Ajay Hasia v Khalid Mujib

The case of Ajay Hasia v Khalid Mujib, (1981) 1 SCC 722, was a significant ruling by
the Supreme Court of India. In this case, the Court established a test to figure out if
an individual, corporation, or society could be considered an instrumentality or
agency of the government. This determination is important because it decides
whether they can be treated as a “State” under Article 12 of the Constitution of India.
When an entity is regarded as a “State” under Article 12, it can be subject to a writ
petition if it violates the Constitution.

The Court’s decision, which Justice P. N. Bhagwati presented, essentially summarised

Bhagwati’s perspective in the case of R. D. Shetty v International Airport Authority of
India. Ajay Hasia condensed the International Airport Authority case into a six-factor
test for identifying whether an entity qualifies as an instrumentality or agency of the
State.

Facts of Ajay Hasia v Khalid Mujib

Ajay Hasia v Khalid Mujib involves the Regional Engineering College in Srinagar,
which is one of 15 colleges in the Union Territory of Jammu and Kashmir. These
colleges are registered and managed as “societies” under government oversight.
They are registered under the J&K Registration of Societies Act of 1898. The
government has direct or indirect control over the management and administrative
functions of these colleges. The funding for these colleges comes from both the
central government and the J&K state government. Faculty and staff recruitment for
the college are typically carried out by government representatives and many faculty
members are government appointees themselves.

The current situation arises from a writ petition filed by the petitioners, who seek to
invoke Article 32 against the college authorities on the grounds that the college falls
under the definition of “the state.” The petitioners applied for admission to the B.E.
Course at the college in response to a notice issued by the college authorities
regarding available admission vacancies. However, they argue that the admission
process and the subsequent results lack validity. The procedure included a qualifying
examination worth 100 marks and a viva voce examination (an oral examination)
worth 50 marks. The petitioners claim that this process was unfairly implemented to
their disadvantage.

The petitioners allege that the college authorities determined the results of both the
qualifying examination and the viva voce examination unjustly. They contend that
they scored higher marks in the qualifying examination compared to the applicants
who were admitted solely on the basis of the viva voce examination, which accounts
for almost 50% of the total evaluation. The viva voce examination, which lasted only
2 or 3 minutes, consisted of questions unrelated to the course and, in the petitioners’
view, cannot be considered a reliable test for determining admissions. This has raised
questions about the maintainability of the petitioners’ claims and the reliability of the
admission procedure.

Issues Raised
The issues raised in Ajay Hasia v Khalid Mujib were:

1. Whether the said college comes under the definition of state under
article 12 and hence whether the writ is maintainable or not?
2. Whether the admission procedure of the college is violative of
Article 14 as alleged by the petitioners?

Arguments Made by the Petitioner

In the case of Ajay Hasia v Khalid Mujib, the petitioners aimed to challenge the
classification of the Regional Engineering College, Srinagar, asserting that it should
indeed be regarded as a ‘State’ within the meaning of Article 12 of the Indian
Constitution.

The primary argument presented by the petitioners in Ajay Hasia v. Khalid Mujib was
that, despite being officially registered as a society, the college essentially functioned
as a governmental entity. They argued that the college’s establishment was a result
of government initiatives and a significant portion of its funding came from the
Governments of India and Jammu and Kashmir.

Furthermore, the petitioners pointed to the composition of the Board of Governors

as evidence of government control over the college. The Board was predominantly
composed of government appointees, including representatives from various
government bodies and officials appointed by the two governments. This, they
contended, demonstrated that the college was not merely a passive recipient of
government funds but was directly under government control.

According to the petitioners in Ajay Hasia vs Khalid Mujib, the genuine nature and
character of the college were governmental in nature, thus categorising it as a ‘State’
under Article 12. They argued that the formal registration of the college as a society
under the Jammu and Kashmir Registration of Societies Act, 1898, should not alter
the core essence of the institution. They maintained that the court should delve
beyond the legal form and take into consideration the actual operations and control
of the college, which, in their view, fell firmly within the scope of governmental
authority.
Arguments Made by the Respondents
In contrast, the Respondents in Ajay Hasia v Khalid Mujib put forth the argument that
the Regional Engineering College, Srinagar, should not be classified as a ‘State’ under
Article 12. Their primary contention was based on the formal legal status of the
college. They maintained that, despite substantial government influence, the college
was officially registered as a society and, therefore, should not be considered a
government entity.

The Respondents acknowledged that the government played a pivotal role in

establishing the college, provided significant funding and had government
appointees on the Board of Governors. However, they argued that the college
functioned as an autonomous entity. They contended that the link between the
college and the government was more in name than in substance and did not
transform the college into a ‘State’.

