Report No. 145

2.12. Legal Position.-

Now the legal position is clearly established by the decision of the Supreme Court that a Corporation, a Government Company or any other instrumentality of the State or agency constituted under the statutory provision or under the Companies Act or under the Societies Registration Act would fall within the definition of 'State' under Article 12 of the Constitution for the purposes of Part III of the Constitution, provided such undertakings fulfil the tests as discussed earlier. Sometimes, difficulties do arise in determining the character of an instrumentality of the State-even on the application of the tests laid down by the Supreme Court.

Some of the High Courts have taken divergent views in this regard. But if one bears in mind the fact that no particular factor is conclusive, one can understand the decisions which are sometimes cited as deviating from the principles laid down by the Supreme Court. It has to be remembered that if a company, besides being a non-statutory body, does not perform any statutory or public duty, it may not fall within "State".

Similarly, the mere fact that the name of a particular society appears in the Allocation of Business Rules would not be conclusive, as held in the case of Council of Scientific and Industrial Research, a registered society and non-statutory body. [The view taken by the Supreme Court in that case has been watered down by subsequent decisions; and, at present, the view taken in the case of International Airport Authority holds the field.]

In Ajay Hasia's case, the Supreme Court held that society registered under the Jammu and Kashmir Registration of Societies Act, 1898 was an instrumentality or agency of the State and the Central Government; consequently, it was an authority within the meaning of Article 12.1 The declaration of law laid down in the International Airport Authority decision is.the law of the land. Any different view taken by High Courts contrary to the Supreme Court's decision is incorrect.

1. Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722: AIR 1987 SC 487