National University Of Study and Research in Law,Ranchi

PROJECT WORK
ON ARTICLE 12 (STATE INSTRUMENTALITEIS)

SUBMITTED TO Miss. POONAM KUMARI

SUBMITTED BY NIRBHAY TIWARI Roll no. 29

B.A.(Hns.)L.L.B.(Hns.) 2ND SEMESTER

Contents
Introduction Definition of the state under Article 12: Scope and Ambit Scope of application of Fundamental Rights: It is limited by Article 12 Expansion of Article 12: Need for and manner of expansion Conclusion Bibliography

INTRODUCTION Man is born with a title to perfect freedom and an uncontrolled enjoyment of all the rights and privileges of the law of nature and he has by nature a power to preserve his property i.e. his life, liberty and estate against the injuries and attempts of other men.1 The aim of all political association is conservation of the natural and inalienable rights of man. This was the basic idea of the philosophy of Social Contract. The concept of human rights protects individuals against the excesses of the state. With this idea some written constitution gives special provisions of natural and essential human rights in the name of fundamental rights as to confirm the essence of Democracy. These rights are protected by state and governmental organs are forbidden from interfering with them. In modern times, the concept of the publics basic rights has been given a more concrete and universal texture by the Charter of Human Rights enacted by the United Nations Organization. The concept of Fundamental Rights represents a trend in the modern democratic governments. So the Fundamental Rights are enforced through the courts against the government and its institutions. In India, constitution provides the fundamental rights in part 3rd under Article 14 to 35. As we know that the Fundamental Rights are restriction over governments work which gives protection to human rights of the public. So now question arises that whom should we put into the criteria of government or the state institutions? Article 12 defines the word State for the purpose of the Fundamental Rights and Directive Principles of the State Policy. It gives name of organs of government which come under the definition of State but it does not give clear picture of all the authorities which we can consider as State for the purpose of part 3rd and 4th of Indian Constitution. 12. Definition- In this part, unless the context otherwise requires, the State includes the Government and Parliament of India and the Government and the Legislature of each of the states and all local and other authorities within the territory of India or under the control of the Government of India.2 This definition of State is not competent to deal with the case violating Fundamental Rights. Many cases were decided after the commencement of the constitution to enlighten the meaning and scope of Article 12. Now this Project Work is also dealing with Article 12 elaborating the meaning and scope word State and its instrumentalities against which Fundamental Rights are to be claimed. The most significant expression used in Art. 12 is other authorities. This expression is not defined in the
1 2

According to Locke, John in Two Treatise of Government. th See- Article-12, Bakshi, P.M., Bare Act of Constitution Of India, (10 edition, 2010), Universal Law Publishing Co.

Constitution. The term should be much wider so that more and more bodies can be brought within the discipline of the Fundamental Rights. In this regard decisions of the Supreme Court and the problem regarding the terms used in the Article 12 has been discussed in this project work. Now we will see what is the meaning, scope, usage of the term State and comparison of State instrumentalities with other democratic countries and seek the need of extending the ambit of the term other authorities.

Definition of the State under article 12: Scope and Ambit

Article 123 of the Constitution defines the State as follows: In this part, unless the context otherwise requires, the State includes 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. The definition of the term the State specifies the authorities and instrumentalities functioning within or without the territory of India, which shall be deemed to be the State for the purpose of part III of the Constitution. The definition is inclusive and not exhaustive. Therefore, authorities and instrumentalities not specified in it may also fall within it if they otherwise satisfy the characteristics of the State as defined in this article. The authorities and instrumentalities specified in article 12 are i. ii. iii. iv. The Government and Parliament of India; The Government and the legislature of each of the states; All local authorities; and Other authorities within the territory of India or under the control of the government of India. There are three aspects of article 12 which require to be particularly noticed. They are: i. The definition given in article 12 is not an explanatory and restrictive definition but an extensive definition. ii. It is definition of the expression the State and not of term state or states and iii. It is inserted in the Constitution for the purposes of part III and thereof.

