Pradeep Kumar Biswas v Indian Institute of Chemical Biology (Supreme Court, 2002) — the test for "other authorities" under Article 12

Every question about whether a corporation, company, society or board is bound by the fundamental rights is now answered by the test stated in this case. It gathers up the earlier line, Rajasthan Electricity Board, Sukhdev Singh, Ramana Shetty, Ajay Hasia, and states a single cumulative question. It is the case to cite first in any answer on Article 12.

In 1972 Sabhajit Tewary, a Junior Stenographer with the Council of Scientific and Industrial Research (CSIR), filed a writ petition under Article 32 claiming parity of remuneration with newly recruited stenographers, relying on Article 14. A Bench of five judges denied him relief in Sabhajit Tewary v Union of India (1975) because they held that the writ petition was not maintainable against CSIR, which was not an "authority" within Article 12. The correctness of that decision came up for reconsideration before a Bench of seven (Bharucha C.J., Quadri, Lahoti, Santosh Hegde, Doraiswamy Raju, Ruma Pal and Pasayat JJ.), Ruma Pal J. delivering the judgment.

CSIR's history was traced. The Department of Commerce had set up the Board of Scientific and Industrial Research in 1940 and the Industrial Research Utilisation Committee in 1941; a Resolution of the Legislative Assembly of 14 November 1941 was accepted by the Government; and by a further Resolution of 26 September 1942 the Government of India decided to set up a Council on a permanent footing as a registered society under the Registration of Societies Act, 1860. "Unquestionably this shows 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. The Prime Minister is ex officio President of the Society; the Governing Body is dominated by Government appointees; the bye-laws can be amended only with the sanction of the Government of India; and the President may review, amend or vary any decision of the Governing Body.

1. What is the test for deciding whether a body is an "authority" and so "the State" within Article 12?
2. Applying it, is CSIR "the State"?
3. Should Sabhajit Tewary continue to stand?

The line of cases. The Court traced the "drastic changes in recent years" noted by Mathew J. in Sukhdev Singh v Bhagatram (1975), where the Oil and Natural Gas Commission, the Industrial Finance Corporation and the Life Insurance Corporation, statutory corporations, were held to be authorities. Those tests "were affirmed and amplified in" Ramana Dayaram Shetty v International Airport Authority of India (1979), and "were reformulated two years later by a Constitution Bench in" Ajay Hasia v Khalid Mujib Sehravardi, where what had been obiter in the two earlier cases "formed the ratio decidendi", the body there being a society registered under the Jammu and Kashmir Registration of Societies Act, 1898 running a college.

The test. "The picture that ultimately emerges is that the tests formulated 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. The question in each case would be - 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."

CSIR. "Coming now to the facts relating to CSIR, we have no doubt that it is well within the range of Article 12, a conclusion which is sustainable when judged according to the tests judicially evolved for the purpose." The Court went through its formation, objects and functions, management and finances, and found the Government's role dominant throughout. A further fact had come to light since 1975: on 31 October 1986 the Central Government, under section 14(2) of the Administrative Tribunals Act, 1985, had notified CSIR so as to bring its employees within the tribunal's jurisdiction, which "serves in removing any residual doubt as to the nature of CSIR and decisively concludes the issues before us against it."

Overruling. "Should Sabhajit Tewary still stand as an authority even on the facts merely because it has stood for 25 years? We think not." Since the earlier decision was "plainly erroneous, it is our duty to say so and not perpetuate our mistake." "Sabhajit Tewary decision must be and is in the circumstances overruled." The matter was remitted to the appropriate Bench.

A body is "the State" under Article 12 when, on the cumulative facts, it is financially, functionally and administratively dominated by or under the control of the Government, that control being particular to the body and pervasive. Regulatory control, whether statutory or otherwise, is not enough. The Ajay Hasia indicia are guides to that inquiry, not independent tests any one of which is decisive.

Zee Telefilms v Union of India (2005) applied the test to hold that the Board of Control for Cricket in India is not "the State": not created by statute, no Government share capital, practically no Government funding, a monopoly not conferred or protected by the State, and only regulatory control. The remedy against such a body, for its public functions, is a writ under Article 226. G. Basi Reddy v ICRISAT (2003) treated the indicia as "merely indicative indicia and are by no means conclusive or clinching in any case".