State under Article 12: Tracing its Evolution

Article 12 of the Indian Constitution consists of all the bodies that constitutes ‘state’. This includes government, parliament of India, legislature of all states, local authorities and other authorities within India. The phrase ‘other authorities’ is highly ambiguous. A series of judgements have tried to interpret it due to which several educational institutions, electricity boards and banks have also come under the purview of state. In this write-up, we will discuss how the interpretation of ‘other authorities’ has evolved over time.

            The first case for analysis is Electricity Board Rajasthan v. Mohan Lal. In this case, the issue was whether an electricity board carrying out ‘commercial activities’ can be called a ‘state’ under article 12. The court held that an organization carrying out commercial activities would not remove it from the purview of a state. This is because as per article 19(1)(g), everybody has the right to trade and business and as per article 298, state is empowered to carry out trade and business. The test of ‘ejusdem generis’ which means ‘of same kind’ was also established in this case. This implies that only the organizations which are of same kind as government, legislature of all states, parliament of India and local authorities would come under the purview of ‘other authorities’. It is to be noted that the board has the power to give directions and disobeying such orders would constitute criminal offence. The board derives its power from a statute and has been created in accordance with it. Hence, it is an instrumentality of the state.

            The test of ‘ejusdem generis’ was not discussed in any case further. The test of ‘instrumentality’ was developed. In the case of Sukhdev v. Bhagatram, the issue was whether public corporations like LIC, ONGC and IFC would be a state. The said that India is a ‘welfare state’ and the role of state is very deep and significant. Few governmental organizations cannot fulfil it and therefore, we need public corporations to deliver these duties wholly. State acts through these public corporations which are its ‘instrumentality or agency’. A few criterias were laid down to ascertain if the organization is a state such as: unusual degree of control on organizations’ decisions by state, organization is carrying out a public function, requires government approval at several stages of administration, management etc. This case also clarified that financial control of a state over the organization is not the sole factor to decide instrumentality.

            Another relevant case R.D. Shetty v. Airport Authority of India laid down a list to decide the instrumentality of an organization. This list included factors such as magnitude of financial assistance by the state, does the state exercises unusual degree of control over the organization, what is the nature and extent of control, whether the organization enjoys state conferred monopoly status and whether the public functions carried out by the organization are closely related to governmental functions. This list is not exhaustive and the cumulative effect of all factors have to considered for deciding the answer. In the case Ajay Hasia v. Khalid Mujib, these factors were widened. It was also held in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology that a rigid application of these factors is not required. These factors must be applied flexibly to determine the instrumentality.

            In the landmark judgement BCCI v. Cricket Association of Bihar and Others, the bench held that BCCI was not a state as the government did not have an usual degree of control over its activities even though BCCI performed public functions. BCCI can be sued for breaching statutory or constitutional rights but not for breaching fundamental rights. Hence, a writ petition was maintainable under article 226 but not under article 32. The same was upheld in the case Janet Jayepal v. SRM University, education was called a ‘public function’ and since all the other factors were fulfilled, the court upheld the university to be a state under article 12. However, SRM university was a private body and hence, it cannot file a writ under article 32. A writ was maintainable under article 226 only. The ‘public function test’ has been prevalent and has been applied in a recent case, where RBI was held to be a state as it performs a ‘public function’.

            It is very evident from the case discussions that the meaning of ‘other authorities’ under article was first interpreted as per ‘ejusdem generis’. The interpretation slowly shifted to analysing if the organization was an instrumentality of the state and if it performed public function. It can also be observed that all the factors are considered in cumulation, if the organization is performing public function but is not managed by the state, it was not considered a state under article 12. Hence, equal importance has to be given to every factor and only after weighing and analysing every element should the court decide if the organization is a state.

Aishwarya Says:

I have always been against Glorifying Over Work and therefore, in the year 2021, I have decided to launch this campaign “Balancing Life”and talk about this wrong practice, that we have been following since last few years. I will be talking to and interviewing around 1 lakh people in the coming 2021 and publish their interview regarding their opinion on glamourising Over Work.

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In the year 2021, we wrote about 1000 Inspirational Women In India, in the year 2022, we would be featuring 5000 Start Up Stories.

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