STATE – ARTICLE 12

Constitutional Law II
National Law University Odisha
August 2020

Rishika Khare
Assistant Professor
NLUO
 WHAT IS STATE?
 Associated with Sovereign Power
 Police State v. Welfare State
 To have a state is to surrender some natural rights in return of effective
ability of the protect the rights of the individual.
 State becomes guarantor and protector, and it has correlative duties
towards its citizens.
 In case of violation of these rights provided by the State (Fundamental
Rights) (in the Constitution) – who do you approach?
State – Representative by the Sovereign Power
 Sovereign power & subordinate officers (Political sovereign – Dicey)
(Human superior commanding obedience) (Executive)
 Legal Sovereign - Dicey (Law making bodies) Law commands
obedience (Legislature)
 State Action Doctrine – individual rights apply only to state action and
not against private action
 STATE IN ARTICLE 12
 In this Part, unless the context otherwise requires, “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
 Constitutional Assembly Debates – “The Chairman of the
Drafting Committee clarified that ‘other authorities’
would refer to those that had ‘the power to make laws OR
the power to have discretion vested in it’. He further
stated that it would be cumbersome to list the various
institutions upon whom Part III was binding, so the term
‘State’ was useful in this regard.”
OTHER AUTHORITIES

Statutory
Body
Other
Authorities
Non-Statutory
Body

 Authority –power to issue rules, bye laws or regulation having force

of law & the other authorities should construed ejusdem generis –
OVERRULED
 Statutory Bodies – Body established under a statute – Eg. Prasar
Bharti, ONGC, LIC
 Non-Statutory body – approved, registered, incorporated under a
statute – Eg. BSNL, Air India, Central Power Research Institute
 STATUTORY BODY
 Case overruled – University of Madras v. Shantha Bai (ejusdem
generis) 1954.
 Difference between state funded and state aided colleges
 State needs to make facilities for colleges
 Private college cannot be compelled to give admission.
 University of Madras not a State

Ujjam Bai v State of UP, 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
characterisation 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 by the Parliament or by the State
including those vested with the duty to make decisions in order to implement
those laws."
UJJAM BAI V UP
 I find it wholly impossible to accede to the submission that
what is termed as judicial power of the State which would
include quasi- judicial authorities created under statutes
do not fall within the definition of the "State" and that
their actions therefore are not to be deemed "'State" action
against which the Constitution has provided the rights
guaranteed under Part III.
RAJASTHAN STATE ELECTRICITY BOARD V.
MOHAN LAL (1967)

 Set up under Electricity Supply Act, 1948 for commercial purpose

 Dispute relating to promotion
 Statutory Body is state
 No common genus running in Article 12
 “power to make rules or regulations and to administer or
enforce them to the detriment of citizens” (Sovereign power)
(Bhargava)
 Concurring: Command and sanction (shah)

Legal Approach Functional Approach

The resemblance with State wrt Bodies that can affect those rights
its powers in a manner similar to that of the
State;
 RAJASTHAN STATE ELECTRICITY BOARD V.
MOHAN LAL (1967)
 Shah J.C.
 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. On the other hand,
there are provisions in the Electricity Supply Act which
clearly show that the powers conferred on the Board
include power to give directions, the disobedience of which
is punishable as a criminal offence.
STATUTORY BODY
 Sukhdev Singh v. Bhagat Ram (1975)
 Cannot follow the narrow approach where disobedience of
direction will attract criminal liability. (ray)
 Merged legal and functional approach to make ‘agency and
instrumentality’ approach. (power to issue binding directions)
Both must be satisfied. (Mathew) –misread?
 Mathew - “A finding of State financial support plus an unusual degree of
control over the management and policies might lead one to characterize
an operation as state action”
 Public Corporation being a creation of state is a state
itself.
 ONGC, LIC, Industrial Finance Corporation – State
Maj (Ray, Chandrachud and Gupta): we hold that rules and regulations framed by
the Oil and Natural Gas Commission, Life Insurance Corporation and the
Industrial Finance Corporation have the force of law. The employees of these
statutory bodies have a statutory status and they are entitled to declaration of
being in employment when their dismissal or removal is in contravention of
statutory provisions. By way of abundant caution we state that these
employees are not servants of the Union or the State. These statutory bodies
are "authorities" within the meaning of Article 12 of the Constitution.

