Ajay Hasia Etc vs Khalid Mujib Sehravardi &; Ors: Case Analysis
Case Name: Ajay Hasia Etc vs Khalid Mujib Sehravardi & Ors
Court: Supreme Court
Bench: Justice Y.V Chandrachud, Justice P.N Bhagwati, Justice Krishnaiyer, Justice Syed Murtaza, Justice A.D Koshal,
Petitioner: Ajay Hasia
Respondent: Khalid Murjib Sheravardi & Ors.
Important Statute: Constitution of India
Year of Judgement: 1980
Part III of Constitution of India guarantees the protection of fundamental rights to its citizen. Fundamental Rights can be claimed against the State and so the definition of what constitutes State is essential. Ajay Hasia vs. Khalid Murjib is a landmark case which explains the parameters when a body falls within the scope of Article 12. It clarifies the concept that merely if a body have statutory power it would not be enough to classify it as a State. It would be a State only when the government has a deep and pervasive control over the authority/body and the body is completely dependent on the government for its operations.
• Regional Engineering College in Srinagar was sponsored by the Government of India. The working and management of the college was carried by a society registered under Jammu and Kashmir Registration of Societies Act,1898.
• The college through a notice invited application for the B.E Course in various branches of Engineering.
• Petitioner applied for admission in the college. There were two sets of tests conducted Written Test and Viva Voice Test.
• The petitioner secured good marks in the written test but he was awarded poor marks in the viva examination due to which he didn’t clarify the admission test.
• The viva test conducted of the petitioner was of 2 to 3 minutes in which questions related to parenting and residence were asked. No formal question pertaining to the subject was asked to the petitioner.
• The petitioner found that there were few students who secured vey less marks in the written test but got selected for the admission in the college merely because they obtained high marks in the viva voice test.
• The petitioner aggrieved by the selection procedure of candidates in the Regional Engineering College filed a writ petitioner under Article 32 of the Constitution claiming that he was denied the Right to Equality and the selection procedure was arbitrary as the selection criteria was relied on viva voice examination and by holding viva voice test lasting of only 2 or 3 minutes and asking questions which had no significance in changing the intellect of the candidate.
• Whether the Regional Engineering College is a state as defined in Article 12.
• Whether the Selection Procedure was violative of Article 14 of the Constitution.
Arguments of Petitioner:
The petitioner contended through various clauses of the Memorandum of Association the college is an instrumentality of government.
• 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, amend, them from time to time with the approval of the Government of Jammu and Kashmir 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.
• Clause 3 sub-clause V of the Memorandum of Association contemplates that the monies required for running the college would be provided by the State and Central Governments.
• Clause 3 sub-clause VI requires the Society to deposit all the money credited to its fund to invest them in such manner as the State Government decide.
• Clause 3 subclause IX states that the accounts of the Society as certified by a duly appointed auditor are mandatorily to be forwarded annually to the State and Central Governments.
• Clause 6 of the Memorandum of Association gives the State Government the power to appoint persons to review the working and progress of the Society. State Government has power, with the approval of the Central Government, to take action and issue such directions as it may consider necessary in respect of any of the matters of the College.
• Clause 7 of the Memorandum of Association has a provision that in case the Society or the college is not functioning properly, the State Government will have the power to take over the administration and assets of the college with the prior approval of the Central Government.
• Clause 9 of the Memorandum of Association provides that the Chairman and other founding members are to be appointed by the State Government with the approval of the Central Government
• Thus, the petitioner contended that college falls within the definition of State as defined under Article 12 of the Constitution.
R.D Shetty vs. International Airport Authority 
The court laid down the test to determine whether the body is agency or instrumentality of the Government. The test is:
1.Entire share capital is owned or managed by State i.e. financial resources
of the State is the chief funding source.
2. Enjoys monopoly status, whether it is State conferred or State protected.
3. If a department of Government is transferred to a corporation.
4. Functional character being governmental in essence i.e. if the functions of
the corporation are of public importance and closely related to
5. Existence of deep and pervasive State control.
The Court said that these tests to determine whether any corporation can be said to be an instrumentality or agency of Government is not conclusive but merely illustrative and have to be used with caution and care.
