Introduction
The Indian Judiciary is very effective in protecting the rights of the citizens. The writ petitions filed by the citizens whenever there is an infringement of their rights make the judiciary more dynamic. The writ petitions can be filed under Article 32 and Article 226 according to the Indian Constitution. We all know there are chiefly five types of writs that are issued in different situations.
There is an increase in economic activities in the present day and there are a lot of new start-ups and companies coming up. As a famous saying goes there are always two sides to a coin, the citizens of our country are occasionally affected by the actions of the private companies and they need an appropriate relief, The main question that is pondering in everyone’s mind is whether a writ petition can be filed against a private company?.
The meaning of private company under the Companies Act, 2013?
To get a basic understanding of this issue we will first look at what is a private company under the Companies Act, 2013. Section 2(68) of the Companies Act, 2013 defines private companies. According to this Act, the private companies are a company having a minimum paid-up share capital of one lakh rupees or such higher paid-up share capital as may be prescribed. There are also certain other features of a private company that is provided in the Section. Private companies,
- Restrict the share to transfer its shares with the help of articles of the association of the company.
- The membership of the private companies is limited to two hundred, where the membership is different in the case of One Person Company
- They prohibit and restrict invitation to the public to subscribe for any securities of the company.[1]
Can a writ be filed against a private company?
There are five types of writs that provide various functions. Writs are formal written order issued by the appropriate Court or authorities to protect the rights of the citizens that are protected under the Indian Constitution. The five types of writs are
- Writ of Habeas Corpus- The writ is against the state as well as individual in case of illegal detention, which is not applicable in case of private companies
- Writ of Certiorari- The writ of certiorari is filed if a lower court or tribunal is acting in overindulgence of jurisdiction and the appropriate tribunal is not competent to deal with the case. The writ of certiorari is similar to the writ of prohibition; the only difference is that this writ is filed after the ruling is provided by the appropriate tribunal or court.
- Writ of Mandamus- The writ of mandamus means “to command” and it is issued against public authority to make them perform their assigned duty. Thus this writ cannot be filed against private companies.
- Writ of Prohibition- The writ of prohibition is filed in the case of whether a lower court or tribunal is not qualified to deal with the case. This writ is filed before the judgment is delivered.
- Writ of Quo Warranto- The writ of quo warranto questions the authority of a person to hold a public office. Thus this writ is also not applicable in the case of private companies.
There are various judicial pronouncements in this regard. The writ lies against the state and the instruments of the state but not against a private company.
The important judgment in this regard is the case of Binny Ltd vs. Sadasivan[2]
Facts:
The appellant was working as a Corporate legal manager in the private company of respondents, which manufactures chemicals. The appellant was removed from his employment and he claimed for the issue of a writ to end this termination and the appellant also filed a writ of mandamus which would allow him to work again in the same position with the same salary.
Issue:
Whether a writ is maintainable against a private company?
Judgment:
It was held by the full bench of the Supreme Court, that the writ of mandamus was not maintainable against the company as it was a private employer and the company does not discharge any public functions, thus it was held that the writ petition is not maintainable.
Thus the current scenario regarding this question a writ will lie against a private company only if it performs a public function or a public obligation.
[1] Section 2(68) of the Companies Act 2013.
[2] [(2005) 6 SCC 657]
This Article is Authored by Sri Sai Kamalini, Fourth-Year, B.A. LL.B(Hons)Student at School of Law, SASTRA.
Also Read – Can A Company File A Writ Petition?