Bakshi. P.M., Bare Act of the Constitution of India, 10 Edn.(Universal Law Publishing Co., New Delhi, 2010)

 Other Authorities:The interpretation of the term other authorities has caused great deal of difficulty and judicial decision has and opinion have undergone changes over time. Todays government performs a large number of functions because of prevailing philosophy of welfare state. The government acts through natural persons as well as juridical persons. Some functions are discharged through the traditional government departments and officials while some functions are discharged through the traditional governmental departments and officials while some functions are discharged through autonomous bodies existing outside the departmental structure such as companies, corporation etc. While the government acting departmentally or through officials undoubtedly falls within the definition of state under article 124, doubts have often be cast as regards the character of the autonomous bodies. The Supreme Court has developed the concept of an instrumentality of the state. Anybody which can be regarded as an instrumentality of the state falls under article 12. The reason for adopting such a broad view under article 12 is that the constitution should whenever possible be so construed as to apply to arbitrary application of power against individual centers of power. The emerging principle appears to be that a public corporation being a creation of the state is subject to constitutional limitation as the state itself. Further that the governing power wherever located must be subject to the Fundamental Constitutional Limitations. In Rajasthan State Electricity v. Mohanlal,5 the Supreme Court ruled that a state electricity board, set up by a statute, having some commercial functions to discharge, would be an authority under Article 12.The court emphasized that it is not material that some of the powers conferred on the concerned authority are of commercial nature. This is because under Article 298, the government is empowered to carry on any trade or commerce. Thus the court observed The circumstance that the board under the Electricity Supply Act is required to carry on some activities of the nature of trade or commerce does not, therefore give any indication that the board must be excluded from the scope of the word state used as used in Article 12.

4 5

K.A. Karim & Sons v. I.T.O., 1983 Tax L.R. 1168. AIR 1967 SC 1857: (1967) 3 SCR 377.

In Sukhdev Singh v. Bhagatram,6 the court held that the corporation like ONGC, IFC, LIC etc. were created by statutes, had the statutory power to make binding rules and regulation, and were subject to the governmental control. They were other authorities within the ambit of Article 12. Statutory corporations are agencies or instrumentalities of the State for carrying on trade or business which otherwise would have been carried out by the State departmentally. This was the contention of court in Sukhdev Singh case which was further interpreted by the Supreme Court by Bhagwati, J., in Ajay Hasia v. Khalid Mujib7, the question regarding the status of a nonstatutory body was finally clinched in this case. In Ajay Hasia case the Supreme Court laid down these following tests to adjudge whether a body is an instrumentality of the government or not: If the entire share capital of the corporation is held by the Government, it would go long way towards indicating that the instrumentality or authority of the Government. Whether the corporation enjoys monopoly status which is State conferred or the State protected. Existence of deep and pervasive State control may afford an indication that the corporation is State agency or instrumentalities. If the functions of the corporation are of public importance and closely related to Governments functions, it would be relevant factor in classifying a corporation as an instrumentality or agency of Government. These contentions are called as Doctrine of Instrumentalities stated in this case. Bhagwati, J., speaking for the court, pointed out that the corporations acting as instrumentality or agency of government would obviously be subject to the same limitations in the field of constitutional or administrative law as the government itself, through in the eyes of law they would be distinct and independent legal entities. If the government acting through its officers is subject to certain constitutional and public law limitations. On consideration of these factors it is found that the corporation is an instrumentality or agency of Government, it would be an authority and, therefore, State within the meaning of Article 12 of the Constitution.

6 7

(1975) 1 SCC 421: AIR 1975 SC 1621. (1981) 1 SCC 722, 737: AIR 1981 SC 487.

