Article 12 – The fundamental rights are available only against the State i.e.

, against
the actions of the State and its officials. The definition of State cannot and must not be
used for restricting the application of a fundamental right only against the State. The
fundamental rights can be directly violated by State by its officials or agencies and
indirectly by other throught its inaction.The latter is dangerous because the state
cannot escape responsibility on the plea that they are actions of private individuals.
The definition of “State” is inclusive and not exhaustive.

The expression “local authorities” refers to authorities like municipalities, District

Boards, panchayats.

Some high courts held that it would be reasonable to construe the expression “other
authorities” ejusdem generis (of the same kind) with government or legislature.
However, this would restrict the interpretation of the expression and hence was
rejected by the SC. In the Rajasthan Electricity case, SC observed that 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 or
promoting educational and economic interests of the weaker sections of people.

In Sukhdev Singh case, 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 3 were corporations created by statutes
and had statutory power to make binding rules and regulations and were subject to
pervasive government. 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. These corporations are instrumentalities or agencies of the state for
carrying on businesses which otherwise would have been run by the state
departmentally. State financial support plus an unusual degree of control over the
management and policies could be one indicator of the character of the body. The
dissenting opinion in the case said that as none of these corporations shared the
sovereign power, these could not be “the State” and held that if they are held to
“State”, their employees would get more protection than government servants and
will flood the courts with cases involving petty matters like seniority and scale of pay.

In RD Shetty’s case, corporations acting as agency of the government would

obviously be subjected to the same limitation in the field of constitutional or
administrative law. Certain provisions were laid down in Ajay Hasia’s case and it
was observed that the enquiry must be not how the juristic person was born but why
was it brought into existence. It was immaterial whether the corporation was created
by statute or under a statute. In MC Mehta’s case, SC argued that even the non-
governmental companies would fall within the meaning of the State for reasons of
State control and regulation and the kind of public function they perform, they satisfy
the test of being an instrumentality or agency of the government.

Authorities under government control – A person can enforce his fundamental

rights against an executive or administrative order of an authority under the control of
the governmental of India, functioning outside the territory of India. Suitable orders
can be passed against Govt. of India directing them to give effect to the decision of
the court in exercise of their power of control over the authority outside the territory
of India. Every authority under control of Govt. of India is “state” within art 12 and
not vice-versa.

State outside article 12 – Court has reminded that what is the State for the purposes
of art 12 need not be the State for other purposes. State must be defined liberally for
wider application of fundamental rights but not for any other purposes. Thus, an
employee of public corporation may challenge the violation of his fundamental rights
by corporation, but for that reason he does not become a State employee.

Judiciary – In he exercise of non-judicial functions such as administrative or

legislative, the courts fall within the definition of “the State”. The exercise of judicial
functions will not occasion the infringment of the fundamental rights and therefore
the question of bringing the courts within the definition of “the State” would not arise.
When court exercises its power to make statutues and makes rules that contravene the
fundamental rights, the rule could be held ultravires and appropriate remedy under art
32 or 226 could be sought. For ex – if appointment of judges are made in violation of
the equality clause, it shall be amenable to the writ jursidiction. Courts are required to
determine the scope of the fundamental rights vis-à-vis legislative or executive action
or action of any other person or body. Unless restricted, Courts are competent to make
a right or wrong determinatiion in exercise of that function. A wrong determination
does not constitute breach of fundamental right and remedy against such mistake is
not to allege a violation of fundamental right and approach court udner art 32 or 226
but to allege that determination of court is inconsistent with FR. In AR Antulay’s
case, majority of the judges said that a wrong determination of the court cannot be
corrected in proceedngs for certiorari, no judge has refuted this proposition. Not much
would be gained by including judiciary with “the state” under art 12. It will only lead
to multiplicity of proceedings by raising the same issues first in appeal and then in
writ proceedings.

Some people entertain serious doubts over the application and efficacy of the
fundamental rights. Firstly, that with the increasing role of private enterprise and the
decreasing role of the State, the fundamental rights would be violated more by the
private enterprise than by the State. Secondly, the private enterprise itself will claim
the fundamental rights as legal person such as corporations, including the
multinational corporations. Horizontal application of fundamental rights – merely by
icnreasing the role of private enterprise, the state cannot absolve itself from the
responsibility of honoring ad safeguarding the FRs. Enforcement of almost all
economic and social rights depends more on political process than on the courts. As
regards, the political and civil rights the position in unlikely to change, and the courts
shall always be available to enforce them.

The definition of “State” has enough scope to cover direct and indirect violations of
the rights. The advancement of information technology shall play a decisive role in
shaping the political and judicial process in support of fundamental rights. Most of the
fundamental rights are by nature and intent available only to natural persion and
cannot inhere in legal or non-natural proces. No question arises of their being availed
of by the corporations much less the multinational corporations.

• 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.

o 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.
o 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.
o 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.
o 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.
o It may also be a relevant factor...whether the corporation enjoys
monopoly status which is the State conferred or State protected.
o Existence of deep and pervasive State control may afford an
indication that the Corporation is a State agency or instrumentality.
o 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.
o 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.
o 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.
o 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.
o It may also be a relevant factor...whether the corporation enjoys
monopoly status, which is the State conferred or State protected.
o Existence of deep and pervasive State control may afford an indication
that the Corporation is a State agency or instrumentality.
o 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.
o 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
o 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.
o 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  

o 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.
o 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

State under Article 12 vis-à-vis Public Authority under RTI Act

Thellapalam Ser. Coop Bank Ltd v. State of Kerala

Issue: Whether a co-operative society registered under the Kerala Co-operative

Societies Act, 1969 will fall within the definition of "public authority" Under
Section 2(h) of the Right to Information Act, 2005 and be bound by the obligations to
provide information sought for by a citizen under the RTI Act.

o A clear distinction between a body which is created by a Statute and a

body which, after having come into existence, is governed in
accordance with the provisions of a Statute. Societies, with which we
are concerned, fall under the later category that is governed by the
Societies Act and are not statutory bodies
o Societies are, of course, subject to the control of the statutory
authorities like Registrar, Joint Registrar, the Government, etc. but
cannot be said that the State exercises any direct or indirect control
over the affairs of the society which is deep and all pervasive.
Supervisory or general Regulation under the statute over the co-
operative societies, which are body corporate, does not render
activities of the body so regulated as subject to such control of the
State so as to bring it within the meaning of the "State" or
instrumentality of the State.
o For arriving at the conclusion that the State has a deep and pervasive
control over the Society, several other relevant questions are required
to be considered, namely, (1) How was the Society created? (2)
Whether it enjoys any monopoly character? (3) Do the functions of the
Society partake to statutory functions or public functions? and (4) Can
it be characterized as public authority?
o Societies, with which we are concerned, admittedly, do not fall in the
above mentioned categories, because none of them is either a body or
institution of self-government, established or constituted under the
Constitution, by law made by the Parliament, by law made by the State
Legislature or by way of a notification issued or made by the
appropriate government.