Article 12 Cases

State as provided under Article 12 of the Constitution has four components:
( a ) The Government and Parliament of India-
Government means any department or institution of department. Parliament shall consist of the President, the House of People and Council of States
( b ) The Government and Legislature of each State
State Legislatures of each State consist of the Governor, Legislative Council and Legislative Assembly or any of them.
( c ) Local Authorities within the territory of India
Authority means
( i ) Power to make rules, bye- laws, regulations, notifications and statutory orders.
( ii ) Power to enforce them.
Local Authority means Municipal Boards, Panchayats, Body of Port Commissioners and others legally entitled to or entrusted by the government, municipal or local fund.
( d ) Other Authorities
Authorities other than local authorities working
( i ) Within the territory of India or;
( ii ) Outside the territory of India.

Article 12 * Pre Electricity Board case, courts took a very narrow interpretation of Article 12. * Ujjam Bai v. State of U.P (1963) - That an "inclusive" definition is generally not exhaustive is a statement of the obvious and as far as Article 12 is concerned.
Rajasthan State Electricity Board v. Mohan Lal (1967) * Junior officer to the petitioner were promoted so he claimed right to equality against electricity board * Meaning of word “authority” as per Webster’s Dicitonary - "a public administrative agency or corporation having quasi-governmental powers and authorised to administer a revenue-producing public enterprise." meaning of the word "authority" is clearly wide enough to include all bodies created by a statute on which powers are conferred to carry out governmental or quasi-governmental functions and we do not see any reason to narrow down this meaning in the context in which the words "other authorities" are used in Art. 12 of the Constitution. * The expression "other authorities" in Art. 12 will include all constitutional or statutory authorities on which powers are conferred by law. It is not at all material that some of the powers conferred may be for the purpose of carrying on commercial activities * The circumstance that the Board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore, give any indication that the Board must be excluded from the scope of the word "State" as used in Art. 12.
Justice Shah – Dissenting Opinion * In determining what the expression "other authority" in Art. 12 connotes, regard must be had not only to the sweep of fundamental rights over the power of the authority, but also to the restrictions which may be imposed upon the exercise of certain fundamental rights (e.g., those declared by Art. 19) by the authority. * Authorities constitutional or statutory invested with power by law but not sharing the sovereign power do not fall within the expression "State" as defined in Art. 12. Those authorities, which are invested with sovereign power i.e., power to make rules or regulations and to administer or enforce them to the detriment of citizens and others fall within the definition of "State" in Art. 12 and constitutional or statutory bodies which do not share that sovereign power of the State are not, in my judgment, "State" within the meaning of Art. 12 of the Constitution.
Sukhdev Singh v. Bhagat Ram (1975) * the question is whether these statutory corporations are authorities within the meaning of Article 12. The statutes for consideration are LIC Act, ONGC Act and Industrial Finance Corporation Act. * All these provisions indicate at each stage that the creation, composition of membership, the functions and powers, the financial powers, the audit of accounts, the returns, the capital, the borrowing powers, the dissolution of the Commission and acquisition of and for the purpose of the company and the powers of entry are all authority and agency of the Central Government. * The Oil and Natural Gas Commission is owned by the Government. It is a statutory body and not a company. The Commission has the exclusive privilege of extracting petroleum. The management is by the Government. It can be dissolved only by the Government. * The structure of the Life Insurance Corporation indicates that the Corporation is an agency of the Government carrying on the exclusive business of life insurance. Each and very provision shows in no uncertain terms that the voice is that of the Central Government and the hands are also of the Central Government. * Institutions engaged in matters of high public interest of performing public functions are by virtue of the nature of the functions performed government agencies. Activities, which are too fundamental to the society, are by definition too important not to be considered government functions.
Arguments by State – * These Corporations cannot be said to be "other authority" contemplated in Article 12 or two principal reasons. First, one of the attributes of a State is making laws. The State exercises governmental functions and the executive power of the State is co-extensive with the legislative power of the State. Second, authority as contemplated in Article 12 means a body of persons established by statute who are entitled as such body to command obedience and enforce directions issued by them on pain of penalty for violation. On these grounds it was said that these corporations cannot make laws like a State and cannot enforce directions.

Matthew J. * The fact that these corporations have independent personalities in the eye of law does not mean that they are not subject to the control of government or that they are not instrumentalities of the government. These corporations are instrumentalities or agencies of the state for carrying on businesses which otherwise would have been run by the state departmentally. * Merely because a corporation has legal personality of its own, it does not follow that the corporation cannot be an agent or instrumentality of the state, if it is subject to control of government in all important matters of policy. The crux of the matter is that public corporation is a new type of institution which has sprung from the new social and economic functions of government and that it therefore does not neatly fit into old legal categories. In stead of forcing it into them, the later should be adapted to the needs of changing times and conditions.
