ARTICLE 12: FROM AJAY HASIA V.

KHALID MUJIB
TO BOARD OF CRICKET CONTROL IN INDIA (BCCI) V. CRICKET ASSOCIATION OF BIHAR
~ Swati Panda

Article 12 of the Constitution of India defines ‘the State’ so as to include “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.” Now the inevitable question that arises before the courts is what organizations and
institutions come within the purview of ‘other authorities’ under the definition of the State.
The judiciary has played a pro-active role in expanding the reach and dimensions of ‘other
authorities’ whereby certain criteria were applied in different cases, and progressively, an
attempt was made to make the definition of ‘State’ inclusive and not exhaustive. This article
would lay emphasis on the evolution of the definition of ‘State’ under Article 12 of the Indian
Constitution and underpinning the rich jurisprudence developed by the Indian Courts since
the landmark verdict in Ajay Hasia v. Khalid Mujib.

One would have thought that the law on this matter was settled in the case of Ramana
Dayaram Shetty v. International Airport Authority of India,1 where the Supreme Court
while holding the International Airport Authority of India as a ‘State’ within the meaning of
Article 12, (¶ 34) concluded that to determine whether a body is an agency or instrumentality
of the state, the following test has been laid down: financial Resources of the State, existence
of deep and pervasive state control, function of governmental essence, department turned into
a corporation and monopoly Status. (¶ 19) In simple words, the court laid an equal emphasis
on the existence of a public function as well as the extent of government control. However,
this position experienced a subtle shift over the years vide the subsequent case laws.

In Ajay Hasia v. Khalid Mujib,2 the question was whether the Regional Engineering College
of Srinagar was ‘State’ within the meaning of Article 12. The College had been established,
and its administration was carried on, by a Society that was registered under the J&K
Societies Registrations Act, 1898. (¶ 6) Consequently, the first argument of the Society was
that it had not been set up by the government under a statute, and so could not come within
the meaning of Article 12. Unsurprisingly, following R. D. Shetty, the Court rejected this

1
AIR 1979 SC 1628.
2
1981 AIR 487.
contention. It cited R. D. Shetty copiously, and followed its decision. The impact, however,
was rather different.

From the beginning of its analysis, the Court focused almost exclusively upon
government control as the primary test for Article 12. The tone of the judgment resembles a
corporate veil analysis. The Court underlined that the purpose of Article 12’s expanded
definition was to cover those corporations where, “behind the formal ownership which is cast
in the corporate mould, the reality is very much the deeply pervasive presence of the
Government. It is really the Government which acts through the instrumentality or agency of
the corporation and the juristic veil of corporate personality worn for the purpose of
convenience of management and administration cannot be allowed to obliterate the true
nature of the reality behind which is the Government.” 3 (¶ 7) What seemed to be concerning
the Court was the government’s attempt at finding a way around and escaping its Part III
obligations by creating the corporate form as a separate legal personality, while maintaining
control over it.

The Court cited extensive excerpts from R.D. Shetty, and summarised the six markers of the
ambit of ‘State’:
1. holding of the corporation’s entire share capital by the government;
2. extensive financial assistance;
3. a State-conferred monopoly status;
4. deep and pervasive State control;
5. functions of public importance, or closely related to governmental functions; and
6. transferring a government department to a corporation. (¶ 9)

While all six of these features were admittedly present at various points in the R.D.
Shetty judgment,4 the Court here dilutes the functional aspect of the test, by relegating it to
one among six factors, most of which are directly about governmental control. The reason
behind this position is that just because an autonomous body carrying out a public function
and has some nexus with the government doesn’t prove that it is functioning as an
instrumentality of the government. Therefore, public function might be a relevant factor, but
not a conclusive one. This is the reason why the court emphasized on test of government

3
Ajay Hasia v. Khalid Mujib, 1981 AIR 487.
4
Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628.
control and that “these tests are not conclusive or clinching, but they are merely indicative
which have to be used with care and caution…”5

The Court’s application of the principles to the facts of the case reflects this. After examining
the composition of the Society and its board of governors, its finances and its administration,
the Court concluded that the “control of the State and the Central Governments is indeed so
deep and pervasive”,6 (¶ 15) that the Society was undeniably an instrumentality or agency of
the State under Article 12. On the other hand, the Court paid no attention to the function
performed by the Society – that of higher education – in its analysis. The functional test,
therefore, is conspicuously missing from the Court’s analysis.

