STATUTORY PUBLIC

CORPORATIONS
Assignment by Varun Singh

MAY 30, 2022

DR. B.R. AMBEDKAR NATIONAL LAW UNIVERSITY, RAI
Administrative Law
 TABLE OF CONTENTS

CONTENT PAGE NUMBER

Acknowledgement 1

Cases Cited 2

Abstract 3

Introduction 4

Definitions of Statutory Corporations 5

Are they Considered ‘State’ under Article 12? 6

Characteristics of Public Corporations 8

Case laws on Statutory Corporations 11

Conclusion 18

Bibliography 19

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 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to

my teacher of Administrative Law “Ms. Vaneet Kaur Sokhi”
for their able guidance and support in completing my
project.

I would also like to extend my gratitude to my Dean of

Academics “Dr. Pradeep Kumar” and Vice Chancellor “Dr.
Archana Mishra” for providing me with all the facilities that
were required.

Date: Varun Singh

May 30, 2022 Section - B

1|Page
 CASES CITED

Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, 1975

Dhanoa v. Municipal Corporation of Delhi, 1981

Rajasthan Electricity Board v. Mohan Lal, 1967

Ujjam Bai v. State of Uttar Pradesh, 1961

K. S. Ramamurthi Reddiar v. The Chief Commissioner, Pondicherry and Another, 1963

University of Madras v. Shanta Bai, AIR 1954

Zee Telefilms v. UOI, 2005

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 ABSTRACT

Statutory Public Corporations are an important part of Administrative Law. They are a
corporation under the control of the Government and are established by a statute. They are
considered as “State” under Article 12 ad also considered as a legal person and have certain
fundamental rights. These corporations are instrumentalities or agencies of the State for
carrying on business which otherwise would have been run by the State departmentally.

Corporate bodies are statutory corporations; they are legal entities that are created by the law
and are artificial persons. A government-appointed board of directors oversees the operations of
these corporations, these corporations have the authority to enter into contracts and conduct
business under their names.

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 INTRODUCTION
Administrative law is the law that governs the administrative actions, as per Ivor Jennings-
the administrative law is the law relating to administration, it determines the organisation, powers
and duties of administrative authorities, it includes law relating to the rule-making power of the
administrative bodies, the quasi-judicial function of administrative agencies, legal liabilities of
public authorities and power of the ordinary courts to supervise administrative authorities, it
governs the executive and ensures that the executive treats the public fairly.1

Administrative law is a branch of public law, it deals with the relationship of individuals
with the government, it determines the organisation and power structure of administrative and
quasi-judicial authorities to enforce the law, it is primarily concerned with official actions and
procedures and puts in place a control mechanism by which administrative agencies stay within
bounds.2

However, administrative law is not a codified law. It is a judge-made law which evolved over
time.3

Statutory Public Corporations are a part of Administrative Law. Statutory Public

Corporation, as the name suggests, is a body corporate, formed a special act of the Centre or State
legislature. It is fully financed by the government, its powers, objects, limitations etc. are also
decided by the act of the legislature, examples include Air India, State Bank of India, Life
Insurance Corporation of India etc.4

They enjoy complete autonomy but are answerable to the particular legislature which has enacted
them.

1
All you need to know about Administrative Law available at https://blog.ipleaders.in/administrative-law-1/ (last
visited May 30, 2022)
2
Ibid
3
Ibid
4
Statutory Public Corporations available at https://www.toppr.com/guides/business-studies/private-public-and-
global-enterprises/statutory-corporations/ (last visited May 30, 2022)

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 DEFINITIONS OF STATUTORY PUBLIC
CORPORATIONS

If we break down the word Statutory Public Corporations, we would see that it is a public
entity (i.e., established by the Centre or state legislature) and is under the control of the same. They
are established by a statute, that’s why it is called a Statutory Public Corporations or just Statutory
Corporations.