Som Prakash vs. Union of India 
The Court held that a government company BHARAT PETROL PUMP fell within the meaning of expression the State used in Article 12. The Court held that the expression other authorities comprises of all statutory authorities on whom powers are conferred for carrying commercial activities. It was also held that the expression other authorities are not confined to statutory corporation also include a government company, a registered society or bodies which have some nexus and interrelation with the government.
U.P Warehousing Corporation vs. Vijay Narain 
It was held that U.P Warehousing Corporation is a State within the meaning of Article 12 as it was formed through a statue and managed by the government .and the ownership lies with State. Justice Chinnapa Reddy in his separate justice in this case summed up the position as The position and function of State has completely changed . it is a welfare state which has increased the government activity in manifold ways. Its activities have touched many aspects of citizens life. If a corporation is owned by the government or controlled by the government or is an instrumentality or agency of the government, it must be held to be an authority within the ambit of Article 12.
The petitioner also explained that how society acted arbitrarily in selection procedure of the candidates., firstly by ignoring the marks obtained by the candidates at the qualifying written test and secondly by allocating as many as 50 marks for the viva voce examination as against 100 marks allocated for the written test and by asking questions which had no relevance to determine intellectual capacity of a candidate.
Arguments of Respondent
The Respondent strongly contended that the college would not fall within the scope of Article 12 as it was not created under a statue but was a society registered under the Society Registration Act 1860. Hence, the defendant claimed that the writ petition is not maintainable.
The Respondent claimed that since Fundamental Rights are available only against the State there was no question of violation of Article 14 of the Constitution.
The respondent relied on the case Sarabjit Tewary vs. Union of India
Sarabjit Tewary vs. Union of India
The court in this case observed that the bodies who are not incorporated through a statue and are registered under the Companies Act 1956 and the Societies Registration Act 1860 are not considered to be a state under Article 12 of the Constitution. These could not be held to be departments of government.
However later this decision was reversed in Pradeep Kumar Biswas vs. Institute of Chemical Biology.
The court relied on the case of R.D Shetty vs. International Airport Authority and on having met the required condition to be called as a State the court held that society was an agency of Government as they government had a deep control over its functioning as its composition was determined by the representatives of government, the society is to comply with direction of the government. The Memorandum of Association of Society and the Rules Act of the Society clearly indicates that the college was owned, controlled and managed by the Government and hence a State under Article 12 of the Constitution under “Other authorities.”
The court did not rely on the test of Sarabjit Tewary vs. Union of India. The issue which arose in this case was as to whether the Council of Scientific and Industrial Research which was registered under the Societies Registration Act, 1860 was an “authority” within the meaning of Article 12. The Court implicitly assented to the proposition that if the Council were an agency of the Government, it would undoubtedly be an “authority”. But, considering the various features 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 fact that the Council was a society registered under the Societies Registration Act, 1860, but considered 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”.
Also Read: RELATIONS BETWEEN THE UNION AND THE STATES- A key for development
The court further explained that the test is not as how a jurist person is created but the reason for its existence. A Corporation maybe a statuary corporation or a government body formed under the Companies Act 1950 or a society registered under the societies act of 1860. It would be an authority under article 12 if it is an instrumentality or Agency of Government.
Since the college was declared as State under Article 12 of the Constitution it was required to fulfil to obey the constitutional mandate of the Fundamental Rights enshrined in Part III of the Constitution .in this case the Court the court said that an oral interview interview test is not a very satisfactory test for assessing and evaluating the capacity and calibre of the candidates and is prone to abuse. It should be re stored to only as an additional. The court proposed that the test must be tape recorded in order to judge whether it was conducted in an arbitrary manner.
It was also held that the allocation of 33 1/3 percent of total marks for oral interview test is arbitrary. However, the court declined to quash the admission procedure in view of lapse of 18 months when the students have completed almost 3 semesters.
However State Government, the Society and the College have agreed that the best fifty students, out of those who applied for admission for the academic year 1979-80 and who have failed to secure admission so far, they will be granted admission for the academic year 1981-82 and the seats allocated to them will be in addition to the normal intake of students in the College.
 1981 SCC (1) 722;
 1979 SCC (3) 489;
 1981 SCC (1) 449;
 1980 SCC (3) 459;
Author: Deepanshi Jain
Edited by- Ankita