Furthermore, the Respondents in Ajay Hasia versus Khalid Mujib highlighted that the
college had its own set of rules and regulations and was not directly bound by
government rules. They also emphasised that the college had a degree of flexibility in
its operations and was not under the government’s direct control in its day-to-day
activities.

Therefore, the core of the Respondents’ argument was that the college’s formal
registration as a society and its operational autonomy set it apart from a government
body, thereby excluding it from the scope of ‘State’ under Article 12. They urged the
court to consider the legal form of the college and its self-governing nature,
asserting that the level of government influence was insufficient to classify the
college as a ‘State’.

Judgement in Ajay Hasia v Khalid Mujib

Issue 1
The court in Ajay Hasia v Khalid Mujib ruled in favour of the petitioners on the first
issue, affirming that the present writ petition was legally maintainable because the
Regional Engineering College fell within the scope of Article 12 under the category of
“other authorities.”

In their analysis, the court examined various clauses within the memorandum of
understanding and rules of conduct governing the registered college authority. They
highlighted that the composition of the Society was predominantly influenced by
delegates chosen by the Central Government and the governments of Jammu and
Kashmir, Punjab, Rajasthan and Uttar Pradesh, with the Central Government’s
agreement. The financial resources required to operate the college were provided
entirely by the Central Government and the Government of Jammu and Kashmir. The
Society could only secure additional funds with the concurrence of both the State
and Central Governments. Furthermore, the rules of the Society needed approval at
both government levels.

Taking into consideration the arguments presented by the petitioners and analysing
them in the context of how the college operated under the overall control of the
government, the court in Ajay Hasia v Khalid Mujib concluded that the Regional
Engineering College, as a registered society, could be considered a “State” under
Article 12 and thus the present writ petition was maintainable. They emphasised that
it did not matter whether the corporation was established by legislation or statute for
this purpose; what mattered was whether it acted as a government instrumentality or
agency. The key question was not how the juristic person came into existence but
why it was created.

Furthermore, the court laid out a test to determine whether an entity falls within the
category of an instrumentality or agency of the state under Article 12:

• If the government owns the entire share capital of the body, it strongly
suggests that the body is an instrument of the government.
• When the government provides financial aid that covers nearly all of the
body’s expenses, it may imply that the body possesses a governmental
character.
• It’s a relevant factor if the body has a monopoly status granted or protected
by the state.
• The presence of profound and widespread state control may indicate that the
body is a state instrument.
• If the body’s functions are of public importance and closely connected to
governmental functions, it is a relevant factor to consider the body as an
instrumentality of the government.
Issue 2
On the second issue, the court’s ruling in Ajay Hasia v Khalid Mujib leaned slightly in
favour of the respondents but maintained a lawful and impartial stance. The bench
laid down specific guidelines to determine whether the selection procedure violated
Article 14 of the Indian Constitution.

The court provided justifications for its order, taking into account the evidence
presented. It emphasised that it’s well established that a state authority or institution
has the discretion to establish its own selection procedures without rigid restrictions.
In this case, the college acted correctly by conducting both exams and there was no
clear evidence of bias. However, the court found that allocating 50 out of 150 marks
to the viva voce examination was excessive and should be reviewed for future
admission tests at the college. The court also noted that the current admissions of
students should not be reversed, as it would be unfair to those who were admitted
and the petitioners should not be allowed to gain admission benefits solely on the
suspicion of bias by the respondents. Regarding the violation of Article 14, the court
in Ajay Hasia v Khalid Mujib closely examined the distinction between the doctrine of
classification and Article 14. It explained that the mere classification or ranking of
things by hierarchy or value does not necessarily imply unequal or unjust treatment
under Article 14 of the Indian Constitution. The court also dismissed the petitioners’
argument that interview rounds were unsuitable for assessing a person’s suitability
for a position, stating that oral interviews are an integral part of the Indian selection
process, as long as they are conducted fairly.

The court found no concrete evidence to support the petitioners’ claim that the viva
voce examination was too brief or irrelevant. The respondents clarified that the
average interview time was 4 to 5 minutes and candidates were appropriately
assessed for their suitability for the course. The court concluded that the potential for
interviews to be abused or manipulated is not a sufficient reason to eliminate them
from the selection procedure.

However, the court in Ajay Hasia v Khalid Mujib issued overall guidelines to prevent
future discrepancies. It directed the college to review its selection procedure, with the
viva voce examination holding a smaller proportion of the total marks allocated.