CASE ANALYSIS – Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722

INTRODUCTION

In the recent decision of Kaushal Kishore v. State of Uttar Pradesh, (2023), the Hon’ble Supreme Court of India observed that certain fundamental rights, particularly those enshrined under Articles 19 and 21 of the Constitution, may be enforceable not only against the “State” as defined under Article 12, but also against non-state actors. However, this extended enforceability is not applicable to all fundamental rights under Part III of the Constitution. Except for Articles 19 and 21, the enforceability of other fundamental rights remains limited to actions of the “State” and its instrumentalities as envisaged under Article 12.

Article 12 of the Constitution defines the expression “State” to include the Government and Parliament of India, the Government and 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. The interpretation of “other authorities” under Article 12 has been a subject of significant judicial development.

The ruling in Kaushal Kishore is noteworthy not only for its observations on non-state liability but also for reiterating the constitutional limits within which fundamental rights may be invoked. The case in question also involved challenges to the admission process of a college managed by a society registered under the Jammu and Kashmir Registration of Societies Act, 1898. Although the core dispute pertained to the alleged arbitrariness of admissions, the Court made pertinent observations regarding the applicability of Article 12 to entities discharging public functions, despite not being part of the government per se.

The principles laid down in Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722, were reaffirmed. In that landmark judgment, the Hon’ble Supreme Court, through Justice P. N. Bhagwati, evolved a comprehensive test to determine whether a corporation, society, or individual entity could be treated as an “instrumentality” or “agency” of the State. The test—an extension of the reasoning laid down earlier in R. D. Shetty v. International Airport Authority of India, (1979) 3 SCC 489—includes the following six factors:

1. Financial assistance: Whether the entire share capital is held by the government.
2. Administrative control: The extent of deep and pervasive State control over the functioning of the entity.
3. Public function: Whether the functions performed by the entity are of public importance and closely related to governmental functions.
4. Origin: Whether the entity was created by a statute or under a statute.
5. Governmental assistance: Whether there is a significant financial, administrative, or other form of support from the government.
6. State-dependence: Whether the entity would be unable to function without government aid.

Based on these indicia, an institution—even if incorporated as a private body—may be held to fall within the ambit of “State” under Article 12 and thus be amenable to writ jurisdiction in cases of violation of fundamental rights.

This legal framework ensures that institutions performing public duties do not escape constitutional accountability merely by virtue of their technical legal status as private bodies.

ISSUES FOR CONSIDERATION

1. Whether a Society Registered Under Statutory Law Can Qualify as “State” Within the Meaning of Article 12 of the Constitution of India?
   The issue concerns the determination of whether a society, though not expressly a governmental body, can nonetheless be classified as a “State” by virtue of its functions, control, or funding, thereby attracting constitutional obligations under Part III of the Constitution.
2. What Constitutes “Other Authorities” Within the Scope of the Term “State” as Defined Under Article 12 of the Constitution?
   This issue seeks to examine the interpretative boundaries of the term “other authorities” under Article 12 and whether institutions performing public functions, despite being established as private or non-governmental entities, fall within its ambit and are therefore amenable to writ jurisdiction for enforcement of fundamental rights

JUDGMENT SUMMARY: Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722

Issue I: Whether the Society Managing the Regional Engineering College Falls Within the Ambit of “State” Under Article 12 of the Constitution

The Hon’ble Supreme Court, in adjudicating the first issue, held that the writ petition was maintainable, as the society managing the Regional Engineering College could be classified as “State” under the definition provided in Article 12 of the Constitution of India. The Court, after a thorough analysis of the Memorandum of Understanding and the Rules governing the functioning of the Society, observed that the said institution functioned under deep and pervasive governmental control.

It was noted that the governing structure of the society was substantially influenced by nominations made by the Central Government and the governments of Jammu & Kashmir, Punjab, Rajasthan, and Uttar Pradesh, all with the concurrence of the Central Government. The Court further highlighted that the college’s funding was entirely provided by the Central Government and the Government of Jammu & Kashmir. Additionally, the society could raise additional resources only with the prior approval of the said governments, and even amendments to the society’s rules required government sanction.

Considering these facts, the Court concluded that the society was functioning as an instrumentality or agency of the State. It categorically held that the determinative factor for identifying a “State” under Article 12 is not the method of incorporation—whether by statute or registration under a society law—but the nature and degree of control and functions discharged by the body in question.

To guide such determinations, the Court reiterated and crystallised the test laid down earlier in R.D. Shetty v. International Airport Authority of India, (1979) 3 SCC 489, stating that an entity may be considered an instrumentality or agency of the State under Article 12 if:

• The entire share capital is held by the Government;
• The entity is wholly dependent on government financial assistance for its functioning;
• It enjoys a monopoly status granted or protected by the Government;
• There exists deep and pervasive governmental control;
• The functions discharged are of public importance and in furtherance of governmental objectives;
• The entity was created by a statute or is under statutory authority.

