NEW DELHI: An organisation cannot escape constitutional scrutiny merely because the government set it up as a society rather than as a department or a statutory body, the Supreme Court has held, ruling that what counts is the depth of government control and not the legal form adopted.
A bench of Justices Prashant Kumar Mishra and Augustine George Masih made the observation in a November 6 judgment dismissing an appeal by the National Book Trust and upholding a 2012 Delhi High Court ruling that declared the trust an instrumentality of the government and therefore "State" under Article 12 of the Constitution.
"Registration as a society does not place a body mandatorily beyond Article 12 of the Constitution," the bench said. The test, it held, is whether the government exercises such "deep and pervasive control" that the body's financial, functional and administrative autonomy is substantially circumscribed, to be assessed on the overall relationship rather than on any single factor.
Applying it to the NBT, established by government resolutions of June 15, 1957 and September 28, 1962, the court found control at every stage. Its chairman is appointed by the Centre and holds office at the government's pleasure, with a three-year term for members. Representatives of the education, finance and information and broadcasting ministries sit on its governing body and executive committee; the finance ministry's representative doubles as its financial adviser, and financial matters must be placed before him under Rule 57, with disagreements going up to the ministers. Its accounts are kept in a form prescribed by the government and audited by the CAG.
"These provisions cannot, in our view, be characterised as isolated instances of ordinary regulatory supervision," the bench said. The fact that the trust earns revenue from its publications does not, by itself, displace the pervasive governmental control, it held.
The court clarified two limits. Performing a public function, receiving grants or having some government involvement does not by itself make a body "State" — publication and dissemination of books may not be an exclusively governmental function. And Article 12 status does not convert the trust into a government department or make its employees civil servants, nor confer the service protections of Articles 309 to 311; it attracts the discipline of Part III on fundamental rights.
Senior advocate Sanjay Jain assisted the court as amicus curiae in The Chairman, National Book Trust India & Anr v AR Abdul Gaffar & Ors.
(With inputs from media reports)