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Most of the litigation is based on what falls within ‘other authorities’ given in this article
Pre Rajasthan Electricity Board case, courts took a very narrow interpretation of Article
12.
o The fact that these corporations have independent personalities in the eye of law does not
mean that they are not subject to the control of government or that they are not instrumentalities
of the government. These corporations are instrumentalities or agencies of the state for carrying
on businesses which otherwise would have been run by the state departmentally
o The crux of the matter is that public corporation is a new type of institution which has sprung
from the new social and economic functions of government and that it therefore does not neatly
fit into old legal categories. Instead of forcing it into them, the later should be adapted to the
needs of changing times and conditions.
o The ultimate question which is relevant for our purpose is whether the Corporation is an
agency of instrumentality of the Government for carrying on a business for the benefit of
the public.
o Sukhdev – The Court held that bodies which were creatures of the statues having important
State functions and where State had pervasive control of activities of those bodies would be State
for the purpose of Article 12.
o Sabhajit – The Court held a body which was registered under a statute and not performing
important State functions and not functioning under the pervasive control of the Government
would not be a State for the purpose of Article 12.
o One thing is clear that if the entire share capital of the corporation is held by Government it
would go a long way towards indicating that the corporation is an instrumentality or agency of
Government.
o Where the financial assistance of the State is so much as to meet almost entire expenditure of
the corporation, it would afford some indication of the corporation being impregnated with
governmental character.
o It may also be a relevant factor…whether the corporation enjoys monopoly status which is the
State conferred or State protected.
o Existence of deep and pervasive State control may afford an indication that the Corporation is
a State agency or instrumentality.
o If the functions of the corporation of public importance and closely related to governmental
functions, it would be a relevant factor in classifying the corporation as an instrumentality or
agency of Government.
o Specifically, if a department of Government is transferred to a corporation, it would be a
strong factor supportive of this inference of the corporation being an instrumentality or agency of
Government
o Principles laid down in Ajay Hasia are not a rigid set of principles so that if a body falls
within any one of them it must ex hypothesi, be considered to be a State within the meaning of
Article 12.
o The Question in each case will have to be considered on the bases of facts available as to
whether in the light of the cumulative facts as established, the body is financially, functionally,
administratively dominated, by or under the control of the Government.
o Such control must be particular to the body in question and must be pervasive.
o Mere regulatory control whether under statute or otherwise would not serve to make a body a
State.
o 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 upon 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.
o K.R. Anitha v. Regional Director, ESI Corporation (2003) – When the law provides for a
general control over a business in terms of a statute and not in respect of the body in question, it
would not be a ‘State’.
o Jiby P. Chacko v. Mediciti School of Nursing, Ghanpur (2002) – A school would be a
State if it is granted financial aid.
You can grab notes on other provisions of the Constitution and other law subjects from here.