Concurring (Mathew): there are no provisions for issuing binding

directions to third parties the disobedience of which would entail
penal consequence, the corporations set up under statutes to carry
on business of public importance or which is fundamental to the
life of the people can be considered as 'state' within the meaning
of Article 12
 NON-STATUTORY BODY
 RD Shetty v. International Airport Authority 1979
 State agency OR instrumentality test was adopted (PN Bhagwati
replies on concurring judgement)
 Socio-economic justice as the end of state policy.
 Even when the State if making contract it has to comply with
fundamental rights
 “that the Government which represents the executive authority
of the State, may act through the instrumentality or agency of
natural persons or it may employ the instrumentality or
agency of juridical persons to carry out its functions.”
 Control – financial or administrative
 Whether performing public function
 AJAY HASIA V. KHALID MUJIB 1980
 Instrumentality or agency test (PN Bhagwati) relying on Sukhdev Singh
(Mathew) and RD Shetty (Bhagwati)
 6 pointer test

 Regional Engineering College, Srinagar - sponsored by the

Government of India.
 administration and management are carried on by society registered
under the Jammu and Kashmir Registration of societies Act, 1898
 Admission process arbitrary

 ISSUES
 Whether state under Article 12
 Whether Article 14 violated
 AJAY HASIA V. KHALID MUJIB 1980
 Regional Engineering College MoA
1. Money provided by SG/CG
2. To be deposited/invested as approved by SG
3. SG/CG to appoint persons to review working and hold inquiries
4. If not functioning properly SG/CG to takeover administration
5. CG/SG from time to time appoint members of society

Respondents – society registered under J&K Society’s Registration Act and not a
corporation or statutory body

Whether State?
 AJAY HASIA V. KHALID MUJIB 1980
 Instrumentality or agency test (PN Bhagwati)
1. if the entire share capital of the corporation is held by Government … so much
as to meet almost entire expenditure of the corporation
2. financial assistance of the State is so much as to meet almost entire expenditure
of the corporation
3. monopoly status which is the State conferred or State protected
4. Existence of deep and pervasive State control not merely regulatory
(administrative control)
5. Functions of the corporation of public importance and closely related to
governmental functions
6. 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.

(from Krishna Iyer? – Som Prakash v. UOI)

 PRADEEP BISWAS V. INSTITUTE OF CHEMICAL
BIOLOGY 2002 (5:2)
 Facts
 Appellant Challenging termination from service by respondent
 Challenging Sabhajit Tewari v UoI 1975 (CSIR not an authority)
in light of subsequent judgments
 Council for Scientific and Industrial Research a registered
society under Act 1860
 Was set up by Department of Commerce (CG) in national
interest for economic welfare and to facilitate planned
economic growth.
 Governing body of CSIR can amend bye laws of CSIR
 In case of dissolution, assets to be distributed as per the
mandate of Government.
 Pay Scale, Service rules orders of Government to be
applicable
 JUDGMENTS RELIED UPON (BY MAJORITY)
 RSEB v Mohan Lal - “Article 12 will include all constitutional
or statutory authorities on whom 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".
 A N Ray: "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. Such an authority is not precluded from making profit for
the public benefit".

 Sukhdev Singh & RD Shetty - , it began to be increasingly felt

that the framework of civil service was not sufficient to handle
the new tasks which were often of specialised and highly
technical character. The inadequacy of the civil service to deal
with these new problems came to be realized and it became
necessary to forge a new instrumentality or administrative
device for handling these new problems.
 Ajay Hasia : 6 pointer test
ARGUMENTS PRESENTED IN SABHAJIT TEWARY V
UOI

 Establishing CSIR means Government takes special care

that
 promotion, guidance and co-operation of scientific and
Industrial Research
 the institution and financing of specific researches to
institutes undertaken scientific research
 the utilisation of the result of the researches conducted
towards the development of industries in the country are
carried out in a responsible manner.

Society cannot be equated with State BUT enlarge the

scope and width of the Fundamental Rights by bringing
within their sweep every authority which is an
instrumentality or agency of the government
 EXPANSION OF DEFINITION OF STATE
 “the State is… distancing itself from commercial
activities and concentrating on governance rather than
on business.”
 As in RD Shetty - if government while entering into
contract must respect Article 14, after outsourcing the
work through tender, is the private company not
required act out of fairness under Article 14
 Expansion under public function criteria MC Mehta v
UOI, Unnikrishnan
 Approach inclusive and non exhaustive
ZEE TELEFILMS V. UNION OF INDIA (2005)
(5 JUDGE BENCH)
 Facts
 Telecast rights of Zee Telefims for all matches between
2004 to 2008 were cancelled arbitrarily
 Not a state
 Board was not created by statute,
 the Government held no share capital,
 State provided no financial assistance,
 State conferred no monopoly,
 State exercised no pervasive control,
 and Government had not transferred a government-owned
corporation.