• Public Corporation is a new type of institution which has sprung from new social & economic
functions & therefore doesn’t neatly fit into legal categories. Instead of forcing it into them,
the latter should be adopted to the needs of the changing time and conditions.
• In the case of Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi5 Justice Mathew said
“A public corporation is not generally a multi-purpose authority but a functional organization
created for a specific purpose. insofar as they fulfil public tasks on behalf of Government, they
are public authorities and as such subject to control by Government.”6
• In Dhanoa v. Municipal Corporation of Delhi it was held: A corporation is an artificial being
created by law having a legal entity entirely separate and distinct from the individuals who
compose it with the capacity of continuous existence and succession, notwithstanding changes
in its membership, in addition, it possesses the capacity as such legal entity of taking, holding
and conveying property, entering into contracts, suing and being sued, and exercising such
other powers and privileges as may be conferred on it by the law of its creation just as a natural
person may.7
• Halsbury’s Law of England defined it as: A corporation may be defined as a body of persons
(in the case of a corporation aggregate) or an office (in the case of a corporation sole) which is
recognized by the law as having a personality which is distinct from the separate personalities

5
(1975) 1 SCC 421
6
Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421
7
Dhanoa v. Municipal Corporation of Delhi, 1981 AIR 1395

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 of the members of the body or the personality of the individual holder for the time being of the
office in question.8

ARE THEY CONSIDERED AS ‘STATE’ UNDER ARTICLE

12?
Our Indian Constitution defines as to what comes under the definition of “State” in
Article 12 as: the State includes the Government and Parliament of India and the Government
and the Legislature of each of the States and all local or other authorities within the territory of
India or under the control of the Government of India.9

The words like “other authorities” and “under the control of the government of India”
give us an idea as to whether Public Corporations are state or not.

Let us look at some case laws on the topic:

(1) Rajasthan Electricity Board v. Mohan Lal, 1967:

“The expression "other authorities" in Art. 12 will include all constitutional or statutory
authorities on whom powers are conferred by law”10

(2) Ujjam Bai v. State of Uttar Pradesh, 1961:

“Again, Art. 12 winds up the list of authorities falling within the definition by referring to
'other authorities within the territory of India which cannot obviously be read as ejusdem generis
with either the Government and the Legislatures or local authorities. The words are of wide
amplitude and capable of comprehending every authority created under a statute and functioning
within the territory of India or under the control of the Government of India. There is no
characterization of the nature of the 'authority' in this residuary clause and consequently it must
include every type of authority set up under a statute for the purpose of administering laws enacted

8
Halsbury's Laws of England CORPORATIONS (VOLUME 24 (2010))
https://www.whatdotheyknow.com/request/569827/response/1352009/attach/3/Halsbury%20corporations.pdf?cooki
e_passthrough=1 (last visited May 29, 2022)
9
The Constitution of India, art. 12
10
State Electricity Board, Rajasthan v. Mohan Lal AIR 1967 S.C. 1857

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by the Parliament or by the State including those vested with the duty to make decisions in order
to implement those laws.”11

(3) K. S. Ramamurthi Reddiar v. The Chief Commissioner, Pondicherry and Another:

“Further, all local or other authorities within the territory of India include all authorities within
the territory of India whether under the control of the Government of India or the Governments of
various States and even autonomous authorities which may not be under the control of the
Government at all.”12

(4) Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, 1975:

“On the question of the statutory corporations being included with Article 12 the State
undertakes commercial functions in combination with governmental functions in a welfare State.
Governmental function must be authoritative. It must be able to impose decision by or under law
with authority. The element of authority is of a binding character The rules and regulations are
authoritative because these rules and regulations direct and control not only the exercise of powers
by the Corporations but also all persons who deal with these corporations.

Similarly, 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 every
provision shows in no uncertain terms that the voice is that of the Central Government and the
hands are also of the Central Government.

Again, the provisions of the Industrial Finance Corporation Act show that the Corporation is
in effect managed and controlled by the Central Government.13

Moreover, statutory corporations enjoy protection of punitive action taken under the Acts, a
privilege not given to companies incorporated under the Companies Act.”

“Hence the statutory corporations under question are agencies or instrumentalities of the
"State" and are, therefore, "State" within the meaning of Article 12. The fact that these
Corporations have independent personalities in the eye of law does not mean that they are not

11
Ujjam Bai v. State of Uttar Pradesh 1962 AIR 1621
12
K. S. Ramamurthi Reddiar v. The Chief Commissioner, Pondicherry and Another, 1963 AIR 1464
13
Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi AIR 1975 SC 1331

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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 business which
otherwise would have been run by the State departmentally. If the State had chosen to carry on
these businesses through the medium of government departments, there would have been no
question that actions of these departments would be "State action."”