In cases following Ajay Hasia, the judgment invariably turned upon the aspect of control. In
B.S. Minhas v. Indian Statistical Institute and Ors.,7 the petitioner had challenged the
arbitrary appointment of Shri B.P. Adhikari as the director of the Indian Statistical Institute,
when the petitioner was eminently a more suitable candidate for the position and thereby, a
violation of Article 14 and 16 of the Constitution. The question of maintainability of the writ
on the grounds of weather the respondent society registered under the Societies Registration
Act, 1860 and governed by the Indian Statistical Institute Act, 1959 can be considered an
‘authority’ under Article 12 for the purpose of the writ came up. The court, following the
Ajay Hasia’s case, held that “the control of the Central Government in the institution is deep
and pervasive and, therefore, to all intents and purposes it is an instrumentality of the
Central Government and as such is an ‘authority’ within the meaning of Article 12 of the
Constitution.”8

In P.K. Ramachandra Iyer and Ors. v. Union of India and Ors.,9 the petitioners held the
post of Professors since 1963, 1970 and 1970 respectively. However, they were denied the
revised pay scale introduced in 1971-72 despite having the minimum qualifications, requisite
experience and the fact that they are already employed and are performing the same or
identical duties as are being performed by newly recruited Professors in the sister disciplines.
It was contended that the same was discriminatory and violative of Article 14 and that’s
where the question of whether ICAR is a ‘state’ became relevant. Once again following Ajay
Hasia’s case, the Court held that the Indian Council of Agricultural Research (ICAR) and its

5
Id.
6
Id.
7
1984 AIR 363.
8
Id.
9
1984 (2) S.C.R. 141.
affiliate Indian Veterinary Research Institute (IVRI) which was a society registered under the
Societies Registration Act was an instrumentality of the State falling under the expression
‘other authority’ within the meaning of Article 12. The said Council was wholly financed by
the Government. Its budget was voted upon as part of the expenses incurred in the Ministry
of Agriculture. The control of the Government of India permeated through all its activities.
Since its inception, it was set up to carry out the recommendations of the Royal Commission
on Agriculture. According to this Court, these facts were sufficient to make the said Council
an instrumentality of the State.

Perhaps this rather over - enthusiastic application of the broad limits set by Ajay Hasia may
have persuaded this Court to curb the tendency in Chander Mohan Khanna v. NCERT.10 In
this case the court observed that the NCERT carried out activities which are not wholly
related to Government functions. Its affairs are conducted by the Executive Committee
comprising of Government servants and educationists, who would enter into arrangements
with Government, public or private organisations or individuals in furtherance of the
objectives for implementation of its programmes. Its funds consist of grants made by the
Government, contribution from other sources and income from its own assets. It is free to
apply its income and property towards the promotion of its objectives and implementation of
the programmes. The Government control is confined only to the proper utilisation of the
grant. The NCERT is thus largely an autonomous body with no deep and pervasive control by
the government. The Court thereby relied on the judgement in Tekraj Vasandhi alias K.L.
Basandhi v. Union of India,11 and held that NCERT is not a ‘State’ under Article 12.

However, the triumph of the legal test was completed in 2002, in the case of Pradeep Kumar
Biswas v. Indian Institute of Chemical Biology,12 a judgment delivered by a seven-judge
bench. The factual matrix of the case is complex: briefly, it involved the reconsideration
of Sabhajit Tewari’s case,13 in which a constitution bench had held that the Council of
Scientific and Industrial Research (CSIR) was not ‘State’ within the meaning of Article 12
because its origin or genesis was not from any Statute. In Pradeep Kumar Biswas, the
appellants filed a writ petition to challenge the termination of their services by ‘Indian
Institute of Chemical Biology’ which is a unit of the CSIR. Justice Ruma Pal went into the
history of the Supreme Court’s Article 12 jurisprudence, and distinguished between a

10
AIR 1992 SC 76.
11
(1988) 2 SCR 260.
12
(2002) 5 SCC 111.
13
Sabhajit Tiwari v. Union of India, 1975 AIR 1329.
‘narrow’ and a ‘broad’ approach to Article 12. Overruling the Sabhajit Tewari’s case, she
held that “CSIR was ‘created’ by the Government to carry on in an organized manner what
was being done earlier by the Department of Commerce of the Central Government.” 14 A
change in its structure did not change its nature and hence, it is a ‘state’ under Article 12. For
her, however, the difference was not between the legal and the functional approach, as I have
discussed earlier, but between the statutory approach (in the earliest cases), and the legal
approach (Rajasthan State Electricity Board v. Mohan Lal and Ors.15 onwards). In her
judgment, the functional test is erased out of history: the judgment in R.D. Shetty16 is simply
treated as affirming the legal approach, which was ultimately crystallised in Ajay Hasia.

