What is the State – V: Zee Telefilms, the Death of the Functional Approach, and an Alternative

In the last post, we saw how Ajay Hasia, and the cases following it up to Pradeep Kumar Biswas, gradually began to adopt the legal approach to the meaning of “State” under Article 12, at the expense of the functional approach. 

If Pradeep Kumar Biswas impliedly did away with the public function test, Zee Telefilms vs Union of India did so expressly. In that case, the question was whether the Board of Control for Cricket in India was “State” within the meaning of Article 12. The Board argued that its autonomous nature took it out of the ambit of Article 12, per Pradeep Kumar Biswas. Zee Telefilms, on the other hand, pointed to the “governmental functions exercised by the Board in the area of cricket.” The Court held in favour of the Board. Following Pradeep Kumar Biswas, it noted that the Board was not created by statute, the Government held no share capital, provided no financial assistance, conferred no monopoly, exercised no pervasive control, and had not transferred a government-owned corporation. Consequently, Article 12 was not applicable. Responding to the petitioners’ contentions, the Court then stated: “Even assuming that there is some element of public duty involved in the discharge of the Board’s functions even then as per the judgment of this Court in Pradeep Kumar Biswas that by itself would not suffice for bringing the Board within the net of “other authorities” for the purpose of Article 12″ (paragraph 25)

The petitioners also argued a variant of the functional test – i.e., the power of the Board, by virtue of its near-exclusive control over cricket in India, to impact an important fundamental right on a national scale: the Article 19(1)(g) right to carry on a trade, business or profession – brought it within the ambit of Article 12. Rejecting this contention, the Court held that “the pre-requisite for invoking the enforcement of a fundamental right under Article 32 is that the violator of that right should be a State first… [but] we have already held that the petitioner has failed to establish that the Board is State within the meaning of Article 12. Therefore assuming there is violation of any fundamental right by the Board that will not make the Board a “State” for the purpose of Article 12.” (paragraph 28)

The functional argument – as we have seen through this series of posts – has two (connected justifications). First, there is an idea of a “public function” – certain tasks that, because of their very nature, a government ought to perform, and that shouldn’t be left to the market (policing and defence are uncontroversial examples), such as provisions of social or individual goods that we think every person is entitled to in a modern democracy (education and healthcare are more contested examples). Secondly, it is argued that “centres of power” (a term used by the Supreme Court) are under particular obligations because of their ability to affect basic rights in a deep and pervasive manner, across the board (for instance, control over the country’s police force) – whether those centres of power are State entities, or private ones (like large corporations). In the two paragraphs excerpted above, we can see that the Zee Telefilms court directly rejected both these arguments, unambiguously consigning the functional argument to judicial oblivion.

The Court also rejected the contention that the control of cricket was in the nature of a “State function”, holding that “the State/Union has not chosen the Board to perform these duties nor has it legally authorised the Board to carry out these functions under any law or agreement. It has chosen to leave the activities of cricket to be controlled by private bodies out of such bodies’ own volition (self-arrogated). In such circumstances when the actions of the Board are not actions as an authorised representative of the State, can it be said that the Board is discharging State functions? The answer should be no. In the absence of any authorisation, if a private body chooses to discharge any such function which is not prohibited by law then it would be incorrect to hold that such action of the body would make it an instrumentality of the State.”

But what if, tomorrow, the State “chooses” to leave the function of policing – or maintaining prisons – or national defence – or the judicial system – to private parties? Here, we have the classic problem of a purely descriptive baseline for State function, that we first highlighted in our discussion of R.D. Shetty. With a descriptive baseline, as the State retreats, the areas within which fundamental rights operate become more and more constricted. In fact, this is precisely the argument that the Court made at the end of Zee Telefilms. Cases such as Rajasthan Electricity Board and Sukhdev Singh, it held, were decided in a different socio-economic climate; now, on the other hand, “the State is… distancing itself from commercial activities and concentrating on governance rather than on business.” Yet surely, this cannot be right. Constitutional rights cannot depend upon the economic policy that a State follows at any given time. Intuitively, as well, it seems somewhat strange to visualise a situation where, for instance, a private corporation is given control over the country’s water supply, which it then withholds from people of a particular religion – and to imagine that the Constitution will have nothing to say about that. Again, these thought experiments highlight the need for a normative baseline of “State functions”, that the Court – throughout its jurisprudence – has consistently failed to engage with.

After Pradeep Kumar Biswas and Zee Telefilms, it seems clear that Article 12 is strictly limited to instances of pervasive governmental control, and the public function test is irrelevant to the enquiry. We must look elsewhere for the solution to the problems highlighted above.