Based on the above considerations, the Court held that the society managing the college satisfied the criteria to be classified as “State” under Article 12 and was amenable to writ jurisdiction.

Issue II: Whether the Selection Procedure for Admission Violated Article 14 of the Constitution

On the second issue, the Hon’ble Court adopted a balanced approach. While upholding the general validity of the college’s selection process, it found certain aspects warranting judicial scrutiny. The Court reaffirmed the principle that State-affiliated institutions are entitled to formulate their own admission procedures, provided they adhere to constitutional mandates of fairness, non-arbitrariness, and equality as envisaged under Article 14.

The Court observed that the admission procedure—which comprised both a written examination and a viva voce (oral interview)—was not inherently arbitrary or unconstitutional. However, it found that allotting 50 out of 150 total marks (i.e., one-third) to the viva voce component was excessive. While no malafide intention or bias was established against the college authorities, the disproportionate weightage accorded to the oral interview could result in subjective evaluations and potential unfairness. Accordingly, the Court directed that future admission processes must reassess and reduce the weight assigned to the viva voce component.

Importantly, the Court clarified that while oral interviews are a permissible and often necessary tool in selection processes, they must not be allowed to dominate the overall assessment criteria to the detriment of objective evaluation methods like written exams.

As regards the current admissions, the Court declined to annul them, holding that it would be unjust to disturb the status of already admitted students and to grant admission to petitioners merely on a speculative allegation of procedural bias.

In addressing the applicability of Article 14, the Court also expounded on the distinction between permissible classification and unconstitutional arbitrariness. It held that not all classification or hierarchical structuring is violative of Article 14, so long as it is based on reasonable and intelligible differentia and bears a rational nexus with the objective sought to be achieved.

KEY NOTE

The Supreme Court, while affirming the maintainability of the writ petition against the society under Article 12, upheld the fundamental principle that constitutional protections, including those under Articles 12 and 14, must extend to institutions substantially controlled and funded by the State. At the same time, the Court underscored the importance of fair and balanced selection processes in public institutions and issued prospective directions to ensure procedural fairness in future admission exercises.

POINT OF LAW INVOLVED

The central legal questions arising in the matter of Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722, primarily relate to the interpretation and application of constitutional provisions enshrined under Part III of the Constitution of India—particularly with respect to the meaning and ambit of the term “State” under Article 12 and the right to equality under Article 14. The following constitutional and statutory provisions were examined and interpreted by the Hon’ble Supreme Court:

I. Constitution of India – Part III (Articles 12 to 35)

1. Article 12 – Definition of the “State”

Article 12 of the Constitution defines the term “State” to include:

“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 provision is foundational in determining the enforceability of fundamental rights, as the rights enshrined under Part III of the Constitution can only be invoked against entities falling within the ambit of “State” as defined therein. Importantly, the phrase “other authorities” has been the subject of extensive judicial interpretation and expansion over the years.

In University of Madras v. Shanta Bai (1953), the Hon’ble Supreme Court held that “other authorities” would include entities that perform governmental or sovereign functions. The interpretation was further expanded in Rajasthan State Electricity Board v. Mohan Lal (1967), where it was held that any authority created by statute and operating within India or under the control of the Government of India would be covered under Article 12.

The Court further widened the interpretation in Sukhdev Singh v. Bhagat Ram (1975), R.D. Shetty v. International Airport Authority (1979), and finally in Ajay Hasia v. Khalid Mujib (1981), where a detailed test was laid down to identify whether a body, though not formally part of the government, could be classified as an instrumentality or agency of the State.

More recently, in Kaushal Kishore v. State of Uttar Pradesh (2023), the Supreme Court held that in certain contexts, particularly with respect to Articles 19 and 21, fundamental rights could be enforced even against non-State actors.

2. Article 14 – Right to Equality

Article 14 guarantees:

“Equality before the law and the equal protection of the laws within the territory of India.”

This Article embodies both negative and positive dimensions of equality. The first aspect ensures the absence of any special privileges for individuals or groups, establishing that all are equal before the law. The second imposes a duty on the State to ensure equal treatment and prevent arbitrary discrimination.

In E.P. Royappa v. State of Tamil Nadu (1973), the Hon’ble Supreme Court held that arbitrariness is antithetical to equality, and any State action that is arbitrary in nature violates Article 14. In Ajay Hasia, this principle was applied to evaluate whether the admission procedure adopted by the institution was constitutionally valid.

3. Article 32 – Right to Constitutional Remedies

Article 32 provides a constitutional remedy to approach the Hon’ble Supreme Court for the enforcement of fundamental rights. It empowers any person aggrieved by a violation of fundamental rights to seek relief directly from the Supreme Court through appropriate writs, including mandamus, certiorari, prohibition, habeas corpus, and quo warranto.

In State of West Bengal v. Nuruddin (1998), the Court held that where a legal duty is cast upon a public authority, the non-performance of that duty can be remedied through the issuance of a writ of mandamus under Article 32.

