Guest Post: Constitutional Invalidity Writ Large in Transcon v. ICICI

[This is a guest post by Rohan Deshpande.]

The Bombay High Court (“Court”) in its order dated April 11, 2020 in Transcon Skycity (“Transcon”) v. ICICI Bank (“ICICI”) was called upon to interpret the Reserve Bank of India’s Statement of Developmental and Regulatory Policies and detailed instructions, both dated March 27, 2020 (collectively, “RBI Directives”). The RBI Directives, inter alia, provide for a moratorium to be applicable from March 01, 2020 to May 31, 2020 in relation to repayment of instalments and classification of accounts as non-performing assets (“NPA/s”). These were issued by the RBI in view of the adverse impact of the novel coronavirus pandemic upon servicing of debt. Prior to Transcon v. ICICI, the RBI Directives were already the subject matter of consideration by the Delhi High Court and the Bombay High Court.

Transcon filed the above case as a writ petition under Article 226 of the Constitution of India, with ICICI as the first respondent and the RBI as the second. It was Transcon’s case that although it had defaulted on certain loan instalments payable to ICICI prior to March 01, 2020, the benefit of the moratorium should be extended to it inter alia in view of the impact of the nationwide lockdown upon its business. The prayers in its petition were:

(a) To issue a writ of mandamus directing that the RBI Directives are applicable to Transcon’s loan account held with ICICI;

(b) To issue a writ of mandamus restraining ICICI from classifying Transcon’s loan account as an NPA;

(c) In the alternative to prayer (a), to declare the RBI Directives as unconstitutional and violative of Articles 14 and 19(1)(g) of the Constitution;

(d) Interim relief restraining ICICI from taking any coercive steps or other measures to alter the status of Transcon’s loan account to an NPA.

The purport of the first prayer may be questionable, but what is beyond doubt is that the second prayer was sought as a mandamus against a private entity not covered within the ambit of Article 12 of the Constitution. Naturally, ICICI raised a preliminary objection to the maintainability of Transcon’s petition. In what constitutes a creative moulding of reliefs in favour of Transcon, the Court proceeded to pass an ad-interim order directing ICICI to exclude the period in which these is an overlap between the moratorium period and the nationwide lockdown from the computation of the 90-day NPA declaration period, thus granting time to Transcon for regularising its defaulted payments after lifting of the lockdown. The question of maintainability of the petition was left open to be decided at a later date. It is the view of the author that such an order passed by the Court is beyond the scope Article 226 of the Constitution of India.

At the outset, the issue of maintainability ought to have been considered by the Court as a precursor to granting ad-interim reliefs which had the effect of allowing in substance what Transcon was seeking under prayer (d) read with prayer clause (b) of its petition. The jurisdiction of the Court to entertain Transcon’s petition was not challenged by ICICI on the basis of some procedural irregularity, but based on a substantial one regarding the Court’s lack of inherent jurisdiction to exercise the public law remedy under Article 226 of the Constitution against ICICI. The Court even noted that,

10. … A mandamus is sought, but without any pleading that justice, though demanded, has been denied. The law on this is well-settled. Similarly, there is not even a whisper of an averment as to how the two Respondents are amenable to the writ jurisdiction of this Court …,

Yet, it proceeded to observe in the same paragraph that:

Those matters, though in my view crucial, are perhaps best left for another day. The Petitioners are put to notice that these are among the questions they will have to deal with at some stage.

It was in this manner that the Court proceeded to undertake no enquiry on the issue of maintainability, apart from merely noting the rival contentions of the parties and deferring this enquiry to a future date. Assume that Transcon takes the benefit of the order, regularises its payments, but subsequently, the regular division bench of the Court concludes that the petition was indeed without jurisdiction – the clock cannot be set back in time. Irreparable injury would thus be caused to ICICI, which could have taken consequential measures in law to proceed against Transcon after declaration of its account as an NPA. Having decided to grant ad-interim reliefs in the petition in the aforesaid manner, a substantial public law defence to exercise of jurisdiction under a discretionary provision has been rendered nugatory by the Court, and is irreconcilable with the maxim actus curiae neminem gravabit, viz., that an act of the court shall prejudice no man.

Nothing prevented the Court from either conclusively dealing with the issue of maintainability or permitting Transcon at the threshold to withdraw the petition and file a civil suit with an accompanying application for interim reliefs, akin to the previous case before the Bombay High Court arising in context of the self-same RBI Directives. Urgency, and/or exceptional circumstances resulting from the coronavirus pandemic would be no defence to deferring the question of maintainability to a future point in time when the exercise, even if successfully determined in favour of the contesting respondent, loses complete relevance. There is certainly potential for abuse associated with this manner of proceeding with a writ petition, as pressing urgency can arise in other petitions in the future, dehors the pandemic, with this decision being cited as a precedent for postponing an enquiry into the otherwise preliminary issue of maintainability, even when the same is an ex facie plausible enquiry like in this case.

In any event, even assuming that Transcon’s petition was indeed maintainable, there is a further point which needs consideration.

What Transcon was seeking through its petition can be prima facie made out from one of the contentions recorded within the order:

9. … What is being assailed here is not any action by the ICICI Bank on its own but a circular issued by the RBI, the 2nd Respondent, which is undoubtedly an instrumentality of the State within the meaning of Article 12 of the Constitution of India. … What the Petitioners, therefore, seek is not that the ICICI Bank should act in any particular manner that violates RBI directives or guidelines but, rather, an interpretation of those circulars and guidelines applicable to the moratorium period so as to bind ICICI Bank. What is being questioned here is a directive or set of directives issued by an instrumentality of the State — the RBI — and what the Petitioners seek is an interpretation of those directives and circulars to bring them into accord with their avowed objective. … (emphasis added)

However, quite contrary to the aforesaid, the Court did not interpret or give a wider construction to the RBI Directives in the manner contended. Rather, it did not interpret or water down the RBI Directives in any manner whatsoever, but proceeded to grant an in personam relief, limited in operation only to Transcon and ICICI, without being binding at all upon the RBI. Certain observations from the order of the Court can be adverted to in this regard:

23. What needs to be done is to fashion a workable order limited to the facts of this particular case ensuring that it sets no precedent for ICICI Bank in other cases and yet ensuring that the Petitioners have enough latitude to be able to service their debt. …

44. It is also clarified that this order will not serve as a precedent for any other case in regard to any other borrower who is in default or any other bank. Each of these cases will have to be assessed on their own merits.

