Report No. 145
2.6. Statutory and non-statutory status.-
After the above decision, to state the position broadly, it became possible for the courts to hold an entity to be "State", even if it did not have a direct statutory origin. No doubt, if it is a statutory Undertaking vested with functions analogous to those of the Government, it would be falling within the ambit of State. But the absence of direct statutory origin may not be material, if the entity in question is an agency or instrumentality of the State.
This is illustrated by the well-known judgment of 1981.1 That 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. The ingredients which weighed with the Supreme Court in holding the society to be a "State"-to mention the principal characteristics-were the following:-
(i) The composition of the society is dominated by the representatives of the Government.
(ii) The expenses of the society are entirely provided by the Central Government.
(iii) The rules made by the society require prior approval of the Government.
(iv) The society is required to comply with all directions of the Government.
(v) Government can appoint and remove members from the society.
(vi) Thus, an overall control is exercised by the Government.
1. Ajay Hasia v. Khalid Mujib, AIR 1981 SC 487.
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