Therefore, these case laws make it aptly clear that Public Corporations are “State” under
Article 12 of the Indian Constitution.

CHARACTERISTICS OF PUBLIC CORPORATIONS

1. Corporate Body: Corporate bodies are statutory corporations; they are legal entities that are
created by the law and are artificial persons. A government-appointed board of directors oversees
the operations of these corporations, these corporations have the authority to enter into contracts
and conduct business under their names.14

2. State-owned Corporations: Statutory corporations are wholly owned by the state, which
provides full support by fully subscribing to the capital.15

3. Own staffing system: Employees are not government servants, even though government owns
and manages a corporation. Employees of various corporations receive balanced or uniform pay
and benefits by the government. They are recruited, remunerated and governed as per the rules
laid down by the corporation.16

4, Financial independence: A statutory corporation enjoys financial autonomy or independence.

It is not subject to the budget, accounting and audit controls. After getting the prior permission
from the government, it can even borrow money within and outside the country.17

14
Statutory Corporation – Features, Merits, and Demerits available at https://www.geeksforgeeks.org/statutory-
corporation-features-merits-and-demerits/ (last visited May 30, 2022)
15
Ibid
16
What is a Statutory Corporation? Explain its features, merits and limitations. available at
https://www.owlgen.in/what-is-a-statutory-corporation-explain-its-features-merits-and-limitations/
17
Ibid

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5. Answerable to the legislature: The statutory corporations enjoy freedom in case of internal
management and running of the operations of the corporation, but are answerable to the state or
government legislature that created it.18

6. Perpetual Succession: Its members may leave of die, but it continues to exist

7. Created by a Statute: Unlike private corporations, they are established by an act of the
parliament or state legislature.

8. Considered as Person: They are considered as ‘person’ and not ‘citizen’ and therefore have
certain fundamental rights enshrined upon them.

9. They can sue and can be sued: As they are a ‘person,’ they can sue and be sued and can also
enter into contracts independently.

10. Public Accountability: They are accountable to the public and are created for their welfare.

11. Considered as ‘State’: They come under the definition of ‘State’ under Article 12 of the
Constitution.

Merits of Public Corporations:

The main advantages of the statutory corporation are:

1. Initiative & flexibility: Operations & management of a statutory corporation is done

independently, without any government’s interference, with its own initiative & flexibility.
2. Administrative autonomy: A public corporation is able to manage its affairs with
independence & flexibility.19
3. Quick decisions: A public corporation is relatively free from red-tapism, as there is less file
work & less formality to be completed before taking decisions.
4. Service motive: The activities of the public corporation are discussed in parliament. This
ensures the protection of public interest.

18
Statutory Corporation https://byjus.com/commerce/statutory-corporation/ (last visited May 30, 2022)
19
Statutory Corporation https://byjus.com/commerce/statutory-corporation/ (last visited May 30, 2022)

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5. Efficient staff: The public corporations can have their own rules & regulations regarding
remuneration & recruitment of employees. It can provide better facilities & attractive terms
of service to staff to secure efficient working from its staff.20
6. Professional management: Board of directors of statutory corporation consists of business
experts & the representatives of various groups such as labor, consumers nominated by the
government.21
7. Easy to raise capital: As such corporations are fully owned by the government, they can
easily raise required capital by floating bonds at a low rate of interest. Since these bonds are
safe, the public also feels comfortable in subscribing such bonds.

Demerits of Public Corporations:

1. Autonomy on paper only: The autonomy & flexibility of public corporation is only for
name’s sake. Practically ministers, government officials & political parties often interfere
with the working of these operations.22

2. Lack of initiative: Public corporations do not have to face any competition & are not guided
by a profit motive. So, the employees do not take initiative to increase the profit & reduce
loss. The losses of the public corporation are made good by the government.