In a writ petition under the Constitution, where the very basis to grant reliefs against ICICI was under challenge and unadjudicated, and where interpretation of the RBI Directives was the only public law element involved, it is disconcerting that the Court has granted ad-interim reliefs as if this were a private lis exclusively between Transcon and ICICI. The caveat that judicial review under Article 226 should not be exercised in a manner which converts the High Court into a mere court of appeal is an old one, but in this case, the High Court seems to have misconstrued its writ jurisdiction with that of a civil court of first instance.

The power under Article 226 may be discretionary, and not confined to granting of prerogative writs. While in personam reliefs can also be granted by the writ court, discretion under Article 226 cannot be exercised in a manner contrary to the mandate of Article 12. In moulding and granting reliefs against a private body, the Court has acted in a manner wholly impermissible in law and expressly contrary to the observations of the Supreme Court, inter alia in Federal Bank v. Sagar Thomas:

… in our view, a private company carrying on banking business as a scheduled bank, cannot be termed as an institution or company carrying on any statutory or public duty. A private body or a person may be amenable to writ jurisdiction only where it may become necessary to compel such body or association to enforce any statutory obligations or such obligations of public nature casting positive obligation upon it. (emphasis added)


In the present case, there was no statutory obligation which the Court called upon ICICI to enforce by way of the order, since the Court expressly shied away from forming any opinion, even a prima facie one in the absence of the RBI being represented by counsel, that the RBI Directives cast a statutory or a positive public obligation in the manner contended by Transcon. It is therefore the author’s view that the said order is beyond the scope of a petition under Article 226 of the Constitution, and is invalid.

Before concluding, it may be noted that even the Delhi High Court order against Yes Bank Ltd. appears to have been similarly passed in a writ petition, that too, without the RBI being arrayed as a party. Despite a challenge as to maintainability not being recorded in the order, in the author’s view, the above observations would apply with equal force. Further, this order would stand vitiated as being contrary to the principles of natural justice as the Delhi High Court interpreted the RBI Directives to arrive at a prima facie view, without any limitation as imposed by the Bombay High Court, in the absence of the RBI being made a party to the petition.

[The author thanks Mihir Naniwadekar for his comments on a draft version of this post.]

Deemed Universities and Article 12 of the Constitution

Krupakar Manukonda has drawn my attention to an interesting Supreme Court judgment handed down yesterday. In Dr. Janet Jeyapaul v SRM University, the question was whether a writ petition was maintainable against the SRM University, which is a “deemed University” within the meaning of S. 3 of the UGC Act (the petitioner had filed a writ petition complaining of unfair termination of services).

The Supreme Court held that the petition was maintainable under Article 226 of the Constitution, since SRM University had been constituted for – and was engaged in – performing a “public function”. In paragraphs 15 and 16, it relied upon De Smith, “a well-known treaty (sic!)” on judicial review, and the English case of R v Panel. This is somewhat curious, since both the treatise and the judgment deal with the scope of judicial review in a common law system sans a Constitution, while in the present case, the issue turned upon the scope of Article 226 of the Constitution. In any event, in paragraph 22, the Court provided five reasons for its decision:

“Firstly, respondent No. 1 is engaged in imparting education in higher studies to students at large. Secondly, it is discharging “public function” by way of imparting education. Thirdly, it is notified as a “Deemed University” by the Central Government under Section 3 of the UGC Act. Fourthly, being a “Deemed University”, all the provisions of the UGC Act are made applicable to respondent No. 1, which inter alia provides for effective discharge of the public function – namely education for the benefit of public. Fifthly, once respondent No. 1 is declared as “Deemed University” whose all functions and activities are governed by the UGC Act, alike other universities then it is an “authority” within the meaning of Article 12 of the Constitution. Lastly, once it is held to be an “authority” as provided in Article 12 then as a necessary consequence, it becomes amenable to writ jurisdiction of High Court under Article 226 of the Constitution.”

The underlined paragraph is a little curious. It is by now well-established that the correct test for determining whether or not a particular body falls within the meaning of “other authority” under Article 12, is whether it is within the “functional, financial and administrative” control of the State. The fact that the legal status of a body is determined by a statute is neither necessary, nor sufficient, for it to fall within Article 12. In the early case of Sukhdev Singh v Bhagat Ram, the Supreme Court had noted:

“A company incorporated under the Companies Act is not created by the Companies Act but comes into existence in accordance with the provisions of the Act. It is not a statutory body because it is not created by the statute. It is a body created in accordance with the provisions of the statute.”

There is a distinction, therefore, between a body that is conferred with a certain legal status under a statute, and a body that is created by the statute. Unarguably, in the former case, the legal status, without anything more, is insufficient to bring the body within the meaning of Article 12. Here, however, the Supreme Court seems to have held that the mere fact that the SRM University is brought within the purview of the UGC Act automatically brings it within Article 12, without any analysis of whether the control test has been satisfied.

Indeed, in 2012, while dealing with an identical issue, the Rajasthan High Court observed:

“Perusal of the pleadings reveals that no facts pertaining to financial or administrative involvement and control of the Central or the State Government in any manner has been pleaded. The only argument is in regard to section 3 of the UGC Act whereby BITS has been declared as ‘deemed to be university’. Merely declaring respondent BITS as deemed to be university does not cover it under Article 12 of the Constitution.”

(The single judge’s opinion has been challenged on the ground that a previous division bench of the Rajasthan High Court had already held BITS to fall within Article 12. Interestingly, in that case, the Court had gone into a detailed analysis of the functional, financial, and administrative control exercised upon BITS by the government – see here).

It is unclear why the Supreme Court needed to go into Article 12 at all. As we have discussed before on this blog, the tests for maintainability under Articles 12 and 226 are different, and the word “authority” has a much broader meaning under Article 226 than it does under Article 12. A public function test is sufficient to attract Article 226, as compared to the much stricter control test under Article 12. This, being an Article 226 case, could have been decided solely on public function grounds. The introduction of Article 12, and the manner in which it has been discussed, raises some concerns about the future direction of law on the point.

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.


What is the State – IV: Agency/Instrumentality as a Function of State Control

In the last post, we saw how the impact of R.D. Shetty was to create a blended legal-functional approach towards interpreting Article 12. Two years afterwards, in 1981, a Constitution Bench of the Court considered the question yet again, in Ajay Hasia vs Khalid MujibJustice Bhagwati, who wrote for the Court in R.D. Shetty, also authored the unanimous opinion in Ajay Hasia. This makes the marked shift in tone between the two cases both striking and surprising.

In Ajay Hasia, the question was whether the Regional Engineering College of Srinagar was “State” within the meaning of Article 12. The College had been established, and its administration was carried on, by a Society that was registered under the J&K Societies Act. Consequently, the first argument of the Society was that it had not been set up by the government under a statute, and so could not come within the meaning of Article 12. Unsurprisingly, following R.D. Shetty, the Court rejected this contention. It cited R.D. Shetty copiously, and declared itself to be following its decision. The impact, however, was rather different.