One possible solution lies in R.D. Shetty. Recall our original analysis of the case: the Court’s reasoning proceeded along two distinct prongs. One was an Article 12 analysis. The other – which preceded it – was a public law analysis. That is, the Court began with examining the government’s obligations when it acted as a contractor – that is, obligations of fairness and non-discrimination – and then extended the argument to instrumentalities or agencies of the government (which included a strong functional component). It then located another source of those obligations within Article 14 of the Constitution, which launched it off into its Article 12 analysis. In other words, obligations of fairness and non-discrimination stem both from Article 14 and from general principles of public law. The judiciary’s subsequent narrowing down of Article 12 affects the reach of Article 14, limiting it to pervasively government-controlled bodies, but leaves the reach of public law – as outlined in R.D. Shetty – untouched.

Two Supreme Court cases support this proposition. The first is Justice Mohan’s concurring opinion in Unnikrishnan.  The question in that case was whether Article 14 applied to private educational institutions. Justice Mohan observed: “What is the nature of functions discharged by these institutions? They discharge a public duty. If a student desires to acquire a degree, for example, in medicine, he will have to route through a medical college. These medical colleges are the instruments to attain the qualification. If, therefore, what is discharged by the educational institution, is a public duty that requires… [it to] act fairly.

The duty to act fairly – which, in content, is identical to the Article 14 obligation – stems directly from the public duty performed by the entity. As R.D. Shetty teaches, the source of that duty might be either the Constitution, or public law. Pradeep Kumar Biswas and Zee Telefilms close off the first avenue, but not the second.

The second case is – interestingly enough – Zee Telefilms itself. Recognising the trouble with unaccountable private bodies wielding vast swathes of power, the Court held that “it cannot be denied that the Board does discharge some duties like the selection of an Indian cricket team, controlling the activities of the players and others involved in the game of cricket. These activities can be said to be akin to public duties or State functions and if there is any violation of any constitutional or statutory obligation or rights of other citizens, the aggrieved party may not have a relief by way of a petition under Article 32. But that does not mean that the violator of such right would go scot-free merely because it or he is not a State. Under the Indian jurisprudence there is always a just remedy for violation of a right of a citizen. Though the remedy under Article 32 is not available, an aggrieved party can always seek a remedy under the ordinary course of law or by way of a writ petition under Article 226 of the Constitution which is much wider than Article 32.”

Thus, the Court does not hold that non-State bodies do not have a duty to abide by the content of the fundamental rights; it expressly limits its holding to restricting the application of Part III, qua Part III, to non-State bodies. In fact, it specifically refers to Article 226, which vests in the High Court to issue orders and writs to “any person or authority” for the “enforcement of any of the rights conferred by Part III, and for other purposes.” The implications are that it is at least conceptually possible to hold a non-State body accountable for a substantive Part III violation – only not by invoking Part III via an Article 32 petition before the Supreme Court. The only way this is possible is by holding that while the content of the duties in both cases is identical (e.g., the duty to act fairly), their source is different (Article 14 and public law).

This, I would suggest, is sensible. Instead of applying Part III in a blanket manner to any “centre of power”, leading to strange and incongruous results (e.g., what connection could exist between a corporation in control of the nation’s water supply, and the right of minorities to preserve their culture?), the public-law approach allows us to calibrate the scope of an entity’s obligations to its function. For example, in Zee Telefilms, this would entail applying the substance of Article 19(1)(g) to the BCCI; and in Unnikrishnan, the substance of Article 14 to the admissions decisions of educational institutions. Ultimately, the logic boils down to this: entities that – as a structural (and not individual, or isolated) matter, have control over the effective exercise of individuals’ fundamental rights, ought to be accountable within their sphere of control.

If we examine Marsh vs Alabama (which the R.D. Shetty Court relied upon), we find something of this logic at work. In Marsh, one important reason why the Court held that First Amendment rights applied to the sidewalks and streets of a privately-owned company town, was the lack of a feasible exit option: people living in the company town couldn’t simply pack up and go elsewhere to engage in free speech and expression; thus, they would simply be denied any effective exercise of their constitutional rights, if the private owners’ property interests were allowed to trump the First Amendment. Or, in other words, the company-town was in a position where it effectively had  exclusive power and control over the constitutional rights of a significant number of people. Consequently, the First Amendment applied. I suggest that, in the last analysis, examining the extent to which such power and control exists in individual cases, and accordingly deciding the scope of the (public-law sourced) obligations of private entities (for which there is precedent, in the form of Unnikrishnan and Zee Telefilms), is both intellectually the most defensible approach, and pragmatically the most sensible one.




Filed under Article 12: Meaning of "State"

4 responses to “What is the State – V: Zee Telefilms, the Death of the Functional Approach, and an Alternative

  1. Advocate

    Fantastic series !

  2. Pingback: Horizontality under the Indian Constitution: A Schema | Indian Constitutional Law and Philosophy

  3. Pingback: The BCCI Controversy, Public Functions and Cultural Goods, and the Return (?) of the Functional Test | Indian Constitutional Law and Philosophy

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