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Article 12: State- Definition| Test of Instrumentality| Cases

INTRODUCTION TO THE CONCEPT OF STATE UNDER ARTICLE 12

The Constitution of India

Article 12 of the Indian Constitution 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.


According to provisions of Article 12, the term ‘State’ includes-

1. The Government and the Parliament of India
2. The Government and the Legislatures of the State
3. All local authorities
4. Other authorities within the territory of India, or under the control of the Central Government.

The actions of any of the bodies comprised within the term STATE as under Article 12 can be challenged before the Courts under Article 13(2), on grounds of violation of the fundamental rights.


The most significant term under Article 12 is “OTHER AUTHORITIES” in (4), as the expression is not defined under the Constitution, and the decision on delineating the meaning of such term rests with the Judiciary of the country. The interesting part is, the wider the ambit of the meaning of the expression, consequently wider the scope of the application of the fundamental rights.


  • Therefore, we observe, on the part of the Drafting Committee of the Constitution, a certain shrewd and far-seeing approach, to allow through judicial precedents as well as decisions, to allow for the widening of such ambit, and enforce the fundamental rights of the Indian citizens, against a larger scope of authorities, other than the Government and Legislature of Union and State.


In the case of the University of Madras v. Shantabai, the Madras High Court evolved the principle of ejusdem generis which meant that only the authorities that perform governmental or sovereign functions can be included under Article 12. The Court’s interpretation of the definition of State was very restrictive in this case. The Court treated the definition to be exhaustive and confined the scope of OTHER AUTHORITIES.


We shall now discuss this topic under the following two heads-


(A)-OTHER AUHTORITIES


An autonomous body may be a statutory body i.e., a body set up directly by a statute, or it may be a non-statutory body i.e., a body registered under the general law, such as the Companies Act, Societies Registration Act, or State Cooperative Societies Act, etc. Questions have been raised about whether such bodies should be added to the purview of Article 12.


For this purpose, the Supreme Court has developed the concept of “Instrumentality” of the State. Any body or institution which can be regarded as an “instrument” of the State also falls under the provision of Article 12.


In the case of Rajasthan State Electricity Board v. Mohanlal, the Supreme Court held that the expression “other authorities” included those other authorities which had been created by the Constitution or under any Statute, and on whom powers had been conferred by law. And it is immaterial that some of the powers conferred on the authority may be for the purpose of carrying on commercial activities while deciding the status of the authority under Article 12 of the Constitution.


(B)-AUTHORITIES UNDER THE CONTROL OF GOVERNMENT OF INDIA



Indian Flag hoisted in front of the official emblem of the Government of India

  • The phrase “authorities under the Government of India”, is meant to bring into the definition of the State, all areas outside the territory of India, but which are under or may come under the control of the Government of India, such as mandatory or trustee territories. Such a territory may come under India’s control by international agreement.


In the State of Assam v. Barak Upatayaka D. V. Karamchari Sansthan, the Supreme Court held that financial assistance provided by the State Government in the form of grants-in-aid to Assam Cooperative Society continuously for some years does not make the society a state, as per the definition of State as provided in Article 12 and therefore, the State would not be responsible for allowances and payment of salaries of its employees.


THE TEST OF INSTRUMENTALITY


In the case of Sukhdev v. Bhagatram, Mathew J. observed that:


"The reason for adopting such a broad view of Article 12 is that the Constitution should, whenever possible- “be so construed as to apply to arbitrary application of power against individuals by Centre of power. The emerging principle appears to be that public cooperation being a creation of the State is subject to the Constitutional limitations of the State itself.”


The Rashtrapati Bhawan: India's administrative capital

In the above case, the Apex Court discussed the status of statutory corporations such as ONGC, IFC, LICI etc. The Court held that all these corporations were to be construed as “States” under the meaning of Article 12 because these corporations were created by the statutes, had the statutory to make binding rules and regulations and were subject to pervasive governmental control.


To find out whether an entity is the State’s agency or instrumentality, he gave the following determining factors:


  1. Whether the state has financial and administrative control over an essential public function.

  2. Whether the entity or instrumentality or agency is performing an essential public function.

  3. Whether the agency or entity is carrying out business for the benefit of the public or not.

  • The concurring view of Justice Mathew became a guiding principle for future judges to determine whether an entity is a state’s agency or instrumentality or not. A similar set of principles was also established in the case of R. D. Shetty v. International Airport Authority.


Furthermore, in the case of Ajay Hasia v. Khalid Mujib, a regional engineering college was under the Government’s financial and administrative control. The Court held that the college was an “authority” for Article 12. The Court, in this case, laid down the following tests to determine whether a body is an instrumentality of the government or not:


  • If the entire share capital of the Corporation is held by the Government

  • Where the financial assistance of the State is so much as to meet almost the entire expenditure of that corporation

  • Whether the corporation enjoys a monopoly, whether State protected or not State protected.

  • There is existence of deep and pervasive State Control.

  • If a department of Government is transferred to a Corporation.

However, these tests are not conclusive and exhaustive. They are only inclusive.


CAN THE JUDICIARY BE CONSIDERED AS AN INSTRUMENTALITY OF THE STATE?


The Supreme Court of India

In Naresh v. State of Maharashtra, the question arose whether the Judiciary was included in the definition of State, under Article 12. It was held that even if the Court is a state, a writ under Article 32 cannot be issued against a High Court of competent jurisdiction against its juridical orders, because such orders can be said to violate the fundamental rights.


However, it shall be pertinent to note that, a noted Indian jurist, Mr. H. M. Seervai believed the Courts should be included in the definition of the state, and a Judge acting as a Judge is subject to writ jurisdiction of the Supreme Court.

The Courts like any other organ of the Government are limited or constrained by mandatory provisions of the Constitution, and they can be hardly allowed to override the fundamental rights under the shield that their jurisdiction includes the right to make erroneous jurisdiction.


However, subsequently, in the case of A. R. Antulay v. R. S. Nayak, it was held that the Courts cannot pass an order or decision or direction which could be violative of the fundamental rights of citizens, and therefore, it can be surmised that the expression ‘State’ as provided under Article 12 of the Constitution includes judiciary as well.

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