The main tests which the courts apply to determine whether a body is an instrumentality of the government or not are: funding and control. In the case of M.C. Mehta v Sriram Fertilizers Corporation Ltd.,8 keeping the Bhopal Gas Tragedy in its view, was considering whether an industrial unit said to be hazardous should be closed. The court said the a hyper technical approach could not be adopted so as to defeat the ends of justice. The court stated that the reason for deliberately expanding the ambit of article 12: primarily due to the social consequence of our corporate structure. The court proceeded to give further reasons on account of which the ambit of article 12 need to be enlarged so as to bring private companies also under the discipline of fundamental rights. Local Authority:The expression local authority in Article 12 refers to a unit of local self-government like a municipal committee or a village panchayat.9 The Delhi Development Authority, a statutory body, has been held to be a local authority because it is constituted for the specific purpose of development of Delhi according to plan which is ordinary municipal function.10 In the instant case, reference was made to the definition of local authority given in Section 3(31) of the General Clause Act which runs as follows: local authority shall mean a municipal committee, district board, body of port commissioners or other authority legally entitled to, or entrusted by the government with, the control or the management of a municipal or a local fund. So the term local authority refers to the authorities like municipalities, district boards, panchayats, improvements trust, port trusts, mining settlement boards, etc. Rashid Ahmed v. M.B. Kairana11is one of the earliest instance where a municipal board was held to be a local authority under Article 12.

8 9

1987 (1) SCC 395 Ajit Singh v. State of Punjab: AIR 1967 SC 856. 10 Union of India v. R.C. Jain, AIR 1981 SC 951: (1981) 2 SCC 308. 11 AIR 1950 SC 163. Followed in State of Gujarat v. Shantilal Mangaldas, (1969) 1 SCC 509, 521: ATR 1969 SC 634.

 Authorities under Government Control:The words under the control of Government of India, in the Article 12 are meant to bring the definition of State not only every authority within the territory of India, but also those functioning outside, provided such authorities are under the control of the Government of India. Thus, a person can enforce his fundamental rights against an executive or administrative order of an authority under the control of the Government of India, functioning outside the territory of India. In such a case suitable orders may be passed against the Government of India directing them to give effect to the decision of the court in the exercise of their power of control over the authority outside territory of India.12 The court also seems to have held that an authority within the reach of Article 12 is automatically within the control of the Government of India.13 This does not appear to be correct. Every authority under the control of Government of India is State within Article 12. But the reverse of it does not automatically follow.

12 13

N. Masthan Sahib v. Chief Commr., AIR 1963 SC 533. Distt. Manager, A.P. SRTC v. K. Sivaji, (2001) 2 SCC 135.

Scope of application of fundamental rights: Is it limited by article 12 With economic liberalization in India and globalization of world economy entertain serious doubts about the application and efficacy of the fundamental rights. The doubts are based on two fundamental premises: firstly, that with the increasing role of private enterprise and the decreasing role of the State, the fundamental rights would be violated more by the private enterprises than by the State, and secondly, the private enterprise itself will claim the fundamental rights as legal person such as corporations, including the multi-national corporations. While these premises warn us against the possibility of reduced use and application of fundamental rights, they may not be able to cause any damage to them. As regards the first premise, let us recall the horizontal application of fundamental rights. In that context merely by increasing the role of the private enterprise the State cannot absolve itself from the responsibility of honoring and safeguarding the fundamental rights. Of course in that case the enforcement of the fundamental rights will depend more on the political process than on the courts. But in any case enforcement of almost all economic and social rights depends more on political process than on the courts. As regards the political and civil rights the position is unlikely to change and the courts shall always be available to enforce them. In those case the definition of the State, as interpreted by the courts, has enough potency to cover direct and indirect violations of the rights. In this connection phenomenal advancement in information technology shall play a decisive role in shaping the political and judicial process in support of the fundamental rights. Their violation will be subject to scrutiny not only nationally but also internationally.14

14

Shukla, V.N., Constitution of India, (Eastern Book Company, Lucknow, 2008 (11 th edn.) p 34.)

