Ajay Hasia Vs. Khalid Mujib Sehravardi & Ors [1980] INSC 219 (13 November 1980)

BHAGWATI, P.N.

CHANDRACHUD, Y.V. ((CJ) KRISHNAIYER, V.R.

FAZALALI, SYED MURTAZA KOSHAL, A.D.

CITATION: 1981 AIR 487 1981 SCR (2) 79 1981 SCC (1) 722

CITATOR INFO:

R 1981 SC1009 (11,12) D 1981 SC1771 (3,6,9) F 1983 SC 130 (14) R 1983 SC 580 (9) F 1984 SC 363 (20) F 1984 SC 541 (8,13,14) F 1984 SC 873 (7,9,11) D 1984 SC1056 (7) RF 1984 SC1361 (19) F 1985 SC 364 (8) R 1985 SC1416 (94) R 1986 SC 596 (2) RF 1986 SC1370 (101) R 1986 SC1571 (59,69,105) E&D 1987 SC 454 (22,25) RF 1987 SC1086 (17,26) APL 1988 SC 469 (9,10,11,12) R 1988 SC1369 (11) R 1988 SC1451 (8) APL 1989 SC 88 (7) RF 1989 SC 341 (14) R 1989 SC 903 (32) F 1989 SC1642 (25) E 1989 SC1977 (7) APL 1990 SC 334 (104) R 1990 SC1031 (12) RF 1990 SC1277 (46) R 1990 SC1402 (29) RF 1991 SC 101 (32) RF 1992 SC 76 (2,8) F 1992 SC1858 (19)

ACT:

Admission to Engineering College-Jammu & Kashmir Regional Engineering College, Srinagar, registered as a society under the Jammu & Kashmir Registration of Societies Act, 1898-Whether a "State" under Article 12 of the Constitution and amenable to writ jurisdiction.

Viva voce test-Interview of each of the candidates lasting only two or three minutes asking formal questions relating to the candidates parentage and residence and without any relevance to the subject for which marks were allocated, whether arbitrary-Allocation of 1/3 of the total marks required for the qualifying examination for the viva voce-Whether bad, unreasonable and arbitrary-Whether prescribing different admission procedures for candidates belonging to the State of Jammu & Kashmir and candidates belonging to other State is violative of the Equality Clause under Article 14.

HEADNOTE:

Dismissing the writ petitions, the Court

HELD : (1). Having regard to the Memorandum of Association and the Rules of the Society, the respondent college is a State within the meaning of Article 12. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction.

The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is in-charge of general superintendence, direction and control of the affairs of the Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. The State Government and by reason of the provision for approval, the Central Government also thus have full control of the work- 80 ing of the Society and therefore, the Society is merely a projection of the State and the Central Governments. The voice is that of the State and the Central Governments. The Society is an instrumentality or the agency of the State and the Central Governments and it is an "authority" within the meaning of Article 12. If the Society is, an "authority" and, therefore, the "State" within the meaning of Article 12, it must follow that it is subject to the constitutional obligation under Article 14. [99F-H, 100 K-F] (2) The expression "other authorities", in Article 12 must be given an interpretation where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool, for constitutional law must seek the substance and not the form. The Government may act through the instrumentality or agency of juridical persons to carry out its functions, since, with the advent of the welfare State its new task have increased manifold. [90B-D] It is, undoubtedly, true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but 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. It is clear that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity. If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations. If such a corporation were to be free from the basic obligation to obey the Fundamental Rights, it would lead to considerable erosion of the efficiency of the Fundamental Rights, for in that event the Government would be enabled to override the Fundamental Rights by adopting the stratagem of carrying out its functions through the instrumentality or agency of a corporation, while retaining control over it. The Fundamental Rights would then be reduced to little more than an idle dream or a promise of unreality. [91B-F] The Courts should be anxious to enlarge the scope and width of the Fundamental Rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activities, whether through natural persons or through corporate entities, to the basic obligation of the Fundamental Rights. The constitutional philosophy of a democratic socialist republic requires the Government to under take a multitude of socioeconomic operations and the Government, having regard to the practical advantages of functioning through the legal device of a corporation, embarks on myriad commercial and economic activities by resorting to the instrumentality or agency of a corporation, but this contrivance of carrying on such activities through a corporation cannot exonerate the Government from implicit obedience to the Fundamental Rights. To use the 81 corporate methodology is not to liberate the Government from its basic obligation to respect the Fundamental Rights and not to override them. The mantle of a corporation may be adopted in order to free the Government from the inevitable constraints of red-tapism and slow motion but by doing so, the Government cannot be allowed to play truant with the basic human rights, otherwise it would be the easiest thing for the government to assign to a plurality of corporations almost every State business such as Post and Telegraph, TV, Radio, Rail, Road and Telephones-in short every economic activity-and thereby cheat the people of India out of the Fundamental Rights guaranteed to them. That would be a mockery of the Constitution and nothing short of treachery and breach of faith with the people of India, because though apparently the corporation will be carrying out these functions, it will in truth and reality be the Government which will be controlling the corporation and carrying out these functions through the instrumentality or agency of the corporation. Courts cannot by a process of judicial construction allow the Fundamental Rights to be rendered futile and meaningless and there by wipe out Chapter III from the Constitution. That would be contrary to the constitutional faith of the post-Menaka Gandhi era. It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation. If a corporation is found to be a mere agency or surrogate of the Government, "in fact owned by the Government, in truth controlled by the government and in effect an incarnation of the government," the court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the government and, therefore, not subject to the constitutional limitations. Therefore, where a corporation is an instrumentality or agency of the Government, it is an authority within the meaning of Article 12 and, hence, subject to the same basic obligation to obey the Fundamental Rights as the government. [91G-H, 92A-G] R. D. Shetty v. The International Airport Authority of India & Ors., [1979] 1 S.C.R. 1042 and U.P. Warehousing Corporation v. Vijay Narain, [1980] 3 S.C.C. 459, followed.

