The Definition of State in Indian Constitution

Civil (2)

12. Definition

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.

The Concept

Dr. B.R. Ambedkar explaining the scope of Article 12 and reason why this Article was placed in the Chapter on Fundamental Rights so spoke in the Constituent Assembly :

“The object of the fundamental rights is two-fold. First, that every citizen must be in a position to claim those rights. Secondly, they must be binding upon every authority I shall presently explain what the word “authority” means upon every authority which has got either the power to make laws or the power to have discretion vested in it. Therefore, it is quite clear that if the Fundamental Rights are to be clear, then they must be binding not only upon the Central Government, they must not only be binding the Provincial Government, they must not only be binding upon the Governments established in the Indian States, they must also be binding upon District Local Boards, Municipalities, even village panchayats and taluk boards, in fact, every authority which has been created by law and which has got certain power to make laws, to make rules, or make bye- laws.

If that proposition is accepted and I do not see anyone who cares for Fundamental Rights can object to such a universal obligation being imposed upon every authority created by law then, what are we to do to make our intention clear? There are two ways of doing it. One way is to use a composite phrase such as “the State”, as we have done in article 7; or, to keep on repeating every time, “the Central Government, the Provincial Government, the State Government, the Municipality, the Local Board, the Port Trust, or any other authority”. It seems to me not only most cumbersome but stupid to keep on repeating this phraseology every time we have to make a reference to some authority. The wisest course is to have this comprehensive phrase and to economise in words”. [quoted  in Pradeep Biswas -vs- Institute of Chemical Biology 2002 (5) SCC 111].

