Report No. 145
1.2. Decisions of the Supreme Court.-
The Supreme Court of India has held in a number of decisions that Public Corporations and Undertakings fall within the inclusive definition of 'State'. Therefore these Corporations and Undertakings are subject to Part III of the Constitution. Consequently, the Supreme Court and the High Courts have power of judicial review under Articles 32 and 226 of the Constitution. The Supreme Court and High Courts have interfered with the orders of Public Corporations and Undertakings in relation to service matters and also with regard to commercial transactions.
The interference by the courts caused anxiety to the Bureau of Public enterprises, as, in its opinion, this has created serious difficulties in the functioning of Public Sector Undertakings on commercial and industrial principles. The Bureau has proposed amendment of Article 12 in a manner designed to exclude Public Corporations and Undertakings from the expression "other authorities", to ensure the avoidance of judicial review and interference by courts in the functioning of these Undertakings.