(3) The test for determining as to when a corporation can be said to be an instrumentality or agency of Government may be culled out from the judgment in the International Airport Authority's case. They are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government with the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. The relevant tests gathered from the decision in the International Airport Authority's case may be summarized as: (i) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government. (ii) 'Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character.' (iii) 'It may also be a relevant factor...... whether the corporation enjoys monopoly status which is the State conferred or State protected.' (iv) 'Existence of 'deep and pervasive State control may afford an indication that the Corporation is a state 82 agencies or instrumentality.' (v) 'If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation an instrumentality or agency of Government.' (vi) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of Government."[96F-H, 97A-D] It is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The enquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government company or a company formed under the Companies Act, 1956 or it may be a society registered under the Societies Registration Act, 1860 or any other similar statute. Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article

12. [97F-H, 98A-B] (4) Merely because a juristic entity may be an "authority" and, therefore, "State" within the meaning of Article 12, it may not be elevated to the position of "State" for the purpose of Articles 309, 310 and 311 which find a place in Part XIV. The definition of "State" in Article 12 which includes an "authority" within the territory of India or under the control of the Government of India is limited in its application only to Part III and by virtue of Article 36, to Part IV and it does not extend to the other provisions of the Constitution and, hence, a juristic entity which may be "State" for the purpose of Parts III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution. [98B-D] S. L. Aggarwal v. Hindustan Steel Ltd., [1970] 3 S.C.R.Sabhajit Tewary v. Union of India & Ors., [1975] 3, S.C.R. 616 and Sukhdev Singh v. Bhagat Ram, [1975] 3 S.C.R.

explained and distinguished.

(5) Article 14 must not be identified with the doctrine of classification. What Article 14 strikes at is arbitrariness because any action that is arbitrary, must necessarily involve negation of equality. The doctrine of classification which is evolved by the courts is not para- phrase of Article 14 nor is it the objective and end of that Article. It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and therefore constituting denial of equality. If the classification is not reasonable and does not satisfy the two conditions, namely, (1) that the classification is founded on an intelligible differentia and (2) that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action, the impugned legislative or executive action, would plainly be arbitrary and the guarantee of equality under Article 14 would be breached. Wherever, therefore, there is arbitrariness in State action whether it be the 83 legislature or of the executive or of an "authority" under Article 12, Article 14 immediately springs into action and strikes down such State action. In fact, the concept of reasonableness and non-arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution. [100G, 102D-F] E.P. Royappa v. State of Tamil Nadu, [1974] 2 S.C.R.

Maneka Gandhi v. Union of India, [1978] 2 S.R. 621 and R. D. Shetty v. The International Airport, Authority of India, & Ors., [1979] 1 S.C.R. 1042, applied.

(6) The procedure adopted by the respondent Society cannot be regard as arbitrary merely because it refused to take into account the marks obtained by the candidates at the qualifying examination but chose to regulate the admissions by relying on the entrance test. The entrance test facilitates the assessment of the comparative talent of the candidates by application of a uniform standard and is always preferable to evaluation of comparative merit on the basis of marks obtained at the qualifying examination, when the qualifying examination is held by two or more different authorities, because lack of uniformity is bound to creep into the assessment of candidates by different authorities with different modes of examination. [103A-B, D-F] (7) The oral interview test is undoubtedly not a very satisfactory test for assessing and evaluating the capacity and calibre of candidates, but in the absence of any better test for measuring personal characteristics and traits, the oral interview test must, at the present stage, be regarded as not irrational or irrelevant though it is subjective and based on first impression, its result is influenced by many uncertain factors and it is capable of abuse. In the matter of admission to college or even in the matter of public employment, the oral interview test as presently held should not be relied upon as an exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification. [106C-E] R.Chitra Lakha and Others v. State of Mysore and Others, [1964] 6 S.C.R. 368, followed.

