From Advocatespedia, The Law Encyclopedia
The Constitution of India, Article 12 : “In this part, unless the context otherwise requires, “the State” includes the Government and the Parliament of India, the Government and the Legislature of each of the States, all local and other authorities within the territory of India or under the control of the Government of India.”
Article 12 of the Constitution has four components:
(a) The Government and Parliament of India– Government means any department or institution of department. Parliament shall consist of the President, the House of People and Council of States.
(b) The Government and Legislature of each State– State Legislatures of each State consist of the Governor, Legislative Council and Legislative Assembly or any of them.
(c) Local Authorities within the territory of India
(d) Other Authorities– Authorities other than local authorities’ working-
(i) Within the territory of India or;
(ii) Under the control of the Government of India.
The first two categories of Article 12 included the legislative and executive wings of the Union and State and they are quite specific. The latter two categories, particularly the last are not so specific and require some explanation. To give a wider dimension to Fundamental Rights the Judiciary has interpreted “State” in different context at different time. Fundamental Rights constitute limitation on the power of the State and are a guarantee against State action.
INTERPRETATION OF “OTHER AUTHORITIES”- JUDICIAL EVOLUTION
Today’s government performs a large number of functions because of the prevailing philosophy of a social welfare state. Some functions are discharged through the traditional governmental departments and officials while some functions are discharged through autonomous bodies existing outside the departmental structure, such as, companies, corporations etc. While the government acting departmentally, or through officials, undoubtedly falls within the definition of ‘state’ under Article 12, doubts have been cast as regards the character of autonomous bodies.
In University of Madras v Shanta Bai, the Madras High Court held that ‘other authorities’ could only indicate authorities of a like nature, i.e. ejusdem generis. Ejusdem generis is a Latin phrase which means “of the same kind.” So construed, it could only mean authorities exercising governmental or sovereign functions. In cannot include persons, natural or juristic, such as, a University unless it is ‘maintained by the State’.
The above restrictive interpretation of other authorities was rejected by Supreme Court in Ujjammbai v. State of U.P. and it observes that the words “other authorities” are of wide amplitude and capable of comprehending every authority created under the statute and functioning within the territory of India. Consequently it must include every type of authority set up under a statute for the purpose of administering laws enacted by the Parliament or by the State including those vested with the duty to make decisions in order to implement those laws.
In Rajasthan State Electricity Board v. Mohan Lal, Supreme Court pointed out that the expression “other authorities” in Article 12 could include all constitutional and statutory authorities on whom powers were conferred by law.
The Supreme Court in Sukhdev v. Bhagatram
Held that the rules and regulations framed by the Oil and Natural Gas Commission, the Life Insurance Corporation and the Industrial Finance Corporation are all States because the rules and regulations made by them have the force of law.
Justice Mathew in his concurring judgment advocated the new evolving concept of the state acting through a corporation and making it an agency or instrumentality of the State which found support in subsequent decisions of the Supreme Court.
In Ramana Dayaram Shetty v. The International Airport Authority of India,
The Supreme Court held that corporations established by statute or incorporated under law are an instrumentality or agency of the Government, if they satisfied certain tests which may be summed up as under:
The source of the share capital;The extent of the State control over the Corporation, and Whether it is “deep and pervasive”;Whether the Corporation has a monopoly status;Whether the functions of the Corporation are of public importance and closely related to governmental functions; andWhether, what belonged to a Government Department formerly was transferred to the Corporation.
Various factors for determining whether a body is agency of state has been laid down in Ajay Hasia v. Khalid Mujib:
If the entire share capital of the corporation is held by the government, it would go for long way towards indicating that the corporation is an instrumentality or an authority of the government.Where the financial assistance of the state is so much as to meet almost entire expenditure of the corporation it would afford some indication of corporation being impregnated with the government character.Whether the corporation enjoys monopoly status which is state conferred or state protected.Existence of deep and pervasive state control may afford an indication that the corporation is a state agency or instrumentality.If the function of the corporation are of public importance and closely related to government functions, it would be relevant factor in classifying a corporation as an instrumentality or agency of the government.If a department of government is transferred to corporation, it would be strong factor supporting the inference of the corporation being an instrumentality or agency of the government.
Ajay Hasia case was criticized on the basis that the tests laid down in that case were relevant for the purpose of determining whether an entity was an instrumentality or agency of the state and that simply by holding a legal entity to be an instrumentality or agency of the state, it did not necessarily became an authority within the meaning of “other authorities” in Article 12. “To be an authority”, “the entity should have been created by a Statute or under a statute and functioning with liability and obligations to the public.”
In G. Bassi Reddy v. International Crops
Research Institute, Supreme Court held the institute is an International Organization, set up as a non-profit research and training centre, with the object to help developing countries in semi-arid tropics to alleviate rural poverty and hunger in ways that are environmentally sustainable and does not come under State.
It was laid down that The Indian Statistical Institute, Indian Council of Agricultural research, Sainik School Society, U.P. State Co-operative Land Development Bank Ltd. , U.P Rajya Karamchari Kalyan Nigam, all societies registered under the Societies Registration Act; Project and Equipment Corporation of India Ltd., a government of India undertaking; Food Corporation of India, a statutory corporation; The Steel Authority of India Ltd, a Public Limited company owned, controlled and supervised by the Central Government; Mysore Paper Mills Ltd, a State Government Company; The Indian Oil Corporation, a company registered under the Companies Act, 1956; a State-aided school, whose employees enjoy statutory protection and which is subject to the regulations made by the State education department; a medical college run by municipal corporation; several State electricity boards created on the lines of Rajasthan Electricity Board; Central Inland Water Transport Corporation Ltd, a government company jointly owned by Central government and two State governments; a Government Company constituted as development authority under a State Town Planning Act; regional rural banks established under the Regional Rural Banks Act,1976; port trusts created under the Major Port Trusts Act, 1889 or 1963 have been held ‘other authorities’ within the meaning of Article 12.
 M.P. Jain, Indian Constitutional Law. Nagpur: Lexis Nexis, 2012. p.907.  University of Madras v Shanta Bai AIR 1954 Mad 67.  Ujjammbai v. State of U.P AIR 1962 SC 1621.  Rajasthan State Electricity Board v. Mohan Lal AIR 1967 SC 1857.  Sukhdev v. Bhagatram AIR 1957 SC 1331.  Ramana Dayaram Shetty v. The International Airport Authority of India AIR 1979 SC 1628.  Ajay Hasia v. Khalid Mujib AIR 1981SC 487.  G. Bassi Reddy v. International Crops Research InstituteAIR 2003 SC 1764.  Basu, D.D, Commentary on the Constitution of India, Lexis Nexis, Nagpur, 2012.