Case comment on Pradeep Kumar Biswas v.

Indian Institutes of Chemical

Biology

INTRODUCTION
The present case (Pradeep kumar Biswas) arose out of a writ application filed by the appellants
in the Calcutta High Court challenging the termination of their services by Respondent No. 1
which is a unit of CSIR. Their request for an interim order was refused by the High Court on the
prima facie view that in view of the Supreme Court’s decision in the above Sabhajit Tewary v.
Union of India, (1975) 1 SCC 485, to the effect that CSIR was not “State” within the meaning of
Article 12 of the Constitution, the writ petition itself was not maintainable. The appellants then
approached the Supreme Court. A two-Judge Bench of the Supreme Court took the view that the
decision in the aforesaid Sabhajit Tewary case required reconsideration in view of subsequent
decisions of the Supreme Court decisions in respect of several other institutes of similar nature
set up by the Union of India, and, therefore, the matter came to be referred to the present
Constitution Bench of 7-Judges. The questions involved in this case were:

(i) whether CSIR was a State within the meaning of Article 12

(ii) if yes, whether the Supreme Court should reverse the decision to the contrary in the
above Sabhajit Tewary case, which had stood for over a quarter century.

The Supreme Court answered both the questions in the affirmative by a majority of 5 Judges
while 2 Judges delivered the minority decision.
BACKGROUND

In 1972, Sabhajit Tewary, a Junior Stenographer with the Council of Scientific and Industrial
Research (CSIR) had filed a writ petition under Article 32 of the Constitution claiming parity of
remuneration with the Stenographers who were newly recruited to CSIR, on the basis of Article
14 of the Constitution. A Constitution Bench of 5 Judges of the Supreme Court in Sabhajit
Tewary v. Union of India, (1975) 1 SCC 485 : (1975) 3 SCR 616 : AIR 1975 SC 1329, denied
him the benefit of Article 14 holding that the writ petition was not maintainable against CSIR as
it was not an “authority” within the meaning of Article 12 of the Constitution.

MEANING OF STATE UNDER ARTICLE 12

Article 12 defines state in the following manner:

In this part unless the context otherwise requires, “the State” includes
1.The Government and Parliament of India
2.The Government and Legislature of each of States
3 Local Authorities or
4 Other Authorities
Within the territory of India or under the control of Government of India.

The Government and Parliament of India

The term points to Union executive and legislature. This phrase can be understood by simple
observation, whenever Parliament passes a bill and it gets the assent and is brought into force as
an “act” it is a function of the central legislature. Whenever any “act” whether as a whole or in
part infringes upon fundamental rights of an Individual, it is challenged before the Judiciary and
then the same is left to Judicial scrutiny. As we have seen in the celebrated case of Shreya
Singhal v. Union of India AIR 2015 SC 1523 , Section 66A was challenged before the Hon’ble
Apex Court as being in violation of Article 19 and on the same basis was struck down and
declared ultra vires. Now, Information Technology Act, 2000 is a Central Law passed by Union
legislature and therefore being a “state” it could not be allowed to violate fundamental rights.

Government and Legislature of the States

This phrase indicates that acts of State legislature or Executive will also not be beyond reproach
and any State act, order, rule etc. which leads to infringement of rights of an individual shall be
safeguarded.

Local authorities
Authorities like Municipality, District Boards etc. all come under the scope of local authorities
and remedy against them can be sought by an individual. The bye-laws that a Municipal
committee makes are all under the definition of Law under Article 13 and can be challenged on
basis of violation of a fundamental right. The reference to local authorities has been given in the
General Clauses act, 1897 and it would be pertinent to analyse the same briefly.

A proper and careful scrutiny of Section 3(31) suggests that an authority in order to be a local
authority, must be of like nature and character as a municipal committee, District Board or Body
of Port commissioners, possessing therefore, many, if not all, of the distinctive attributes and
characteristics of those bodies, but possessing one essential feature namely, that it is legally
entitled to or entrusted by the government with the control and management of a local fund.