(8) Having regard to the drawbacks and deficiencies in the oral interview test and the conditions prevailing in the country, particularly when there is deterioration in moral values and corruption and nepotism are very much on the increase, allocation of a high percentage of marks for the oral interview as compared to the marks allocated for the written test, is not free from the vice of arbitrariness.

The allocation of as high a percentage as 33 1/3 of the total marks for oral interview suffers from the vice of arbitrariness. [107A-D] The court, however, to avoid immense hardship being caused to those students in whose case the validity of the selection cannot otherwise be questioned and who have nearly completed three semesters and taking into consideration the fact that even if the petitioners are ultimately found to be deserving of selection on the application of the proper test, it would not be possible to restore them to the position as if they were admitted for the academic year 1979-80, which has run out long since declined to set aside the selection made. The Court was, however, of the view that under the existing circumstances.

84 allocation of more than 15% of the total marks for the oral interview would be arbitrary and unreasonable. [107G-H, 108A-F] A. Peeriakaruppan v. State of Tamil Nadu, [1971] 2 S.C.R. 430; Miss Nishi Meghu v. State of Jammu & Kashmir & Ors., [1980] 3 S.C.R. p. 1253, applied.

(9) There can be no doubt that if the interview did not last for more than two or three minutes on an average and the questions asked had no bearing on the factors required to be taken into account the oral interview test would be vitiated, because it would be impossible in such an interview to assess the merit of a candidate with reference to these factors. Here the absence of proper affidavit by the members of the committee to the contrary leads to the only conclusion that the selection made on the basis of such test must be held to be arbitrary. However, if the marks allocated for the oral interview do not exceed 15% of the total marks and the candidates are properly interviewed and relevant questions are asked with a view to assessing their suitability with reference to the factors required to be taken into consideration, the oral interview test would satisfy the criterion of reasonableness and non- arbitrariness. Further it would be desirable if the interview of the candidates is tape-recorded, for in that event there will be contemporaneous evidence to show what were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee. [109A-B, D-E, F-H]

ORIGINAL JURISDICTION: Writ Petition Nos. 1304, 1262, 1119, 1118, 1574-75, 1373-74, 1244-45, 1230, 1494-97, 1566- 67, 1143, 1440, 1586, 1420-23, 1441-43, 1389, 1144, 1461, 1437-39, 1431, 1268, 1145, 1263 and 1331 of 1979.

(Under Article 32 of the Constitution) Anil Dev Singh, Lalit Kumar Gupta, Subhash Sharma, C.P. Pandey and S. K. Sabharwal for the Petitioners in W.PS.1389, 1437-39, 1262, 1497, 1586, 1230 and 1263 of 1979.

Y. S. Chitale, P. N. Duda, V. K. Pandita, R. Satish and E. C. Agarwala for the Petitioners in W.P. Nos. 1241-43, 1495-96, 1566-67, 1423, 1143-44,1118-19,1494, 1145 and 1331 of 1979.S. K. Bisiaria for the Petitioner in W.P. 1461/79.

Rishi Kesh and B. Datta for the Petitioner in W.Ps.1373-74, 1304 and 1431/79.

Y. S. Chitale, D. N. Tiku, E. C. Agarwala, M. Mudgal, Ashok Kaul and Vineet Kumar for the Petitioners in W.Ps.1244-45, 1420-22 and 1440/79.

S.S. Khanduja for the Petitioners in W.Ps. 1268, 1574- 75/79.

S. N. Kacker and Altaf Ahmed for the appearing Respondents.

85 The Judgment of the Court was delivered by BHAGWATI, J. These writ petitions under Article 32 of the Constitution challenge the validity of the admissions made to the Regional Engineering College, Srinagar for the academic year 1979-80.

The Regional Engineering College, Srinagar (hereinafter referred to as the College) is one of the fifteen Engineering Colleges in the country sponsored by the Government of India. The College is established and its administration and management are carried on by a Society registered under the Jammu and Kashmir Registration of Societies Act, 1898. The Memorandum of Association of the Society in clause 3 sets out the objects for which the Society is incorporated and they include amongst other things establishment of the college with a view to providing instruction and research in such branches of engineering and technology as the college may think fit and for the advancement of learning and knowledge in such branches. Vide sub-clause (i). The Society is empowered by clause 3 sub- clause (ii) of the Memorandum of Association to make rules for the conduct of the affairs of the Society and to add to, amend, vary or rescind them from time to time with the approval of the Government of Jammu and Kashmir State (hereinafter referred to as the State Government) and the Central Government. Clause 3 sub-clause (iii) of the Memorandum of Association confers power on the Society to acquire and hold property in the name of the State Government. Sub-clause (v) of clause 3 of the Memorandum of Association contemplates that monies for running the college would be provided by the State and Central Governments and sub-clause (vi) requires the Society to deposit all monies credited to its fund in such banks or to invest them in such manner as the Society may, with the approval of the State Government decide. The accounts of the Society as certified by a duly appointed auditor are mandatorily required by sub- clause (ix) of clause 3 of the Memorandum of Association to be forwarded annually to the State and Central Governments.

