Statutory Corporation is an autonomous form of Public sector.

It is formed by passing a Special

Act either at the Legislature Assembly or at the Parliament. The "Statue" clearly defines the rules
and regulations, plans & policies, rights & powers, limits & scope for working of the corporation.
It is formed with the intention of service motive only.1
According to Herbert Morrison, “A public corporation is a combination of public ownership,
public accountability & business management for public ends.”
Reserve Bank of India, State Bank of India, Life Insurance Corporation, Unit Trust of India,
Employees State Insurance Corporation, Oil and Natural Gas Corporation etc. are some examples
of statutory corporations.

(1) Statutory corporation is a creature of a statute which lays down its rights, duties and obligations.
Therefore, a corporation can have those rights and exercise those functions only which are author-
ised by the statute, either expressly Or by necessary implication, provided it is not expressly
prohibited. Actions of a corporation ‘ outside the authorised area of operation are ultra vires and
can- ' not bind the corporation. Such ultra vires acts cannot be ratified 7 and the doctrines of
estoppel or acquiescence do not apply in such cases.
(2) It has a separate legal entity and, therefore, can sue or be sued in its corporate name. It can
hold and dispose of property by such name,
(3) Depending on the provisions of the statute of its creation, a cor- poration is largely autonomous
in finance and management. It has funds of its own.
(4) It operates an activity on behalf of the government which may be regulatory, benefactory,
commercial or developmental.
(5) The statute may delegate rule-making power to a corporation; such rules and regulations are
binding if they are within the authority, made in the manner laid down by the statute and do not
violate any provision of the Constitution.
(6) A statutory corporation is a “State” within the definition of the term in Article 12 of the
Constitution, and therefore, is subject to the writ jurisdiction of the Supreme Court and High Courts
under Articles 32 and 226 of the Constitution. The logical deduction from this, therefore, is that
fundamental rights can be claimed against a corporation.‘ Mandamus would also lie against the
corporation to enforce a statutory or public duty. Whether other public undertakings such as
government com- panies and registered bodies are “State” or not within the mean- ing of Article
12. would depend on the question whether they are “agency or instrumentality” of the State. If a
public undertaking is - - , agency or instrumentality of the State, then it will be a “State” Article
12. and, hence, writ jurisdiction of the court shall - hi to it. Private corporations are not “State”
within the .__.;',~“,. fie In and, hence, are not within the gravitational gt“ writ jurisdiction of the
courts unless these are operat- ., ft‘ mac and discharging public functions. it..- ..

1
http://www.indiastudychannel.com/resources/125343-What-Statutory-Corporations.aspx
Page 524.
That a statutory corporation can claim the benefit m Constitution. It 18 Significant to note that
the Law Commission of India in its IOIst Report has recommended an amendment to the
Constitution for making fundamental rights under Article I9(I)(a) available to those corporations
and Other entities which are not regarded as natural persons, provided they are engaged in
communication business. .
A public undertaking is subject to Article I4 of the Constitution, and thus not entitled to deny any
person equality by its treat-ment. Quashing the differential revised tariff rate laid down by
the Orissa State Electricity Board in Kartzk Enterprise (P) Ltd. v. Orissa SEB7 [Kartik Enterprise
(P) Ltd.], the court ruled that the Board is to so adjust its treatment that ultimately no inequality
resulted. Without the statutory immunity, the act1v1ties of a corporation are liable to tax. It is
considered an "assessee" under the Income Tax Act, 1961 and a "dealer" under the Central Sales
Tax Act, 1956. Statutory corporations cannot enjoy the privilege of the government
to withhold documents. Though there is no decision of the court on this point, yet there seems to
be no rationale in extending the privilege of the government to a corporation which, by and large,
undertakes regulatory or benefactory or commercial functions. Public enterprises are owned by the
people and the persons who manage them are accountable to the people. In order to enforce this
principle of accountability, the Supreme Court has broadened the doctrine of locus standi.
Therefore, if the sale of the property of any public corporation is "unjust, unfair and mala fide",
the workers shall have right to challenge it under Article 32 or 226 of the Constitution.8 In
Fertiliser Corpn. Kamgar Union V. Union of India9, the highest Bench was faced with the question
whether the labour union of the Fertiliser Corporation had locus standi to challenge the sale of
old plants by the corporation. Though the Supreme Court dismissed the petition because it
found nothing wrong with the sale of old machinery, yet broadening the doctrir16 of locus standi,
the Chief Justice observed:
But, in an appropriate case, it may become necessary in the Changing awareness of legal rights
and social obligations to take a broader view of the question of locus [standi], to initiate a
proceeding, be it under Article 2.2.6 or under Article 32 of the Constitution.