Holding

NCERT is not a "State" under Article 12 of the Constitution.

Summary

The appellant, an employee of the National Council of Educational Research and Training (NCERT), challenged his termination by filing a writ petition under Article 226 of the Constitution. The Delhi High Court dismissed the petition, holding that NCERT was not an "instrumentality or authority" within the meaning of Article 12 and therefore not amenable to writ jurisdiction. On appeal, the Supreme Court examined whether NCERT qualifies as a "State" under Article 12. Relying on the Society's registration under the Societies Registration Act, its autonomous functioning, limited governmental control confined to grant utilisation, and the presence of indicative factors such as finance and control, the Court concluded that NCERT does not satisfy the criteria of a State. Consequently, the appeal was dismissed, affirming the High Court's decision.

Issues considered

Whether the National Council of Educational Research and Training (NCERT) is a "State" within the meaning of Article 12 of the Constitution of India.

Legislation cited

Constitution of Indias. Article 12
Societies Registration Act

Subjects

Article 12State definitioninstrumentalityNCERTwrit petitiontermination of serviceSocieties Registration Actgovernment controlindicative factors

Judgment

CHANDER MOHAN KHANNA A
v.
J NATIONAL COUNCIL OF EDUCATIONAL RESEA~CH A19D
TRAINING AND ORS.

SEPTEMBER 17,1991
B
{K. JAGANNATHA SHETTY AND YOGESHWAR D~YAL,JJ.)

~..... Constitution of India:
A1. '2-NCERT whether "State"-Indicative indicia a~td deten11ina- C
tive factors - What are.
In a writ petition challenging the termination of services of the
appellant, who was an employee in the National Council of Educational
Research & Training (NCERT), the High Court upheld the preliminary
objection that the writ petition was not maintainable as NCERT wa~6t D
an instrumentality or authority within the meaning of Art. 12 .
o'f
I
the
.
Constitution. Aggrieved, the appellant filed the appeal by spe~ial leave to
this Court.

On the question whether NCERT is "State" as defined under Article
12 of the Constitution, E
Dismissing the appeal, the Court,
HELD: 1.1. Like all societies, having a Memorandum of Association
and Rules for internal management, the National Council of Educational
Research and Training is a society registered under the Societies
Registration Act. (168 E] F

1.2. Having regard to the object, functions, activities, sources of
funds of NCERT, freedom of application of its income and property
towards the promotion of its objectives and implementation of
programmes, confinement of Government control only to proper G
utilisation llf the grant, and largely being an autonomous body, the
institution does not satisfy the requirements of "State" under Article 12 of
the Constitution. (169 G-H; 170A-C; 171 C-D]

Tekraj Vasandlti alias K.L. Basandlti v. Union of India (1988] 2 SCR-
260, Sablijit Tewari v. Union of India and Ors., [19751 1 SCC 485, referred to. H
165
166 SUPREME COURT REPORTS (1991) SUPP. 1 S. C.R.

A Ajay Basia v. Khalid Mujib Seltravardlti, (1981) 1 SCC 722 P.K )L.--
Ramacltandra Iyer v. Union of India, (1984) 2 SCC 141 distinguished.

2. Article 12 should not be stretched so as to bring in every
autonomous body which has some nexus with the Government within the
sweep of the expression "State". A wide enlargement of the meaning must
B be tempered by a wise limitation. It must not be lost sight of.that in the
•
modern concept of Welfare State ; independent institution; corporation
and agency are generally subject to State control. The State control does
not render such bodies as "State" under Article 12.

C The State control, however vast and pervasive, is not determinative.
The financial contribution by the State is also not conclusive. [168 A-BJ

3. The powers, functions, finances and control of the government
are some of the indicating factors to answer the question whether a body is
"State" or not. These are merely indicative indicia and are by no means
D conclusive or clinching in any case. Each case should be handled with care
a11d caution. [167 E-G]

Sukhdev Singh v. Bhagat Ram, (1975) 1 SCC 421; R.D. Sltetty v.
Intemational Airport Authority, [1979)3 SCC 489, and Som Prakash Rekhi v.
E Union of India, [1981) 1 SCC 449, referred to .

4.1 The combination of State aid coupled with an unusual degree of
control over the management and policies of the body, and rendering of an
important public service being the obligatory functions of the State may
largely point out that the body is "State". [168 B-C]
F
4.2. lfthe Government operates behind a corporate veil, carrying·out
governmental activity and governmental functions of vital public
importance, there may be little difficulty in identifying the body as "State",
within the meaning of Article 12 of the Constitution. [168 CJ
G
Central Inland Water Transpor:t Corporation v. Brojonath Gangoli,
(1986) 3 SCC 156, Tekraj Vasandlti alias K.L. Basa11dhi v. Union of India,
(1988) 2 SCR 260, referred to.

CIVIL APPELLATE JURISDlCTION : Civil Appeal No. 1699 of
H 1981.
KHANNA v. NCERT [ SHETIY, J.) 167

-~- From the Judgment and order dated 10.4.1980 of the Delhi H~ A
Court in Civil Writ No. 450of1971.

H.K. Puri for the Appellant.