Clause 6 of the Memorandum of Association empowers the State Government to appoint one or more persons to review the working and progress of the Society, or the college and to hold inquiries into the affairs thereof and to make a report and on receipt of any such report, the State Government has power, with the approval of the Central Government, to take such action and issue such directions as it may consider necessary in respect of any of the matters dealt with in the report and the Society or the College, as the case may be, is bound to comply with such directions. There is a provision made in clause 7 of the Memorandum of Association that in case the Society or the college is not functioning properly, the State Government will have the power to take over the 86 administration and assets of the college with the prior approval of the Central Government. The founding members of the Society are enumerated in clause 9 of the Memorandum of Association and they are the Chairman to be appointed by the State Government with the approval of the Central Government, two representatives of the State Government, one representative of the Central Government, two representatives of the All India Council for Technical Education to be nominated by the northern Regional Committee, one representative of the University of Jammu and Kashmir, one non-official representative of each of the Punjab, Rajasthan, U.P. and Jammu and Kashmir States to be appointed by the respective Governments in consultation with the Central Government and the Principal who shall also be the ex-officio Secretary.

The Rules of the Society are also important as they throw light on the nature of the Society. Rule 3 clause (i) reiterates the composition of the Society as set out in clause 9 of the Memorandum of Association and clause (ii) of that Rule provides that the State and the Central Governments may by mutual consultation at any time appoint any other person or persons to be member or members of the Society. Rule 6 vests the general superintendence, direction and control of the affairs and its income and property in the governing body of the Society which is called the Board of Governors. Rule 7 lays down the constitution of the Board of Governors by providing that it shall consist of the Chief Minister of the State Government as Chairman and the following as members : Three nominees of the State Government, three nominees of the Central Government, one representative of the All India Council for Technical Education, Vice-Chancellor of the University of Jammu and Kashmir, two industrialists/technologists in the region to be nominated by the State Government, one nominee of the Indian Institute of Technology in the region, one nominee of the University Grants Commission two representatives of the Faculty of the College and the Principal of the college as ex-officio member-Secretary. The State Government is empowered by rule 10 to remove any member of the Society other than a member representing the State or Central Government from the membership of the Society with the approval of the Central Government. Clause (iv) of Rule 15 confers power on the Board to make bye-laws for admission of students to various courses and clause (xiv) of that Rule empowers the Board to delegate to a committee or to the Chairman such of its powers for the conduct of its business as it may deem fit, subject to the condition that the action taken by the committee of the Chairman shall be reported for confirmation at the next meeting of the Board. Clause (xv) of Rule 15 provides that the Board shall 87 have power to consider and pass resolution on the annual report, the annual accounts and other financial estimates of the college, but the annual report and the annual accounts together with the resolution passed thereon are required to be submitted to the State and the Central Governments. The Society is empowered by Rule 24, clause (i) to alter, extend or abridge any purpose or purposes for which it is established, subject to the prior approval of the State and the Central Governments and clause (ii) of Rule 24 provides that the Rules may be altered by a Resolution passed by a majority of 2/3rd of the members present at the meeting of the Society, but such alteration shall be with the approval of the State and the Central Governments.