From the beginning of its analysis (which starts at paragraph 7 of the judgment), the Court focused continuously – and almost exclusively – upon government control as the determining test for Article 12. The tone of the judgment resembles a corporate-veil analysis from company law. The purpose of Article 12’s expanded definition, according to the Court, was to cover those corporations where, “behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government… it is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government.” (Paragraph 7) What seemed to be concerning the Court was the government’s attempt to doing an end run around its Part III obligations by creating the corporate form as a separate legal personality, while maintaining control over it: or, in other words, fraud. Comments to that end are scattered throughout the core of the Court’s analysis, in paragraph 7.

Immediately after that, the Court cited extensive excerpts from R.D. Shetty, before “summarising” that case through six markers of the ambit of “State”: (1) holding of the corporation’s entire share capital by the government; (2) extensive financial assistance; (3) a State-conferred monopoly status; (4) deep and pervasive State control; (5) functions of public importance, or closely related to governmental functions; and (6) transferring a government department to a corporation. (Paragraph 9)

While all six of these features were admittedly present at various points in the R.D. Shetty judgment, the Court here dilutes the functional aspect of the test, by relegating it to one among six factors, most of which are directly about governmental control. In R.D. Shetty, on the other hand, government control (which could be financial, or administrative, or both) was treated as being equally important as the performance of a public function. Not so in Ajay Hasia, where the judgment – and its six criteria – are primarily about preventing the State from acting colourably via a corporate shield.

The Court’s application of the principles to the facts of the case (paragraph 15 onwards) bears this out. After examining the composition of the Society and its board of governors, its finances and its administration, the Court concluded that the “control of the State and the Central Governments is indeed so deep and pervasive”, that the Society was undeniably an instrumentality or agency of the State under Article 12. On the other hand, the Court paid no attention to the function performed by the Society – that of higher education – in its analysis. The functional test, therefore, is conspicuously missing from the Court’s analysis (interestingly, the function of education as a ground for attracting Part III obligations was considered a few years later by Justice Mohan, in his concurring judgment in the Unnikrishnan case).

In cases following Ajay Hasia – P.K. Ramachandra Iyer vs Union of IndiaB.S. Minhas vs Indian Statistical Institute, Central Inland Water Transport Corporation vs Brojo Nath Ganguly, and Chander Mohan Khanna vs NCERT – the judgment invariably turned upon the aspect of control. However, the triumph of the legal test was completed in 2002, in the case of Pradeep Kumar Biswas vs Indian Institute of Chemical Biology, a judgment delivered by a seven-judge bench. The factual matrix of the case is complex: briefly, it involved the reconsideration of Sabhajit Tewari’s case, in which a Constitution bench had held that the Council of Scientific and Industrial Research was not “State” within the meaning of Article 12. In Pradeep Kumar Biswas, Justice Ruma Pal went into the history of the Supreme Court’s Article 12 jurisprudence, and distinguished between a “narrow” and a “broad” approach to Article 12. For her, however, the difference was not between the legal and the functional approach, as we have discussed, but between the statutory approach (in the earliest cases), and the legal approach (Rajasthan Electricity Board onwards). In her judgment, the functional test is erased out of history: Justice Mathew’s concurrence in Sukhdev Singh and the judgment in R.D. Shetty are simply treated as affirming the legal approach, which was ultimately crystallised in Ajay Hasia.

Having listed Ajay Hasia’s six factors, Justice Ruma Pal decided to crystallise them further. The teaching of the cases that culminated in Ajay Hasia, she held, was “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.” Here, the entire focus is on control, and the public-function aspect has disappeared altogether.

Justices Lahoti and Raju recorded a dissenting opinion. They argued that the majority – as well as the line of cases that it had relied upon – had gone fundamentally wrong in equating “instrumentality or agency” with “other authorities”, under Article 12. If – following Justice Bhagwati’s opinion in Ajay Hasia – the point of the “instrumentality or agency” test was to prevent the government from hiding behind the corporate form, then the actions of the corporation so created could simply be equated to those of the “State” itself, without the necessity of going through “other authorities”. Or, in other words, the actions of a corporation whose directing mind and will is the State, are actions of the State, simply put. Article 12 defines “State” inclusively, but there is no need to resort to terms such as “other authorities”, when the corporate veil has been – colloquially – pierced, and the identity of the corporation equated with the identity of the State.

What then does “other authorities” mean? Justices Lahoti and Raju commenced their enquiry from Article 13. Article 13(1) states that all laws inconsistent with Part III, at the time of the commencement of the Constitution, are void to the extent of such inconsistency. Article 13(2) prohibits the State from passing laws contravening Part III. Article 13(3) defines a “law” as “any Ordinance, order, bye law, rule, regulation, notification, custom or usages having in the territory of India the force of law.” Latching upon this definition of “law”, Justices Lahoti and Raju argued that because the whole point of Part III – as Article 13 demonstrated – was to protect citizens from certain kinds of laws, Article 12’s “other authority” must be such that is competent to make these kinds of laws. This took them back to the “narrow” approach, which they drew from the writings of Seervai, and attributed (in my submission, incorrectly) to Justice Mathew’s concurrence in Sukhdev Singh’s Case. They held that “to be an authority, the entity should have been created by a statute or under a statute and functioning with liability and obligations to public. Further, the statute creating the entity should have vested that entity with power to make law or issue binding directions amounting to law within the meaning of Article 13(2) governing its relationship with other people or the affairs of other people – their rights, duties, liabilities or other legal relations.”

While Justices Lahoti and Raju’s objections to the majority’s use of “instrumentality or agency” are compelling, in my submission, in their interpretation of the term “other authorities”, the conclusion does not necessarily follow from the premise. It is, of course, true that Article 13 lists a specific way in which fundamental rights can be violated (by a law, which will be accordingly void), but that does not imply that that is the only way in which fundamental rights can be violated. Consider the wordings of two different kinds of fundamental rights. Article 14 reads: “The State shall not deny to any person equality before the law, or equal protection of the laws within the territory of India.” Article 15(1) reads: “the State shall not discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.” The difference between the two provisions shows that where the framers envisioned fundamental rights as being violated only by a “law” (under its expanded definition in Article 13(2)), they were explicit about it; at the same time, many of the fundamental rights are worded affirmatively, and make no mention of violation through law. Indeed, in cases like Kharak Singh, the Court has held that Articles 19(2) to 19(6) – which permit reasonable restrictions – by law – on Article 19 fundamental rights – apply only when there is a “law”; if there is no “law”, but only State action, then there is a straightforward violation of fundamental rights. This buttresses the conclusion that – at least in theory – it is possible for violations of fundamental rights to take place in the absence of law. Justice Lahoti and Raju’s dissent is eloquently argued, and their view has much to recommend itself, but the case still remains to be made out.



