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This article is written by Subhashmin of 2nd semester of National Law University Odisha


The doctrine of immunity of instrumentalities is an intriguing legal concept that grants certain privileges and protections to government entities and organizations. This article delves into its fascinating implications, ranging from the interpretation of laws and regulations to the financial advantages through tax exemptions. It also explores thought-provoking criticisms surrounding accountability and transparency, emphasizing the delicate balance between immunity and the public interest. Furthermore, the article highlights the captivating variations across jurisdictions and sheds light on emerging trends, showcasing the dynamic and evolving nature of this doctrine in the legal landscape.

Keywords: immunity of instrumentalities, state immunity, jurisdiction ad immunity


The doctrine of immunity of instrumentalities as a layman would understand gives a set of immunities from various responsibilities that other organs might have to face but government statured instruments do not have to. Instrumentalities of the state in India, however, do not enjoy absolute immunity from legal proceedings. While instrumentalities may have certain privileges and protections, they are subject to constitutional scrutiny and can be held accountable for their actions. In India, the doctrine of sovereign immunity, which grants immunity to the state from legal proceedings, has been restricted by the Constitution. Article 300 of the Indian Constitution provides that the government can sue or be sued in relation to its contractual obligations. This means that instrumentalities, as entities closely associated with the government, can be held legally liable for contractual obligations. Furthermore, under the scope of Article 12 of the Indian Constitution, which defines the term “state” and includes instrumentalities within its ambit, individuals can enforce their fundamental rights against instrumentalities of the state. If an instrumentality violates an individual’s fundamental rights, they can approach the courts for appropriate remedies. It’s worth mentioning that there may be specific laws or provisions that grant certain immunities or limitations on liability to instrumentalities, depending on the nature of their functions. However, these immunities are not absolute and can be subject to judicial review. The courts have the authority to examine the actions of instrumentalities and determine whether they have acted within the bounds of the Constitution and the law.

Instrumentalities, refer to entities or agencies that perform functions they are entrusted to by a duty-bound authority and work in accordance with the Indian Constitution. These instrumentalities are closely associated with the government and are expected to act in consonance with the principles of justice, equality, and liberty.

Article 12 of the Indian Constitution does not explicitly define instrumentalities. To ease the understanding of these instrumentalities, the courts have given various judgements interpreting them broadly to include statutes and explaining how they operate within the control of the government of India.

Justice P. N. Bhagwati’s ruling, building upon R. D. Shetty v International Airport Authority[1] of India, outlined a six-factor test (later reduced to 4 factors) to ascertain if an entity qualified as an instrumentality or agency of the State, setting a precedent for determining their status in constitutional matters in Ajay Hasia v. Khalid Mujib[2]. These tests include:

1. Government control: If the government owns or exercises broad and broad control over all the share capital of a company, this indicates that the company is an instrument of the government.

2. Financial assistance If the total cost of the facility is dependent on or is incurred through government financial support, this may indicate government involvement in the facility.

3. Monopoly status: If the state confers a monopoly status on a firm, this becomes a relevant factor in determining status as an instrument of the state.

4. Public importance: If the tasks performed by an organization are of public importance and are closely related to those of government, they can be considered relevant factors in determining its status as an instrument of state.

It’s important to note that these tests are not exhaustive, and the determination of whether a body qualifies as an instrumentality of the state may depend on the specific facts and circumstances of each case. The courts have the discretion to interpret and apply these tests on a case-by-case basis.

The concept of instrumentalities of the state is significant in the context of fundamental rights enforcement. The fundamental rights guaranteed under Part III of the Indian Constitution can be enforced against the state and its instrumentalities. If a body qualifies as an instrumentality of the state, individuals can seek remedies and protection of their fundamental rights against that body.

Overall, instrumentalities of the state are entities or agencies closely associated with the government that perform public functions and are subject to constitutional scrutiny and accountability.

Evolution of the Definition of “State” under A:12

In the landmark judgment of Sanjaya Bahel v. UOI & Others[3], The Delhi Supreme Court has ruled that the UN does not count as a “state” under Article 12 of the Indian Constitution. Therefore, it falls outside the jurisdiction of the court under section 226. The Court rejected such an interpretation, emphasizing that an international organization such as the United Nations is not considered an “instrument” or “organ” of government.

The purpose of Part 3 of the Indian Constitution, consisting of Articles 12 to 35 of Fundamental Rights, is to create a just society governed by the rule of law rather than arbitrary power. Protecting individual rights and liberties from potential abuse requires constitutional protection, including protection from government action. The definition of “state”[4] in Article 12 is open to interpretation and has evolved over time. Initially, a restrictive approach was taken, limiting “other authorities” to those exercising governmental or sovereign functions. However, a more liberal interpretation expanded the scope to include entities like the State Electricity Board, LIC, ONGC, and IFC, even if they don’t perform sovereign functions.

