Concept of State

(Under Article 12 of the constitution of India)

Important Points to remember
Part III of the Constitution of India comprising Articles 12-35 provides
for the concept of State.
The first Article of part III of the Constitution that is Article 12 defines
State, the significance of this Article is observed with the fact that
fundamental rights are enforceable against the state.
The opening words of Article 12 Unless the context Otherwise
requires, the state includes suggest that the concept of State
under article 12 is used in the context of Part III that is in the context of
fundamental rights. Thus, under Article 12 the concept of state is to be
understood in the context of fundamental rights only.
Further, Article 12 is not exhaustive but inclusive, meaning thereby
Article 12 is not complete with its letters. But there is scope to interpret
the provisions of Article 12.
Under article 12 there are four important clauses which are necessary to
define the concept of state.
Article 12 - In this part, unless the context otherwise requires, State
Includes
Clause (1) Government of India and Parliament.
Clause (2) Government of each state and State legislature
of
each state.
Clause (3) All local and other authorities within the
territory of India.
Clause (4) All local and other authorities under the
control of government of India.

 The term state includes executive as well as legislative organ of the union
and the state, it is the actions of these bodies that can be challenged before
the courts as violating fundamental rights.
The executive and legislative organ of the state is quite specific and self
explanatory. Problems arise with respect to clause 3 and clause 4 of Article
12.
However, the concept of Local Authority is defined under section 3(31) of
the General Clauses Act, 1897. It refers to authorities like Municipalities,
District Board, Panchayat, improvement trust and Mining settlement Boards.
It is to be noted here that, the term other authority is not defined anywhere,
so we have to rely upon the courts interpretation.

In interpreting the term State the first important decisions comes from the
verdict of Madras High Court. Madras High Court in University of Madras
v. Shantha Bai1the Court by applying the rule of ESJUDEM GENERIS
(of the same kind), held that university of Madras is not a state within the
Article 12 of the constitution, since university of madras is not performing
governmental or sovereign functions. Thus, in this case, Madras high court
has given a restrictive interpretation of Article 12.
The restrictive interpretation of Article 12 was overruled by the Supreme
Court in Ujjambai v State of U.P2 , the court held that esjudem generis rule
could not be resorted to in interpreting this expression as there is no
common genus running through theses named bodies (Art.12) nor can these
bodies be so placed in one single category or any rational basis.
Thereafter in the year 1967, Supreme Court has come up with guidelines in
interpreting the term State under Article 12, In State, Electricity Board
1 AIR 1954 Mad 67
2 AIR 1962 SC 1621

Rajasthan v. Mohan Lal3, here it was held that the term pother authority is
wide enough to include all authorities created by the constitution or statute
on whom powers are conferred by law. It is not necessary that authority
should be engaged in performing governmental or sovereign functions. In
this case Supreme Court has emphasized upon HOW the authority is
created. If it created by the constitution or by the statute, then it is state
within the meaning of Article 12 of the Constitution. This case is also know
for (HOW Test)

The test laid down by the supreme court in Electricity Board Rajasthan was
followed by the supreme court in Sukhdev Singh v Bhagat Ram 4, it was
held that ONGC, LIC, IFC are authorities within the meaning of Article 12
of the constitution. They all are state because all of them have power to
make regulation under the statute for regulating conditions of service of their
employees. However, in this test Justice Mathew in a separate but
concurring judgment preferred a broader test. He gave the modern concept
of state and talked about the agency or instrumentality of state. According to
him if the functions of the corporation are public importance which is
closely related to governmental functions, it should be treated as an agency
or instrumentality of government and hence a state within the meaning of
Article 12. Thus in this case, Justice Mathew has suggested WHY Test, why
we need to treat a corporation a state.
The opinion of Justice Mathew was followed by Supreme Court in
Rammana D Shetty v. International Air Port Authority 5, the court held that
International Air Port Authority is authority. The court also developed the
general proposition that an instrumentality or agency of the government
would be regarded as an authority or state. In this case the Supreme Court
3 AIR 1967 SC 1857
4 AIR 1975 SC 1331
5 AIR 1979 SC 1628

has laid down some tests to determine whether a body could be regarded as
an instrumentality or not.

Here it is to be noted, the decisions of the court has settled the issue of state
with respect to statutory body, but the confusion prevails with regard to nonstatutory body.
Finally, in Ajay Hasia v. Khalid Mujib 6, 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.

The meaning of other authorities was finally confirmed in Som Prakash

Rekhi v. Union of India7

6 AIR 1981 SC 487

7 AIR 1981 SC 212.

Effect of Ajay Hasia Case

Following the law laid down in Ajay Hasia case, following bodies were held
to be state

Indian Statistical Institute.

Indian Council of Agricultural Research.
Sainik School Society.
U.P State Co-operative Land Development Bank Ltd.
U.P Rajya Karamchari kalyan Nigam
All Societies registered under Societies registration Act.
Project and equipment corporation of India Ltd.
A government of India Undertaking.
Food Corporation of India.
A Statutory corporation
The Steel Authority of India ltd.
A public limited company owned, supervised and controlled by
Central Government.
Mysore paper Mills Ltds.
A State Government Company
The Indian Oil Corporation.
A Company registered under the Companies Act, 1956.
A State aided School. Whose employees enjoys statutory
protection and which is subject to the regulation made by the state
education department.
A medical college runs by a municipal corporation.
Several State electricity Boards created on the lines Rajasthan
electricity Boards.

