Concept of State under Article 12 of Indian

Constitution
A PROJECT SUBMITTED TO RAJIV GANDHI NATIONAL
UNIVERISTY OF LAW, PUNJAB FOR THE THIRD SEMESTER OF
B.A. LL.B. (HONS)

Submitted to: Submitted by:

Ms. Lovepreet Kaur Harsh Mangal

(Ass. Professor of Law) Rollno. 18008

Group no. 2
 ACKNOWLEDGEMENT
I would like to express my special thanks of gratitude to my teacher Ms. Lovepreet Kaur I,
who gave me the golden opportunity to do this wonderful project of Constitution on “Concept
of State under Article 12 of Indian constituion”. I came to know about so many new things I
am really thankful to them. Secondly I would also like to thank my friends who helped me a
lot in finalizing this project within the limited time of frame
 Chapter 1

INTRODUCTION
1.1 Article 12 of the Constitution of India:

The Constitution of India, Article 12 : “In this part, unless the context otherwise requires, 
“the State” includes the Government and the Parliament of India, the Government and the 
Legislature of each of the States, all local and other authorities within the territory of India or
under the control of the Government of India.”

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

(d) Other Authorities- Authorities other than local authorities’ working-

( i ) Within the territory of India or;

( ii ) Under the control of the Government of India.

1.2 Importance of Article 12:

The Constitution of India has defined the word ‘State’ for the purpose of Part III and Part IV.
The State has been defined by different political thinkers. In Political theory for state to exist
the Territory, Population, Sovereignty and Capacity to maintain international relation is
important but this definition could not serve the purpose of enforcement of Fundamental
Rights. Fundamental Rights constitute limitation on the power of the State and are a
guarantee against State action. The Fundamental Rights are a protection against invasion of
the rights by the State. So, Article 12 of Indian Constitution defines State against whom the
fundamental rights can be claimed. Therefore, whether Constitution says or not, it is
generally assumed that Fundamental Rights given in Part III are available against the State
that is against the action of State and its officials.

Chapter 2

Judicial Interpretation of Article 12

The definition of State in Article 12 is not exhaustive but inclusive, which means that apart
from the bodies or organs which have been enumerated, others may also be covered by the
expression State.

In State of West Bengal v/s Subodh Gopal Bose 1, the Supreme Court observed that the object
of Part III of the Indian Constitution is to provide protection to the rights and freedoms
guaranteed under this part by the invasion of ‘State’. Individuals need constitutional
protection against the state. The rights which are given to the citizens by way of fundamental
rights as included in Part III of the Constitution are guarantee against State action as
distinguished from the violation of such rights from private parties. Private action is
sufficiently protected by the ordinary law of land. Patanjali Sastri, CJ, said:

“The whole object of Part III of the constitution is to provide protection for the freedoms and
rights mentioned therein against arbitrary invasion by the state”

In P.D. Shamdasani v. Central Bank of India 2, the petitioner, in an application under Article
32 of the constitution, sought the protection of the court on the ground that his property rights
under Articles 19(1)(f) and 31 were infringed by the action of another private person – the
central bank of India. The Supreme Court said that the language and structure of Article 19
and its setting in Part III of the Constitution clearly show that the Article was intended to
protect those freedoms against state action other than in the legitimate exercise of its power to
regulate private rights of property by individuals is not within the purview of this article.3
1
AIR 1952 SC 59
2
Ibid.
3
J.N. Pandey, The Constitutional Law Of India, Central Law Publisher, Allahabad, 2011, p. 59
The term state thus includes executive as well as the legislative organs of the Union and
States. It is therefore, the actions of these bodies that can be challenged before the courts as
violating fundamental rights.

The first two categories included the legislative and executive wings of the Union and State
in all their possible varieties. They are quite specific and self explanatory. The latter two
categories, particularly the last are not so specific and require some explanation. To give a
wider dimension to Fundamental Rights the Judiciary has interpreted “State” in different
context at different time.

Authorities: Authority means a person or body exercising power to command. In the context
of Article 12, the word “authority” means authority who has the power to make laws, orders,
regulations, bye-laws, notifications etc. which have the force of law and power to enforce
those laws.

Other authorities: In article 12 ‘other authorities’ is used after mentioning a few of them,
such as, the government,  parliament of India, the government and legislature of each of the
states and all local authorities.