3. Rigid structure: The objects & powers of public corporations are defined by the act & these
can be amended only by amending the statute or the act. Amending the act is a time-
consuming & complicated task.23

4. Clash amongst divergent interests: The government appoints the board of directors & their
work is to manage & operate corporations. As there are many members, it is quite possible
that their interests may clash. Because of this reason, the smooth functioning of the
corporation may be hampered.24

20
Ibid
21
Ibid
22
Statutory Corporations https://www.toppr.com/guides/business-studies/private-public-and-global-
enterprises/statutory-corporations/ (last visited May 30, 2022)
23
Ibid
24
Ibid

10 | P a g e
5. Unfair practices: The governing board of a public corporation may indulge in unfair practices.
It may charge an unduly high price to cover up inefficiency.

6. Suitability: The public corporation is suitable where the undertakings require:

o monopoly powers.

o special powers, defined by the act or statute.

o regular grants from the government.

o an appropriate combination of public accountability & operational autonomy.

CASE LAWS ON STATUTORY CORPORATIONS

(1) Rajasthan Electricity Board v/s Mohanlal & Ors, A.I.R 1967 S.C. 25.

The case is a Special leave appeal filed by the State Electricity Board of Rajasthan before the
Hon’ble Supreme Court of India against the order passed by the High Court of Rajasthan. The
Case deals with the scope of the term ‘State’ defined under Article 12 of the Indian Constitution
as well as the word ‘local authority’, which shall mean a municipal committee, district board,
body of port commissioners or other authority legally entitled to, or entrusted by the Government
with, the control or management of a municipal or local fund under Section 3(31) of the General
Clauses Act, 1897.

FACTS OF THE CASE:

Mohanlal, and the other 10 workers were all provisionally placed at the disposal of the Electricity
Board of Rajasthan, Jaipur by a notification issued by the Government on 12th February 1958,
purporting to exercise its powers under section 78A of Electricity (Supply) Act, 1948. Previously
all of them were permanent employees of the State Government holding posts of Foremen in the
Electrical and Mechanical Department. A direction was included in the notification that new
grades and service conditions were to be framed for those employees whose services were
transferred to the Board under its regulation.25

25
Rajasthan Electricity Board v/s Mohanlal & Ors available at https://lawfoyer.in/rajasthan-electricity-board-v-s-
mohanlal-

11 | P a g e
Employees were to be given the option of accepting these new grades and service conditions,
continuing in their existing grades and service conditions, except in regard to conduct and
disciplinary rules, or obtaining relief from Government service by claiming pension or gratuity as
may be admissible under the Rajasthan Service Rules on the abolition of posts. The Board did not
create any additional grades or service criteria until the present lawsuit arose.

Mohanlal worked under the Board for a period of 2 years and was then deputed by the State
Government by its order dated 27th January, 1960, to the Public Works Department of the
Government. The Government issued an order to the Secretary of the Board on August 10, 1960,
suggesting that Mohanlal and 10 other workers would be considered as on deputation to the Board.
The Public Works Department issued an order on November 24, 1962, restoring Mohanlal to his
parent department with effect from December 1, 1962, although the deputation time was later
extended.

He was returned to the Board from the Public Works Department on July 11, 1963, posting him as
a Foreman. While working in the Public Works Department, the Board had promoted the other
10 employees to Assistant Engineers, while he was promoted to Assistant Engineer in the Public
Works Department. Mohanlal raised a request to the Board as well as the Government for his
promotion as Assistant Engineer under the Board, which was turned down.

Mohanlal then filed a petition in the Rajasthan High Court under Articles 226 and 227 of the
Constitution. Mohanlal argued that he was entitled to equal treatment with the other 10 workers
and that the Board had acted in contravention of Articles 14 and 16 of the Constitution by not
considering him for promotion alongside them. The High Court acknowledged Mohanlal’s
argument, overturned the decision promoting the other 10 workers and ordered the Board to
reconsider the promotions after considering Mohanlal’s arguments.

ISSUES RAISED BEFORE THE COURT:

ors/#:~:text=Respondent%20Mohanlal%20filed%20a%20petition,16%20of%20the%20Indian%20Constitution (last
visited May 30, 2022)

12 | P a g e
1. Whether The Electricity Board be considered under the definition of “State” under Article
12 of the Indian Constitution?

