INTRODUCTION

The Constitution of India had followed the U.S. precedent and enacted Fundamental Rights in
the Constitution itself. The United States Constitution has defined their legislative and executive
powers in two Articles, which makes it easier to define their correlation. However, Indian
Constitution being an elaborative one, it is difficult to correlate the legislative and executive
powers because those powers are to be found in widely separated parts of our Constitution.

Whilst enacting the Fundamental Rights in Part-III of our Constitution, the founding fathers
showed that they had the will, and were ready to adopt the means to confer legally enforceable
fundamental rights. The question that was required to be answered is as to against whom were
the fundamental rights to be enforced? Broadly speaking, against the State not as ordinarily
understood but as widely defined under Article 12 of the Constitution of India.1

The term State is defined under Article 12 of Part III (Fundamental Rights) of the Constitution
of India. It states that:

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 States and all local or
other authorities within the territory of India or under the control of the Government of
India.

1
H.M. Seervai, Constitutional Law of India: A critical commentary, 4th Edition, Universal Law Publishing Co. Pvt.
Ltd., Vol.1, Pg. No. 349
 Concept of State

Article 12 of Constitution:

The word "State" has different meanings depending upon the context in which it is used. The
expression "The State" when used in Parts III & IV of the Constitution is not confined to only the
federating States or the Union of India or even to both. By the express terms of Article 12, the
expression "the State" includes:

the Government of India;

Parliament of India;

the Government of each of the States which constitute the Union of India;

the Legislature of each of the States which constitute the Union of India;

all local authorities within the territory of India;

all local authorities under the control of the Government of India;

all other authorities within the territory of India; and (viii) all other authorities under the
control of the Government of India.

The definition of the expression "the State" in Article 12, is however, for the purposes of Parts
III and IV of the Constitution, whose contents clearly show that the expression "the State" in
Article 12 as also in Article 36 is not confined to its ordinary and constitutional sense as
extended by the inclusive portion of Article 12 but is used in the concept of the State in relation
to the Fundamental Rights guaranteed by Part III of the Constitution and the Directive Principles
of State Policy contained in Part IV of the Constitution which principles are declared by Article
37 to be fundamental to the governance of the country and enjoins upon the State to apply
making laws.

Article 298 of the Constitution expands the executive power of the Union of India and of each of
the States which collectively constitute the Union to carry on any trade or business. By extending
the executive power of the Union and of each of the States to the carrying on of any trade or
business Article 298 does not, however, convert either the Union of India or any of the States
which collectively form the Union into a Merchant buying and selling goods or carrying on
either trading or business activity, for A the executive power of the Union and of the States
whether in the field of trade or business or in any other field, is always subject to constitutional
limitations and particularly the provisions relating to Fundamental Rights in Part III of the
Constitution and is exercisable in accordance with and for the furtherance of the Directive
Principles of State Policy prescribed by Part IV of the Constitution. The State is an abstract
entity and it can, therefore only act through its agencies or instrumentalities, whether such
agency or instrumentality be human or juristic. The trading and business activities of the State
constitute "public enterprise". The structural forms in which the Government operates in the field
of public enterprise are many and varied. These may consist of Government departments,
statutory bodies, statutory corporations, Government companies etc. The immunities and
privileges possessed by bodies so set up by the Government in India cannot, however, be the
same as those possessed by similar bodies established in the private sector because the setting up
of such bodies is referable to the executive power of the Government under Article 298 to carry
on any trade or business.

In Ujjain Bai v. State of U.P.2 , the Supreme Court observed that Article 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 or the
Legislature or Local authorities. The word State is of wide amplitude and capable of
comprehending every authority created under the statute and functioning within the territory of
India. There is no characterization of the nature 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.

The preponderant considerations for pronouncing an entity as State agency or instrumentality

are:
(1) Financial resources of the state being the Chief finding source;
(2) Functional character being governmental in essence;
(3) Plenary control residing in government;
(4) Prior history of the same activity having been carried on by government and made over to the
new body;
(5) Some element of authority or command. Whether the legal person is a corporation created by
a statute, as distinguished from under a statute, is not an important criterion although it may be
an indicium.3

2
AIR 1962 SC 1621
3
Som Prakash v. Union of India, AIR 1981 SC 212 (para 52) relying on Ramana v. International Airport Authority of
India, AIR 1979 SC 1628
 ORIGIN AND SCOPE

When the body is financially, functionally and administratively dominated by or under the
control of the government and such control is particular to the body and is pervasive, then it will
be State within Article 12. If the control is merely regulatory, it will not be a State.4

UNLESS THE CONTEXT OTHERWISE REQUIRES

The Context of a provision in Part III may exclude the meaning given by Article 12 to the word
State. For instance, the expression security of the State I Article 19(2) refers not to the
persons carrying on the administration of the State but to the State as organized political society.