Having listed Ajay Hasia’s six factors, Justice Ruma Pal decided to crystallise them further.
According to her, the position of law as culminated in Ajay Hasia17 was “whether in the light
of the cumulative facts as established, the body is financially, functionally and
administratively dominated by or under the control of the Government. Such control must be
particular to the body in question and must be pervasive. If this is found then the body is a
State within Article 12. On the other hand, when the control is merely regulatory whether
under statute or otherwise, it would not serve to make the body a State.” Here, the entire
focus is on control, and the public-function aspect has disappeared altogether.

14
Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111.
15
1967 AIR 1857.
16
Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628.
17
Ajay Hasia v. Khalid Mujib, 1981 AIR 487.
If Pradeep Kumar Biswas impliedly did away with the public function test, Zee Telefilms v.
Union of India18 did so expressly. In this case, a tender was awarded to the Zee Films for the
exclusive television rights but was subsequently revoked due to a stalemate that arose
because of a writ filed by ESPN Star Sports who had submitted a competing tender. As a
result, the question was whether the Board of Control for Cricket in India (BCCI) was ‘State’
within the meaning of Article 12. The Board argued that its autonomous nature took it out of
the ambit of Article 12. Zee Telefilms, on the other hand, pointed to the “governmental
functions exercised by the Board in the area of cricket.” The Court held in favour of the
Board. Following Pradeep Kumar Biswas, it noted that the Board was not created by statute,
the Government held no share capital, provided no financial assistance, conferred no
monopoly that the board enjoys, exercised no pervasive control, and had not transferred a
government-owned corporation. Consequently, Article 12 was not applicable. Responding to
the petitioners’ contentions, the Court then stated: “Even assuming that there is some element
of public duty involved in the discharge of the Board’s functions even then as per the
judgment of this Court in Pradeep Kumar Biswas that by itself would not suffice for bringing
the Board within the net of ‘other authorities’ for the purpose of Article 12.”19 (¶ 25)

The Court also rejected the contention that the control of cricket was in the nature of a “state
function”, holding that “the State/Union has not chosen the Board to perform these duties
nor has it legally authorised the Board to carry out these functions under any law or
agreement. It has chosen to leave the activities of cricket to be controlled by private bodies
out of such bodies’ own volition (self-arrogated). In such circumstances when the actions of
the Board are not actions as an authorised representative of the State, can it be said that the
Board is discharging State functions? The answer should be no. In the absence of any
authorisation, if a private body chooses to discharge any such function which is not
prohibited by law, then it would be incorrect to hold that such action of the body would make
it an instrumentality of the State.”20

After Pradeep Kumar Biswas and Zee Telefilms, it seems clear that Article 12 is strictly
limited to instances of pervasive governmental control, and the public function test is
irrelevant to the enquiry. In the recent case of BCCI and Ors. v. Cricket Association of
Bihar and Ors.,21 the question of whether BCCI is a state under Article 12 and whether a writ

18
(2005) 4 SCC 649.
19
Id.
20
Zee Telefilms v. Union of India, (2005) 4 SCC 649.
21
(2015) 3 SCC 251.
petition filed before the High Court under Article 226 of the Constitution is maintainable or
not propped up. Answering the first issue, the Hon’ble Supreme Court reiterated the position
in Zee Telefilms and held that BCCI is not a ‘state’. While answering the latter question, the
Court held that “the BCCI did perform certain public functions like selection of the team to
represent the country in international arena and had a complete sway on the game of cricket
which made it amenable to the writ jurisdiction of the High Court under Article 226.” (¶ 30)
This does not change the position as settled in Pradeep Biswas and Zee Telefilms (and rather
strengthens it) and only underlines the need to hold the institutions performing public
functions answerable for any violation of fundamental rights of the people it is serving, on
standards generally applicable to judicial review of State action.

In a nutshell, the law on this matter is settled and in the contemporary jurisprudence, heavy
reliance is placed on the examination of the deep and pervasive control of the government,
rather than on the statutory or functional test, for determining the status of an institution as a
‘state’ under Article 12 of the Constitution.

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