II. Jammu and Kashmir Registration of Societies Act, 1898

The case also involved the legal status of a society registered under the Jammu and Kashmir Registration of Societies Act, 1898. The question before the Court was whether such a society, although not created directly by statute, could still be brought within the ambit of Article 12 on the grounds that it performed public functions and operated under deep and pervasive governmental control.

The Court, while interpreting the society’s status, examined its structure, funding, control, and functional obligations, ultimately holding that despite being a society registered under a general statute, it could be considered a “State” under Article 12 owing to its character as an instrumentality or agency of the government.

INTERPRETATION STATEMENT 

The legal point at issue in Ajay Hasia revolved around the interpretation of “State” under Article 12 and the applicability of Article 14’s equality mandate to an institution that was not statutorily established but functionally equivalent to a public authority. The case reaffirmed and refined constitutional jurisprudence concerning the reach of fundamental rights and reinforced judicial scrutiny of quasi-governmental bodies in the context of equality and fairness in public dealings.

ANALYSIS

The Hon’ble Supreme Court, in Ajay Hasia v. Khalid Mujib Sehravardi, undertook a comprehensive examination of the constitutional definition and scope of the term “State” under Article 12 of the Constitution of India, primarily in the context of the maintainability of the writ petition against a society managing a Regional Engineering College. The Court’s observations predominantly focused on delineating the contours of the expression “authority” and, by extension, “other authorities” under Article 12.

In determining maintainability, the Court provided an authoritative clarification of what kinds of entities—such as societies, corporations, or companies—could be treated as “State” under Article 12. The Court reiterated that the decisive test was not the method of incorporation or the legal structure of the body but rather the degree of governmental control, funding, and the nature of functions performed. It listed key indicia for identifying when a body can be considered an instrumentality or agency of the government, thereby falling within the ambit of “other authorities.” However, the Court made it explicit that the list of factors is illustrative and not exhaustive.

The Court further emphasized the constitutional importance of expanding the definition of “State” to include bodies performing public functions under governmental influence. Such an interpretation ensures that entities discharging public duties cannot evade constitutional accountability merely by being structured as private or semi-autonomous bodies. It warned that a narrow interpretation of Article 12 would effectively defeat the constitutional guarantee of fundamental rights, especially if the State could delegate its functions to non-state bodies to circumvent constitutional mandates.

The Court also revisited the scope of Article 14, reaffirming the principle laid down in E.P. Royappa v. State of Tamil Nadu (1973) that arbitrariness is antithetical to equality. Any act that is arbitrary, unreasonable, or lacking transparency would be deemed violative of Article 14.

Having clarified the constitutional framework, the Court proceeded to evaluate the merits of the petition. Among the four principal contentions raised by the petitioners, the first two pertained to broader questions regarding the validity of the admission process and the propriety of the viva voce (oral interview) component as a mode of assessment.

On the first contention, which challenged the admission process in toto, the Court upheld the need for a structured and uniform entrance procedure, including written examinations, for determining the merit of candidates. It rejected the plea to invalidate the entire selection process.

On the second contention, although the Court acknowledged that the oral interview could be susceptible to subjective biases and might not be the most accurate measure of merit, it refrained from striking it down. The Court noted the lack of any superior or alternative mechanism to assess candidates’ aptitude and potential, especially for professional education. It, however, stressed that the oral interview must not disproportionately influence the selection outcome and made recommendations to improve its reliability.

The third and fourth contentions were case-specific and concerned the excessive weightage given to the viva voce component (50 out of 150 marks) and the brevity of the interviews. On these grounds, the Court ruled in favour of the petitioners, finding the process to be arbitrary and unreasonable. However, it declined to set aside the admissions already made due to the inordinate delay of 18 months and the potential prejudice to students who were not party to the proceedings.

Despite the lack of concrete relief to the petitioners in terms of reversing admissions, the Court laid down binding guidelines to prevent similar arbitrariness in future admission processes. It directed that:

• The marks allocated for viva voce shall not exceed 15% of the total marks.
• Only relevant questions shall be asked during oral interviews.
• Oral interviews should be video recorded to ensure transparency.

While the Court admitted the validity of three out of the four contentions raised by the petitioners, the relief granted was limited. The only practical relief extended was a directive for the petitioners to be considered for admission in the subsequent academic year (1981–82). The overall approach of the Court was more recommendatory and prospective, aimed at reforming administrative practices rather than undoing the admissions already made.

The Court’s restrained approach was informed by considerations of equity and the absence of substantive proof of mala fides in the conduct of the interviews. Nonetheless, the ruling holds significant precedential value, especially concerning the enforceability of fundamental rights against quasi-governmental bodies and the judicial oversight of procedures for candidate selection in public institutions. The guidelines issued by the Court have since served as important constitutional benchmarks in matters involving oral interviews, selection procedures, and the rights of candidates in public admissions and employment.

Written by Swapnil Chatterjee; an intern under Legal Vidhiya.

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