In M.C Mehta v. Union of India8, Supreme Court of India has advanced a

strong opinion to include even non governmental companies within the
scope of Article 12 of the constitution of India. The reason for inclusion
of non-governmental organization within the meaning of state are, state
control of registration and the kind of public function they are performing
8 AIR 1987 SC 1086

they satisfy the test of being an instrumentality or agency of the

government.

In Pradeep Kumar Biswas v. Indian Institute of Chemical Biology 9 , The

Supreme Court of India held that CSIR (Centre for Scientific and
Industrial Research, Headquarter at Bangalore) is a state under Art. 12 of
the Constitution of India. The decision of Supreme court in this case is
important because in Sabhajit Tiwary v. Union of India 10 , the court has
held that CSIR is not a state under Art. 12 , but in Pradeep Kumar Biswas
case the court has overruled its decision and held that CSIR is state.
However it is important to note that the Art. 12 should not be stretched so
as to bring in every autonomous body which has some nexus with the
government within the sweep of the expression state.

Whether Judiciary is state under Article 12 of the constitution of

India ?
Judiciary is an important an integral organ of the state, but under the scheme of
Art.12 only executive and legislature is mentioned specifically as state. With this
fact important question arises, is the omission of judiciary under article 12 is
deliberate?

Under, the scheme of constitution of India, judiciary plays an important role in

protection and enforcement of fundamental rights, In Daryo v. State of U.P11, the
Supreme Court has held that with regard to fundamental rights court performs two
9 (2002) 5 SCC 121.
10 (1975) 1 SCC 485
11 AIR 1961 SC 1457

important functions one is protection of fundamental right and other is

interpretation of fundamental right. If the court is the mechanism through which
fundamental rights are enforced and interpreted then how can court be the violator
of fundamental rights of the people? If the court violates the fundamental rights
then who shall enforce the Fundamental rights?

In order to bring court within the expression of State under article 12, a
distinction has to be made with respect to Judicial and Non-Judicial Functions.
When court discharges non-judicial functions, the court can possibly be held
responsible for the violation of FRs of the people. ( Non-Judicial Function include
rule making functions, appointment of officers etc.) However, when court performs
a judicial functions , then court can not violate FRs of the people, even on account
of wrong decision ,if somebodys FRs is violated, then the remedy is to avail
appeal to a higher forum. Because court is competent to make right or wrong
decision.

In Naresh S. Mirjakar v. State of Maharastra12, it was held that even if a court is

state, a writ under Art. 32 cant be issued to High Court of competent jurisdiction
against its judicial order because such order cannot be said to violate the
Fundamental rights. What the judicial decisions purports to do is to decide the
controversy between the parties and nothing more.

In A. R Antulay v. R.S Nayak13, it was held that the court could not pass an order
or issue a direction which would be violative of Fundamnetal Rights so, it can be
said that the expression state includes judiciary also.

12 AIR 1967 SC 1
13 AIR 1988 SC 1531

Renowned Scholars H.M Seervai has the opinion that Judiciary should be
included within the definition of State under Art. 12, and a Judge acting as a judge
is subject to writ jurisdiction of the Supreme Court. Similar view was taken by Dr.
D.D Basu; Dr. Basu has the opinion that the judiciary is an important organ of the
state and judiciary is limited by constitutional provisions. Therefore, under the
shield that judiciary can make right or wrong decision can not violate the
fundamental rights of the people.

Questions ( one word or one sentence answer)

1. Which Article of the Constitution of India talks about the concept of
State?
2. What is the meaning of expression unless the context otherwise
requires?
3. In which context Article 12 of the constitution of India defines state?
4. Why the definition of State is important under Article 12?
5. What is the meaning of expression local authority?
6. Is government of India a state under Article 12?
7. Is parliament of India a state under Art.12?
8. Is government of NCT of Delhi a State under Art. 12?
9. Is mining settlement board a state under Art. 12?
10.Is improvement trust a state under Art? 12?
11.Is Provision of Art. 12 is exhaustive?
12.Is provision of Art? 12 is inclusive?
13.Is Section 3(31) of General clauses Act, 1897 define local authority?
14.What does the term Esjudem Generis mean?
15.Name the Judge who propounded why test in Sukhdev Singh v. Bhagat
Ram?
Long Answer questions.
1. Explain the concept of State under Art.12 of the Constitution of India.
Why the concept of State is important under part III of the constitution
of India?
2. What do you mean by the term Esjudem generis; explain its application
under Art. 12 of the constitution.

3. Explain the how and why test propounded by the Supreme Court?
4. What do you mean by the term agency or instrumentality of state?
Explain the ratio of R.D Shetty case? Is international Airport Authority
an instrumentality of State?
5. Explain the test laid down by Supreme Court in Ajay Hasia case. Apply
the test to find out whether BCCI (Board of control for Cricket in India)
is state or not under Art. 12 of the constitution of India?
6. Is judiciary a state under Article 12 of the constitution of India? What is
scholarly view upon the subject?