What is the State – III: Adopting the “Instrumentality or Agency” Test

In the last post, we discussed two approaches towards interpreting the term “other authority” in Article 12, exemplified by the majority and the concurrence in Rajasthan State Electricity Board v. Mohan Lal. The “legal approach” assimilates to the State those entities that the State creates (via statute), or has extensive control over. Or, in other words, the State must, in some way, be closely connected with the workings of the entity in question. The “functional approach”, on the other hand, brings within Article 12  all entities that perform State-like functions. Justice Mathew’s concurring opinion in Sukhdev Singh v. Bhagat Ram, as we saw, shuttled back and forth between the two conceptions, and his “agency and instrumentality” test appears to be agnostic about which approach it favours.

The question came before the Court again, in the 1979 case of R.D. Shetty vs International Airport AuthorityThe International Airport Authority was a corporate body constituted under the International Airport Authority Act of 1971. It invited tenders for running restaurants and snack bars at the Bombay International Airport, and ultimately accepted the highest bid. This decision was challenged, on the ground that in awarding the contract, the Authority had failed to abide by its own stipulations, and in treating similarly situated persons differently, had violated Article 14. The first question, therefore, was whether the International Airport Authority was subject to Article 14 obligations.

The Court’s analysis can be divided into five parts (although the Court itself does not do the division). In the Part I (paragraphs 10 to 12), the Court set out some general principles constraining the action of the government, when it acts as a contractor. In Part II (paragraphs 13 to 18), it analysed the situations under which a corporation can be subjected to the same public law constraints that apply to the government, as listed out in the Part I. In the Part III (paragraphs 19 to 27), it cited precedents that also located Article 14 as the source of these constraints. In Part IV (paragraphs 28 to 32), it extended its analysis in the first and second parts to Article 12, in order to determine when Article 14 obligations would apply to corporations. And in Part V (paragraphs 33 to 36), it applied its legal findings to the case of the International Airport Authority. The key conclusion of the Court is found in paragraph 28 of the judgment, where it referred to the two lines of precedent that we have discussed before, and adopted the broader “instrumentality and agency” test Justice Mathew propounded in his concurring opinion in Sukhev Singh vs Bhagat Ram, as a “perhaps more satisfactory [test]… for determining whether a body… falls within the definition of ‘State’.”

The Court first established the unexceptionable proposition that even when the government is acting as a contractor, it is bound by public law obligations of fairness, non-discrimination and non-arbitrariness. It held that these obligations arose both from Article 14, and from general principles of public and administrative law. The basis for this, the Court found, was in the rapidly expanding functions of the State in the welfare era, where “the power of the executive Government to affect the lives of the people is steadily growing. The attainment of socio-economic justice being a conscious end of State policy, there is a vast and inevitable increase in the frequency with which ordinary citizens come into relationship of direct encounter with State power-holders. This renders it necessary to structure and restrict the power of the executive Government so as to prevent its arbitrary application or exercise.”

Having established this proposition, the Court then held “that the Government which represents the executive authority of the State, may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of juridical persons to carry out its functions.” Once again, the Court referred to the expanding role of the State, which created the environment for the creation and flouring of the public corporation, “as incidental to or in aid of governmental functions.” Naturally, such corporations would be subject to the same public and constitutional law obligations as the State. The key question then became the question of determining when a corporation was an “instrumentality or agency” of the State.

The Court held that that there could be no “cut and dried formula” that would provide the answer, and proceeded to examine a range of alternatives. Citing the American doctrine of State action, it noted that “extensive and unusual financial assistance” from the government might be a relevant consideration. The same considerations applied to an “unusual degree of [State] control over the policies and management” of the corporation (paragraph 15).

These two considerations – financial and administrative control – are, as we can see, part of the legal approach to the meaning of State. In the next paragraph, however, the Court shifted gears: “another factor which may be regarded as having a bearing on this issue and it is whether the operation of the corporation is an important public function.” This, as we have seen before, is a deeply fraught question, and depends almost entirely upon resolving the normative question about the proper role of the State. The Court was acutely aware of the problem, referring to the difficulty in determining “what functions are governmental, and what are not”, and noting that the answer to that question was changing continuously, even as the place of the State in society changed over the years. Nonetheless, ultimately it seemed to settle upon a largely descriptive test: “the modern State operates a multitude of public enterprises and discharges a host of other public functions. If the functions of the corporation are of public importance and closely related to governmental fun ctions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government.” (Paragraph 16). Of course, there is a very important problem with this: what do you do when the State retreats from functions that it used to perform (as is happening under the present, neo-liberal model?). It is quite clear that a descriptive test can be of no help in such a situation: a normative baseline of “State function” is essential.

In affirming the public function test, the Court relied upon the American case of Marsh v. Alabama, which we have discussed before on this blog. In Marsh, a privately owned company-town was required to permit a Jehovah’s Witness to exercise her First Amendment rights by preaching on the sidewalk. In Marsh, there were a number of considerations that went into the final decision: the fact that traditionally, parks, public squares and sidewalks were places for the exercise of First Amendment rights, that there was no viable alternative for the residents of the company town (leading to unequal treatment between people who lived in company towns, and those who lived in ‘regular towns’), and that First Amendment rights were deemed to be superior in importance to property rights. Therefore, Marsh was not decided solely on the ground of a “public function”, and this ambiguity is reflected in the Court’s conclusion, where it held that “the public nature of the function, if impregnated with governmental character or “tied or entwined with Government” or fortified by some other additional factor, may render the corporation an instrumentality or agency of Government.” (Paragraph 18) The exact distinction between a “public function” and “governmental character” remains unclear.

The Court then went on to cite precedents that also required the government to act fairly, when contracting, under Article 14. At this point, the Court had established the public law obligations that apply to the government when it acts as a contractor (Part I), extended those obligations to corporations that were acting as instrumentalities or agencies of the State (Part II), and located a further ground of the obligations in Article 14). Part IV, therefore, became a mirror image of Part II: also extending the Article 14 obligations – in addition to public law obligations – to corporations, by interpreting Article 12. It is here that – as we saw above – the Court simply lifted its “instrumentality or agency” discussion from Part II, and applied it to Article 12 as well, concluding that “[what is relevant and material] is  “whether the Corporation is an instrumentality of the Government in the sense that a part of the governing power of the State is located in the Corporation and though the Corporation is acting on its own behalf and not on behalf of the Government, its action is really in the nature of State action.”

