Judgement Briefs

Constitutional Law

Pradeep Kumar Biswas v. Indian Institute of Chemical Biology

(2002) 5 SCC 111

Citation
(2002) 5 SCC 111
Court
Supreme Court of India
Date
16 April 2002
Bench
S.P. Bharucha C.J.; S.S.M. Quadri; R.C. Lahoti; N. Santosh Hegde; Doraiswamy Raju; Ruma Pal; Arijit Pasayat

Facts

  • Employees of the Indian Institute of Chemical Biology challenged the termination of their services.
  • The Institute was a constituent unit of the Council of Scientific and Industrial Research, commonly known as CSIR.
  • CSIR was registered as a society and was not created directly by a statute.
  • The Calcutta High Court declined to treat CSIR as “State,” relying upon the earlier Supreme Court decision in Sabhajit Tewary v. Union of India.
  • In Sabhajit Tewary, a five-judge Bench had held that CSIR was not an authority under Article 12.
  • Because later cases had substantially expanded the instrumentality doctrine, the correctness of Sabhajit Tewary was referred to a seven-judge Bench.

Issue

  • Whether CSIR was financially, functionally and administratively dominated by the Central Government.
  • Whether CSIR was an instrumentality of the State under Article 12.
  • Whether the six factors stated in Ajay Hasia were rigid conditions or only relevant indicators.
  • Whether Sabhajit Tewary should be overruled.

Rule

  • The tests in Ajay Hasia are not a mechanical checklist.
  • The Court must examine the cumulative effect of all relevant facts.
  • The controlling inquiry is whether the body is:
  • financially dominated;
  • functionally dominated; and
  • administratively dominated by government.
  • Governmental control must be particular and pervasive, not merely general regulatory supervision applicable to all bodies in that field.
  • A body does not become State merely because it receives some financial assistance or is regulated.
  • Conversely, statutory creation is not essential where the body is in substance an agency or instrumentality of government.

Application

  • The majority examined CSIR’s origin, constitution, finances, administration and relationship with government as a whole.
  • CSIR had been established by a Government of India resolution to promote scientific and industrial research in the national interest.
  • The Prime Minister of India was its ex officio President.
  • Its governing structure contained Union ministers and senior government officials.
  • The Director-General and other important functionaries were appointed with governmental involvement.
  • Government possessed substantial power over the composition and functioning of the governing body.
  • A very large part of CSIR’s funding came from government grants.
  • Its assets, expenditure and financial decisions were subject to governmental supervision.
  • The Government had itself described CSIR in official material as a society owned or controlled by the Central Government.
  • Its scientific research was closely connected with national planning, technological development and governmental policy.
  • The majority concluded that this was not ordinary external regulation.
  • Governmental control extended into CSIR’s financial, administrative and functional structure.
  • Considering all factors cumulatively, CSIR was a governmental instrumentality.
  • The majority clarified that no single factor—such as funding, public function or government nomination—was conclusive by itself.
  • The decision must arise from the overall relationship.
  • Justices Lahoti and Doraiswamy Raju dissented.
  • They considered that government support and representation did not amount to the necessary deep and pervasive control.
  • In their view, CSIR retained sufficient institutional autonomy, and broadening Article 12 excessively could convert many publicly assisted bodies into State authorities.

Conclusion

  • By a 5:2 majority, the Supreme Court held that CSIR was “State” under Article 12.
  • Its financial dependence, governmental composition, administrative structure and nationally significant functions demonstrated particular and pervasive governmental domination.
  • The six indicators in Ajay Hasia were declared flexible factors rather than rigid requirements.
  • Sabhajit Tewary was overruled.
  • The employees’ constitutional challenge could therefore proceed against CSIR and its constituent institute.