The Judgment of the Court was ·delivered by
B
K. JAGANNATHA SHETIY, J. Whether the National Council of
Educational Research and Training (NCERT) is "State" as defined under
Article 12 of the Constitution ? This is the only question that calls for
decision in this appeal. The appellant was an employee of the NCERT. His
services were terminated by the Secretary of NCERT. Challenging the
termination he moved the Delhi High Court under Article 226 of the- Con- C
stitution.The NCERT raised a preiiminary objection as to the main-
t!iinability of the writ petition. The objection was that the NCERT is not
amenable. to the "Writ jurisdiction of the High Court as it is .not an in-
strumentality or other authority within the meaning of Article 12 of the
Constitution. The .High Court has upheld the preliminary objection and
dismissed the writ petition. The decision of the High Court has been chal- D
lenged in this appeal.

There are only general principles but not exhaustive test to deter-
mine whether a body is an instrumentality or agency of the Government.
Even in general principles , there is no cut and dried formula which would E
provide correct division of bodies into those which are instrumentalities or
agencies of the Government and those which are not. The powers, func-
tions, finances and control of the Government are some of the indicating
factors to answer the question whether a body is "State" or not. Each case
should be handled with care and caution. Where the financial assistance
from the State is so much as to meet almost entire expenditure of the F
institution, or the share capital of the corporation is completely held by the
Government, it would afford some indication of the body being impreg-
nated with governmental character. It may be a relevant factor if the in-
stitution or the corporation enjoys monopoly status which is State
conferred or State protected. Existence of deep and pervasive State control
may ?fford an indication. If the functions of the institution are of public G
importance and related to governmental functions, it would also be a
relevant factor. These are merely indicative indicia and are by no means
conclusive or clinching in any case See Sukhdev Singh v. Bhagat Ram,
[1975] 1 SCC 421; R.D. Shetty v. Intematinnal Airport Authority, [1979]3
SCC 489; Ajay Rasia v. Khalid Mujib Sehravardlzi, [1981]1 SCC 722 and
Som Prakash Rekhi ~.Union of India, [1981]1 SCC-449. H
168 SUPREME COURT REPORTS (1991) SUPP. 1 S. C.R.

A Article 12 should not be stretched so as to bring in every autonomous
body which has some nexus with the Government within the sweep of.
expression "State". A wide enlargement of the meaning must be tempered
by a wise limitation. It must not be lost sight of that in the modem concept
of Welfare State; independent institution, corporation and agency are
generally subject to State control. The State control does not render such
B bodies as "State" un~er Article 12. The State control, however, vast and
pervasive is not determinative. The financial contribution by the State is
also not conclusive. The combination of State aid coupled with an unusual
degree of control over the management and policies of the body, and
rendering of an important public semce being the obligatory functions of
the State may largely point out that the body is "State". If the Government
C overates be~ind a corporate veil, carrying out gov!!rnment&l activity and
governmental functions of vital public importance, there may be little dif-
ficulty in identifying the body as "State'! within the meaning of Article 12 of
the Constitution. See: P.K Ramachandra Iyer v. Union of India, (1984)2
SCC 141 Central Inland Water Transport Corporation v. Brojonath Gangoli,
(1986) 3 SCC 156 and Tekraj Vasandlzi alias K.L. Basandhi v. Union of
D India, (1988)2 SCR 260. 'r-
The NCERT is a society registered under the Societies Registration
Act. Like all societies, it has a Memorandum of Association. It has Rules
for internal management. The High Court has elaborately examined the
Memorandum of Association and the rules of the NCERT. The relevant
E part of the discussion by the High Court is as follows:

''The NCERT is governed by a Memorandum of Association
subscribed to by seven officers of the Government of India on
· 6.6.1961. Under clause 3.1 of the Memorandum of Association
the object of the Council is to assist and advise the Ministry of
F
Education and Social Welfare in the implementation of its
policies and major programmes in the field of education par-
ticularly school education. Under clause 3.2 the Council is em-
powered for the realisation of the above objectives to
undertake several kinds of programmes and activities which
G include coordination or research, extension services and train-
ing, dissemination of improved educational techniques and
practices in schools, collaboration in educational programmes,
distribution of ideas and information, preparation and publica-
tion of books, materials, periodicals and other literature and
allied activities. Under clause 5 the income and property of
H the. Council is to be applied towards the promotion of its ob-
KHANNA v. NCERT [ SHETI'Y, J.) 169

