies for student’s wing as the rule prohibiting to join political party in the act is ultravires the act and also the Constitution. As given in the facts, private sector includes all the companies, societies, trusts, limited liability partnerships, etc which involves a considerable amount of population. The rule prohibiting employees to not join the political parties would lead to restriction of political freedom of a large chunk of population. Basically, more than half of the population would work in the private sector and if they are prohibited to join a political party then it would result with only a limited people who can disrupting the balance of political rights between the people. Thus, the rule is not ultravires to the constitution but it also violates political freedom of the people. It leads to concentration of political authority amongst handful people which could result in to arbitrary rule in the State. ➢ Right to continue an association The court in Damayanti v. Union of India6 held that, “necessarily implies that the person forming the association have also the right to continue to be associated with only those whom they voluntarily admit in the association. Any law by which the members are included in the voluntary association without any option being given to the members to keep them out, or any law which takes away the membership of those who have voluntary joined it, will be a law violating the right to form any association.” Thus, in the given ratio it is violation of Art. 19(1)(c) if there is any law which restricts the person to continue any association. Many political unions were formed by the people of Kalyana and if they are given jobs in the private sector, it would lead 6 Damayanti v. Union of India 1971 AIR 966 Memorial for Petitioner’s Page 27 of 28 them to discontinue as member of that political party. Thus, it violates the right to form association being ultra vires to the Constitution and it is ultra vires to the Act.