JUDICIAL EVOLUTION OF THE

CONCEPT OF STATE
SUBMITTED By:
Rachit Verma
Roll No 131189
Group No - IX

Introduction
Fundamental Rights (Part III), Directive Principles (Part IV) Fundamental
Duties (Part IVA) constitute the foundation principles of the Constitution.
Most individuals are poor and need the help of the State in order to fulfill their
basic needs.
State has to act as a catalyst in order to help in their development.
Role of the State is fundamental in the protection of its people.

 State has to implement the Directive Principles as mentioned in order to aid

the growth of individuals.
Chapter III was incorporated in the Constitution in order to stop the State
from arbitrary exercise of power.
The net effect of Article 12 and Article 32 (which gives the people to move to
the Supreme Court by appropriate proceedings) is Article 13 which strikes
down all the laws which are in derogation of Part III of the Constitution and
prohibits the State to make any laws which derogate this part.

Evolution of
the Concept
of State

Statutory Board
Public Sector Undertakings
Registered Society
Government Company under
Companies Act
Private Bodies
Concept of Territory

A. STATUTORY BOARD
1. Rajasthan State Electricity Board v. Mohan Lal:
Facts:
.1st July 1957 Formation of Rajasthan State Electricity Board under Electricity Supply
Act.
.Previously got electricity from Electrical and Mechanical Department.
.Mohan Lal permanent member of this board ; sent to PWD ; got promoted at PWD
from Foreman to Asst. Engineer ; Transferred back to this board and post awarded was
that of Foreman.
.Mohan Lal challenged this move.

Question Raised:
What constitutes other authorities?
Held:
Principle of Ejusdem Generis cannot be applied in the case of interpreting as to what other
authorities mean.
Authorities can be set up in these forms:
Statutory Corporations.
Government Companies.
Registered Societies.
Government Department or ministry.

 Shah J went into the analytical approach of this judgment and set up a test to determine as
to what constitutes other authorities.
Test consists of these questions:
Whether the act serves the entire public?
Has it been given the power to formulate its rules and regulations?
Has it been given he power to compel to follow its directions?
Has it been given the power to discharge its duties?

B. PUBLIC SECTOR UNDERTAKING

1. Sukhdev Singh v. Bhagatram:
Facts:
.3 Statutory Corporations LIC, IFC, and ONGC terminated the service of some
employees in contravention of their rules governing their service.
.The Contravention was in violation of Article 14 (Right to Equality).
Question Raised:
.Whether ONGC, IFC and LIC constitute a State or not?

Held:
Judges came to a conclusion that ONGC, IFC and LIC constitute a State as mentioned in
Article 12.
Matthew, J., in his concurrent judgment analysed the acts which constituted these 3 bodies.
Section 25 of the ONGC Coercive Power of State.
IFC and LIC Public Service Organizations which serves the public 3 rd Arm of
Government

Concept of State Action Directs Public Companies to carry out State Functions.

C. REGISTERED SOCIETIES
1. R.D. Shetty v. International Airport Authority of India
Facts:
.A notice was issued inviting tenders from Registered IInd Class Hoteliers having at least five
years experience for putting up and running a restaurant and two snack bars at the
International Airport of Bombay.
.In spite of not satisfying this condition of eligibility, a tender of a Hotelier was accepted
giving grise to the appellants cause of action.
. It was alleged by the appellant that in so doing, he and others were deprived of an equal
opportunity of submitting their tenders and being considered for the contract.

Questions Raised:
Whether the International Airport Authority of India is a State or not?
Held:
If body is agency or instrumentality of Government, it may be an authority under Article 12.
The Government laid down these tests:
Whether the financial resource of State is the chief funding Source?
Whether there exists of deep and pervasive State control?
Whether its functional character is being governed by State in essence?
Whether the body enjoys monopoly status or not?

 International Airport Authority of India is a State as Government has the power to

appoint the chairman and other members ; The Government provided capital to this body.
Court concluded that these tests are only illustrative and not conclusive.

2. Sebhajit Tewary v. Union of India

Facts:
.In 1972 Sabhajit Tewary, a Junior Stenographer with the Council of Scientific and
Industrial Research (CSIR) filed a writ petition under Article 32 of the Constitution claiming
parity of remuneration with the stenographers who were newly recruited to the CSIR.
.His claim was based on Article 14 of the Constitution.
Held:
.Court took a completely different approach from Sukhdev Singh even though the bench
was same and gross injustice was done.
.The Court did not apply the test which was laid down in Sukhdev Singh.