jects and cannot be disposed of by way of dividends, .bonus etc. A
But under this clause, the Council is free to apply fhe income
and property towards its objectives in such manner as it may
think fit. It is subject to the limitations placed by the Govern-
ment of India in this regard only in respect of the expenditure
of grants made by the Government. Under clause 6 the
Government of India could review the work and progress of B
the Council and take appropriate action to give effect to -the
reports received on enquiries. In addition, the Government
------ could at any time issue directions to the Council on important
matters of policy and programmes." Rule 3 of the Rules of the
Council provides for Constitution of the Council which con-
sists mainly of various Government officials but also includes C
the Chairman of the University Grants Commission, four Vice
Chancellors and a number of nominees, four from school
teachers and several others. Rule 7 enables the Government
to fix the period of appointment of the members and to extend
it from time to time. The council's affairs are conducted by the
Executive Committee whose constitution is outlined in Rule D
23. This includes_yarious Government servants but it also in-
cludes four educationists and three Professors and Heads of
Departments who may be nominated by the President. Rule
37 provides that if there is any difference of opinion the view
of the majority will prevail subject to a veto which could be E
exercised by the Government of India within a month. It also
enables the President to refer any question for the decision of
- ·-A.
the Government. Rule 40 enables the Executive Committee to
frame and amend Regulations not inconsistent with the rules.
Rule 42 empowers the Executive Committee to enter into ar-
rangements with Government, public or private organisations F .
or individuals in furtherance of its objectives and implementa-
tion of its programmes. Rule 57 provides that the funds of the
council shall consist of (i) grants made by Government; (ii)
contribution from other sources; (iii) Income from the assets
of the Council; and (iv) Receipts of the Council from other
sources." · . G
The object of the NCERT as seen from the above analysis is to assist
and advise the Ministry of Education and Social Welfare in the implemen-
tation of the Governmental policies and major programmes in the field of
education particularly school education. The NCERT undertakes several.
kinds of programmes and activities connected with th.e coordination of H
170 SUPREME COURT REPORTS (1991) SUPP. 1 S. C.R.

A research extension services and training, dissemination of improved educa-
tional techniques, collaboration in the educational programmes. It also
undertakes preparation and publication of books, materials, periodicals
and ~ther literature. These activities are not wholly related to Government
functions. The affairs of the NCERT are conducted by the Executive
Committee comprising of Government servants and educationists. The
.B Executive Committee would enter into arrangements with Government,
public or private organisations or individuals in furtherance of the objec-
tives for implementation of programmes. The funds of the NCERT consist
of : (i) grants made by the Government, (ii) contribution from other sour-
ces and (iii) income from its own assets. It is free to apply its income and
property towards the promotion of its objectives and implementation of the
C programmes. The Government control is confined only to the proper
utilisation of the grant. The NCERT is thus largely an autonomous body.

· ' Al?I.~~!. ~ ·.si.~il~f '.)~r~e'_ ~~s ·:c~~~i4~;~ci.)y th~; ~o.urt in Tekr~j
Vasandhi alias KL. Basandhz v. Union of India, {1988)2 SCR 260. This
Court was required to determine whether the Institute of· Constitutional
D and Parliamentary Studies (ICPS) wa:; State under Article 12. The ICPS
was a registered society financed mostly by the Central Government and
partly by gifts and donations from Indian and foreign agencies. The first
President of the society was the then Speaker of the Lok Sabha. Out of the
five vice- presidents three were the then central ministers ; the other two
were the then Chief Justice of India and the Attorney General. The ob-
E jects of the society were to provide for constitutional and parliamentary
studies, promotion of research in constitutional law, setting up of legislative
research and reference service for the benefit of legislators, organisation of
training programmes in matters of parliamentary interest and importance
and publication of a journal. The Court found tha~ ICPS was born as a
voluntary organisation . It found further that though the annual financial
F contribution from the State was substantial, it was entitled to receive aid
from the public and in fact recei\'.ed contributions from other sources. Its
objects were not governmental business. As regards the argument that the
government exercised pervasive control over ICPS, the Court said:

"In a Welfare State................. Governmental control is very
G pervasive and touches all aspects of social existence........... A .>-·
broad picture of the matter has to be taken and a discerning
mind has to be applied keeping the realities and human ex-
periences in view so as to reach a reasonablel co'nCtusion.", ·.~
• J·. ·"' 4 I. t,
Jf.:. ·~ A

In the light of all these factors it has heid that ICPS was not ,;State".
H
Kl:{ANNA v. NCERT [ SHETIY, J.] 171

In the present case, the High Court has relied upon the Constitution A
Bench decision of this Court in Sablijit Tewari v. Union of India and Ors.,
(1975] 1 SCC 485. There it was held that the Council of Scientific and
Industrial Research (CSIR), which was sponsored and controlled by the
Central Government and registered under the Societies Registration Act
was not "State" within the meaning of Article 12. But this decision has been
distinguished and watered down in the subsequent decisions particularly in B
Ajay Basia and Ramchandra Iyer cases (supra).

Counsel for the appellant strongly relied upon the decision in P.K
Ramchandra Iyer case where this Court held that Indian Council for
Agricultural Research (ICAR) was "State" under Article 12. But it may be
noted that ICAR was originally an attached office of the Government of C
India and its position was not altered when it was registered as· a society .
That case, therefore is clearly distinguishable.
... . .' .t '· - ' - . l. ' •
..
... . . . . ~ .•
..

In our opinion, the case on.hand, having regard to the indications to
which we have called attention earlier, does not satisfy the requirements of
"State" under Article 12 of the Constitution. We, therefore, agree with the D
conclusion of the High Court and dismiss the appeal. In the circumstances
· of the case, we make no order as to costs.

R.P. Appeal dismissed.

-