 UoI contended –state recognized body; permission for

international cricket is taken (so administrative
control)
 ZEE TELEFILMS V. UNION OF INDIA (2005)
(5 JUDGE BENCH)
 Some element of public duty will not suffice to bring
BCCI under definition of ‘other authorities’
 “it cannot be denied that the Board does discharge
some duties like the selection of an Indian cricket
team, controlling the activities of the players and
others involved in the game of cricket. These activities
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.”

Case clarifies that Article 12 is limited to bodies

where government has deep and pervasive
control
 ZEE TELEFILMS V BCCI (S B SINHA)
 Encouragement of Sports is State function under Entry 33 List II
 And part of education under entry 25 List III
 The Ministry of Youth Affairs and Sports was earlier a
department of the Ministry of Human Resource Development.
Now a separate Ministry of Youth Affairs and Sports has come
into being
 Article 12
 includes all other authorities within the territory of India or under the
control of the Government of India
 It does not say that such other authorities must be under the control of
the Government of India. The word 'or' is disjunctive and not
conjunctive.
 The feature that the Board has been allowed to exercise the
powers enabling it to trespass across the fundamental rights of a
citizen is of great significance
 Only its actions of promoting the sport, making a law of cricket
for the entire country, representing the country in international
forum, appointing India's representative and the all pervasive
control over players, managers and umpires are State actions.

 ICC does not want State Interference & Control

 Sports and Recreation Commission suspended Zimbabwe Cricket
Board
 “We do not take the decision to suspend a Member lightly, but we
must keep our sport free from political interference”-Chairman
 Zimbabwean government would seize the funds allotted for
development of Sports
 ZC board originally elected in mid-June be reinstated to office
within three months

https://www.espncricinfo.com/story/zimbabwe-suspended-by-
icc-over-government-interference-1195171
 ZEE TELEFILMS V BCCI (S B SINHA)

 Rejects –public function requirement explicitly

 State has not authorised public function but left public
function to a private entity
 Question – What if state chooses to leave police function,
judicial system, defence, prisons to private entities,
water supply – would they not be state?
 Constitutional rights cannot depend on economic policy
of the state
 the Court does not hold that non-State bodies do not have a duty
to abide by the content of the fundamental rights; it expressly
limits its holding to restricting the application of Part
III, qua Part III, to non-State bodies.- Article 226 (conceptually
possible)
 BOARD OF CONTROL FOR CRICKET IN INDIA V. CRICKET
ASSOCIATION OF BIHAR (2015) (3 JUDGE BENCH)

 Where there is a right, there is a remedy – Art. 226 can be invoked

against BCCI.
 Non state bodies do not have the duty to abide by the content of
Fundamental Right.
 questions related to allegations of sporting fraud, conflict of interest
leveled against functionaries of the BCCI
 BCCI‟s control over the sport of cricket in India is deep and
pervasive
 BCCI enjoys a de facto monopoly status; formulates rules,
regulations, norms and standards covering all aspects of the game
of cricket in India.
 power of choosing (or selecting) members of the national cricket,
coaches
 power of disqualifying players which may at times put an end to
the sporting career of a cricketer.
 BOARD OF CONTROL FOR CRICKET IN INDIA V. CRICKET
ASSOCIATION OF BIHAR (2015) (3 JUDGE BENCH)

 It spends huge sums of money in building, developing and

maintaining infrastructures like stadium, cricket academies and
State sports associations.
 It frames and regulates pension schemes and incurs expenditure
on coaches, trainers and physicians to look after and cater to the
cricket players.
 It sells broadcasting and telecasting rights and collects
admission fees
 Functions take place with concurrence of government – which is
aware and supportive
 Doctrine of fairness and good faith applicable
 Judgement attempts at justifying the BCCI’s role but does not
establish that BCCI is a state
 Amenable to art 226
 WHETHER JUDICIARY IS STATE

 While the judiciary like any other State organ is

limited by the provision of the constitution, it is not
State (superior courts).
 “no judicial proceeding could be inferred to have been
violating the fundamental rights” (Rupa Ashok Hurra
v. Ashok Hurra 2002)
 for administrative purposes & legislative purposes
the working of the court, and not for the dispensation
of justice, judiciary falls within the purview of the
State.
 Quasi Judicial bodies – not courts, part of executive
wing – therefore State under Article 12