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Meaning of State under article 12


Meaning of State
Meaning of State

Content:-


Initial Decade


In the absence of specific context indicating otherwise, the term 'State' encompasses various entities, including the executive and legislature of both the Union and individual states, along with all local or similar authorities within the territorial bounds of India or under the governance of the Indian government.


This definition, though not exhaustive, is inclusive, implying that beyond the explicitly listed organs or bodies, others may also fall under the umbrella of the term 'State.' Article 12 serves as an interpretative provision in this regard. 


The phrase 'other authorities' lacks a precise definition in the Constitution or any statutory legislation, leading courts to adopt a broad and liberal interpretation.


However, it's crucial to note that this expansive interpretation of the term 'State' applies primarily to Part III (Fundamental Rights) and Part IV (Directive Principles) of the Constitution and does not extend to other constitutional provisions, such as Articles 309-311 (Part XIV), as elucidated in the case of Sukhdev Singh.


Executive and Legislature of Union and States

This category inherently encompasses the Union and State Governments, as well as the Parliament and State Legislatures. Additionally, it includes entities like the acting President of India and Governors of States within the executive realm. 


The term 'Government' also covers departments or institutions under governmental control, such as the I.T. or Excise Department, and establishments like the Forest Research Institute, Dehradun.


Authorities

Defined by Webster's dictionary, 'authority' denotes a person or body wielding power or command. In the context of Article 12, it refers to the authority to enact laws, orders, regulations, bye-laws, etc., which possess the force of law and the capability to enforce those laws, exemplified by municipal bye-laws.


Local Authorities

As per Section 3 of the General Clauses Act, 'local authorities' pertain to bodies like Municipalities, District Boards, Panchayats, etc.


Other Authorities

The term 'other authorities' in Article 12 appears subsequent to the mention of the executive and legislature of Union and States, as well as all local authorities. Consequently, it implies authorities of a similar nature, following the ejusdem generis principle. 


Thus, it encompasses bodies exercising governmental or sovereign functions and excludes individuals, whether natural or juristic, unless they are 'maintained by the State,' as established in the case of University of Madras v Shantha Bai. 


However, subsequent rulings have dismissed the application of the ejusdem generis rule, given the lack of a common genus among the named bodies in Article 12, rendering them incompatible for classification under a single category.

 
 

R.D. Shetty v. International Airport Authority of India


In the case of R.D. Shetty v International Airport Authority of India (AIR 1979 SC 1628), the court established several criteria for determining whether a body qualifies as an agency or instrumentality of the government:


  • Financial Dependency: If the primary source of funding for the entity is the State, particularly if the government holds the entire share capital of a corporation.


  • Extent of State Control: The presence of significant and pervasive control by the State, evidenced by factors such as the government's authority over appointments and removals within the entity, and the requirement for government approval on important rules or decisions.


  • Governmental Functionality: If the core functions of the corporation serve public interests and are essentially governmental in nature.


  • Transfer of Government Departments: If a government department is transferred to the corporation, indicating a close relationship with the State.


  • Monopoly Status: Whether the corporation enjoys a monopoly status conferred or protected by the State.


However, the court emphasised that these tests serve as guidelines rather than definitive criteria. They must be applied judiciously and with caution, without stretching them to encompass every autonomous body merely connected to the government. 


In the specific instance of the International Airport Authority, it was deemed to be 'the State' due to factors such as the Central Government's authority to appoint the chairman and other board members, as well as the exclusive reliance on government-provided capital by the Authority.




Article 12: Key Judicial Precedents


In the case of Ajay Hasia v Khalid Mujib (AIR 1981 SC 487), it was established that a society registered under the Societies Registration Act, 1898, qualifies as an agency or instrumentality of the State and consequently falls within the definition of 'State' as per Article 12 of the Constitution. The ruling was based on the assertion that both the State and Central governments exercise full control over the operations of such societies. 


The focus of inquiry should not be on how the juristic person (such as a society) is established, but rather on the purpose for which it is brought into existence. Whether the corporation is created by a specific statute or under a statute is deemed immaterial in this context. The crucial aspect is the extent of control exerted by the government over its functioning.


In the case of Chandra Mohan Khanna v NCERT (AIR 1992 SC 76), the court ruled that the National Council of Educational Research and Training (NCERT) does not qualify as a 'State' under Article 12 of the Constitution. NCERT, being a society, aims to aid and advise the Ministry of Education in implementing government policies. However, its activities are not exclusively governmental in nature. 

