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Pradeep Kumar Biswas v. Indian Institute of Chemical Biology

Supreme Court of India · 16 April 2002 · 7 judges

The majority held that the Council of Scientific and Industrial Research is 'the State' under Article 12, being financially, functionally and administratively dominated by the Government, and overruled Sabhajit Tewary v. Union of India.

Facts

A five-Judge Bench in Sabhajit Tewary v. Union of India (1975) had held that the Council of Scientific and Industrial Research (CSIR), a society registered under the Societies Registration Act, 1860, was not an 'authority' under Article 12, so a writ petition against it was not maintainable. The appellants challenged the termination of their services by the first respondent, a unit of CSIR, in the Calcutta High Court. Interim relief was refused because the writ petition was not maintainable against it, and the appeal was dismissed on the basis of Sabhajit Tewary. On their appeal, a two-Judge Bench in 1986 referred the matter to a Constitution Bench to reconsider Sabhajit Tewary in the light of later decisions.

Questions before the Court

  1. What is the test for deciding whether a body is 'the State' or an 'other authority' within Article 12?
  2. Is CSIR 'the State' within Article 12?
  3. Should Sabhajit Tewary v. Union of India, which had stood for over 25 years, be overruled?

What the Court held

  • The Ajay Hasia tests are not rigid rules under which a body meeting any one of them must be the State. The question is whether, on the cumulative facts, the body is financially, functionally and administratively dominated by or under the control of the Government. That control must be pervasive and particular to the body; regulatory control is not enough.
  • The form of the body, whether a statutory corporation, a company or a registered society, and its apparent autonomy do not matter if it is in fact an instrumentality or agency of the Government.
  • CSIR is the State under Article 12. The Government created it to carry on work done by the Department of Commerce; its objects serve planned industrial development; the Prime Minister, its ex officio President, can review the Governing Body's decisions; at least 70 per cent of its funds are Government grants, and Government controls its service rules, budget and assets.
  • A 1986 notification bringing CSIR under Section 14(3) of the Administrative Tribunals Act, 1985 as a society owned and controlled by Government confirmed this, since such a notification could issue only for a body amenable to writ jurisdiction under Article 12.
  • Sabhajit Tewary was plainly erroneous and was overruled, though it had stood for over 25 years. The matter was remitted to the appropriate Bench to be decided in the light of this judgment.

Why it matters

The judgment restates the test for 'other authorities' under Article 12: whether the body is financially, functionally and administratively dominated by or under the pervasive control of the Government, judged on cumulative facts, and not by mechanical use of the Ajay Hasia factors. It overrules Sabhajit Tewary and brings CSIR within Part III. The dissent distinguished an 'authority' from an 'instrumentality or agency' of the State.

In the Court's words

Copied from the official judgment; each passage links to its page.

“The picture that ultimately emerges is that the tests formulated in Ajay Hasia 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.”
Ruma Pal, J.Page 11 of the judgment
“From this perspective, the logical sequitur is that it really does not matter what guise the State adopts for this purpose, whether by a Corporation established by statute or incorporated under a law such as the Companies Act or formed under the Societies Registration Act, 1860. Neither the form of the Corporation, nor its ostensible autonomy would take away from its character as 'State' and its constitutional accountability under Part III vis-a-vis the individual if it were in fact acting as an instrumentality or agency of Government.”
Ruma Pal, J.Page 6 of the judgment
“From whichever perspective the facts are considered there can be no doubt that the conclusion reached in Sabhajit Tewary 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.”
Ruma Pal, J.Page 17 of the judgment
“It is this basic and essential distinction between an 'instrumentality or agency' of the State and 'other authorities' which has to be borne in mind. An authority must be an authority sui juris to fall within the meaning of the expression 'other authorities' under Article 12.”
R.C. Lahoti, J. (dissenting)Page 30 of the judgment

Provisions interpreted

Related judgments

Case and bench

Parties
Pradeep Kumar Biswas v. Indian Institute of Chemical Biology & Ors.
Case
Civil Appeal No. 992 of 2002
Decided
16 April 2002
Bench
S.P. Bharucha CJI, Syed Shah Mohammed Quadri, R.C. Lahoti, N. Santosh Hegde, Doraiswamy Raju, Ruma Pal, Arijit Pasayat
Opinions
Majority 5:2. Majority judgment by Ruma Pal, J.; R.C. Lahoti, J. (for himself and Doraiswamy Raju, J.) dissented, holding CSIR not to be 'the State' and Sabhajit Tewary correctly decided.

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