Courts have ruled that where there is pervasive or predominant governmental control or
significant involvement in the activities, such bodies, entities and organizations fall within the
definition of “the State”. As a result of judicial interpretation, “the State” has been held to
include statutory bodies such as insurance corporations, nationalized banks, airline
corporations, electricity boards, educational institutions and societies  whose composition and
administration are predominantly controlled by the government. Consequently the reach and
extent of protection of fundamental rights has been widened and greater protection has been
afforded especially in the area of employment against discriminatory practices.

Again there are private, non-State entities which discharge important quasi-governmental or
important public functions, which have repercussions on the life and welfare of the
community. Such entities and bodies can be regarded as “the State” as would appear from the
concurring opinion of Justice Mathew. “Institutions engaged in matters of high public interest
or 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 function”.4

4
 Sukhdev Singh  v. Bhagatram, AIR 1975 SC 1331, 1355
 Chapter 3

State and its instrumentalities

Various factors for determining whether a body is agency of state has been laid down in Ajay
Hasia v. Khalid Mujib5:

a)     If the entire share capital of the corporation is held by the government, it would go for
long way towards indicating that the corporation is an instrumentality or an authority of the
government.

b)    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 corporation being
impregnated with the government character.

c)     Whether the corporation enjoys monopoly status which is state conferred or state
protected.

d)    Existence of deep and pervasive state control may afford an indication that the
corporation is a state agency or instrumentality.

e)     If the function of the corporation are of public importance and closely related to
government functions, it would be relevant factor in classifying a corporation as an
instrumentality or agency of the government.

f)     If a department of government is transferred to corporation, it would be strong factor

supporting the inference of the corporation being an instrumentality or agency of the
government.

In the case of Ajay Hasia v. Khalid Mujib,6 the question raised was whether the Regional
Engineering College, Srinagar, established, administered and managed by a society registered
under the J&K Registration of Societies Act, was State within the meaning of Article 12.
Justice P. N. Bhagwati speaking for a unanimous five-judge bench reiterated that the test for

5
(1981) 1SCC 722: AIR 1981SC 487
6
Supra. 24
determining whether a corporation falls within the definition of State in Article 12 was an
instrumentality or agency of government. The enquiry must be not how the juristic person
was born but why was it brought into existence. It was therefore immaterial whether the
corporation was created by a statute or under a statute. The concept of instrumentality or
agency of the government was not limited to a corporation created by a statute but was
equally applicable to a company or society considering the relevant factors.

Considering the tests formulated in Ajay Hasia case7, and holding that the tests so laid down,
were not a rigid set of principles, so that if a body fell within any of them, it must, ex
hypothesis, be considered to be a state within the meaning of Article 12, the majority ruled
that the question in each case would be – “whether in the light of cumulative facts as
established, the body is financially, functionally and administratively dominated by or under
the control of Government. Such control must be particular to the body in question and must
be pervasive. If it was found that the control of the Government was merely regulatory
whether under Statute or otherwise, it would not serve to make the body, a state, the court
held.8

Explaining and criticizing the decision in Ajay Hasia case, the minority, consisting the two
learned judges, said that the tests laid down in that case were relevant for the purpose of
determining whether an entity was an instrumentality or agency of the state and that simply
by holding a legal entity to be an instrumentality or agency of the state, it did not necessarily
became an authority within the meaning of “other authorities” in Article 12. “To be an
authority”, the learned judges opined, “the entity should have been created by a Statute or
under a statute and functioning with liability and obligations to the public.”

Applying the tests laid by the Apex Court in Pradeep Kumar Case,9 a Divisional Bench of
the Supreme Court in G. Bassi Reddy v. International Crops Research Institute,10 held the
respondent institute is not covered by Article 12. The institute is an International
Organization, set up as a non-profit research and training centre, with the object to help
developing countries in semi-arid tropics to alleviate rural poverty and hunger in ways that
are environmentally sustainable. Not set up by the Government, the institute gives its services
voluntarily to a large number of nations besides India. It is not controlled by, neither it is

7
Ibid.
8
Pradeep Kumar v. I.I.C.B., (2002) 5 SCC 111.
9
Supra 27.
10
AIR 2003 SC 1764.
accountable to the Government. The Indian Government’s financial contribution to the
Institute is minimal and is participation in administration of the Institute is limited to 3 out of
5 members.