In its analysis of whether or not the International Airport Authority fell within the definition of “State”, the Court undertook an extensive investigation of the nature and form of governmental control, from state financial and administrative control, to the corporation performing the erstwhile governmental function of administering airports, and so on. Crucially, the fact that the International Airports Authority was set up under a statute did not play a determinative (or even significant) role in the Court’s analysis, as it had in previous cases.

Thus, in R.D. Shettythe Court adopted the language of Justice Mathew – “instrumentality or agency” – but subsumed within it both the legal and the functional approaches, developing one composite test that took into account financial and administrative control as well as public function (the Court’s reliance upon Marsh is particularly significant, since in that case the holding turned not upon the company town’s formal association with the State, but almost entirely upon what it was doing), in a holistic, case-specific enquiry.

In the next post, we will continue to chart this development in subsequent cases.

What is the State – II: Two Approaches to Interpreting Article 12

Previously, we discussed some textual approaches to Article 12’s definition of “State”. Recall the key question: against which entities can claims of fundamental rights be raised? At one end of the spectrum is the State itself, and at the other end are private individuals performing private acts . There can be no quibble against the early decision of the Supreme Court in Shrimati Vidya Verma v. Shiv Narain Vermawhere the Court refused to find an Article 21 violation in the case of one individual being detained by another. Quoting Patanjali Shastri J.’s opinion in A.K. Gopalan, the Court held that “as a rule, constitutional safeguards are directed against the State and its organs and that protection against violation of rights by individuals must be sought in the ordinary law.

But there are – as we discussed previously – a host of problematic cases that lie between “State” and “individual”. Bodies created by a statute, bodies that whose management has government representatives, bodies under the administrative control of the government, bodies funded entirely by the government, bodies performing government-outsourced tasks, and so on. Which of these fall within Article 12, and why?

The first time the Court was called upon to seriously grapple with these issues was in the 1967 case of Rajasthan State Electricity Board v. Mohan LalThe case involved a promotion dispute between some workmen and the Rajasthan State Electricity Board. Articles 14 and 16 claims were raised, and consequently, the preliminary question that fell to be determined by the Court was whether the Board came within the purview of Part III, by virtue of being “State” (other authority) under Article 12.

The Rajasthan State Electricity Board was a corporate body that had been constituted under an Act (the Electricity Supply Act, 1948), for the purposes of supplying electricity within the State of Rajasthan. The Board argued that the phrase “other authority” must be read “ejusdem generis” – that is, when a law refers to a number of specific categories, and then ends with a general clause, that general clause must be understood only to contain those things which are part of the common genus to which the specific categories belong. To take a banal example, “BJP, Congress, AAP, TMC and other political parties” does not include the American Democratic Party, because clearly, what is being referred to is Indian political parties. According to the board, the common class running through Article 12 was bodies exercising governmental functions. The Electricity Board, on the other hand, was set up by a statute to carry out commercial activities. Thus – the Board argued – it could not be brought within the ambit of Article 12. It cited decisions from the High Courts of Madras, Mysore and Punjab to contend that Article 12 was limited to “a person or a group of persons who exercise the legislative or executive functions of a State or through whom or through the instrumentality of whom the State exercises its legislative or executive power. In those cases, State Universities had been found not to fall within the ambit of Article 12.

Rejecting this argument – and overturning the judgments of the High Courts – the Supreme Court declined to apply the principle of ejusdem generis, holding that there was no common “genus” running through Article 12. Instead, it turned to the dictionary for the meaning of the word “authority”:

“[Authority means] a public administrative agency or corporation having quasi- governmental powers and authorised to administer a revenue- producing public enterprise.” This dictionary meaning of the word “authority” is clearly wide enough to include all bodies created by a statute on which powers are conferred to carry out governmental or quasi-governmental functions. The expression “other authorities” is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the control of the Government of India.”

According to this language, the test appears to be two-pronged: either the body is created by a statute, or it is under the control of the government. Subsequently, however, the Court appears to run them together, holding that “the expression “other authorities” in Art. 12 will include all constitutional or statutory authorities on whom powers are conferred by law.” Or, in other words, they key test is a statutory connection between the government and the body in question (“control”, perhaps, is a function of creation by statute). The fact that the functions were commercial were irrelevant, since the State itself could clearly carry out trade and business. Thus, the Board – having been established by Statute – was found to come within the scope of Article 12.

Justice Shah concurred in the judgment, but differed on the reasoning. He approached the issue not from the standpoint of the meaning of “Authority”, but from the place of Article 12 in the Constitution – in particular, at the beginning of Part III. According to Justice Shah, Article 12 must be interpreted in the context of Part III, which guaranteed that fundamental individual rights would not be encroached upon. Therefore, what mattered was whether “the authority was invested with the sovereign power to impose restrictions on very important and basic fundamental freedoms… authorities constitutional or statutory invested with power by law but not sharing the sovereign power do not fall within the expression “State” as defined in Art. 12. Those authorities which are invested with sovereign power i.e., power to make rules or regulations and to administer or enforce them to the detriment of citizens and others fall within the definition of “State” in Art. 12.

Justice Shah thus placed special importance on “sovereign power”, which he appeared to understand as an ability to affect fundamental freedoms in a far-reaching. Therefore, his reasons for holding that the Board fell within Article 12 was not that it was created by statute, but that:

“The Board is an authority invested by statute with certain sovereign powers of the State. It has the power of promoting coordinated development, generation, supply and distribution of electricity and for that purpose to make, alter, amend and carry out schemes under Ch. V of the Electricity (Supply) Act, 1948, to engage in certain incidental undertakings; to organise and carry out power and hydraulic surveys; to conduct investigation for the improvement of the methods of transmission; to close down generating stations; to compulsorily purchase generating stations, undertakings, mains and transmission lines; to place wires, poles, brackets, appliances, apparatus, etc; to fix grid tariff; to issue directions for securing the maximum economy and efficiency in the operation of electricity undertakings, to make rules and regulations for carrying out the purposes of the Act; and to issue directions under certain provisions of the Act and to enforce compliance with those directions. The Board is also invested by statute with extensive powers of control over electricity undertakings. The power to make rules and regulations and to administer the Act is in substance the sovereign power of the State delegated to the Board.”