Pursuant to clause (iv) of Rule 15 of the Rules, the Board of Governors laid down the procedure for admission of students to various courses in the college by a Resolution dated 4th June, 1974. We are not directly concerned with the admission procedure laid down by this Resolution save and except that under this Resolution admissions to the candidates belonging to the State of Jammu and Kashmir were to be given on the basis of comparative merit to be determined by holding a written entrance test and a viva voce examination and the marks allocated for the written test in the subjects of English, Physics, Chemistry and Mathematics were 100, while for viva voce examination, the marks allocated were 50 divided as follows: (i) General Knowledge and Awareness-15; (ii) Broad understanding of Specific Phenomenon-15; (iii) Extra-curricular activities-10 and (iv) General Personality Trait-10, making up in the aggregate-50. The admissions to the college were governed by the procedure laid down in this Resolution until the academic year 197980, when the procedure was slightly changed and it was decided that out of 250 seats, which were available for admission, 50% of the seats shall be reserved for candidates belonging to the Jammu & Kashmir State and the remaining 50% for candidates belonging to other States including 15 seats reserved for certain categories of students. So far as the seats reserved for candidates belonging to States other than Jammu & Kashmir were concerned, certain reservations were made for candidates belonging to Scheduled Castes and Scheduled Tribes and sons and wards of defence personnel killed or disabled during hostilities and it was provided that "inter se merit will be determined on the basis of marks secured in the subjects of English, Physics, Chemistry and Mathematics only". The provision made with regard to seats reserved for candidates belonging to Jammu & Kashmir State was that "apart from 2 seats reserved for the sons and daughters of the permanent college employees, reservations shall be made in accordance with the 88 Orders of Jammu and Kashmir Government for admission to technical institutions and the seats shall be filled up on the basis of comparative merit as determined under the following scheme, both for seats to be filled on open merit and for reserved seats in each category separately; (1) marks for written test-100 and (2) marks for viva voce examination-50, marking up in the aggregate-150. It was not mentioned expressly that the marks for the written test shall be in the subjects of Physics, English, Chemistry and Mathematics nor were the factors to be taken into account in the viva voce examination and the allocation of marks for such factors indicated specifically in the admission procedure laid down for the academic year 1979-80, but we were told and this was not disputed on behalf of the petitioners in any of the writ petitions, that the subjects in which the written test was held were English, Physics, Chemistry and Mathematics and the marks at the viva voce examination were allocated under the same four heads and in the same manner as in the case of admissions under the procedure laid down in the Resolution dated 4th June, 1974.

In or about April 1979, the college issued a notice inviting applications for admission to the first semester of the B.E. course in various branches of engineering and the notice set out the above admission procedure to be followed in granting admissions for the academic year 1979-80. The petitioners in the writ petitions before us applied for admission to the first semester of the B.E. course in one or the other branch of engineering and they appeared in the written test which was held on 16th and 17th June, 1979. The petitioners were thereafter required to appear before a Committee consisting of three persons for viva voce test and they were interviewed by the Committee. The case of the petitioners was that the interview of each of them did not last for more than 2 or 3 minutes per candidate on an average and the only questions which were asked to them were formal questions relating to their parentage and residence and hardly any question was asked which would be relevant to any of the four factors for which marks were allocated at the viva voce examination. When the admissions were announced, the petitioners found that though they had obtained very good marks in the qualifying examination, they had not been able to secure admission to the college because the marks awarded to them at the viva voce examination were very low and candidates who had much less marks at the qualifying examination, had succeeded in obtaining very high marks at the viva voce examination and there by managed to secure admission in preference to the petitioners. The petitioners filed before us a chart showing by way of comparison the marks obtained by the petitioners on the one hand and some of the successful candidates on the other at the qualifying examination, in the written test and at the viva voce exami- 89 nation. This chart shows beyond doubt that the successful candidates whose marks are given in the chart had obtained fairly low marks at the qualifying examination as also in the written test, but they had been able to score over the petitioners only on account of very high marks obtained by them at the viva voce examination. The petitioners feeling aggrieved by this mode of selection filed the present writ petitions challenging the validity of the admissions made to the college on various grounds. Some of these grounds stand concluded by the recent decision of this Court in Miss Nishi Maghu v. State of Jammu & Kasmir & Ors. and they were therefore not pressed before us. Of the other grounds, only one was canvassed before us and we shall examine it in some detail.

But before we proceed to consider the merits of this ground of challenge, we must dispose of a preliminary objection raised on behalf of the respondents against the maintainability of the writ petition. The respondents contended that the college is run by society which is not a corporation created by a statute but is a society registered under the Jammu & Kashmir Societies Registration Act, 1898 and it is therefore not an 'authority' within the meaning of Art. 12 of the Constitution and no writ petition can be maintained against it, nor can any complaint be made that it has acted arbitrarily in the matter of granting admissions and violated the equality clause of the Constitution. Now it is obvious that the only ground on which the validity of the admissions to the college can be assailed is that the society adopted an arbitrary procedure for selecting candidates for admission to the college and this resulted in denial of equality to the petitioners in the matter of admission violative of Art. 14 of the Constitution. It would appear that prima facie protection against infraction of Art. 14 is available only against the State and complaint of arbitrariness and denial of equality can therefore be sustained against the society only if the society can be shown to be State for the purpose of Art. 14. Now 'State' is defined in Art. 12 to include inter alia the Government of India and the Government 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 and the question therefore is whether the Society can be said to be 'State' within the meaning of this definition. Obviously the Society cannot be equated with the Government of India or the Government of any State nor can it be said to be a local authority and therefore, it must come within the expression "other authorities" if it is to fall within the definition of 'State'. That immediately leads us to a consideration of the question as to what are the "other authorities" contemplated in the definition of 'State' in Art. 13.

