LLM Notes: Are Public Utility Services “State” for the purpose of Article 12 of the Constitution of India?

  Should the definition of Article 12 be widened in the era of Liberalization, Globalization, and Privatization? Explain with the help of case laws.

Meaning of Article 12 – “State”

·       Article 12 of the Indian Constitution defines “State” as including:

o   The Government and Parliament of India,

o   The Government and Legislature of each State,

o   All local or other authorities within the territory of India or under the control of the Government of India.

·       The objective is to clarify to whom fundamental rights can be enforced against.

Whether Public Utilities are “State” Under Article 12

·       Public Utility Services refer to organizations providing essential daily services to citizens – e.g., electricity (MSEB, TATA Power), water supply, transport (MSRTC, BEST, Railways), telecommunications (BSNL), gas supply, public health, postal services, etc.

·       Public Utilities often fall under “other authorities” in Article 12, particularly if:

o   They are set up under a statute,

o   Owned, controlled, or substantially financed by the government,

o   Performing public functions.

Judicial Interpretation and Case Law

1.       R.D. Shetty v. International Airport Authority (1979)

o   The Supreme Court held that if a body is financially, functionally, and administratively dominated or controlled by the government, it is an instrumentality or agency of the State under Article 12.

o   Introduced the “Instrumentality of the State” test.

2.       Ajay Hasia v. Khalid Mujib (1981)

o   Provided criteria to decide if a body is a “State”:

§  Government’s full or substantial financial support,

§  Deep and pervasive control,

§  Uniqueness of functions (public interest),

§  If the entity is performing a governmental or public function.

o   Even if a body is technically private, but meets these tests, it can be considered “State”.

3.       Zee Telefilms Ltd. v. Union of India (2005)

o   The Supreme Court held BCCI is not “State” since it is not substantially controlled by the government, nor set up under statute, despite performing public functions.

o   The case sets limits on the expansion of Article 12 to purely private bodies.

4.      Electricity Board of Rajasthan v. Mohan Lal (1967)

o   Held that State Electricity Boards, created by statute and under governmental control, are “State”.

5.       Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002)

o   Held that even if an institution is created by statute and largely controlled by the government, it will fall under “State” for the purpose of enforcing Fundamental Rights.

Summary Table

Case	Body in Question	Held as “State”?	Reason
R.D. Shetty (1979)	International Airport Authority	Yes	Government instrumentality/control
Ajay Hasia (1981)	Engineering College	Yes	Deep government control/financing
Zee Telefilms (2005)	BCCI	No	Not statute established, nor government controlled
Rajasthan Elec. Board v. Mohan Lal	State Electricity Board	Yes	Created by statute, under government
Pradeep Kumar Biswas (2002)	Indian Institute of Chemical Biology	Yes	Government control/ownership

 

In the Era of Liberalization, Globalization, and Privatization (LPG)

·       Many public services are now delivered by the private sector (e.g., private power distribution, telecom, transport).

·       Issue: Should private bodies performing public functions be covered by Article 12?

o   Present test: Only those with strong government nexus/control are “State”.

o   However, with critical public services handled by private actors, leaving them outside the scope of fundamental rights risks citizens’ access and remedies for public wrongs.

Need to Expand the Definition

·       Why?

o   To ensure entities that impact fundamental rights and welfare (private companies in health, water, telecom, etc.) respect constitutional protections.

o   Prevents avoidance of constitutional duties by outsourcing public functions.

·       Judicial Support:

o   Even if an entity is private, if it is performing functions of public importance, courts have sometimes imposed public law obligations (see MC Mehta v. UOI, for environmental matters).

o   The tendency is to interpret “State” expansively to safeguard rights, but within some logical and practical limits.

Conclusion

·       Public utilities which are government-controlled/statutory are “State” under Article 12 and subject to fundamental rights enforcement.

·       In the LPG era, there is a strong argument (supported by social needs, case law trends, and academic thought) for widening Article 12 to include private entities that perform duties of a public character or wield significant governmental power.

·       The judiciary is cautious, not to make every private entity “State”, but emphasizes examining the degree of control, function, and government involvement.

·       Case law consistently supports expanding constitutional accountability for all bodies—public or private—that perform crucial public functions affecting citizen rights.

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