Expansion of article 12: Need for and manner of expansion The private sector undertakings and private corporations, national and multinational should be treated as the State in certain situations, so as to make them subject to fundamental rights. Here it must be pointed out at the outset that the guarantee of fundamental rights is essentially a device whereby the autonomy of an individual is protected from encroachment by those who have power and capacity to do the same. Since the governing power rests with the State, possibility of the encroachment has traditionally is mainly the concern of ordinary law to be made and enforced by the State in exercise of its governing power. But this governing power cannot be so exercised as to dictate to the individual to do or not to do certain things in certain spheres of their life. Within his protected domain a private party has the freedom of choice, freedom to act according to his likes and dislikes and even according to his prejudices and idiosyncrasies. This one may do irrespective of the fact that such a selfish or irrational act may harm or even ruin another person or party. An attitude of sympathy and cooperation toward ones fellow citizens is an ideal, which is not allowed to be achieved by legal coercion beyond a certain point. This is the essence of personal liberty and nothing to be said hereafter is meant to negate this basic postulate. But in certain circumstances an act of a private party begins to resemble the act of a public authority and private rights begins to look like public power. This may happen because of 1) Governmental nexus and assistance to the private act or 2) Concentration of economic power; or 3) The simple fact that the private party has control over something which is indispensable for the ordinary living of other individuals. The circumstances may be diverse, but the essence of the matter is that it is possible for a private party to exercise control over the lives and fortunes of others in vital matters and here it is observe the same norms as a public authority. In other words, in those circumstances the private party should be treated as the State and subjected to the discipline of fundamental rights. The determination of exact circumstances in which a private party should be treated as a question of detail which may have to be worked out from case to case in the context of specific facts present there. It is also possible that they may be borderline

case where opinions may differ. Judicial pronouncement may be influenced not only by the personal opinion of the judge concerned but also by prevailing needs and philosophy of the time which are themselves changeable. But what can be said safely is that now the time has come when the meaning of the term the State in article 12 of the Constitution should be given broader interpretation so as to include those sections of the private sector whose governing and controlling power over the ordinary multitude is indistinguishable from that of public authorities properly so called. If this is not done, the changes contemplated to be brought about by the new economic policy would make this part of the constitutional law of India look at variance from the realities of politico-economic life of India in this century. From the above change has been advocated with the assumption that the same can be brought about by through, 1) The judicial innovation, or 2) The amendment by the Parliament of India in article 12. The judicial innovation: - The following submissions are made with a view to help advancing the interpretation on the subject within broad parameters of existing doctrinal framework. First, many areas of the private sector can be covered under the existing agency and instrumentality test. The six indices of this test mentioned above which have so far been adumbrated by the court, are actually relevant mainly in relation to public sector understandings and it is in the context of these undertakings that the above guidelines were lain down. But, here the essence of the matter is that there should be evidence of governmental nexus with the private activity. Since some governmental regulation and interference in every private activity is a fact of life, what is needed is some special type of government regulation. This may be indicative of the special importance, which the governmental gives to that activity. This leads us to take note of another type of governmental nexus, which may be found even without any governmental assistance or collaboration. The private sector may under take activities which may be of such public and general importance that they are generally allowed to be undertaken only by the government, and therefore, the principle should be applied that a private party