INCLUDES

This word indicates that the definition is not exhaustive. Hence, even though the definition
expressly mentions only the Government and the Legislature, there might be other
instrumentalities of State Action within the sweep of the definition. The non mention of the
Judiciary does not, therefore, necessarily indicate that the courts are intended to be excluded
from the definition.5

The author is definitely of the opinion that by reason of the word includes the definition of
Article 12 enables the Indian Supreme Court to include within the definition all the three organs
of the State (executive, legislative and judicial) as well as all other authorities which have been
included within the concept of State action in U.S.A., and that any narrowing down of the ambit
of the definition would be defeating the object of inserting the definition of Article 12.

AUTHORITY

Literally authority means a person or body exercising power or having a legal right to
command and be obeyed. An Authority is a group of persons with official responsibility for a
particular area of activity and having a moral or legal right or ability to control others. If a
particular cooperative society can be characterized as a State under Article 12, it would also be
an authority within the meaning of Article 226 of the Constitution.6

4
Pradeep Kumar Biswas v. Union of India, (2002) 5 SCC 111 : 2002 (3) SCR 100; Durga Das Basu, Commentary
on Constitution of india, 8th Edition 2007, Wadwa Nagpur, Vol. 1, Pg. No. 638
5
Ujjam`Bai v. State of U.P., (1963) 1 SCR 778 (968-9)
6
K. Morappan v. Dy. Registrar of Co-operative Society; (2006) 4 MLJ 641. Refer:Durga Das Basu, Commentary on
Constitution of india, 8th Edition 2007, Wadwa Nagpur, Vol. 1, Pg. No. 641
Authority means a public administrative agency or corporation having quasi governmental
powers and authorized to administer a revenue producing public enterprise. It is wide enough to
include all bodies created by a statute on which powers are conferred to carry out governmental
or quasi- governmental functions.7 Authority in law belongs to the province of power.

The word State and Authority used in Article 12 remain among the great generalities of the
Constitution the content of which has been and continues to be applied by Courts from time to
time.8

LOCAL AUTHORITIES WITHIN THE TERRITORY OF INDIA

Local authorities are under the exclusive control of the States, by virtue of entry 5 of List II of
the 7th Schedule. That entry contains a list of some local authorities. This expression will,
therefore, include a Municipal Committee9; a Panchayat10; a Port Trust11; Municipality is a
State within the meaning of Article 1212. But that does not mean that the authorities are State
Government or Central Government and there is distinction between State and Government.

In Union of India v/s R.C.Jain13, to be considered a local authority, an authority must fulfill
the following tests-

1) Separate legal existence.

2) Function in a defined area.
3) Has power to raise funds.
4) Enjoys autonomy.
5) Entrusted by a statute with functions which are usually entrusted to municipalities.

OTHER AUTHORITIES

It refers to authorities other than those of local self- government, who have power to make rules,
regulations, etc. having the force of law. Instumentality and agency are the two terms, which
to some extent overlap in their meaning. The basic and essential distinction between an
instrumentality or agency of the State and other authorities has to be borne in mind. An
Authority must be authority sui juris within meaning of expression other authorties under
Article 12. A juridical entity, though an authority may also ratify the list of being an

7
Rajasthan State Electricity Board v. Mohal Lal, AIR 1967 SC 1857
8
Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111 (Supra)
9
State of Gujarat v. Shantilal, AIR 1969 SC 634 (643)
10
Ajit Singh v. State of Punjab, AIR 1967 SC 856 (866)
11
R.I. Handicraft Manufacturing Association v. Kottayam Municipality, AIR 2000 Ker 30
12
Natwarlal Khodidas Parmar v. Dist. Panchayat, Jamnagar, AIR 1990 Guj. 142
13
1981 SCR (2) 854
instrumentality or agency of the state in which event such authority may be held to be an
instrumentality or agency of State, but not vice versa.14

In the case of R.D.Shetty v/s International Airport Authority15, the Court laid down five tests
to be considered other authority:
1) Entire share capital is owned or managed by State.
2) Enjoys monopoly status.
3) Department of Government is transferred to Corporation.
4) Functional character governmental in essence.
5) Deep and pervasive State control.
6) Object of Authority

In the case of Ajay Hasia v. Khalid Mujib Sehravardi 16 , It has been held that whether a
statutory body falling within the purview of the expression other authorities is to be considered
differently. In the opinion of minority, the tests laid down in this case are relevant only for the
purpose of determining whether an entity is an instrumentality or agency of the State. Supreme
Court has developed a general test to determine whether a body is state or not.

Following are the tests.

Financial resource of the state is the chief funding source.
Existence of deep and pervasive state control.
Functional character being governmental in essence that is
functions of the corporation are of public importance and are
closely related to governmental functions.
If a department of a government is transferred to a corporation.
Whether the corporation enjoys monopoly status which is state
conferred or state protected.

The Court held that these tests are not conclusive but illustrative only and will have to be used
with care and caution.

14
6 Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111 (para 97)
15
1979 SCR (3)1014
16
8 (1981) 1 SCC 722; refer H.K. Saharays Constitution of India, An Analytical approach, 4th Edition, Eastern
Law House, Pg. No. 56
In Electricity Board, Rajasthan v. Mohan Lal17, The Supreme Court held that the expression
other authorities is wide enough to include all authorities created by the Constitution or statute
on whom the powers are conferred by Law. It is not necessary that the statutory authority should
be engaged in performing governmental or sovereign function.