The majority and the concurrence represent two approaches to Article 12, which we may label the “legal approach” and the “functional approach”. The legal approach begins with a certain understanding of the paradigm case of the “State” (the government itself”, and assimilates to “State” those entities that seem to bear a close family resemblance to it. This translates into entities that the government itself creates, or seems to have near-complete control over. The “functional approach”, on the other hand, starts from the perspective of the individual, and the individual’s guaranteed rights that act as limits upon the sovereign power of the State. Bodies that can affect those rights in a manner similar to that of the State, are – under this view – assimilated to the State. The crucial difference between the two approaches is evident if we consider the fact that under Justice Shah’s approach, had the electricity distribution been entirely outsourced to a private party (say, Reliance), it too would have fallen within the ambit of Article 12.

Subsequently, however, in Sukhdev Singh v. Bhagat Ram, a majority of the Court read Rajasthan Electricity Board to have established the narrower proposition that Article 12 was attracted if the body had the power to issue directions whose disobedience could be punished by criminal law, or if it had the power to make, administer and enforce rules and regulations. That case involved three public corporations – the Oil and Natural Gas Corporation, the Life Insurance Corporation and the Industrial Finance Corporation. The majority’s narrow decision holding all three corporations to fall within the meaning of “State”, although clearly correct under both the majority and the concurrence opinions in Rajasthan Electricity Board does not, however, get us very far in a conceptual understanding of Article 12.

Such an analysis was provided by Justice Mathew, in a concurring opinion, although it is extremely difficult to determine a coherent ratio from that judgment. In the beginning, Justice Mathew seemed to adopt both the legal and the functional approach, merging them into one test, which he called “the agency and instrumentality” approach. Entering into a lengthy historical disquisition, he argued that as the role of the State changed from merely establishing law and order to providing for the public welfare, much of those welfare functions began to be performed through the means of corporations. The key observations comes in paragraph 90 of the judgment:

” The Constitution was framed on the theory that limitation should exist on the exercise of power by the State. The assumption was that the State alone was competent to wield power. But the essential problem of liberty and equality is one of freedom from arbitrary restriction and discrimination whenever and however imposed. The Constitution, therefore, should, wherever possible, be so construed as to apply to arbitrary application of power against individuals by centers of power. The emerging principle appears to be that a public corporation being a creation of the State is subject to the Constitutional limitation as the State itself. The pre-conditions of this are two, namely, that the corporation is created by State, and, the existence of power in the corporation to invade the Constitutional right of individual.”

The intriguing point about this paragraph is that it is based on a non-sequitur. If the Constitution ought to apply to wherever there is arbitrary application of power be centers of power, it does not follow – at all – a corporation must be State-created to fulfill those conditions (again, Reliance is a classic example). In other words, in substance, Justice Mathew put forward an argument for the functional approach, but in conclusion, he subordinated it entirely to the legal approach. In fact, he takes the majority and concurring opinions in Vidya Verma, and holds that the requirements laid out in both must be satisfied for Article 12 to be attracted!

Immediately afterwards, however, he moved away from that conclusion, noting that:

Generally speaking, large corporations have power and this power does not merely come from the statutes creating them. They acquire power because they produce goods or services upon which the community comes to rely.”

The rest of the opinion is devoted to a meandering analysis that seems to constantly shift back and forth between some variants of the legal and the functional approach, talking about financial aid, tax exemptions, control over management policies, public functions… and ultimately comes to rest somewhere midway, expressed as:

” The ultimate question which is relevant for our purpose is whether such a corporation is an agency or instrumentality of the government for carrying on a business for the benefit of the public.”

“Agency or instrumentality” is not a self-interpreting term, however, and the true test, after the judgments in Rajasthan Electricity Board and Bhagat Ram, was still fuzzy. It would be up to later judgments to clarify it.


What is the “State”? – I: Article 12 and Constitutional Obligations

When we think of a Bill of Rights, there are two structural questions that we must answer before we even get to analysing its substantive content. Against whom are the rights enforceable – i.e., which parties are subject to the obligations that the rights impose. And who is entitled to enforce the rights – a question that often (but by no means always) translates into the question of which parties do the rights protect. Both these questions have been controversial. Evidently, individuals are beneficiaries of fundamental rights. But what about corporations? If individuals incorporate in order to do business, it would seem perverse to deny the right to carry on a business or profession to the corporation. But how about other non-commercial rights, like the freedom of speech and the freedom of religion? The church exists in a corporate form, but surely the church has freedom of religion rights separate and independent from the rights of its members? But what about a for-profit corporation whose owners have certain religious beliefs, which they wish to exercise in hiring decisions? Again, the press exists in corporate form, and if there’s anything that free speech includes, it’s the freedom of the press. But what about corporations donating large sums of money to political candidates, and justifying it on free speech grounds? The issues are endless, complex and often intractable.

In this series of posts, however, I wish to examine the first question: against which entities can fundamental rights be invoked?

Textually, the answer is present in Article 12 of the Constitution:

“In this part [i.e., Part III], unless the context otherwise requires, the State includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.”

One of the important rules of legal interpretation is the rule of ejusdem generis. When a legal text has a number of specific and concrete terms, followed by a general term, then the general term must be interpreted to contain only that which would broadly be consistent with the specific terms. Insofar as Article 12 begins with the terms “the Government and Parliament of India and the Government and Legislature of each of the States”, the phrase “other authorities” – under the rule of ejusdem generis, ought to be interpreted in a manner consistent with the concrete terms that come before it. That is, “other authorities” must be confined to State-like entities.

This is not altogether surprising. Classically, bills of rights are designed to structure a vertical relationship between State and citizen. The regime of private law – the law of contract and tort – operate between citizens, while the regime of non-Constitutional public law – e.g., criminal law – operates between citizens via enforcement by the State. That, very roughly, is what the legal map would look like.

To understand why, a brief excursion into history would be apposite. Bills of rights – in their modern form – first emerged out of the Glorious Revolution in England (1689), the American Revolution (1776) and the French Revolution (1789). These revolutions were driven by a rising bourgeois class, against the dying vestiges of feudalism, and its concomitant aspects such as hereditary nobility, a landed gentry, and an economic system based around feudal relations of lord and vassal, serf and master. Consequently, while the bourgeois framed the language of the revolution in universal terms, it ultimately reflected their class interests. This is particularly evident in these Bills of Rights. Because the greatest threat to the bourgeois was an over-intrusive State meddling with trade, the primary functions that Bills of Rights played was to wall off an entire sphere of action from State interference, within which the bourgeois were free to shape their economic relations as they saw fit. The rights that we now take for granted as universal human rights – rights of expression, religion and so on – had their origins in the bourgeois’ desire to construct an unregulated economic realm free from State interference.