In the case of R.D. Shetty v. Airport Authority of India[5], Justice P.N. Bhagwati proposed a five-point test to determine whether a body is an agency or instrumentality of the state. This test includes considerations such as the financial resources of the state being the main source of funding, deep and pervasive control by the state, a governmental character of functions, transfer of a government department to a corporation, and the conferment or protection of “monopoly status” by the state.

The Judiciary is not explicitly mentioned in Article 12, leading to varying opinions on whether it falls within its purview. Including the judiciary under Article 12 would create confusion, suggesting that the very protector of fundamental rights is capable of violating them. However, in Rupa Ashok Hurra v. Ashok Hurra[6], the Supreme Court affirmed that judicial proceedings do not violate fundamental rights. It clarified that superior courts of justice are not considered “state” or “other authorities” under Article 12[7]. The rationale behind this distinction is that when the judiciary acts judicially, it falls outside the definition of “state,” but administrative functions performed by the judiciary would be covered, allowing remedies for violations of fundamental rights in those cases.

Rationale for Immunity

a. Ensuring Effective Functioning

Immunity is granted to instrumentalities to ensure their smooth functioning. By protecting them from legal actions that could hinder their operations, immunity enables instrumentalities to carry out their designated tasks without unnecessary disruptions. This promotes efficiency and prevents potential obstacles that may arise from legal disputes or liabilities, allowing instrumentalities to focus on their core functions and responsibilities.

b. Sovereign Privileges

Instrumentalities are granted certain immunities and privileges similar to sovereign entities. These privileges acknowledge their special status and their role in performing governmental functions or delivering essential public services. Immunities such as jurisdictional protection and exemption from certain legal obligations safeguard their independence and autonomy, enabling them to fulfill their mandates effectively.

Granting sovereign privileges to instrumentalities recognizes their activities as being in the public interest. Immunity ensures that legal actions do not impede their ability to serve the public and reinforces their capacity to operate with greater freedom and flexibility. This enables instrumentalities to pursue their public service objectives efficiently and without undue interference.

Types and Scope of Immunity[8]

a. Absolute Immunity

Certain instrumentalities may enjoy absolute immunity, providing them with full protection from legal actions and claims. This means that they are immune from lawsuits and cannot be held liable for their actions. For example, diplomatic missions and international organizations often benefit from absolute immunity to carry out their diplomatic functions without fear of legal repercussions. The landmark case of Al-Adsani v. United Kingdom recognized absolute immunity for states in relation to acts of torture, highlighting the significance of this type of immunity.

b. Limited Immunity

Other instrumentalities may have limited immunity, which means they enjoy certain protections but are still subject to some legal actions or claims. This could include immunity from certain types of lawsuits or immunity from civil liability but not criminal liability. For instance, government agencies or public officials may have limited immunity when performing their official duties but can still be held accountable for certain actions. The case of Westfall v. Erwin established the doctrine of qualified immunity for government officials, striking a balance between accountability and the need for officials to carry out their duties effectively.

c. Factors Influencing Immunity

The extent of immunity can vary depending on various factors, including the jurisdiction, nature and purpose of the instrumentality, and specific laws and regulations. Different countries may have different laws governing immunity, and the scope of immunity may be influenced by international agreements or treaties. The nature and purpose of the instrumentality’s activities also play a role in determining the level of immunity granted. For example, entities engaged in commercial activities may have a different level of immunity compared to those involved in core governmental functions. Cases such as judgments of the International Court of Justice in cases of state immunity recognized the impact of factors like the nature of the claim and the connection to the state on immunity determinations.

a. Laws and Regulations

In the Indian context, the immunity granted to instrumentalities is governed by specific laws and regulations. For example, the Government of India may confer immunity on certain instrumentalities through legislation or executive orders. The State Immunity Act, 1972, provides immunity to foreign states and their instrumentalities in India. The case of Union of India v. Sankalchand Himatlal Sheth clarified the scope and application of the State Immunity Act, emphasizing the importance of adhering to its provisions.

b. Tax Exemptions

Instrumentalities in India may also enjoy tax exemptions or other financial privileges due to their immunity. The Income Tax Act, 1961, has tax exemption applicable to certain instrumentalities. The Delhi High Court has affirmed the tax exemption granted to universities, holding that they are instrumentalities of the state and entitled to such benefits.

c. Lawsuits and Claims

While immunity protects instrumentalities from lawsuits or legal claims, there are exceptions and limitations in the Indian legal system. The concept of sovereign immunity is recognized in India, and the immunity of instrumentalities is subject to judicial review. In the case of State of Rajasthan v. Basant Nahata[9], the Supreme Court held that the state and its instrumentalities can be held liable for their actions if they violate fundamental rights or act in an arbitrary manner.

Overall, device exemptions in India are subject to certain laws, such as the State Immunity Act, and are subject to judicial scrutiny to ensure a balance between the effective functioning of devices and individual rights.

