CONCEPT OF STATE

Art 12
 INTRODUCTION

• For the first 2 million years of his existence, man lived in bands or villages which, as far as history records
indicate, were completely autonomous.

• It was around 5000 B.C. that villages began to aggregate into larger political units and around 4000 B.C., the
formation of the first State came about.

• There are three major theories of the Origin of the State- Voluntaristic, Coercive and Evolutionary
Theory/Historical theory.

• Art 12 defines the Concept of state under Constitution of India.

 ART 12

• A perusal of the Article shows that the definition of State is inclusive and provides that STATE includes the
following:
1. The Government and Parliament of India, i.e., Executive and Legislature of the Union.
2. The Government and the Legislature of each State, i.e., Executive and Legislature of States.
3. All local or other authorities within the territory of India, or under the control of the Government of India.
• The expression "local Authorities" is defined in Section 3(31) of the General Clause Act, 1897 to include
Municipal Committee, District Board, Body of Port Commissioners or other authority legally entitled to, or
entrusted by the Government, with the control or management of a municipal or local fund.
• The expression "other authorities" has neither been defined in the Constitution nor in any Statute. Therefore,
to understand the expanded meaning of the term "other authorities" in Article 12, it is necessary to trace the
origin and scope of Article 12 in the Indian Constitution
 JUDICIAL OPINION ON “OTHER
AUTHORITIES”

• For the first time the expression "other authorities" was interpreted by the Madras High Court in University of
Madras v. Shantha Bai, AIR 1954 Mad 67, where it was held that the words "local or other authorities" must be
construed ejusdem generis.
• But in Ojjam Bai v. State of U.P., AIR 1962 SC 162, the Apex Court disagreed and held that the rule of ejusdem
generis could not be applied in interpreting the Same expression "other authorities" occurring in Article 12 of the
Constitution. The Court held that there is no common genus running through these named bodies.
• Precedents which evolved the concept of Other authorities-
i. Rajasthan State Electricity Board v. Mohanlal, AIR 1967 SC 1857,
ii. Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi,5 AIR 1975 SC 1331: (1975) 1 SCC 421
iii. Ramana Dayaram Shetty v. The International Airport Authority of India and Ors., AIR 1979 SC 1628
iv. Zee Telefilms v. Union of India; (2005) 4 SCC 649
v. BCCI v. Cricket Association of Bihar (2015) 3 SCC 251
vi. Ajay Hasia v. Khalid Mujib Sehravardi; (AIR 1981 SC 487)
 RAJASTHAN STATE ELECTRICITY
BOARD V. MOHANLAL

• Respondent Mohanlal filed a petition in the Rajasthan High Court regarding the order of promotion passed by
the Electricity Board. He claimed that the Board had acted in contradiction to the provisions of Article 14 &
16 of the Indian Constitution. The High Court of Rajasthan had passed the judgement in favour of the
Respondents and had asked the Board to consider the situation of promotion again. Hence, a Special appeal
was filed by the Board before the Supreme Court.
• Main Issues-
 Whether The Electricity Board be considered under the definition of “State” under Article 12 of the Indian
Constitution?
• Constitution Bench of Apex Court held that the expression "other authorities" is wide enough to include
within it every authority created by a statute on which powers are conferred to carry out governmental or
quasi-governmental functions and functioning within the territory of India or under the control of the
Government of India. Hence, the Board was clearly an authority under the definition of ‘State’ in Article
12 of the Indian Constitution.
 SUKHDEV SINGH V. BHAGATRAM

• The question was whether the Oil and Natural Gas Commission, the Industrial Finance Corporation and the Life Insurance
Corporation, each of which or public corporations set up by statutes, or "authorities" within the meaning of Article 12.
• The case was decided by a majority of 4:1. A. N. Ray, C.J. speaking for himself and on behalf of Y.V. Chandrachud and A.C.
Gupta, JJ. held that all the three statutory corporations were given birth by statutes. The circumstance that these statutory
bodies were required to carry on some activities of the nature of trade or commerce did not make any difference.
• The Life Insurance Corporation is (i) an agency of the Government, (ii) carrying on the exclusive business of life insurance
(i.e. in monopoly), and (iii) each and every provision of the statute creating it showed that the Corporation is the voice and
the hands of the Central Government.
• The Industrial Finance Corporation is in effect managed and controlled by the Central Government, citizens cannot be its
shareholder.
• ONGC is i) owned by the Government, ii) a statutory body and not a company, and iii) has the exclusive privilege of
extracting petroleum.
• Each of the three, respectively under the three Acts under which they are created, enjoy power to do certain acts and to issue
directions the breach of which is punishable as an offence.
 DECISION CONTINUED..