This explains why bills of rights were exclusively enforceable against the State. The standard answers – that there is something particularly egregious about State oppression as opposed to private oppression, and/or the State has much greater power, and so we must be particularly solicitous in protecting individuals against the State – might explain part of the issue, but not all of it. We are well aware that economic relations exist between private parties, and ultimately, are as powerful a weapon in a society of deeply unequal resource distribution, as is the coercive power of the State (the history of industrial Europe in the 19th century bears this out). The complete explanation, as we have noticed, lies elsewhere.

This model was upset in the mid-20th century, with the philosophical discrediting of laissez-faire economics, and the advent of the welfare State. The conception of the State changed from the classical liberal vision of simply guaranteeing law and order so that private parties could shape their own economic relations without interference, to a provider of important public goods ranging from education to healthcare to transport to essential commodities. Oftentimes, especially in mixed economies, the State would carry out many functions working alongside private corporations.

The philosophical shift in the functions of the State, however, also led to a corresponding philosophical shift in the idea of a bill of rights. If, now, the baseline of legitimate State action is the provision of public goods, then it stands to reason that whoever is in charge of providing those public goods ought to be subject to obligations under the bill of rights. So, for example, if we hold that it is the State’s task to provide low-cost, accessible healthcare to all its citizens, then insofar as that function is outsourced to a private party, that private party continues to perform a State function. Correspondingly, the argument goes, we are justified in imposing fundamental rights obligations upon that private party, as long as it continues to be in the shoes of the State.

We will see strands of these arguments in the important cases that the Supreme Court has decided under Article 12. Interestingly, however, there is a textual hook on which to hang this ideas. Consider again:

“In this part [i.e., Part III], unless the context otherwise requires, the State includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.”

An equally important interpretive principle is the principle against surplusage. The legislature is deemed not to have wasted its words, and thus, an interpretation that renders a word or a phrase superfluous, is to be avoided. Here we can see that two phrases have been used: “within the territory of India” and “under the control of the Government of India”. They are connected by the word “or”, which implies that they are disjunctive. Consequently, there is a set of bodies that comes under Article 12, which is not under the control of the Government of India.

There are three possible ways of interpreting this. First, this refers to bodies under the control of the State governments. This is unsatisfactory, however, because it is clear that where the framers wanted to specify “under the control of…”, they expressly included it in the constitutional text. In other words, it seems strangely inconsistent drafting to specify “under the control of” when it comes to the federal government, and imply the same when it comes to the State government. It would have been far more convenient – and lucid – to have said, for example, “under the control of the Government of India or the legislatures of the States“.

Secondly, “within the territory of India” might be narrower than “under the control of the Government of India”, referring only to bodies expressly set up under statute. This would seem, again, to make part of the provision superfluous, because presumably statutory bodies, that owe their very existence to parliamentary legislation, are “under the control” of the Government.

The last option is to read “within the territory of India” as covering a set of circumstances parallel to that of bodies “under the control of the government”: that is, private bodies not under the control of the government, but performing governmental functions. This, of course, was the upshot of our theoretical distinction – and I argue that it is the interpretation supported by the most natural reading of the text, and the historical circumstances in which the Constitution came about.

This means, in turn, that the interpretation of Article 12 must be steeped in political philosophy. The interpreter needs to set her conceptual baseline for what she considers to be legitimate State functions – and it is on that basis that the term “other authority” will be interpreted.

Keeping this framework in mind, both historical and conceptual, we shall examine the Supreme Court’s approach to this question, in the coming posts.



Guest Post: Judicial Accountability and Fundamental Rights – II

[This is the second – and concluding – guest post by Krishnaprasad K.V., an M.Phil candidate at the University of Oxford, and formerly of NLSIU Bangalore (2012)]

Part I in this series of posts attempted to survey the precedent. The crux of the argument there was this – contrary to the assertion of a Constitution bench of the Supreme Court in Ashok Rupa Hurra, the proposition that judicial orders may be subject to Part III scrutiny is not foreclosed by precedent. I will make two further points here. First, there are strong reasons in principle for concluding that judicial orders must indeed be scrutinised on the basis of Part III standards. Second, the seemingly worrying consequences of this proposition (some of which were highlighted by responses to the previous post) are capable of resolution through other means. I will consider each of these in turn.

A. Principle

There are at least three reasons in principle that, in my view, dictate the conclusion that judiciary does fall within the purview of “State” as defined by Art. 12 of the Constitution.

First, Art. 12 adopts an institutional (as opposed to a functional) classification. The scope of Art. 12 must therefore be determined on the basis of the nature of the entity concerned, not the function it performs. A literal reading of Art. 12 should suffice to vindicate this claim:

“In this Part, unless the context otherwise requires, “the State’’ includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India.”

This conclusion when read in light of the Constitution bench decision of the Supreme Court in P. C. Garg v Excise Commissioners provides powerful support for the view that I advance here. In P. C. Garg, the petitioners challenged the validity of one of the rules made by the Supreme Court in exercise of its powers under Art. 145. The impugned rule provided that the Court may impose such conditions as to costs and security as it deems fit, including in petitions under Art. 32. Holding that these rules were indeed capable of violating Part III norms, Gajendragadkar J. reasoned as follows:

“If any of the provisions of such a law were to contravene any of the fundamental rights guaranteed by Part III, they would be struck down as being unconstitutional. Similarly, there can be no doubt that if in respect of petitions under Art. 32 a law is made by Parliament as contemplated by Art. 145(1), and such a law, in substance, corresponds to the [impugned provision], it would be struck down on the ground that it purports to restrict the fundamental right guaranteed by Art. 32. The position of an order made either under the rules framed by this Court or under the jurisdiction of this Court under Art. 142(1) can be no different.” (emphasis mine)

It may be argued that, in the light of the nature of the impugned provision in P. C. Garg, that decision must be confined to legislative actions by judicial bodies. However, as noted above, this argument sits uneasily with the wording of Art. 12. It is difficult to see how a functional distinction of this nature can be accommodated within the clearly institutional classification adopted by Art. 12.

