Introduction
The majority’s stand, in the PK Biswas case, highlighted the importance of government control as a factor in ascertaining whether an entity would qualify as a State. The main point of inquiry is whether the government exercises dominant financial, functional, and administrative control over the entity in question, with such control being both specific to that entity and pervasive in its extent. Conversely, if the control is mere regulatory, then even if it is mandated by any statute or otherwise, it would not qualify as a state.
Essentially, such an interpretation which makes deep-pervasive control as the primary factor for determining the entity’s status under Article 12 shifts the focus away from, previously emphasised, public function. Such a transition might facilitate reducing the number of writ petitions under Article 32 and limit judicial discretion in such cases, as the court, now, need not determine if the entity is performing an essential public function, thereby alleviating the judiciary’s burden. However, the problem with this test is its under-inclusivity.
Several scholars have suggested that this test fails to take into account that many entities despite not having formal “functional, financial, and administrative control,” hold significant influence over citizens because of the State authorising them directly or indirectly. As a result, this test puts the citizens at a vulnerable position where their ability to enforce their fundamental rights might be restricted, despite such actions having a significant impact on them.
In Zee Telefilms Ltd. & Anr. v. Union of India & Ors., this issue became apparent. The litigants, in this case, contended that the Board of Control for Cricket in India (BCCI) should come under the ambit of State under Article 12 as it undertakes several public functions and is clearly a de facto monopoly perpetuated by the government itself. However, the court dismissed the arguments of the petitioner and held that BCCI could not be considered a state. While the court acknowledged the fact that the element of public duty is present in the Board’s functions, it, nevertheless, held that mere public function is not sufficient to satisfy the precedent set in the Pradeep Kumar Biswas case. Further, the rationale given by the court was that the government had neither mandated the Board to perform these functions nor exercised any pervasive control over it. Instead, the government has deliberately delegated the regulation of cricket activities to private bodies like the BCCI.
The problem emanating from such an argument is that if the state simply delegates essential public functions, such as policing and water supply to autonomous bodies, without any clear extent of financial, functional, and administrative control, a certain sense of ambiguity would always be present with respect to the enforcement of individuals’ fundamental rights related to these necessary goods and services.
Even the Memorandum of Association of the BCCI suggests that it regulates the official cricket activities in India, acting as the rule-making authority, and holds a monopoly over team selection, training, and tournament organization. Additionally, the 275th Law Commission Report of India recommended classifying the Board of Control for Cricket in India (BCCI) as an “other authority” to include it under the definition of the State. Although BCCI does not receive direct government funding, it benefits from subsidies and tax incentives provided by both State and Central governments. This illustrates how the failure to satisfy the “pervasive control test” from the PK Biswas case results in a lack of accountability for organizations performing functions of significant public importance, like the BCCI.
Therefore, although this binary approach while assessing the scope of Article 12 may assist in reducing the scope of judicial discretion, it also creates a higher threshold for proving an entity’s status as State. As exemplified in the case of BCCI, there’s a pressing need to reconfigure this test to safeguard individuals’ fundamental rights along with maintaining judicial clarity.
Way Forward
It is clearly visible that, over the course of time, the courts have made attempts to broaden the scope of article 12, starting with the application of ejusdem generis, covering only certain entities, to coming up with the deep-pervasive test. However, as mentioned above, these efforts fall short and there is still a need to enlarge the concept of state within Article 12 to accommodate the changing nature of governance.
One possible solution would be reconsidering the concept of ‘agency’ within the ‘agency or instrumentality’ framework. The primary point of inquiry under this model would be assessing the nature of the particular conduct of an entity. If the act is purely of a public nature and has been supported or indirectly authorized by the state, the entity, even if private, undertaking that task would qualify as a state instrumentality with respect to that particular task. Such a framework would provide greater flexibility, unlike the traditional method, which restricts itself by merely focusing on the presence of the direct pervasive control of the state.
Such a model is more feasible as it deals with a wide array of scenarios instead of limiting itself to a few cases. An entity would by default come under the ambit of the State where the government has substantial control. Furthermore, this method could also help in detecting the agency’s relationship with the state in certain ambiguous situations such as cases of de facto monopoly accorded by the state or private entities undertaking essential public functions. For instance, in the case of the BCCI, decisions regarding player selection may render the BCCI an agent of the State, while broadcasting rights decisions may not. Thus, fundamental rights violations would be limited to specific cases where the State’s involvement is evident. This approach provides a greater clarity while ascertaining an entity’s nature due to its nuanced manner of examining the relationship between the State and entities.
Conclusion
The KITCO case has once again highlighted the issue of which entities fall under the definition of “other authorities” and thereby qualify as a State. Although Indian courts generally follow the benchmark laid down by the court in the celebrated case of PK Biswas, this test is fraught with problems of insufficiency and rigidity. The method of inquiry employed by the court in PK Biswas always risks excluding several entities, such as the BCCI, which substantially influence the citizens by performing essential public functions despite them not being overtly a state act. Thus, there is a need for a more nuanced approach, such as redefining the concept of agency which would allow for a much more flexible interpretation of the term “other authorities”. This would ensure that all entities with substantial public impact are appropriately being treated as a state instrumentality and thereby offer a more balanced and practical approach for ascertaining an entity’s status under Article 12.
The post is written by Ayush Gairola, 3rd year student of B.A. LL.B. (Hons.) at NLS Bangalore