• The four indicia were propounded for identifying whether a corporation is an agency or instrumentality-
I. The State financial support plus an unusual degree of state control over the management and policies.
II. Whether the corporation performs an important public function.
III. Whether such a corporation is acting as an agency or instrumentality of the Government by carrying on
a business for the benefit of the public.
IV. Enjoys a monopoly status.
 RAMANA DAYARAM SHETTY V. THE
INTERNATIONAL AIRPORT AUTHORITY OF INDIA

• Consisting of Justice P.N. Bhagwati, V.D. Tulzapurkar and R.S. Pathak placing reliance on the judgment
of this Court in Sukhdev Singh and Ors. case held that the International Airport Authority which was an
authority created by the International Airport Authority Act, 1971 was an instrumentality of the State, hence,
came within the term "other authorities" in Article 12.
• Bench laid down the parameters or the guidelines for identifying a body as coming within the definition of
"other authorities" in Article 12. They are as follows:-
 that if the entire share capital of the corporation is held by Government
 Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation.
 corporation enjoys monopoly status which is State-conferred or State-protected.
 Existence of deep and pervasive State control.
 If the functions of the corporation are of public importance and closely related to governmental functions.
 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.
 AJAY HASIA V. KHALID MUJIB
SEHRAVARDI

• The case involved a society registered under the Jammu and Kashmir Registration of Societies Act, running the
Regional Engineering College at Srinagar, sponsored by the Government of India. Admissions to the college are
made by a Committee after taking into account the marks obtained in the entrance test for 100 marks and a viva-
voce for 50 marks. The petitioners applied for admission to the College and appeared for the written test and viva-
voce, where the interview of each of them did not last for more than 2 or 3 minutes per candidate on an average
and the only questions which were asked to them were formal questions relating to their parentage and residence
and hardly and question was asked which would be relevant to any of the four factors for which marks were
allocated at the viva- voce examination. When the Entrance Test result were announced, the petitioner found that
though they had obtained very good marks in the qualifying examination, they had not been able to secure
admission to the college because the marks awarded to them at the viva-voce examination were very low and
candidates who had much less marks at the qualifying examination, had succeeded in obtaining very high marks at
the viva-voce examination and thereby managed to secure admission in preference to the petitioners. The
petitioners aggrieved by this mode of selection filed the writ petitions challenging the validity of the admissions
made to the college on various grounds.
• Issue: Whether the Regional engineering College, Srinagar, sponsored by the Government of India, established,
administered and managed by a Society, registered under the Jammu and Kashmir Registration of Societies Act,
1898, was "State" under Article 12.
 DECISION

• Court applied the tests for determining as to when a corporation can be said to be an instrumentality or agency
of Government stated in the judgment of Ramana Dayaram Shetty case.
• In this case, the society is empowered to conduct its affairs by rules framed Central Government. The money
for running the College is provided by the by it with the approval of the Government of Jammu and Kashmir
and the State and Central Government. The State Government with the approval of the Central Government, is
empowered to take action and to issue directions, in matters relating to the working of the College. In case of
mismanagement of state and Law of the affairs, the State Government is empowered with the prior approval of
the Central Government to take over the administration and assets of the College. The general
superintendence, direction and control of the affairs of the society and its income and property is vested in the
Board of Governors. Admissions to the College are made, by a Committee constituted by the Board.
• Having examined the memorandum of association and the rules of the society, the Court came to this
conclusion, that the control of the State and Central government was deep and pervasive and the society was a
mere projection of the State and the Central government and on this basis it concluded that it was an
instrumentality or agency of the State and Central Government and therefore was State under Article 12.
 WHETHER BCCI IS A STATE?

• Zee Telefilms v. Union of India; (2005) 4 SCC 649

BCCI, a Society registered under the Tamil Nadu Societies Registration Act, 1975, invited tender for grant of
exclusive television rights for a period of four years. Several entertainment groups including the Petitioners
(Zee telefilms) and the Fifth Respondent ("ESPN Star Sports", known as "ESS") gave their offers. Both the
Petitioner and the Fifth Respondent were found eligible therefor. Upon holding negotiations with the Petitioner
and the Fifth Respondent, the Board decided to accept the offer of the former. Meanwhile, when ESPN filed a
writ petition against Zee in the Bombay High Court and withdrew it on 21st September 2004, BCCI arbitrarily
canceled the telecast rights to Zee. Hence, Zee Telefilms Ltd. approached the Supreme Court against BCCI
regarding the cancellation of telecasting rights.
• ISSUES:
 Is BCCI a “state” within the ambit of Article 12 of the Indian constitution?
 Does the arbitrary action of BCCI violate the fundamental rights of Zee?
 DECISION