doing the same job must do it subject to the same conditions as the government. Here public utilities readily come to mind as an example. This means that many private sector units can be subjected to fundamental rights by the agency and instrumentality test itself. Second, industrial giants, national and multinational corporations can be held to be the State and subject to fundamental rights on the ground that the property and business they own enable them to control the lives and fortunes of a host of people including the employees, distributors, retailers, consumers and in a way the community itself. Third, framers of the Indian Constitution have themselves settled the issue that the need for the guarantee of fundamental rights can be as important against private parties as against the State. It is a different matter that at the time of the framing of the Constitution this need was perceived to be limited only to some kinds of cases. article 28(3) provides that a person attending an educational institution recognized by the state or receiving aid out of state funds shall not be required to participate in any religious instruction without his consent or that of his guardian in case he happens to be a minor nor shall he be required to attend any religious worship there without such consent. Lastly article 29(2) guarantees that a citizen shall not be denied admission to a state recognized or state aided educational institution on grounds only of religion, race, caste, language or any of them. The above provisions can be said to have been progressive according to the standards prevailing at the time when the Constitution was framed and adopted. But our experience during the more than last five decades and more have amply demonstrated that they do not go far enough and in the years to come their inadequacy will be further felt. Thus article 15(2) prohibits discrimination on certain grounds in specified matters. But what is needed is the guarantee of general right to equality against the private sector when it assumes controlling power and begins to look like the State. Some other fundamental rights are also relevant to the private sector. Thus right against pollution under article 21 loses much of its importance if it cannot be enforced directly against private industry. Similarly, it should be possible to invoke article 21 against drug manufacturers who might be selling substandard and unsafe drugs to the people.

Conclusion
The provisions of part III of the Constitution should not be treated as mere legal precepts. They form part of the conscience of the Constitution as they restrict the arbitrary actions of the State in some way or the other. These rights are given to the citizens and the people of the State. There was no ambience of the industrialization and arbitrary use of power by authorities at the time of framing the constitution. It can safely be assumed that the framers intended the provisions to be instrumental in spreading a new constitutional culture. If we exclude the rapidly expanding private sector from the enforcement of these rights, this constitutional culture will have only a limited and truncated domain for its spread. After having argued for the enforcement of fundamental rights, it remains to sort out an incidental problem. It can be persuasively argued that the gist of the relevant fundamental rights can be enforced against the private sector by ordinary legislation instead of bringing the private sector directly within the purview of the Constitution. This argument can further be reinforced with the assertion that the suggestions made in the research paper would only result in further flooding the Supreme Court and high courts with writ petitions, thereby making the court system almost unworkable. To the above objections a threefold response is possible. i. The constitutional guarantee has its own importance and similar guarantees by an ordinary law cannot be compared with the same. ii. In many matters like protection of ecology and prevention of pollution the Supreme Court is already being approached directly through public interest litigation and the state action requirement of article 21 is considered to be satisfied if the Union of India or a state government is added as a co-respondent along with private industry and corporation.15 iii. It is time of expanding dimensions of public law litigation including constitutional law litigation. In many areas where formerly private law remedy was considered sufficient, public law remedies through the invocation of writ jurisdiction of the Supreme Court and high courts are sought and obtained. If is neither possible nor desirable to reverse this trend. It the traditional procedure and existing division of work between the courts at
15

1987 (1) SCC 395.

various levels do not fit in the present scenario, the need is for fresh planning and readjustment. Finally, there is a greater need of expending the meaning and the scope of Article 12 as there are the cases are coming regarding the problem of authority, undefined in the Article 12. One thing is definite that the rapidly growing might of the private sector needs to be subjected to the responsibility of observing constitutional norms contained in the part III of the fundamental rights of the Constitution of India.

Bibliography
BOOKS: WEBITES: BAKSHI P.M ,THE CONSTITUTION OF INDIA, (UNIVERSAL LAW PUBLICATION , NEW DELHI ,2010) SHUKLA V.N ,THE CONSTITUTION OF INDIA(EASTERN BOOK COMPANY,LUCKNOW,11TH EDT) BASHU D.D, THE SHORTER CONSTITUTION OF INDIA(LEXIS NEXIS BUTTERWORTH ,WADHWA, NNAGPUR. 20TH EDT) SEERVAI H. M ,THE CONSTITUTION OF INDIA( UNIVERSAL LAW PUBLICATION , NEW DELHI ,2010)

www.hinduonnet.com www.alrc.net everychildindia.org www.socialsecuritynow.org

NEWSPAPERS THE TIMES OF INDIA