90 While considering this question it is necessary to bear in mind that an authority falling within the expression "other authorities" is, by reason of its inclusion within the definition of 'State' in Article 12, subject to the same constitutional limitations as the Government and is equally bound by the basic obligation to obey the constitutional mandate of the Fundamental Rights enshrined in Part III of the Constitution. We must therefore give such an interpretation to the expression "other authorities" as will not stultify the operation and reach of the fundamental rights by enabling the Government to its obligation in relation to the Fundamental Rights by setting up an authority to act as its instrumentality or agency for carrying out its functions. Where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool, for constitutional law must seek the substance and not the form. Now it is obvious that the Government 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. In the early days when the Government had limited functions, it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge governmental functions which were of traditional vintage. But as the tasks of the Government multiplied with the advent of the welfare State, it began to be increasingly felt that the frame work of civil service was not sufficient to handle the new tasks which were often specialised and highly technical in character and which called for flexibility of approach and quick decision making. The inadequacy of the civil service to deal with these new problems came to be realised and it became necessary to forge a new instrumentality or administrative device for handing these new problems. It was in these circumstances and with a view to supplying this administrative need that the corporation came into being as the third arm of the Government and over the years it has been increasingly utilised by the Government for setting, up and running public enterprises and carrying out other public functions. Today with increasing assumption by the Government of commercial ventures and economic projects, the corporation has become an effective legal contrivance in the hands of the Government for carrying out its activities, for it is found that this legal facility of corporate instrument provides considerable flexibility and elasticity and facilitates proper and efficient management with professional skills and on business principles and it is blissfully free from "departmental rigidity, slow motion procedure and hierarchy of officers". The Government in many of its commercial ventures and public enterprises is resorting to more and more frequently to this resourceful legal contrivance of a corporation because it has many practical advantages and at the 91 same time does not involve the slightest diminution in its ownership and control of the undertaking. In such cases "the true owner is the State, the real operator is the State and the effective controllorate is the State and accountability for its actions to the community and to Parliament is of the State." It is undoubtedly true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but 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. Now it is obvious that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity. If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations. If such a corporation were to be free from the basic obligation to obey the Fundamental Rights, it would lead to considerable erosion of the efficiency of the Fundamental Rights, for in that event the Government would be enabled to over-ride the Fundamental Rights by adopting the stratagem of carrying out its functions through the instrumentality or agency of a corporation, while retaining control over it. The Fundamental Rights would then be reduced to little more than an idle dream or a promise of unreality. It must be remembered that the Fundamental Rights are constitutional guarantees given to the people of India and are not merely paper hopes or fleeting promises and so long as they find a place in the Constitution, they should not be allowed to be emasculated in their application by a narrow and constricted judicial interpretation. The courts should be anxious to enlarge the scope and width of the Fundamental Rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activities, whether through natural persons or through corporate entities, to the basic obligation of the Fundamental Rights.

The constitutional philosophy of a democratic socialist republic requires 92 the Government to undertake a multitude of socioeconomic operations and the Government, having regard to the practical advantages of functioning through the legal device of a corporation, embarks on myriad commercial and economic activities by resorting to the instrumentality or agency of a corporation, but this contrivance of carrying on such activities through a corporation cannot exonerate the Government from implicit obedience to the Fundamental Rights. To use the corporate methodology is not to liberate the Government from its basic obligation to respect the Fundamental Rights and not to over-ride them. The mantle of a corporation may be adopted in order to free the Government from the inevitable constraints of red-tapism and slow motion but by doing so, the Government cannot be allowed to play truant with the basic human rights. Otherwise it would be the easiest thing for the government to assign to a plurality of corporations almost every State business such as Post and Telegraph, TV and Radio, Rail Road and Telephones-in short every economic activity-and there by cheat the people of India out of the Fundamental Rights guaranteed to them. That would be a mockery of the Constitution and nothing short of treachery and breach of faith with the people of India, because, though apparently the corporation will be carrying out these functions, it will in truth and reality be the Government which will be controlling the corporation and carrying out these functions through the instrumentality or agency of the corporation. We cannot by a process of judicial construction allow the Fundamental Rights to be rendered futile and meaningless and thereby wipe out Chapter III from the Constitution. That would be contrary to the constitutional faith of the post- Menaka Gandhi era. It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation. If a corporation is found to be a mere agency or surrogate of the Government, "in fact owned by the Government, in truth controlled by the government and in effect an incarnation of the government," the court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the government and therefore not subject to the constitutional limitations. We are clearly of the view that where a corporation is an instrumentality or agency of the government, it must be held to be an 'authority' within the meaning of Art. 12 and hence subject to the same basic obligation to obey the Fundamental Rights as the government.