2. Whether the Board violated the provisions of Article 14 & 16 of the Indian Constitution as
raised by the Respondents?

3. Whether Respondent Mohanlal was an employee of the Electricity Board?26

JUDGMENT:

The lien of Mohanlal was on a post under the Board, according to a Government order dated
January 27, 1960. Even according to the Board, the phrase “reversion” in the order plainly meant
that Mohanlal was being transferred back to his parent Department from a Department where he
had been on deputation or temporarily.

Also, there is no evidence that any order was made permanently transferring the other employees
to the Board after their services were provisionally put at the disposal of the Board by the
notification of February 12, 1958, and yet they were recognized as permanent employees of the
Board and were promoted to the position of Assistant Engineer from the position of Foremen on
that basis.

Hence, it is found that there were no errors committed by the High Court in holding that
Mohanalal was in service of the board as others and were being governed by identical rules. It is
clear that Mohanlal was entitled to be considered for promotion under the Board on the basis of
equality with other employees.

The High Court made an error in applying the principle of ejusdem generis when interpreting the
phrase “other authorities” in Art. 12 of the Constitution, according to the Supreme Court, because
they failed to recognise the basic principle of interpretation that, in order to invoke the application
of the ejusdem generis rule, there must be a distinct genus or -category running through the bodies
already named.

26
Ibid

13 | P a g e
The fact that the Board is obligated to engage in some trade or commerce operations under the
Electricity Supply Act does not imply that the Board should be excluded from the meaning of the
term “State” as used in Article 12. Also, there are clauses in the Electricity Supply Act that clearly
establish that the Board’s powers include the ability to issue instructions and that non-compliance
is a criminal offence.

The term “other authorities” is broad enough to embrace any authority established by legislation
and operating inside India’s territory or under the supervision of the Indian government. There was
no need to limit this interpretation in the context of Article 12 of the Constitution when the words
“other authorities” are used. Hence, the Board was clearly an authority under the definition of
‘State’ in Article 12 of the Indian Constitution.

(2) University of Madras v. Shanta Bai, AIR 1954 Mod.67

INTRODUCTION:

This case basically discusses on a question which is whether a University can be considered as
part of government or not which is described under Article 12 of the India Constitution. And as
per this case to qualify as other authorities it must has sovereign function without it does not qualify
to be State under other authorities under Article 12 of the Indian Constitution.

And the for the purpose of recognizing the other authorities under Article 12 of the Indian
Constitution the approach of “Ejusdem Generis” was adopted but this judgment was overruled in
the case of Ujjambai Vs State of Uttar Pradesh.

FACTS:

The University of Madras issued an instruction to the affiliated colleges saying that girl students
shall only be admitted after the sanction of the University Syndicate. Admission to Intermediate
classes was distinctly prohibited for females in co-educational colleges The Santha Bai applied for
the admission which was rejected on the basis of the instructions, so she filled a writ petition of
Mandamus against the instruction of the University of Madras.27

27
University of Madras Vs. Shanta Bai available at https://www.scribd.com/document/469775926/university-of-
madras-vs-Shanta-bai-and-anr-docx (last visited May 30, 2022)

14 | P a g e
The question in this case raised was that the is University of Madras which was governed by
Madras University Act can be considered as State.28

JUDGEMENT:

The Court held that the term other authority in the Article 12 of the Indian Constitution should be
“Ejusdem Generis” which basically stands for “of the same kind” with government or legislature.

So, Court basically meant that the first three terms coming before the other authorities in the Article
12 of the Indian Constitution which were Government and parliament, government and legislature
and local authority all are governmental and sovereign in Nature.

So other authorities should derive its colour from the proceeding and authority under Article12 of
the Indian Constitution which means other authorities must governmental and sovereign in nature
so Universities cannot be held as State.

So, the principles of the University of Madras cannot be restricted.

(3) Zee Telefilms v. UOI, (2005) 4 SCC 649

Zee Telefilms Ltd., a leading entertainment technology company with vertical digital media filed
a writ against The Board of Control of Cricket (BCCI) for cessation of the contract dated
21.09.2004 awarding exclusive television rights for a four-year term.