  • Whether a body is “State” as defined by Article 12 of the Constitution of India, or for its being subject to jurisdiction of the Courts, for judicial review purposes, under Article 226 of the Constitution of India. The Petitioners also rely on a few decisions, such as Pradeep Biswas -vs- Institute of Chemical Biology 2002 (5) SCC 111 and Zee Telefilms -vs-Union of India 2005 (4) SCC it is held , article 226 confers wide powers on the High Courts to issue writs to “any person or authority”. It can be issued “for the enforcement of any of the fundamental rights and for any other purpose”. The term “authority” used in Article 226, it has been held, should be widely construed, unlike the term “authority” occurring in Article 12, which is relevant in the context of enforcement of fundamental rights under Art 32. Article 226 confers power on the High Courts to issue writs for enforcement of the fundamental rights as well as other rights. The words “any person or authority” used in Article 226 are, therefore, not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or bodies performing public. The form of the body or institution is irrelevant; what is of relevance is the nature of the obligation imposed, the breach of which is complained against, or the enforcement of which is sought. It has thus been ruled that judicial control over ever changing nature of bodies affecting the rights of people cannot be stereotyped or straight-jacketed. This was emphasized in Andi Mukta Sadguru Shree Muktajee Vandas Swami Suvarna Jayanti Mahotsav Smarak Trust & Ors,-vs- V. R. Rudani1989 (2) SCC 691. In Praga Tools Corporation v. Shri C.A Imanual and Ors., (1969) 3 SCR 773 : (AIR 1969 Supreme Court 1306) , this Court(SC) said that a mandamus can issue against a person or body to carry out the duties placed on them by the Statutes even if it is not a public official or statutory body. It was observed (at 778) ; “It is however not necessary that the person or the authority on whom the statutory duty is imposed need be a public official or an official body. A mandamus can issue, for instance, to an official or a society to compel him to carry out the terms of the statute under or by which the society is constituted or governed and also to companies or corporations to carry out duties placed on them by the statutes authorising their undertakings. A mandamus would also lie against a company constituted by a statute for the purpose of fulfilling public responsibilities. (See Halsbury’s Laws of England (3rd Ed. Vol. II p. 52 and onwards).
  • In Binny Ltd. & Anr. v. V.V. Sadasivan, 2005 (6) SCC 657, while deciding when a private body can be said to be performing public function, the Supreme Court observed: “Judicial review is designed to prevent the cases of abuse of power and neglect of duty by public authorities. However, under our Constitution, Article 226 is couched in such a way that a writ of mandamus could be issued even against a private authority. However, such private authority must be discharging a public function and that the decision sought to be corrected or enforced must be in discharge of a public function. The role of the State expanded enormously and attempts have been made to create various agencies to perform the governmental functions. Several corporations and companies have also been formed by the government to run industries and to carry on trading activities. These have come to be known as Public Sector Undertakings. However, in the interpretation given to Article 12 of the Constitution, this Court took the view that many of these companies and corporations could come within the sweep of Article 12 of the Constitution. At the same time, there are private bodies also which may be discharging public functions. It is difficult to draw a line between the public  functions and private functions when it is being discharged by a purely private authority. A body is performing a “public function” when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of the public as having authority to do so. Bodies therefore exercise public functions when they intervene or participate in social or economic affairs in the public interest. In a book on Judicial Review of Administrative Action (Fifth Edn.) by de Smith, Woolf & Jowell in Chapter 3 para 0.24, it is stated thus: “A body is performing a “public function” when it seeks to achieve some collective benefit for the public or a section of the public and is accepted by the public or that section of the public as having authority to do so. Bodies therefore exercise public functions when they intervene or participate in social or economic affairs in the public interest. This may happen in a wide variety of ways. For instance, a body is performing a public function when it provides “public goods” or other collective services, such as health care, education and personal social services, from funds raised by taxation. A body may perform public functions in the form of adjudicatory services (such as those of the criminal and civil courts and tribunal system). They also do so if they regulate commercial and professional activities to ensure compliance with proper standards. For all these purposes, a range of legal and administrative techniques may be deployed, including: rule-making, adjudication (and other forms of dispute resolution); inspection; and licensing. Public functions need not be the exclusive domain of the state. Charities, self-regulatory organizations and other nominally private institutions (such as universities, the Stock Exchange, Lloyd’s of London, churches) may in reality also perform some types of public function. As Sir John Donaldson M.R. urged, it is important for the courts to “recognize the realities of executive power” and not allow “their vision to be clouded by the subtlety and sometimes complexity of the way in which it can be exerted”. Non-governmental bodies such as these are just as capable of abusing their powers as is government.” In G.Bassi Reddy v. International Crops Research Institute and Another, (2003) 4 SCC 225 it was observed that: “It is true that a writ under Article 226 also lies against a person’ for “any other purpose”. The power of the High Court to issue such a writ to “any person” can only mean the power to issue such a writ to any person to whom, according to well-established principles, a writ lay. That a writ may issue to an appropriate person for the enforcement of any of the rights conferred by Part III is clear enough from the language used. But the words “and for any other purpose” must mean “for any other purpose for which any of the writs mentioned would, be  issued. A writ under Article 226 can lie against a “person” if it is a statutory body or performs a public function or discharges a public or statutory duty.” There are decisions which have ruled that even in the contractual sphere, there is no bar to entertaining a writ petition or if it involves some disputed question of facts. The Supreme Court observed in LIC of India v. Consumer Education & Research Centre, (1995) 5 SCC 482, that: “Every action of the public authority or the person acting in public interest or its acts give rise to public element, should be guided by public interest. It is the exercise of the public power or action ‘ hedged with public element becomes open to challenge. If it is shown that the exercise of the power is arbitrary unjust and unfair, it should be no answer for the State its instrumentality, public authority or person whose acts have the insignia of public element to say that their actions are in the field of private law and they are free to prescribe any conditions or limitations in their actions as private citizens, simplicitor, do in the field of private law. Its actions must be based on some rational and relevant principles. It must not be guided by irrational or irrelevant considerations. Every administrative decision must be hedged by reasons….The actions of the State, its instrumentality, any public authority or person whose actions bear insignia of public law element or public character are amenable to judicial review and the validity of such an action would be tested on the anvil of Article 14. While exercising the power under Article 226 the Court would be circumspect to adjudicate the disputes arising out of the contract depending on the facts and circumstances in a given case. The distinction between the public law remedy and private law field cannot be demarcated with precision. Each case has to be examined on its own facts and circumstances to find out the nature of the activity or scope and nature of the controversy. The distinction between public law and private law remedy is now narrowed down. The actions of the appellants bear public character with an imprint of public interest element in their offers regarding terms and conditions mentioned in the appropriate table inviting the public to enter into contract of life insurance. It is not a pure and simple private law dispute without any insignia of public element.