 It was laid down that The Indian Statistical Institute 11, Indian Council of Agricultural
research12, Sainik School Society13, U.P. State Co-operative Land Development Bank Ltd. 14 ,
U.P Rajya Karamchari Kalyan Nigam15, all societies registered under the Societies
Registration Act; Project and Equipment Corporation of India Ltd. 16 a government of India
undertaking; Food Corporation of India17, a statutory corporation; The Steel Authority of
India Ltd, a Public Limited company owned, controlled and supervised by the Central
Government18; Mysore Paper Mills Ltd, a State Government Company 19; The Indian Oil
Corporation, a company registered under the Companies Act, 195620; a State-aided school,
whose employees enjoy statutory protection and which is subject to the regulations made by
the State education department21; a medical college run by municipal corporation 22; several
State electricity boards23 created on the lines of Rajasthan Electricity Board; Central Inland
Water Transport Corporation Ltd, a government company jointly owned by Central
government and two State governments24; a Government Company constituted as 
development authority under a State Town Planning Act; regional rural banks established
under the Regional Rural Banks Act,1976; port trusts created under the Major Port Trusts
Act, 1889 or 1963 have been held ‘other authorities’ within the meaning of Article 12. In
M.C. Mehta v. Union of India25, without deciding the question finally, Justice Bhagwati
advanced strong arguments for including the non-governmental companies within the
meaning of state.

11
B.S. Minhas v. Indian Statistical Institute, (1983) 4 SCC 582: AIR 1984 SC 363.
12
 P.K. Ramchandra Iyer v. Union of India, (1984) 2 SCC 141.
13
 All India Sainik School Employees Association v. Sainik School Society AIR 1988 SC 88.
14
P. State Co-operative Land Development Bank Ltd. V. Chandra bhan Dubey AIR 1999 SC 753.
15
Virendra Kumar Srivastav  v. U.P Rajya Karamchari Kalyan Nigam, (2005) 1 SCC 149
16
A. L. Kalra v. Project and Equipment Corporation (1984) 3 SCC 316
17
Workmen v. Food Corporation of India, (1985) 2 SCC 136
18
Bihar State Harizan Kalyan Parishad v. UOI (1985) 2 SCC 644
19
Mysore Paper Mill Ltd. v. Mysore Paper mill Officer’s Association (2002) 2 SCC 167
20
Mahabir Auto Stores v. Indian Oil Corporation (1990) 3 SCC 752
21
Mnamohan Singh Jaitli v. Governer, UT of Chandigarh 1984 suppl SCC 540
22
Dinesh Kumar v. Moti lal Nehru Medical College, Allahabad (1985) 3 SCC 542
23
Rohtas Industries Ltd. v. Bihar S.E.B, 1984 supp SCC 161
24
 Central Inland Water Transport Corporations Limited v. Brojonath Ganguly (1986) 3 SCC 156
25
(1987) 1 SCC 395
 Chapter 4

Judiciary- Is It a Part of the State?

Judiciary is the prominent organ of the State. Legislature frames the law and executor organ
implements them and enjoys vast power of delegated legislation as well. One of the most
important functions of Judiciary is to check invasion of fundamental right by these two
organs and their instrumentality. Judiciary is to turn down the rules, regulations, which are in
clear violation of fundamental rights. So judiciary act in three different capacities:

a)     As a rule making authority

b)    As an administrative authority

c)     Act judicially

 Judiciary is part of State or not depends upon the capacity in which it acts. When judiciary
acts in its judicial capacity, it is not included within the meaning of “other authorities” and
therefore, it is not a State under Article 12. But when judiciary acts in administrative
capacity, it is in included within the meaning of “other authorities” and therefore, it is State
under Article 12. If judiciary acts in administrative capacity or exercises administrative
function or make rules and its actions or rules contravene Fundamental Rights, they may be
challenged in the Court.

4.1 Judiciary in its Administrative and Rule making capacity:

In Paramatam Sharan v Chief Justice26 it was held that when Chief Justice of the High
Court or Supreme Court appoints officer of the Court in the exercise of his power of
appointment and the appointment made by him contravene the Fundamental Rights, they may
be challenged in the Court because when Chief Justice of the High Court or Supreme Court
makes appointment officer of the Court the exercise of his power of appointment, he acts in
administrative capacity and therefore, he is included within the meaning of term “State”
under Article 12.

26
AIR 1964 Raj. 13
In Prem Chand Garg v/s Excise Commissioner U.P.27 the question related to the rule making
power of the Supreme Court, conferred by Article 145 for regulating, generally, the practice
and procedure of the Court. Rule 12 of Order 35 made by Supreme Court, provided that the
court might in the proceeding to which the said Order applied, impose such terms as to costs
and as to giving of security, as it considered fit. A petition under Article 32 was one such
proceeding covered by Order 35. By the petition under Article 32, the petitioner has
challenged the validity of an order of the Excise Commissioner refusing permission to the
distillery to supply power alcohol to the petitioner. The petition was admitted, but, acting
under the impugned Rule, the Court directed the petitioner to deposit a security of Rs.2500/-
in cash within 6 weeks, as a condition precedent for issuing rule nisi to the impleaded
respondents. The petitioner having failed to collect the requisite fund, challenged the validity
of Rule 12 of Order 35 and contended that the said Rule was ultra vires as it contravened their
Fundamental Right guaranteed by Article 32.