We may point out that this very question as to when a corporation can be regarded as an 'authority' within the meaning of Art. 12 arose for consideration before this Court in R. D. Shetty v. The International 93 Airport Authority of India & Ores. There, in a unanimous judgment of three Judges delivered by one of us (Bhagwati, J) this Court pointed out:

"So far as India is concerned, the genesis of the emergence of corporations as instrumentalities or agencies of Government is to be found in the Government of India Resolution on Industrial Policy dated 6th April, 1948 where it was stated inter alia that "management of State enterprises will as a rule be through the medium of public corporation under the statutory control of the Central Government who will assume such powers as may be necessary to ensure this." It was in pursuance of the policy envisaged in this and sub-sequent resolutions on Industrial policy that corporations were created by Government for setting up and management of public enterprises and carrying out other public functions. Ordinarily these functions could have been carried out by Government departmentally through its service personnel but the instrumentality or agency of the corporation was resorted to in these cases having regard to the nature of the task to be performed. The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities. If Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through instrumentality or agency of corporations should equally be subject to the same limitations." The Court then addressed itself to the question as to how to determine whether a corporation is acting as an instrumentality or agency of the Government and dealing with that question, observed:

"A corporation may be created in one of two ways. It may be either established by statute or incorporated under a law such as the Companies Act 1956 or the Societies Registration Act 1860. Where a Corporation is wholly controlled by Government not only in its policy making but also in carrying out the functions entrusted to it by the law establishing it or by the Charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of Government. But ordinarily where a corporation 94 is established by statute, it is autonomous in its working, subject only to a provision, often times made, that it shall be bound by any directions that may be issued from time to time by Government in respect of policy matters. So also a corporation incorporated under law is managed by a board of directors or committee of management in accordance with the provisions of the statute under which it is in corporated. When does such a corporation become an instrumentality or agency of Government? Is the holding of the entire share capital of the Corporation by Government enough or is it necessary that in addition there should be a certain amount of direct control exercised by Government and, if so what should be the nature of such control? Should the functions which the Corporation is charged to carry out possess any particular characteristic or feature, or is the nature of the functions immaterial? Now, one thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. But, as is quite often the case, a corporation established by statute may have no shares or shareholders, in which case it would be a relevant factor to consider whether the administration is in the hands of a board of directors appointed by Government though this consideration also may not be determinative, because even where the directors are appointed by Government, they may be completely free from governmental control in the discharge of their functions. What then are tests to determine whether a corporation established by statute or incorporated under law is an instrumentality or agency of Government ? It is not possible to formulate an inclusive or exhaustive test which would adequately answer this question. There is no cut and dried formula, which would provide the correct division of corporations into those which are instrumentalities or agencies of Government and those which are not." The Court then proceeded to indicate the different tests, apart from ownership of the entire share capital:

" .... if extensive and unusual financial assistance is given and the purpose of the Government in giving such assistance coincides with the purpose for which the corporation is expected to use the assistance and such purpose is of 95 public character, it may be a relevant circumstance supporting an inference that the corporation is an instrumentality or agency of Government..... It may therefore be possible to say that where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character ..........But a finding of State financial support plus an unusual degree of control over the management and policies might lead one to characterise an operation as State action-Vide Sukhdev v. Bhagatram [1975] 3 SCR 619 at 658. So also the existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality. It may also be a relevant factor to consider whether the corporation enjoys monopoly status which is State conferred or State protected. There can be little doubt that State conferred or State protected monopoly status would be highly relevant in assessing the aggregate weight of the corporation's ties to the State." "There is also 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. It has been held in the United States in a number of cases that the concept of private action must yield to a conception of State action where public functions are being performed. Vide Arthur S. Miller: "The Constitutional Law of the Security State" (10) Stanford Law Review 620 at 664)." "It may be noted that besides the so-called traditional functions, the modern state operates as 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 functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. This is precisely what was pointed out by Mathew, J., in Sukhdev v. Bhagatram (supra) where the learned Judge said that "institutions engaged in matters of high public interest of performing public functions are by virtue of the nature of the functions performed government agencies. Activities which are too fundamental to the society are by definition too important not to be considered government functions." 96 The court however proceeded to point out with reference to the last functional test:

"......... the decisions show that even this test of public or governmental character of the function is not easy of application and does not invariably lead to the correct inference because the range of governmental activity is broad and varied and merely because an activity may be such as may legitimately be carried on by Government, it does not mean that a corporation, which is otherwise a private entity, would be an instrumentality or agency of Government by reason of carrying on such activity. In fact, it is difficult to distinguish between governmental functions and non- governmental functions. Perhaps the distinction between governmental and non-governmental functions is not valid any more in a social welfare State where the laissez faire is an outmoded concept and Herbert Spencer's social statics has no place. The contrast is rather between governmental activities which are private and private activities which are governmental.

[Mathew, J. Sukhdev v. Bhagatram (supra) at p. 652].

But 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. Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of the inference." These observations of the court in the International Airport Authority's case (supra) have our full approval.