 
 

The control exerted by the government is limited to ensuring the proper utilisation of grants, and NCERT functions as an autonomous body. The court emphasised that the ambit of Article 12 should not be extended to encompass every autonomous body with some connection to the government. Hence, NCERT was deemed outside the purview of 'State' under Article 12.


In the case of Ashok Kumar Singh v BITCO Ltd. (AIR 1998 Pat 9), it was determined that the Bihar Industrial and Technical Consultancy Organisation Ltd. (BITCO) could be considered as a "State" entity. This conclusion stemmed from BITCO's objectives, as outlined in its Memorandum and Articles of Association, which primarily focused on fostering industrial growth in the State—a matter of significant governmental interest.


Moreover, the entirety of BITCO's shares was held by statutory organisations, all of which were considered 'States.'


The Industrial Development Bank of India (IDBI), another 'State' entity, exercised profound and extensive control over BITCO's operations, including the composition and management of its Board of Directors. Consequently, BITCO was deemed to be a subsidiary of IDBI and, by extension, a government company.



In the case of Pradeep Kumar Biswas v Indian Institute of Chemical Biology (2002) 5 SCC 1, the Supreme Court, with a majority decision of 5:2, determined that the Council of Scientific and Industrial Research (CSIR) qualifies as an instrumentality of the State within the scope of Article 12 of the Constitution.


This ruling overturned the decision made in the Sabhajit Tewari case (1975). The majority opinion rested on the premise that despite being established under the Registration of Societies Act, 1860, CSIR was deemed a 'State' entity due to the government's overriding control over its operations.


The objectives outlined in the Memorandum of Association of CSIR clearly indicated its establishment in the national interest, aiming to promote economic welfare and foster planned development in the country. Notably, the Government of India played a dominant role in the governance of CSIR.


The court's observation highlighted the Constitution's partial definition of the term "State" within Article 12, encompassing "the Government under the control of the Government of India."


While acknowledging that an "inclusive" definition is typically non-exhaustive, the court highlighted its role in interpreting the broad concepts of "State" and "authority" as outlined in Article 12.


This interpretation, evolving over time, aligns with the expansive approach to equality under Articles 14 and 16.


Courts have consistently sought to restrain arbitrary exercises of power by various centres of authority, leading to a broadened judicial understanding of the term "State" within Article 12.



 ZEE TELEFILMS LTD. v UNION OF INDIA


In the case of ZEE TELEFILMS LTD. v UNION OF INDIA (2005) 4 SCC 649, the Supreme Court applied the principles established in the landmark judgement of Pradeep Kumar Biswas (2002) 5 SCC 111 to determine whether a body qualifies as the 'State' under Article 12 of the Constitution. The court reiterated the following principles:


1. The principles laid down in Ajay Hasia (1981) 1 SCC 722 are not rigid and conclusive. A body need not meet all those principles to be considered a 'State' under Article 12.


2. Each case must be examined based on the factual circumstances to determine whether the body in question is financially, functionally, and administratively dominated or under the control of the government. Such control must be specific to the body and pervasive.


3. Mere regulatory control, whether statutory or otherwise, is insufficient to categorise a body as the 'State.'


In the case of the Board of Control for Cricket in India (BCCI), the court (majority opinion) concluded that it did not qualify as the 'State' based on the following facts:


- The BCCI was not established by a statute.

- No portion of the BCCI's share capital was held by the government.

- The government provided minimal financial assistance to the BCCI.

- While the BCCI enjoyed a monopoly status in cricket, it was not conferred or protected by the State.

- There was no deep and pervasive State control over the BCCI. Any control exercised was regulatory in nature, akin to other similar bodies.

- The functions of the BCCI were not exclusively public or closely related to government functions.

- The BCCI was not created by the transfer of a government-owned corporation and operated as an autonomous body.


Therefore, the court concluded that the cumulative facts did not demonstrate that the BCCI was financially, functionally, or administratively dominated or under the control of the government.


The government's control over certain activities of the BCCI, such as organising cricket matches and managing the Indian team's travel, was regulatory rather than administrative.


The court further noted that the term "other authorities" in Article 12 was initially introduced to allow judicial review of actions of authorities created under statutes and performing State functions.


However, judicial interpretation over time expanded this definition to include bodies beyond statutory authorities, as seen in cases like Rajasthan SEB (1967) 3 SCR 377 and Sukhdev Singh (1975) 1 SCC 421


Nevertheless, given the evolving socio-economic policy of the country, with the State focusing more on governance than business activities, there seemed to be no immediate need for further expansion of the scope of "other authorities" under Article 12 through judicial interpretation.

 
 

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