Gajendragadhkar, J. speaking for the majority, held that impugned Rule invalid, as it retarded
the assertion or vindication of the Fundamental Right to move to the Supreme Court under
Article 32. The Rules framed under Article 145, the Court held are framed in the exercise of
the delegated power of legislation, and the said power could not be exercised so as to affect
the Fundamental Rights. Likewise, the Chief Justice, in exercising powers of appointment of
officer under Article 146, shall be amenable to the writ jurisdiction, if appointments are made
in violation of Article 14-16 of the Constitution.

It is thus be stated that “Judiciary” while exercising its rule making power would be covered
by the expression “State” within meaning of Article 12.

27
AIR 1963 SC 996 (1004).
 Chapter 5

CONCLUSION
Since 17th century if not earlier, human thinking has been veering round to the theory that
man has certain essential, basic, natural and inalienable rights or freedoms and it is the
function of the State, in order that human liberty may be preserved, human personality
developed, and an effective social and democratic life promoted, to recognize these rights and
freedoms and allow them a free play.

The concept of human rights protects individuals against the excesses of the state. The
concept of human rights presents an attempt to protect the individual from oppression and
injustice. In modern times, it is widely accepted that the right to liberty is the very essence of
a free society and it must be safeguarded at all times. The idea of guaranteeing certain rights
is to ensure that a person may have a minimum guaranteed freedom.

Part III of the Constitution protects substantive as well as procedural rights. Articles 12-35 of
the Constitution pertain to Fundamental Rights of the people. Most of the Fundamental
Rights are claimed against the State and its instrumentalities and not against private
bodies.28 Article 13(2) bars the ‘state’ from making any ‘law’ infringing a Fundamental
Right.

According to Article 13(2), the State ‘shall not make any law, which takes away or abridges
the Fundamental Rights; and a law contravening the Fundamental Rights is, to the extent of
that contravention, void. It is the crucial constitutional provision which deals with the post-
constitution laws. If any such law violates any Fundamental Right it becomes void ab initio,
i.e., from its inception. The effect of Article 13(2) thus is that no Fundamental Right can be
infringed by the state either by legislative or administrative action.

The two important concepts used in this provision are: ‘state’ and ‘law’. These concepts thus,
need some elucidation. Fundamental Rights are mostly claimed against the ‘state’. Article 12
gives an extended significance to the term ‘state’. Article 12 clarifies that the term ‘state’
occurring in Article 13(2), or any other provision concerning Fundamental Rights, has an
expansive meaning.  The action of the any of the bodies comprised within the term ‘state’ as

28
Shamdasani v. Central Bank of India, AIR 1952 SC 59.
defined in article 12 can be challenged before the courts under Article 32 on the ground of
violating Fundamental Rights.

The most significant expression used in Article 12 is “other authorities”. This expression is
not defined in the Constitution. The interpretation of the term “other authorities” in Article 12
had caused a good deal of difficulty, and judicial opinion has undergone changes over time. It
is, therefore, for the Supreme Court, as the Apex Court, to define this term. It is obvious that
wider the meaning attributed to the term “other authorities” in Article 12, wider will be the
coverage of the Fundamental Rights, i.e., more and more bodies can be brought within the
discipline of Fundamental Rights. The reason for adopting such broad view is that the
Constitution should, whenever possible, “be so construed as to apply to arbitrary application
of power against individuals by centers of power. The emerging principle appears to be that a
public corporation being a creation of the state is subject to the Constitutional limitation as
the state itself”.

Again there are private, non-State entities which discharge important quasi-governmental or
important public functions, which have repercussions on the life and welfare of the
community.

The word ‘State' under Article 12 has been interpreted by the courts as per the changing times
.It has gained wider meaning which ensures that Part-III can be applied to a larger extent. As
a result of judicial interpretation, “the State” has been held to include statutory bodies such as
insurance corporations, nationalized banks, airline corporations, electricity
boards, educational institutions and societies  whose composition and administration are
predominantly controlled by the government. Consequently the reach and extent of protection
of fundamental rights has been widened and greater protection has been afforded especially
in the area of employment against discriminatory practices. Thus, it is hoped that it would
continue to extent its width in coming times.