The tests for determining as to when a corporation can be said to be a instrumentality or agency of Government may now be called out from the judgment in the International Airport Authority's case. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression. A wide enlargement of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority's case as follows (1) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long 97 way towards indicating that the corporation is an instrumentality or agency of Government." (2) "Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character." (3) "It may also be a relevant factor.......whether the corporation enjoys monopoly status which is the State conferred or State protected." (4) "Existence of deep and pervasive State control may afford an indication that the Corporation is a State agency or instrumentality." (5) "If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government." (6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government." If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of government, it would, as pointed out in the International Airport Authority's case, be an 'authority' and, therefore, 'State' within the meaning of the expression in Article 12.

We find that the same view has been taken by Chinnappa Reddy, J. in a subsequent decision of this court in the U.

P. Warehousing Corporation v. Vijay Narain and the observations made by the learned Judge in that case strongly reinforced the view we are taking particularly in the matrix of our constitutional system.

We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created.

The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government Company or a company formed under the Companies Act, 1956 or it may be a society registered under the Societies Registration Act, 1860 or any other similar statute. Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would 98 have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12.

It is also necessary to add that merely because a juristic entity may be an "authority" and therefore "State" within the meaning of Article 12, it may not be elevated to the position of "State" for the purpose of Articles 309, 310 and 311 which find a place in Part XIV. The definition of "State" in Article 12 which includes an "authority" within the territory of India or under the control of the Government of India is limited in its application only to Part III and by virtue of Article 36, to Part IV: it does not extend to the other provisions of the Constitution and hence a juristic entity which may be "State" for the purpose of Parts III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution. That is why the decisions of this Court in S. L. Aggarwal v. Hindustan Steel Ltd. and other cases involving the applicability of Article 311 have no relevance to the issue before us.

The learned counsel appearing on behalf of the respondents Nos. 6 to 8, however, relied strongly on the decision in Sabhajit Tewary v. Union of India & Ors(2) and contended that this decision laid down in no uncertain terms that a society registered under the Societies Registration Act, 1860 can never be regarded as an "authority" within the meaning of Article 12. This being a decision given by a Bench of five Judges of this Court is undoubtedly binding upon us but we do not think it lays down any such proposition as is contended on behalf of the respondents.

The question which arose in this case was as to whether the Council of Scientific and Industrial Research which was juridically a society registered under the Societies Registration Act, 1860 was an "authority" within the meaning of Article 12. The test which the Court applied for determining this question was the same as the one laid down in the International Airport Authority's case and approved by us, namely, whether the Council was an instrumentality or agency of the Government. The Court implicitly assented to the proposition that if the Council were an agency of the Government, it would undoubtedly be an "authority". But, having regard to the various 99 features enumerated in the judgment, the Court held that the Council was not an agency of the Government and hence could not be regarded as an "authority". The Court did not rest its conclusion on the ground that the Council was a society registered under the Societies Registration Act, 1860, but proceeded to consider various other features of the Council for arriving at the conclusion that it was not an agency of the Government and therefore not an "authority". This would have been totally unnecessary if the view of the Court were that a society registered under the Societies Registration Act can never be an "authority" within the meaning of Article 12.

The decision in Sukhdev Singh v. Bhagat Ram (1975) 3 SCR 619 was also strongly relied upon by the learned counsel for respondents Nos. 6 to 8 but we fail to see how this decision can assist the respondents in repelling the reasoning in the International Airport Authority's case or contending that a company or society formed under a statute can never come within the meaning of the expression "authority" in Article 12. That was a case relating to three juristic bodies, namely, the Oil and Natural Gas Commission, the Industrial Finance Corporation and the Life Insurance Corporation and the question was whether they were "State" under Article 12. Each of these three juristic bodies was a corporation created by a statute and the Court by majority held that they were "authorities" and therefore "State" within the meaning of Article 12. The Court in this case was not concerned with the question whether a company or society formed under a statute can be an "authority" or not and this decision does not therefore contain anything which might even remotely suggest that such a company or society can never be an "authority". On the contrary, the thrust of the logic in the decision, far from being restrictive, applies to all juristic persons alike, irrespective whether they are created by a statute or formed under a statute.

It is in the light of this discussion that we must now proceed to examine whether the Society in the present case is an "authority" falling within the definition of "State" in Article 12. Is it an instrumentality or agency of the Government? The answer must obviously be in the affirmative if we have regard to the Memorandum of Association and the Rules of the Society. The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government. The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the 100 Society, it can be done only with the approval of the State and the Central Governments. The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction. The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee. The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments. The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government. The Board of Governors, which is in charge of general superintendence, direction and control of the affairs of Society and of its income and property is also largely controlled by nominees of the State and the Central Governments. It will thus be seen that the State Government and by rea