R. D. Shetty v. Int’l Airport Authority Of India (1979) * Tender given to party which did not meet the eligibility criteria, so giving up of tender by airport authority was challenged. * There are several factors which may have to be considered in determining whether a corporation is an agency or instrumentality of Government. * One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. * Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character. * It may also be a relevant factor...whether the corporation enjoys monopoly status which is the State conferred or State protected. * Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality. * If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. * Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government
Ajay Hasia v. Khalid Mujib (1981) * Petitioner got good marks in entrance examination but was rejected in interview where hardly any questions were posed to him. * Contended that the college is run by society which is not a corporation created by a statute but is a society registered under the Jammu & Kashmir Societies Registration Act, 1898 and it is therefore not an 'authority' within the meaning of Article 12. * where a corporation is an instrumentality or agency of the government, it must be held to be an 'authority' within the meaning of Article 12 and hence subject to the same basic obligation to obey the Fundamental Rights as the government * It will thus be seen that the State Government and by reason of the provision for approval, the Central Government also, have full control of the working of the Society and it would not be incorrect to say that the Society is merely a projection of the State and the Central Governments and to use the words of Ray, C.J. in Sukhdev Singh's case (supra), the voice is that of the State and the Central Governments and the hands are also of the State and the Central Governments. We must, therefore, hold that the Society is an instrumentality or agency of the State and the Central Governments and it is an 'authority' within the meaning of Article 12. * There are several factors that may have to be considered in determining whether a corporation is an agency or instrumentality of Government. * One thing is clear that if Government holds the entire share capital of the corporation it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. * Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character. * It may also be a relevant factor...whether the corporation enjoys monopoly status, which is the State conferred or State protected. * Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality. * If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. * Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government
Som Prakash Rekhi v. Union of India (1981) * Pension arbitrarily reduced of the employee of Burmah Shell which was later acquired by the Central government * The true test is functional. Not how the legal person is born but why it is created. Nay more, Apart from discharging functions or doing business as the proxy of the State, wearing the corporate mask there must be an element of ability to affect legal relations by virtue of power vested in it by law * There is no good reason why, if government is bound to observe the equality clauses of the Constitution in the matter of employment and in its dealings with the employees, the corporations set up or owned by the government should not be equally bound and why, instead, such corporations could become citadels of patronage and arbitrary action. * A public authority is a body which has public or statutory duties to perform and which performs those duties and carries out its transactions for the benefit of the public and not for private profit * merely because a corporation has legal personality of its own, it does not follow that the corporation cannot be an agent or instrumentality of the State, if it is subject to control of government in all important matters of policy * Merely because a company or other legal person has functional and jural individuality for certain purposes and in certain areas of law, it does not necessarily follow that for the effective enforcement of fundamental rights under our constitutional scheme, we should not scan the real character of that entity and if it is found to be a mere agent or surrogate of the State, in fact owned by the State, in truth controlled by the State and in effect an incarnation of the State, constitutional lawyers must not blink at these facts and frustrate the enforcement of fundamental rights despite the inclusive definition of Article 12 that any authority controlled by the Government of India is itself State, Law has many dimensions and fundamental facts must govern the applicability of fundamental rights in a given situation.
Pradeep Kumar Biswas v. Indian Institute of Chemical Biology and Ors. (2002) * This case deals with writ petition against Indian Institute of Chemical Biology which is a unit of CSIR (Sabhajit held that Council of Scientific and Industrial Research is not state for purpose of Article 12, this court also held the same) * The significance of Article 12 lies in the fact that it occurs in Part III of the Constitution which deals with fundamental rights. The various Articles in Part-III have placed responsibilities and obligations on the 'State' vis-a- vis the individual to ensure constitutional protection of the individual's rights against the state, including the right to equality under Article 14 and equality of opportunity in matters of public employment under Article 16 and most importantly the right to enforce all or any of these fundamental rights against the 'State' as defined in Article 12 either under Article 32 by this Court or under Article 226 by the High Courts by issuance of writs or directions or orders. * Initially the definition of State was treated as exhaustive and confined to the authorities or those which could be read ejusdem generis with the authorities mentioned in the definition of Article 12 itself. The next stage was reached when the definition of 'State' came to be understood with reference to the remedies available against it. For example, historically, a writ of mandamus was available for enforcement of statutory duties or duties of a public nature. Thus a statutory corporation, with regulations farmed by such Corporation pursuant to statutory powers was considered a State, and the public duty was limited to those which were created by statute. * A precedent like Sabhajit Tewary which has stood for a length of time should not be reversed, however erroneous the reasoning if it has stood unquestioned, without its reasoning being 'distinguished' out of all recognition by subsequent decisions and if the principles enunciated in the earlier decision can stand consistently and be reconciled with subsequent decisions of this Court. * The logical sequitur is that it really does not matter what guise the State adopts for this purpose, whether by a Corporation established by statute or incorporated under a law such as the Companies Act or formed under the Societies Registration Act, 1860. Neither the form of the Corporation, nor its ostensible autonomy would take away from its character as 'State' and its constitutional accountability under Part III vis-a-vis the individual if it were in fact acting as an instrumentality or agency of Government. * Ratio * The Question in each case will have to be considered on the bases of facts available as to whether in the light of the cumulative facts as established, the body is financially, functionally, administratively dominated, by or under the control of the Government. * Such control must be particular to the body in question and must be pervasive. Mere regulatory control whether under statute or otherwise would not serve to make a body a State.
