The Bombay High Court has clarified a critical boundary of constitutional remedy, holding that writ petitions under Article 226 of the Constitution cannot be entertained against private cooperative societies unless they discharge public functions or act as instruments of the state. This ruling resolves a growing trend of litigants misusing writ jurisdiction to circumvent civil remedies against private entities.
Background & Facts
The Dispute
The petitioner, Malegaon Sahakari Sakhar Karkhana Ltd, is a registered cooperative sugar factory operating under the Maharashtra Cooperative Societies Act. The respondent, Atul Ramesh Taware, was employed as a manager and was terminated following an internal inquiry into alleged financial irregularities. He challenged his termination not through civil or labor forums, but by filing a writ petition under Article 226, seeking reinstatement and declaration of termination as illegal.
Procedural History
- 2024: Respondent filed Writ Petition No. 14730 of 2025 before the Bombay High Court, invoking Article 226.
- 2025: Multiple similar petitions were filed by other terminated employees against the same cooperative, consolidated under the caption 'High on Board'.
- 2025: The petitioner cooperative filed objections, arguing that it is a private entity and not a state actor under Article 12.
- 2026: The Court listed all petitions for final hearing and reserved judgment.
Relief Sought
The respondents sought reinstatement, back wages, and declaration that their termination violated principles of natural justice. They contended that the cooperative, due to its scale and economic importance, performed a public function and was thus amenable to writ jurisdiction.
The Legal Issue
The central question was whether a private cooperative sugar factory, registered under the Maharashtra Cooperative Societies Act, qualifies as a "State" under Article 12 of the Constitution, thereby rendering its actions subject to writ jurisdiction under Article 226.
Arguments Presented
For the Petitioner
The petitioner relied on Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and S. D. Organising Committee v. State of Kerala to argue that mere registration under a cooperative statute or receipt of government subsidies does not transform a private entity into a state. It emphasized that the cooperative’s governance is democratic, its funds are member-contributed, and its operations are commercial, not sovereign. The petitioner further cited Zee Telefilms Ltd. v. Union of India to assert that public function must be of a sovereign or regulatory nature, not merely economic or social.
For the Respondent
The respondents contended that the cooperative, as a major employer and economic actor in a rural region, discharged public duties akin to state functions. They cited Ajay Hasia v. Khalid Mujib Sehravardi to argue that entities performing functions of public importance, even if privately owned, are subject to constitutional scrutiny. They also pointed to government oversight under the Cooperative Societies Act as evidence of state control.
The Court's Analysis
The Court undertook a structured analysis of the nature of the petitioner’s entity, distinguishing between private enterprise and state action. It held that the cooperative, despite its size and economic role, remains a voluntary association of members governed by its own bylaws and elected board. The Court observed that the Maharashtra Cooperative Societies Act provides a regulatory framework but does not vest the state with operational control.
"The fact that a cooperative society is regulated by statute does not convert it into a State within the meaning of Article 12. Regulation is not control, and economic importance is not state function."
The Court rejected the argument that employment in a large cooperative constitutes a public function. It reaffirmed the Zee Telefilms test: for an entity to be amenable to writ jurisdiction, it must perform functions that are inherently governmental - such as regulation, taxation, or enforcement of public order. Sugar production, even in a rural economy, remains a commercial activity.
The Court also noted that the respondents had adequate remedies under the Industrial Disputes Act and the Maharashtra Cooperative Societies Act, including arbitration and appeals before the Registrar of Cooperative Societies. Invoking writ jurisdiction to bypass these statutory forums was deemed an abuse of process.
The Verdict
The petitioner won. The Court held that writ jurisdiction under Article 226 cannot be invoked against private cooperative societies unless they exercise sovereign or public functions akin to the state. The petitions were dismissed with costs, and the respondents were directed to pursue remedies under applicable labor and cooperative laws.
What This Means For Similar Cases
Writ Jurisdiction Is Not a General Civil Remedy
- Practitioners must now assess whether the target entity performs a public function before filing a writ petition
- Employment disputes against private cooperatives, trusts, or NGOs must be filed in labor courts or civil forums
- Filing writ petitions against private entities without state nexus invites dismissal and potential costs
Regulatory Oversight ≠ State Control
- Merely being registered under a state statute (e.g., Cooperative Societies Act, Societies Registration Act) does not trigger Article 12
- Government monitoring, subsidies, or licensing are insufficient to establish state character
- Courts will examine actual control, funding, and operational autonomy, not superficial state links
Statutory Remedies Prevail Over Constitutional Petitions
- Where specific statutory grievance redressal mechanisms exist (e.g., Registrar of Cooperatives, Labor Commissioner), writ petitions are barred as an abuse of process
- Lawyers must advise clients to exhaust statutory remedies before approaching constitutional courts
- This reinforces the principle that Article 226 is not a substitute for civil or administrative remedies