Zee Telefilms Ltd., herein after called the First Petitioner and the Union of India is referred as First
Respondent. The Second Respondent to this issue, the BCCI is a society registered under the Act
of Tamil Nadu Societies Registration, 1975 recognized by the Union of India, the Ministry of
Youth Affairs and Sports. The President and the Secretary of the Second Respondent are the Third
and Fourth Respondents, respectively. The Fifth Respondent, “ESPN Star Sports” is a USA based
partnership firm having subsidiary in Singapore, branded as “ESS”. The Sixth Respondent is a
Chartered Accountant Firm which was named by the Board with respect to the tender on
07.08.2004. In the assistance of a notification welcoming bids for the award of elite TV rights for
the time of four-year tender, various entertainment groups including the applicants and Fifth
Respondent thus gave their offers. With the end goal of this issue, we would assume that both the

28
Case Analysis: Zee Telefilms Ltd. v. Union of India available at https://indianlawportal.co.in/case-analysis-zee-
telefilms-ltd-v-union-of-india/ (last visited May 30, 2022)

15 | P a g e
Petitioner and said Respondent were found to be qualified. The First Petitioner offered a bid to the
tune of USD 260,756,756.76 (equivalent to INR 12,060,000,000/- or USD 281,189,189.19
(equivalent to INR 13,005,000,000/-).

After holding dealings with the First Petitioner as likewise the Fifth Respondent, the Board chose
to acknowledge the idea of the former; as per and in assistance whereof a total of INR 92.50 Crore
equal to the USD 20 Million was kept in the State Bank of Travancore. In light of “Zee Telefilms
Ltd. & Anr. Vs Union of India & Others” AIR 2005 SC a draft of purpose was sent by the board;
the First Petitioner consented to comply with the terms and states of offer subject to conditioned
referenced in the same.

The Fifth Respondent in the interim documented a writ request under the watchful eye of the
Bombay High Court which was set apart as Writ Petition (L) No. 2462 of 2004. The gatherings
thereto documented their sworn statements in the said continuance. In its affirmation, the Board
advocated its activity in allowing the agreement for the First Petitioner. On 21.09.2004, the Board
before beginning its contention expressed that it implied to have dropped the whole delicate
procedure on the reason that no finished-up contract was reached between the parties as no letter
of purpose had therefore been given. The First Petitioner, in any case, raised a conflict that such a
finished-up contract had been formed. The Fifth Respondent, taking into account the
announcements made by the advice for the Board, appealed to a court for withdrawal of the writ
request, which was allowed. On 21.09.2004 itself, the Board ended the agreement of the First
Petitioner.

FACTS OF THE CASE:

On initiation of hearing, Mr. K.K Venugopal, learned Senior Counsel showing up for the benefit
of the Second Respondent raised an issue as respect viability of the writ request under Article 32
on the reason that the Board is not a ‘State’ within the ambit of Article 12 of the Constitution of
India. The said issue having been treated as a fundamental issue, the same was heard immediately.
This judgment is limited to the said issue alone.

JUDGEMENT:

A Constitution Bench of Supreme Court ruled that under the Indian Jurisprudence, there was
always a just remedy for the violation of a right of a citizen. Holding on the facts of the case, it

16 | P a g e
was held that the Board of Control for Cricket (BCCI) did not fall within the purview of the term
“State”.

OVERVIEW OF THE JUDGEMENT:

Simply because a body answers the portrayal of a public authority, releases public law functions,
and have public duties would it not, on its own, lead to the conclusion that all its functions are
public functions.

In each case, the question would be whether, in the light of total realities as set up, the body is
financially, functionally, and authoritatively overwhelmed by or heavily influenced by the
Government. Such control must be specific to the body being referred to and must be unavoidable.
On the off chance that this is discovered, at that point, that body is a State under the ambit of
Article 12. Then again, when the control is just regulatory whether, under statute or else, it would
not serve to make the body a State. The details of the case in hand have to be checked on the
criterion touchstone set out in the case of Pradeep Kumar Biswas’ case. Before doing so it would
be advantageous by and by to summarize what are the rules set down in Pradeep Kumar Biswas’
case for a body to be a State under Article 12. They are:

1) Principles laid down in Ajay Hasia are not a rigid set of principles so that if a body falls within
any one of them it must ex hypothesi, be considered to be a state within the meaning of Article 12.

2) 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.

3) Such control must be to the body in question and must be pervasive.