3. Ajay Hasia v. Khalid Mujib:

Facts:
.Under challenge was the validity of admissions made to the Regional Engineering College,
Srinagar for the academic year 1979-80 on grounds of arbitrariness.
.Admissions to candidates belonging to the State of Jammu and Kashmir were to be given on
the basis of comparative merit which was to be determined by holding a written entrance test
of 100 marks in specified subjects and a viva voce examination of 50 marks distributed
across four factors mentioned in the admission resolution.
Question Raised:
.Whether REC is a State or not?

Held:
The decision given in Sabhajat Tewary was erronous and referred it to a larger bench.
A society registered under the Societies Registration Act, 1898 is an agency or
instrumentality of the State.
The test laid down in R.D. Shetty was reiterated.
The Court held that the Viva should constitute less than 15% of the marks.

Pradeep Kumar Biswas v. Indian Institute of Chemical Biology

Facts:
In 1972 Sabhajit Tewary, a Junior Stenographer with the Council of Scientific and
Industrial Research (CSIR) filed a writ petition claiming parity of remuneration with the
stenographers who were newly recruited to the CSIR.
A Bench of five judges of this Court denied him the benefit of Article 14.
They held that the writ application was not maintainable against CSIR.
The Honble bench rejected the application on the grounds that the society does
not have a statutory character and was merely registered under the Societies Registration Act.
In 1986, a Supreme Court bench of 2 judges referred it to a constitutional bench.

Held:
Sabhajit Tewary overruled and held that CSIR is a State under Article 12.
CSIR is a state because of the two reasons:
Government had an overriding control over this organization.
CSIR was set up in the national interest to further economic welfare of the Society by
fostering planned development in the country.
Dissenting judgment of Lahoti, J., - confusion created by Bhagwati who used the word
instrumentality.

D. GOVERNMENT COMPANY UNDER COMPANIES ACT:

1. Som Prakash Rekhi v. Union of India
Facts:
.Burma Shell acquired by the Government.
.Som Prakash Rekhi was an employee of Burma Shell and his pension was reduced from
Rs 169 to Rs 40.
Held:
.The test laid down in R.D. Shetty was reaffirmed.
.State includes not only Statutory Corporations, but also government company, registered
society or bodies which have some nexus with the Government.

E. PRIVATE BODIES
1. Zee Telefilms v. Union of India:
Facts:
.The Board of Control for Cricket in India had terminated a contract with the
petitioner pertaining to the grant of exclusive television rights for a period of four years.
. This action was challenged as arbitrary and violative of Article 14 of the Constitution.
Held:
If Private body exercises public functions, even if it is not a State, aggrieved person has a
remedy under Article 226 of the Constitution of India.
Activities of the board do not come under the guidelines laid down in Pradeep Kumar Biswas.

2. Board of Control for Cricket in India v. Cricket Association of Bihar

Facts:
.In the PIL before the Bombay High Court, serious allegations of betting and spot fixing in
IPL 2013 have been made against Mr. Gurunath Meiyappan as the alleged Team Principal
of Chennai Super Kings and also allegations of betting have been made against the PartTeam Owner of IPL Franchisee Rajasthan Royals.
.The team owner of Chennai Super Kings is India Cements Limited of which Mr. N.
Srinivasan, the President of the BCCI, is the Managing Director and Mr. Gurunath
Meiyappan is the son-in-law of Mr. N. Srinivasan.
Held:
.BCCI performs public functions and remedy under Article 226 and not 32.

E. TERRITORY
1. N. Masthan Sahib v. Chief Commissioner of Pondicherry:
Facts:
.Pondicherry was a French territory.
.N. Masthan Sahib acquired territory under quasi judicial capacity.
.Agreement of 1954.
.De facto power in hands of the Indian Government.
Held:
.Supreme Court framed two questions and asked Government to answer them
.It is a quasi judicial authority and a quasi judicial authority does not come under the ambit
of State. Court relied on house of lords judgement.

2. K.S. Ramamurthy Reddiar v. Chief Commissioner of Pondicherry

Facts:
.He had applied for bus permit.
.Permit denied on the ground that he was a resident of Pondicherry and not a native of
Pondicherry.
Held:
.Court held that there are two types of local authorities.
.Court held that a quasi judicial authority or a judicial authority cannot be directed by the
Government of India to perform its functions.