Secondly, it is now clear that textual ambiguities in the Constitution may be resolved by reference to Constituent Assembly debates (authority for this proposition may be found here, here and here). The view advanced here draws strong support from the Constituent Assembly Debates. In the Constituent Assembly, concerns regarding the textual ambiguities in Art. 12, and in particular, the meaning of the phrase ‘other authorities’ were raised. It was suggested that leaving judicial bodies out of the purview of Art. 12 may lead to the conclusion that “even a Magistrate… might pass an order, or make a notification abridging the rights that are conferred under sub-clause (a) of clause (1) of article 13.” [Constituent Assembly Debates, Vol. VII, p. 609 (1950)]. In response to this concern, Dr. B. R. Ambedkar clarified that “authority” for the purposes of Art. 12 subsumed within its scope “every authority which has got either power to make laws or the power to have discretion vested in it” [Constituent Assembly Debates, Vol. VII, p. 610 (1950)]. It is indisputable that courts fall within the purview of the latter category. (The research on Constituent Assembly Debates is sourced from Ms. Kalyani Ramnath’s article in the National Law School of India Review, available here). Notably, in recognition of the intention of the framers, the National Commission to Review the Working of the Constitution headed by Justice M. N. Venkatachaliah also made the following recommendation:

The definition of ‘the State’ in article 12 being an ‘inclusive’ one, courts have ruled that where there is pervasive or predominant governmental control or significant involvement in its activity, such bodies, entities and organizations fall within the definition of ‘the State’. It is recommended that in article 12 of the Constitution, the following Explanation should be added:- ‘Explanation – In this article, the expression “other authorities” shall include any person in relation to such of its functions which are of a public nature.’ (emphasis mine)

Finally, it appears that many provisions in Part III are, at least in part, directed at judicial bodies. A good example is the power of the Supreme Court under Art. 32 to issue the writ of certiorari. Since that power can only be exercised against judicial or quasi-judicial bodies, the view that judicial orders fall outside the purview of Part III renders it nugatory. [H. M. Seervai, Constitutional Law of India: A Critical Commentary, 4th edn., p. 394]. Another set of similar examples may be found in the rights guaranteed by Art. 20 of the Constitution. Consider for instance, the right not to be “convicted of any offence except for violation of a law in force at the time of the commission.” Since conviction cannot but be by a judicial authority, it is clear that the addressee of the right under Art. 20(1) is the judiciary. Similar is the case with the right not to be “prosecuted and punished for the same offence more than once” and the right of an accused to not be “compelled to be a witness against himself.” These rights are inexplicable on the view that judicial orders fall outside the purview of Part III.

In the light of these reasons, it is submitted that the mere fact that “judiciary” does not find express mention in Art. 12 should not lead one to the contrary conclusion. This is especially so since the nature of the definition in Art. 12 is expressly inclusive.

B. Consequences

Bringing judicial orders within the purview of Part III scrutiny may give rise to several seemingly worrying consequences. If orders made by the Supreme Court are capable of offending Part III rights, does that mean that those orders can be infinitely challenged by way of Art. 32 petitions? Are the Court’s decisions on those Art. 32 petitions then amenable to further challenge? If yes, when will this lead to a final resolution? In my view, the answer to these questions must be found in the proposition that the right guaranteed by Art. 32 is not an absolute right. The right to move the Supreme Court to enforce rights guaranteed by Part III, must itself be subject to reasonable restrictions.

It may objected that the text of Art. 32 (in contrast to Art. 19, for example) does not expressly make it subject to such restrictions. In my view, however, this is not conclusive. An interesting analogy in favour of this view may be found in the Supreme Court’s jurisprudence on Art. 26(c). That provision reads:

“Subject to public order, morality and health, every religious denomination or any section thereof shall have the right: …(c) to own and acquire movable and immovable property.”

In Acharya Narendra Prasadji v. State of Gujarat (AIR 1974 SC 2098), the Court had occasion to consider an interesting argument concerning the scope of permissible restrictions on this right. Admittedly, the impugned legislation in that case, the Gujarat Devasthan Inams Abolition Act, 1969, did not relate to public order, morality or health which are the express grounds listed in Art. 26(c). Despite this, it was argued that the Gujarat Act imposed a reasonable restriction on the right under Art. 26(c). This argument was upheld by a Constitution bench of the Supreme Court. It was held that:

“The question, therefore, arises whether the right under Article 26(c) is an absolute and unqualified right to the extent that no agrarian reform can touch upon the lands owned by the religious denominations. No rights in an organised society can be absolute. Enjoyment of one’s rights must be consistent with the enjoyment of rights also by others.”

If this is true for Art. 26(c), it must equally be true for Art. 32. This is especially so since, in contrast to Art. 26(c) Art. 32 only guarantees the right to move the Supreme Court “by appropriate proceedings.” This phrase is capable of being interpreted as embodying an inherent restriction on the scope of that right.

Further vindication of this view may be found in a recent line of decisions of the Supreme Court that take the view that, at least under some circumstances, the Supreme Court may exercise its discretion to not entertain Art. 32 petitions when the alternative remedy in the form of Art. 226 is available. Consider for instance, the decision in State of West Bengal v Ratnagiri Engineering Pvt. Ltd. There, a division bench of the Supreme Court held:

This writ petition has been filed under Article 32 of the Constitution for declaring the amendment brought about in the West Bengal Land Reforms Act, 1955… as unconstitutional…. In our opinion, the petitioner can file a writ petition before the High Court under Article 226 of the Constitution for this purpose. Hence, we are not inclined to entertain this writ petition under Article 32 of the Constitution.

The same approach was adopted by the Supreme Court in Satish Chandra v Registrar of Cooperative Societies, Delhi and Mohammed Ishaq v S. Kazam Pasha. In my view, the best rationalisation of these decisions is that, the court’s exercise of discretion in not entertaining these petitions constitutes a reasonable restriction on the scope of the right guaranteed by Art. 32.**

In sum, there are strong reasons in principle for concluding that judiciary must be held accountable to Part III norms. However, admittedly, accepting this view may lead to the result that Art. 32 petitions will now be filed in circumstances under which they were not previously available. In my view, an approach that addresses these consequences head-on is preferable to one that turns a blind-eye to the principled reasons that dictate a contrary conclusion. However, I have not attempted to exhaustively define how each of the circumstances under which Art. 32 petitions may be filed, can be dealt with. My attempt is only to suggest that the correct methodology for dealing with the ‘infinite regress’ problem may lie in the recognition that the right under Art. 32 is itself subject to reasonable restrictions.

** This is not to suggest that these decisions are correct in result though. In my view, they are not. In the interests of clarity, I will briefly explain why. As per the decision in Daryao v State of U.P. it is clear that decisions of High Courts while dismissing petitions under Art. 226 constitute res judicata for the purposes of subsequent petitions under Art. 32. Thus, once a petition under Art. 226 has been dismissed by a High Court, a subsequent petition under Art. 32 will succeed only if the ground on which the former petition was dismissed is not a ground applicable to Art. 32 petitions. Now, consider this result in the light of the above decisions. This leads one to the conclusion that Art. 32 will be available to the petitioner in extremely restrictive circumstances i.e. only when the previous petition under Art. 226 was dismissed on a ground that is inapplicable to Art. 32. In more general terms, the reason why this line of decisions in wrong is not because Art. 32 is an absolute right, but because the restriction that these case impose is not a reasonable one.