4) Mere regulatory control whether under statute or otherwise would not serve to make a body a
state.

In this case, the facts defined are: -

1) The Government does not own a majority of the Board’s share capital.

2) Basically, no money related help is given by the Government to meet the entire or whole use of
the Board.

17 | P a g e
3) The Board enjoys a restraining infrastructure status in the field of cricket however such status
isn’t state given or state ensured.

4) The Board isn’t made by a move of a government claimed organization. It is an autonomous

body.

5) There is no presence of profound and pervasive State control. The control if any is just
regulatory in nature as pertinent to other similar bodies. This control isn’t explicitly practiced under
any exceptional resolution relevant to the Board. All elements of the Board are not public functions
nor are they closely related to Governmental functions.

6) Board is not created by a Statute.

In this context, it would be clear that the facts set out do not cumulatively indicate that the Board
is controlled, politically, technically or administratively, by or is subject to government control, if
standards set in Pradeep Kumar Biswa are applied. In this way, the little control that the
Government might be said to have on the Board isn’t inescapable in nature. Such constrained
control is absolutely administrative control and that’s it.

The court propounded:

“……...that when a private body exercises its public functions even if it is not a
State, the aggrieved person has a remedy not only under the ordinary law but also under the
Constitution by way of a writ petition under Article 226.”

So said, the court held that BCCI discharged public duties and for that, the aggrieved, could
proceed against it by way of a public law remedy against the BCCI under Article 226.

CONCLUSION
Statutory Public Corporations are Public Corporations under the regulation of the Center or State,
they are considered State under Article 12, but not citizens. This means that they also have certain
Fundamental Rights, they can sue and can be sued for their misconduct. It is not necessary that a
duty should be cast upon them by the State, they can also be established for trade and commerce.
They work for the welfare of the people and their servants are not considered government servants.

18 | P a g e
They are established by an act of the Parliament or of the State legislature and are under their direct
control, all public corporations are answerable to the Parliament.

Government has a minimum 51% share so they are considered a Public entity and hence are not
governed under the Companies Act. They play an important part in development of Administrative
Law.

BIBLIOGRAPHY
1. All you need to know about Administrative Law available at
https://blog.ipleaders.in/administrative-law-1/
2. Statutory Public Corporations available at https://www.toppr.com/guides/business-
studies/private-public-and-global-enterprises/statutory-corporations/
3. Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi, (1975) 1 SCC 421
4. Dhanoa v. Municipal Corporation of Delhi, 1981 AIR 1395
5. Halsbury's Laws of England CORPORATIONS (VOLUME 24 (2010))
https://www.whatdotheyknow.com/request/569827/response/1352009/attach/3/Halsbury%20
corporations.pdf?cookie_passthrough=1
6. The Constitution of India
7. State Electricity Board, Rajasthan v. Mohan Lal AIR 1967 S.C. 1857
8. Ujjam Bai v. State of Uttar Pradesh 1962 AIR 1621
9. K. S. Ramamurthi Reddiar v. The Chief Commissioner, Pondicherry and Another, 1963 AIR
1464
10. Statutory Corporation – Features, Merits, and Demerits available at
https://www.geeksforgeeks.org/statutory-corporation-features-merits-and-demerits/
11. What is a Statutory Corporation? Explain its features, merits and limitations. available at
https://www.owlgen.in/what-is-a-statutory-corporation-explain-its-features-merits-and-
limitations/
12. Statutory Corporation https://byjus.com/commerce/statutory-corporation/
13. Statutory Corporations https://www.toppr.com/guides/business-studies/private-public-and-
global-enterprises/statutory-corporations/

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14. Rajasthan Electricity Board v/s Mohanlal & Ors available at https://lawfoyer.in/rajasthan-
electricity-board-v-s-mohanlal-
ors/#:~:text=Respondent%20Mohanlal%20filed%20a%20petition,16%20of%20the%20India
n%20Constitution
15. University of Madras Vs. Shanta Bai available at
https://www.scribd.com/document/469775926/university-of-madras-vs-Shanta-bai-and-anr-
docx
16. Case Analysis: Zee Telefilms Ltd. v. Union of India available at
https://indianlawportal.co.in/case-analysis-zee-telefilms-ltd-v-union-of-india/

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