Other authorities

Other authority is the most disputed among all the authorities as it covered many bodies and
certain guidelines have been made by courts for describing other authorities. (Ajay hasia v.
Khalid majumir shaw)
Case description and analysis

 After referring to several decisions on this issue, the majority held that the tests
formulated in Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722, are not a rigid
set of principles so that if a body falls within any one of them it must, ex hypothesi, be
considered to be a State within the meaning of Article 12. The question in each case
would be – whether in the light of the cumulative facts as established, the body is
financially, functionally and administratively dominated by or under the control of the
Government. Such control must be particular to the body in question and must be
pervasive. If this is found then the body is a State within Article 12. On the other hand,
when the control is merely regulatory whether under statute or otherwise, it would not
serve to make the body a State.
 CSIR was “created” by the Government to carry on in an organized manner what was
being done earlier by the Department of Commerce of the Central Government. In fact
the two research bodies which were part of the Department of Commerce have since been
subsumed in CSIR.
 The objects which have been incorporated in the memorandum of association of CSIR
manifestly demonstrate that CSIR was set up in the national interest to further the
economic welfare of the society by fostering planned industrial development in the
country. Such a function is fundamental to the governance of the country.
 CSIR was and continues to be a non-profit-making organization and according to clause
4 of CSIR’s memorandum of association, all its income and property, however derived
shall be applied only “towards the promotion of those objects subject nevertheless in
respect of the expenditure to such limitations as the Government of India may from time
to time impose”.
 From the Rules and Regulations, 1999 of CSIR, the dominant role played by the
Government of India in the Governing Body of CSIR is evident. The Director General
who is ex officio Secretary of the Society is appointed by the Government of India [Rule
2(iii)]. Furthermore, the members of the Governing Body who are not there ex officio are
 nominated by the President and their membership can also be terminated by him and the
Prime Minister is the ex officio President of CSIR.
 The control of the Government in CSIR is ubiquitous. The Governing Body is required to
administer, direct and control the affairs and funds of the Society and, under Rule 43, has
authority “to exercise all the powers of the Society subject nevertheless in respect of
expenditure to such limitations as the Government of India may from time to time
impose”. The Governing Body also has the power to frame, amend or repeal the bye-laws
of CSIR but only with the sanction of the Government of India. Bye-law 44 had provided
“any alteration in the bye-laws shall require the prior approval of the Governor-General-
in-Council”. Under Rule 41, the President may review/amend/vary any of the decisions
of the Governing Body and pass such orders as considered necessary which would be
binding on the Governing Body. Moreover, decisions of the President on questions
referred by the Chairman are binding on the Governing Body. Under this Rule the
subjugation of the Governing Body to the will of the Central Government is complete.
 Under Bye-laws 12, 15, 14 and 19 various service rules and orders, pay scales and
reservation rules applicable to the government servants are applicable to the employees of
CSIR. Moreover, CSIR cannot lay down or change the terms and conditions of service of
its employees and any alteration in the bye-laws can be carried out only with the approval
of the Government of India (Bye-law 20).
 The present financial position of CSIR is that at least 70% of the funds of CSIR are
available from grants made by the Government of India. Under Bye-law 6, funds of the
Society may be invested only in such manner as prescribed by the Government of India.
The non-governmental contributions are a pittance compared to the massive
governmental input.
 As regards expenditure, under Bye-law 1 the budget estimates of the Society are to be
prepared by the Governing Body keeping in view the government instructions. Moreover,
Bye-law 69 requires the accounts of CSIR to be audited by the Comptroller and Auditor-
General and placed before the table of both Houses of Parliament.
 Unlike other registered societies governed by Section 14 of the Societies Registration
Act, 1860, on the winding up or dissolution of CSIR, any property remaining after
 payment of all debts shall have to be dealt with “in such manner as the Government of
India may determine”.
 CSIR is therefore both historically and in its present operation subject to the financial
control of the Government of India. The assets and funds of CSIR though nominally
owned by the Society are in the ultimate analysis owned by the Government.
 Hence, from whichever perspective the facts are considered, there can be no doubt that
the conclusion reached in Sabhajit Tewary case was erroneous. If the decision
of Sabhajit Tewary had sought to lay down as a legal principle that a society registered
under the Societies Act or a company incorporated under the Companies Act is, by that
reason alone, excluded from the concept of State under Article 12, it is a principle which
has long since been discredited.
 On 31-10-1986, under Section 14(2) of the Administrative Tribunals Act, 1985, the
Central Government specified 17-11-1986 as the date on and from which the provisions
of Section 14(3) of the 1985 Act would apply to CSIR “being the Society owned and
controlled by Government”. Therefore, the notification serves in removing any residual
doubt as to the nature of CSIR and decisively concludes the issues in the present case,
against it.
 Since on a re-examination of the question, the Supreme Court has come to the conclusion
that the decision in Sabhajit Tewary case was plainly erroneous, it is the duty of the
Supreme Court to say so and not perpetuate the mistake. Sabhajit Tewary decision must
be and is in the circumstances overruled.

Hence, it was held by the majority opinion of 5 judges that CSIR is a “state” within the meaning
of Article 12 of the Constitution. The 2 dissenting judges, however, gave contrary minority
opinion.