Zee Telefilms Ltd v. Union of India (2005) * Whether BCCI is state for purposes of Article 12?
Observations by Court: 1. The Board is not created by a statute. 2. The Government holds no part of the share capital of the Board. 3. Practically no financial assistance is given by the Government to meet the whole or entire expenditure of the Board. 4. The Board does enjoy a monopoly status in the field of cricket but such status isnot State conferred or State protected. 5. There is no existence of a deep and pervasive State control. The control if any is only regulatory in nature as applicable to other similar bodies. This control is not specifically exercised under any special statute applicable to the Board. All functions of the Board are neither public function nor are they closely related to governmental functions. 6. The Board is not created by transfer of a Government owned corporation. It is an autonomous body. 7. The facts established do not cumulatively show that the Board is financially, functionally or administratively dominated or is under the control of the Government. Thus the little control that the Government may be said to have on the Board is not pervasive in nature. Such limited control is purely regulatory control and nothing more.
Argument of Appellant: 1. In the present day context cricket has become a profession and that the cricketers have a fundamental right under Article 19(1) (g) to pursue their professional career as cricketers. It was also submitted that the Board controls the said rights of a citizen by its rules and regulations and since such a regulation can be done only by the State the Board of necessity must be regarded as an instrumentality of the State. 2. Memorandum of Association and the rules and regulations and due to its monopolistic control over the game of Cricket the Board has all pervasive powers to control a person's cricketing career as it has the sole authority to decide on his membership and affiliation to any particular Cricketing Association, which in turn would affect his right to play cricket at any level in India as well as abroad.

Judgment: 1. To argue that every entity, which validly or invalidly arrogates to itself the right to regulate or for that matter even starts regulating the fundamental right of the citizen under Article 19(1) (g), is a State within the meaning of Article 12 is to put the cart before the horse. If such logic were to be applied every employer who regulates the manner in which his employee works would also have to be treated as State. 2. If the argument of the learned counsel for the petitioner is to be accepted then the petitioner will have to first establish that the Board is a State under Article 12 and it is violating the fundamental rights of the petitioner. In this petition under Article 32 we have already held that the petitioner has failed to establish that the Board is State within the meaning of Article 12. 3. In the absence of any authorization, if a private body chooses to discharge any such function that is not prohibited by law then it would be incorrect to hold that such action of the body would make it an instrumentality of the State. The Union of India has tried to make out a case that the Board discharges these functions because of the de facto recognition granted by it to the Board under the guidelines framed by it but the Board has denied the same. In this regard we must hold that the Union of India has failed to prove that there is any recognition by the Union of India under the guidelines framed by it and that the Board is discharging these functions on its own as an autonomous body. 4. It cannot be denied that the Board does discharge some duties that can be said to be akin to public duties or State functions and if there is any violation of any constitutional or statutory obligation or rights of other citizens, the aggrieved party may not have a relief by way of a petition under Article 32. 5. But that does not mean that the violator of such right would go scot-free merely because it or he is not a State. Though the remedy under Article 32 is not available, an aggrieved party can always seek a remedy under the ordinary course of law or by way of a writ petition under Article 226 of the Constitution, which is much wider than Article 32.
Can Non-Government authorities be made State?
MC Mehta v. Union of India * Under the Industrial Policy Resolution 1956 industries were classified into three categories having regard to the part which the State would play in each of them. The first category was to be the exclusive responsibility of the State. The second category comprised those industries which would be progressively State owned and in which the State would therefore generally take the initiative in establishing new undertakings but in which private enterprise would also be expected to supplement the effort of the State by promoting and development undertakings either on its own or with State participation. The third category would include all the remaining industries and their future development would generally be left to the initiative and enterprise of the private sector. * If an analysis of the declarations in the Policy Resolutions and the Act is undertaken, we find that the activity of producing chemicals and fertilisers is deemed by the State to be an industry of vital public interest, whose public import necessitates that the activity should be ultimately carried out by the State itself, in the interim period with State support and under State control, private corporations may also be permitted to supplement the State effort