In U.P. Warehousing Corporation v. Vijai Narain18, It was held that the U.P. Warehousing
Corporation which was constituted under a statute and owned and controlled by the Government
was an agency or instrumentality of the Government and therefore the State within the
meaning of Article 12.

In Sheela Barse v. Secretary, Childrens Aid Society19, The Court held that Central Inland
Water Transport Corporation, a Government Company which was wholly owned by the Central
Government and managed by the Chairman and Board of Directors appointed and removable by
Central Government, was the State within the meaning of Article 12 and therefore an
instrumentality of the State.

In Sukhdev Singh v. Bhagatram20, The Supreme Court held that Oil and Natural Gas
Commission, Life Insurance Corporation and Industrial Finance Corporation are authorities
within the meaning of Article 12.

In Som Prakash v. Union of India21, The Supreme Court held that a Government company
(Bharat Petroleum Corporation) fell within the meaning of the expression the State used in
Article 12.

The expression other authorities will include all constitutional or statutory authorities on whom
powers are conferred for the purpose of promoting economic activities. It is not only confined to
statutory corporations alone but may include a government company, a registered society, or
bodies which have some nexus with the government. However, the important question that was
raised before the Court was whether a private corporation fell within the ambit of Article 12.
Unfortunately, the answer is yet to be decided.

In Tekraj Vasandi v. Union of India22, The Court held that Institute of Constitutional and
Parliamentary Studies, a society registered under the Societies Registration Act, 1860, is not a
State within the meaning if Article 12. The Institute of Constitutional and Parliamentary Studies
is neither an agency nor an instrumentality of the State. It is a voluntary organization.

17
AIR 1967 SC 1857
18
(1980) 3 SCC 459
19
(1987) 3 SCC 395
20
AIR 1975 SC 1331
21
AIR 1981 SC 212
22
(1988) 1 SCC 236
 WHETHER JUDICIARY IS A STATE

The definition of State under Article 12 of the Constitution does not explicitly mention the
Judiciary. Hence, a significant amount of controversy surrounds its status vis-a-vis Part III of the
Constitution. Bringing the Judiciary within the scope of Article 12 would mean that it is deemed
capable of acting in contravention of Fundamental Rights. It is well established that in its non-
judicial functions, the Judiciary does come within the meaning of State. However, challenging a
judicial decision which has achieved finality, under the writ jurisdiction of superior courts on the
basis of violation of fundamental rights, remains open to debate.

On the one hand, the Judiciary is the organ of the State that decides the contours of the
Fundamental Rights. Their determination, of whether an act violates the same, can be right or
wrong. If it is wrong, the judicial decision cannot ordinarily be said to be a violation of
fundamental rights. If this were allowed, it would involve protracted and perhaps unnecessary
litigation, for in every case, there is necessarily an unsatisfied party. On the other hand, not
allowing a decision to be challenged could mean a grave miscarriage of justice, and go
unheeded, merely because the fallibility of the Judiciary is not recognized.

Whether Judiciary Is State:

Jurists like H.M.Seervai, V.N.Shukla consider judiciary to be State. Their view is supported by
Articles 145 and 146 of the Constitution of India.
1. The Supreme Court is empowered to make rules for regulating the practice and procedure of
Courts.
2. The Supreme Court is empowered to make appointments of its staff and servants; decide its
service conditions.

In Prem Garg v/s Excise Commissioner H.P. the Supreme Court held that when rule making
power of judiciary is concerned, it is State.
Other jurists say that since judiciary has not been specifically mentioned in Article 12, it is not
State.

In Rati Lal v/s State of Bombay, it was held that judiciary is not State for the purpose of
Article12.

In A.R.Antulay v/s R.S.Nayak23 and N.S.Mirajkar v/s State of Maharashtra24, it has been
observed that when rule making power of judiciary is concerned it is State but when exercise of
judicial power is concerned it is not State.

23
1988 SCR Supl. (1) 1
24
1966 (3) SCR 744
 CONCLUSION

The preponderant considerations for pronouncing an entity as State agency or instrumentality

are:
(1) Financial resources of the state being the Chief finding source;
(2) Functional character being governmental in essence;
(3) Plenary control residing in government;
(4) Prior history of the same activity having been carried on by government and made over to the
new body;
(5) Some element of authority or command. Whether the legal person is a corporation created by
a statute, as distinguished from under a statute, is not an important criterion although it may be
an indicium.

The definition of State under Article 12 of the Constitution does not explicitly mention the
Judiciary. Hence, a significant amount of controversy surrounds its status vis-a-vis Part III of the
Constitution. Bringing the Judiciary within the scope of Article 12 would mean that it is deemed
capable of acting in contravention of Fundamental Rights. It is well established that in its non-
judicial functions, the Judiciary does come within the meaning of State. However, challenging a
judicial decision which has achieved finality, under the writ jurisdiction of superior courts on the
basis of violation of fundamental rights, remains open to debate.