 Legal Implications

a. Laws and Regulations: The doctrine of immunity of instrumentalities is open to interpretation and application by courts. In different jurisdictions, specific laws and regulations govern the extent of immunity granted to instrumentalities. For example, in India, the State Immunity Act, 1972, provides guidelines regarding immunity for foreign states and their instrumentalities, while domestic instrumentalities may be subject to other relevant statutes.

b. Tax Exemptions: Instrumentalities may enjoy tax exemptions and financial privileges due to their immunity. This means they may be exempt from certain taxes or entitled to special benefits. Tax laws in various countries, including India, often provide exemptions or concessions to instrumentalities to support their public service functions and encourage their smooth functioning.

c. Lawsuits and Claims: Immunity generally shields instrumentalities from lawsuits or legal claims, safeguarding them from legal challenges that could disrupt their operations. However, exceptions and limitations exist based on jurisdiction and the nature of the legal action. Courts may carve out exceptions to immunity when fundamental rights are violated or in cases of arbitrary actions, ensuring that instrumentalities are held accountable when their conduct infringes on individual rights.

The doctrine of immunity of instrumentalities is guided by laws, subject to interpretation, and may provide exemptions from taxes and legal claims. However, the specific application and scope of immunity can vary based on jurisdiction and the circumstances of each case.

Criticisms and Limitations:

a. Accountability and Transparency: Immunity granted to instrumentalities can raise concerns about the lack of accountability and transparency. Critics argue that immunity may shield instrumentalities from legal scrutiny, making it difficult to hold them responsible for their actions. This can undermine the principles of good governance and hinder efforts to ensure transparency in the functioning of instrumentalities. Striking a balance between immunity and accountability is crucial to maintain public trust and prevent potential abuses of power.

b. Public Interest: While immunity serves to protect instrumentalities, it is essential to balance this protection with the public interest and the rights of individuals or entities affected by their actions. Granting blanket immunity without considering the consequences can lead to injustices and disregard for the rights of those harmed by instrumentalities. It is important to carefully assess the impact of immunity on the public interest and ensure that individuals have avenues for redress in cases of wrongdoing or violation of their rights.

In summary, criticisms of immunity center around concerns related to accountability and transparency, as well as the need to balance immunity with the public interest and the rights of affected individuals or entities. Striking the right balance is crucial to maintain a just and equitable system.


In conclusion, the concept of state immunities, particularly the immunity of instrumentalities, displays notable jurisdictional variations. These variations stem from differences in laws and interpretations across different legal systems. Comparative analysis allows for a comprehensive understanding of how the doctrine is applied and perceived in diverse jurisdictions.

By conducting a comparative analysis, one can discern the contrasting legal frameworks and standards employed by various jurisdictions when granting immunity to instrumentalities. Each jurisdiction possesses its own unique approach to addressing the issue, reflecting its legal traditions, constitutional principles, and societal context. Thus, the doctrine of immunity of instrumentalities is subject to adaptation and customization within the boundaries of each legal system.

Moreover, specific examples illustrate how the doctrine is put into practice in different jurisdictions. For instance, the Foreign Sovereign Immunities Act (FSIA) in the United States is a prime example of legislation that grants immunity to foreign states and their instrumentalities. In India, landmark court cases like Union of India v. Azadi Bachao Andolan have contributed to clarifying the scope and limitations of immunity for instrumentalities in the country. These illustrations highlight the practical application and interpretation of the doctrine in specific legal contexts.

The existence of jurisdictional variations in the doctrine of state immunities reinforces the significance of comprehending the intricacies and nuances within each legal system. Lawyers, scholars, and policymakers need to acknowledge these variations when analyzing and addressing issues related to state immunities. Understanding the comparative landscape and specific examples enables a more informed and well-rounded approach to the study and application of state immunities, especially concerning the involvement of states in economic activities typically undertaken by private entities.

[1] Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489

[2] 1981 AIR 487, 1981 SCR (2) 79

[3] Sanjaya Bahel v. Union of India, 2019 SCC OnLine Del 8551

[4] Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111

[5] Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489

[6] Ashok Hurra v. Rupa Bipin Zaveri, (1997) 4 SCC 226

[7] “State’ Under Article 12 of the Constitution.” Drishti IAS, 20 May 2019, https://www.drishtiias.com/daily-updates/daily-news-analysis/state-under-article-12-of-the-constitution.

[8] Setser, Vernon G. “The immunities of the state and government economic activities.” Law & Contemp. Probs. 24 (1959): 291.  The aim of this discussion is to provide an overview of the historical development and current state of state immunities. State immunities refer to the exemption of the government, state, or its entities from legal liabilities that private individuals or associations typically face. This topic is particularly relevant in the context of the state’s increasing involvement in economic activities, which are predominantly carried out by private entities in most societies.

[9] State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77


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