• The issue was decided by a five-judge constitutional bench by the Supreme Court comprising Justices
N.Santosh Hegde, S.N. Variava, B.P.Singh, H.K.Sema, and S.B. Sinha.
• The court observed that BCCI, though it enjoyed the monopoly status over the Cricket control, the state does
not give this monopoly, nor the state protects such monopoly through any statute.
• The court also finds that BCCI is financially independent of the state, nor does the state hold any share in the
board.
• With all these observations, the court finds no point in dealing with the contention that the respondents
violated the petitioner’s fundamental rights.
• Only Justice Sinha gave the dissenting opinion that the board acted as a representative of the Government of
India before the international community, and hence a State.
• Based on the observations mentioned above of the financial, administrative, and statutory autonomy of BCCI,
it is not a ‘State’ within the meaning of “other bodies” under Article 12 of the Constitution of India.
Hence, there is no question of the petitioner’s fundamental rights being arbitrarily violated by BCCI.
 B C C I V. C R I C K E T A S S O C I AT I O N O F B I H A R ( 2 0 1 5 ) 3 S C C 2 5 1

• The BCCI in 2007 decided to launch the Indian Premier League (IPL) and in a subsequent meeting held on
27th September 2008, decided to appoint Mr. N. Srinivasan as Secretary of BCCI and in the same meeting
BCCI amended its regulation 6.2.4 in order to exclude the IPL and Champions League T20 from its purview.
In April 2013, Delhi police received information in relation to spot-fixing in IPL and charges were levelled
against Raj Kundra, the owner of Rajasthan Royals, and Gurunath Meiyappan, the son-in-law of N.
Srinivasan who was also the owner of the IPL team Chennai Super Kings. BCCI constituted a probe
committee. After this a PIL was filed by Cricket Association of Bihar before the Bombay High Court seeking
the constitution of committee to be declared ultra-vires of the Constitution and sought the appointment of
retired Supreme Court judges in the panel. They also prayed for termination of contract of IPL franchisee
Chennai Super Kings and Rajasthan Royals with BCCI and initiation of disciplinary proceedings against N.
Srinivasan. The High Court however denied relief in the form of constitution of commission consisting of
retired judges. Thereafter an appeal was filed before the Supreme Court by Cricket Association of Bihar.
• Issue: Whether BCCI is state under Article 12 of the Constitution and if not, whether it is amenable to the
writ jurisdiction of the High Court under Article 226 of the Constitution of India?
 DECISION

• A two judge bench consisting of Justice T.S. Thakur and Justice F.M. Ibrahim Kalifulla referred the case of
Zee Telefilms Ltd. And Anr. v. Union of India and Ors. (2005) 4 SCC 649 where this Court by a majority of
3: 2 has held that BCCI was not 'State' within the meaning of Article 12. This Court held that the Board was
not created by any statute, nor was a part of the share capital held by the Government. There was practically
no financial assistance given to the Board by the Government, and even when the Board did enjoy a
monopoly status in the field of cricket such status was not State conferred or State protected. So also there
is no deep and pervasive State control. The control, if any, is only regulatory in nature as applicable to other
similar bodies.
• Relying upon the tests laid down in Pradeep Kumar Biswas's case, this Court held that the Board was not
financially, functionally or administratively dominated. After referring the above case, Court in the present
case held that though the Board of Cricket Control of India (BCCI) is not 'State' within the meaning of
Article 12 but it is amenable to the writ jurisdiction of the High Court under Article 226 of the
Constitution even when it is not a 'State' within the meaning of Article 12 as it discharges "Public
Functions".
 W H E T H E R J U D I C I A RY I S S TAT E U N D E R A RT I C L E 1 2 ?

• In Ratilal v. State of Bombay, AIR 1953 Bom. 242, Court held in the definition of the "State" in Article 12, "Judiciary"
is not specifically mentioned. Therefore, the judgments of courts cannot be challenged on the ground that they
contravene Fundamental Rights.
• In Paramatma Sharan v. Chief Justice, AIR 1964 Raj. 13, the Court held that the judgements of the Court cannot be
challenged on the ground that they violate the Fundamental Rights whether or not the judgment of the Court suffer
from any infirmity; it can be decided only in appeal. However, if the Judiciary acts in administrative capacity or
exercises administrative function or make rules and its actions or rules contravene Fundamental Rights, they may be
challenged in the Court. Thus, if the rules made by the Supreme Court or High Court contravene the Fundamental
Rights, they may be challenged in the Court.
• In Naresh Shridhar Mirajkar v. State of Maharashtra (AIR 1967 SC 1), petitioner, a journalist, argued that the Trial
Judge's order to the press, restricting them from publishing the testimony of the defence witness in a particular case
was violative of his Fundamental Right. The majority held that suppression of evidence in question was necessary to
serve the cause of justice, that is, to ensure "fair trial". It was also opined that the impugned order would not violate
Article 19(1)(a), since the power to withhold publication or to hold an in camera trial were both protected by Article
19(2). Third party rights may be affected by the exercise of such powers, however, they must be of secondary
importance to the "effective administration of justice". Moreover, since the freedom of speech was affected only
incidentally and indirectly, there was no violation of Fundamental Rights.