  •  Even on the issue of judicial control of non-state bodies, the growth of law in India and other parts of the world have been parallel. In Nagle v. Feilden and Others [1966 (2) QB 633], a Jockey Club was entitled to issue licences training horses meant for races. An application for grant of licence was refused, on the ground that the request was by a woman. The action of the Club (a private body) was set aside by the court, which held that it exercised licensing functions, and controlled the profession and, thus, had to be judged and viewed by higher standards. It was held that it could not act arbitrarily. In Greig & Others v. Insole & Others [1978 (3) All ER 449], a Chancery Division considered in great details the rules framed by the International Cricket Council as also the Test and County Cricket Board of United Kingdom. The question which arose there was whether the ICC and consequently the TCCB could debar a cricketer from playing official cricket as well as county cricket as the plaintiffs, well- known and talented professional cricketers (who had played for English County Club and test matches for some years) participated in the World Series Cricket which promoted sporting events of various kinds. In R. v. Panel on Take-overs and Mergers, ex parte Datafin plc & Anr [1987 (1) All ER 564] the Court exercised the power of the judicial review over a private body. The grounds of judicial review, which was granted, are: (a) The Panel, although self-regulating, do not operate consensually or voluntary but had imposed a collective code on those within its ambit; (b) The Panel had been performing a public duty as manifested by the government’s willingness to limit legislation in the area and to use the Panel as a part of its regulatory machinery. There had been an “implied devolution of power” by the Government to the Panel in view of the fact that certain legislation presupposed its existence. (c) Its source of power was partly moral persuasive. Such a power would be exercised under a statute by the Government and the Bank of England.Lloyd LJ in his separate speech said that: “On the policy level, I find myself unpersuaded. Counsel for the panel made much of the word ‘self-regulating’. No doubt self-regulation has many advantages. But I was unable to see why the mere fact that a body is self-regulating makes it less appropriate for judicial review. Of course there will be many self-regulating bodies which are wholly inappropriate for judicial review. The committee of an ordinary club affords an obvious example. But the reason why a club is not subject to judicial review is not just because it is self-regulating. The panel wields enormous power. It has a giant’s strength. The fact that it is self regulation, which means, presumably, that it is not subject to regulation by others, and in particular the Department of Trade and Industry, makes it not less but more appropriate that it should be subject to judicial review by the courts.” [Aston Cantlow, Wilmcote and Billesley Parochial Church Council v. Wallbank [2001] 3 W.L.R. 1323].
  • Equally, that the institution or organization is not controlled, and is autonomous is irrelevant; indeed, the concept of non-government organization(NGO) means that it is independent of any manner of government control in its establishment, or management. That the organization does not perform – or pre-dominantly perform – “public” duties too, may not be material, as long as the object for funding is achieving a felt need of a section of the public, or to secure larger societal goals. To the extent of such funding, indeed, the organization may be a tool, or vehicle for the executive government‟s policy fulfillment plan. This view, about coverage of the enactment, without any limitation, so long as there is public financing, is supported by a recent decision of the Chancery Division in Sugar -vs- British Broadcasting Corporation & Anr [2009] UKHL 9 (where the court considered the coverage of the UK Information Act, in respect of the British Broadcasting Corporation, which was notified as a “public authority” in regard to a certain class of information).
  • In Zee Teleflims Ltd vs UOI where the issue was if the Board of Control for Cricket (BCCI) was “State” under Article 12 of the Constitution, and bound by Article 14. The court had observed in the said ruling that: “…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. But that does not mean that the violator of such right would go scot-free merely because it or he is not a State. Under the Indian jurisprudence there is always a just remedy for the violation of a right of a citizen. Though the remedy under Article 32 is not available, an aggrieved party can always seek a remedy under the ordinary course of law or by way of a writ petition under Article 226 of the Constitution, which is much wider than Article 32.”
  • BCCI is ‘State’ under Article 12 of the Indian constitution by Zee Telefilms Ltd. & Anr vs Union Of India & Ors on 2 February, 2005 .
  • Definition of ‘Authority’ : In [Pradeep Biswas -vs- Institute of Chemical Biology 2002 (5) SCC 111]¬“We sum up our conclusions as under:-(1) Simply by holding a legal entity to be an instrumentality or agency of the State it does not necessarily become an authority within the meaning of ‘other authorities’ in Article 12. To be an authority, the entity should have been created by a statute or under a statute and functioning with liability and obligations to public. Further, the statute creating the entity should have vested that entity with power to make law or issue binding directions amounting to law within the meaning of Article 13(2) governing its relationship with other people or the affairs of other people __ their rights, duties, liabilities or other legal relations. If created under a statute, then there must exist some other statute conferring on the entity such powers. In either case, it should have been entrusted with such functions as are governmental or closely associated therewith by being of public importance or being fundamental to the life of the people and hence governmental. Such authority would be the State, for, one who enjoys the powers or privileges of the State must also be subjected to limitations and obligations of the State. It is this strong statutory flavour and clear indicia of power __ constitutional or statutory, and its potential or capability to act to the detriment of fundamental rights of the people, which makes it an authority; though in a given case, depending on the facts and circumstances, an authority may also be found to be an instrumentality or agency of the State and to that extent they may overlap. Tests 1, 2 and 4 in Ajay Hasia enable determination of Governmental ownership or control. Tests 3, 5 and 6 are ‘functional’ tests. The propounder of the tests himself has used the words suggesting relevancy of those tests for finding out if an entity was instrumentality or agency of the State. Unfortunately thereafter the tests were considered relevant for testing if an authority is the State and this fallacy has occurred because of difference between ‘instrumentality and agency’ of the State and an ‘authority’ having been lost sight of sub-silentio, unconsciously and un-deliberated. In our opinion, and keeping in view the meaning which ‘authority’ carries, the question whether an entity is an ‘authority’ cannot be answered by applying Ajay Hasia tests.(2) The tests laid down in Ajay Hasia’s case are relevant for the purpose of determining whether an entity is an instrumentality or agency of the State. Neither all the tests are required to be answered in positive nor a positive answer to one or two tests would suffice. It will depend upon a combination of one or more of the relevant factors depending upon the essentiality and overwhelming nature of such factors in identifying the real source of governing power, if need be by removing the mask or piercing the veil disguising the entity concerned. When an entity has an independent legal existence, before it is held to be the State, the person alleging it to be so must satisfy the Court of brooding presence of government or deep and pervasive control of the government so as to hold it to be an instrumentality or agency of the State”.