{"id":36292,"date":"2026-11-15T03:14:17","date_gmt":"2026-11-15T03:14:17","guid":{"rendered":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/?p=36292"},"modified":"2026-11-15T03:19:15","modified_gmt":"2026-11-15T03:19:15","slug":"public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control","status":"publish","type":"post","link":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/","title":{"rendered":"Public Corporations and Public Sector Undertakings: Parliamentary and Judicial Control"},"content":{"rendered":"\n<h1 id=\"h-public-corporations-and-public-sector-undertakings-psus-parliamentary-and-judicial-control\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Public_Corporations_and_Public_Sector_Undertakings_PSUs_Parliamentary_and_Judicial_Control\"><\/span>Public Corporations and Public Sector Undertakings (PSUs): Parliamentary and Judicial Control<span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">Public Corporations and Public Sector Undertakings (PSUs) form the backbone of public administration and economic infrastructure in India. Established or owned by the government, they exist to deliver essential services, drive industrial growth, generate employment, and safeguard public interest.<\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #0c0c0c;color:#0c0c0c\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #0c0c0c;color:#0c0c0c\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Public_Corporations_and_Public_Sector_Undertakings_PSUs_Parliamentary_and_Judicial_Control\" >Public Corporations and Public Sector Undertakings (PSUs): Parliamentary and Judicial Control<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Understanding_Public_Corporations_and_PSUs\" >Understanding Public Corporations and PSUs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Public_Corporations\" >Public Corporations<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Public_Sector_Undertakings_PSUs\" >Public Sector Undertakings (PSUs)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Key_Differences_Between_Public_Corporations_and_PSUs\" >Key Differences Between Public Corporations and PSUs<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Why_Parliamentary_and_Judicial_Oversight_Is_Necessary\" >Why Parliamentary and Judicial Oversight Is Necessary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Parliamentary_Control_Over_Public_Corporations_and_PSUs\" >Parliamentary Control Over Public Corporations and PSUs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#1_Questions_and_Debates\" >1. Questions and Debates<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#2_Parliamentary_Committees\" >2. Parliamentary Committees<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#3_Budgetary_Control\" >3. Budgetary Control<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#4_CAG_Audits\" >4. CAG Audits<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#5_Annual_Reports\" >5. Annual Reports<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#6_Ministerial_Responsibility\" >6. Ministerial Responsibility<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Judicial_Control_Over_Public_Corporations_and_PSUs\" >Judicial Control Over Public Corporations and PSUs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#1_Judicial_Review\" >1. Judicial Review<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#2_Enforcement_of_Fundamental_Rights\" >2. Enforcement of Fundamental Rights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#3_Writ_Jurisdiction\" >3. Writ Jurisdiction<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#4_Fairness_in_Contracts_and_Tenders\" >4. Fairness in Contracts and Tenders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#5_Protection_Against_Mala_Fide_Actions\" >5. Protection Against Mala Fide Actions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#6_Compensation_and_Remedies\" >6. Compensation and Remedies<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Landmark_Judicial_Precedents_on_Public_Corporations_and_PSUs\" >Landmark Judicial Precedents on Public Corporations and PSUs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#1_Rajasthan_Electricity_Board_v_Mohan_Lal_1967\" >1. Rajasthan Electricity Board v. Mohan Lal (1967)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#2_Sukhdev_Singh_v_Bhagatram_1975\" >2. Sukhdev Singh v. Bhagatram (1975)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#3_Ramana_Dayaram_Shetty_v_International_Airport_Authority_of_India_1979\" >3. Ramana Dayaram Shetty v. International Airport Authority of India (1979)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-25\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#4_Ajay_Hasia_v_Khalid_Mujib_Sehravardi_1981\" >4. Ajay Hasia v. Khalid Mujib Sehravardi (1981)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-26\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#5_Pradeep_Kumar_Biswas_v_Indian_Institute_of_Chemical_Biology_2002\" >5. Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-27\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#6_Federal_Bank_Ltd_v_Sagar_Thomas_2003\" >6. Federal Bank Ltd. v. Sagar Thomas (2003)<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-28\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Parliamentary_Control_vs_Judicial_Control\" >Parliamentary Control vs. Judicial Control<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-29\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/#Conclusion_Balancing_Autonomy_and_Accountability_in_Public_Sector_Governance\" >Conclusion: Balancing Autonomy and Accountability in Public Sector Governance<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n\n\n\n\n<p class=\"wp-block-paragraph\">While these bodies require day-to-day operational freedom to function efficiently, they cannot operate without oversight. Because they handle public money and wield public authority, they are kept in check through <strong>parliamentary control and judicial control<\/strong> to ensure transparency, legality, and accountability.<\/p>\n\n\n\n<h2 id=\"h-understanding-public-corporations-and-psus\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Understanding_Public_Corporations_and_PSUs\"><\/span>Understanding Public Corporations and PSUs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Although often grouped together, public corporations and PSUs have distinct legal foundations. In practice, &#8220;PSU&#8221; is an umbrella term that encompasses both statutory corporations and government-owned companies.<\/p>\n\n\n\n<h3 id=\"h-public-corporations\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Public_Corporations\"><\/span>Public Corporations<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A public corporation is a statutory body created by a special act of Parliament or a state legislature. It possesses a separate legal identity, meaning it can own property, enter into contracts, and sue or be sued in its own name.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Core Characteristics:<\/strong> Created by special legislation, wholly or largely government-owned, enjoys administrative and financial autonomy, and primarily delivers public utilities or services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Examples:<\/strong> Life Insurance Corporation of India (LIC), Food Corporation of India (FCI), Employees&#8217; State Insurance Corporation (ESIC), and Airports Authority of India (AAI).<\/p>\n\n\n\n<h3 id=\"h-public-sector-undertakings-psus\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Public_Sector_Undertakings_PSUs\"><\/span>Public Sector Undertakings (PSUs)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">A PSU is a commercial enterprise in which the central or state government holds a majority stake and exercises management control. Under Section 2(45) of the Companies Act, 2013, a government company is one where at least 51% of the paid-up share capital is held by the Central Government, one or more State Governments, or a combination of both.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Core Characteristics:<\/strong> Operates primarily on commercial and industrial principles, promotes economic development, and remains accountable to the government and the legislature.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Examples:<\/strong> Bharat Heavy Electricals Limited (BHEL), Oil and Natural Gas Corporation (ONGC), Steel Authority of India Limited (SAIL), and National Thermal Power Corporation (NTPC).<\/p>\n\n\n\n<h3 id=\"h-key-differences-between-public-corporations-and-psus\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Differences_Between_Public_Corporations_and_PSUs\"><\/span>Key Differences Between Public Corporations and PSUs<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Feature<\/th><th>Public Corporations<\/th><th>Public Sector Undertakings (Government Companies)<\/th><\/tr><\/thead><tbody><tr><td><strong>Creation<\/strong><\/td><td>Established by a special act of Parliament or state legislature.<\/td><td>Incorporated under the Companies Act, 2013.<\/td><\/tr><tr><td><strong>Governing Rules<\/strong><\/td><td>Powers and functions are defined by their specific establishing act.<\/td><td>Governed by company law and their memorandum\/articles of association.<\/td><\/tr><tr><td><strong>Primary Focus<\/strong><\/td><td>Public utility, welfare, and essential service delivery.<\/td><td>Commercial, industrial, and profit-orientated economic activities.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"h-why-parliamentary-and-judicial-oversight-is-necessary\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Why_Parliamentary_and_Judicial_Oversight_Is_Necessary\"><\/span>Why Parliamentary and Judicial Oversight Is Necessary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Granting autonomy to public enterprises allows them to avoid bureaucratic delays, but unchecked power carries risks. Oversight is essential to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Prevent the misuse or waste of public funds.<\/li>\n\n\n\n<li>Curb corruption, favouritism, and administrative irregularities.<\/li>\n\n\n\n<li>Ensure alignment with national economic policies and statutory laws.<\/li>\n\n\n\n<li>Protect citizens against arbitrary management decisions.<\/li>\n<\/ul>\n\n\n\n<h2 id=\"h-parliamentary-control-over-public-corporations-and-psus\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Parliamentary_Control_Over_Public_Corporations_and_PSUs\"><\/span>Parliamentary Control Over Public Corporations and PSUs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Parliamentary control ensures democratic and financial accountability, verifying that public enterprises serve the public interest and spend taxpayer money responsibly.<\/p>\n\n\n\n<h3 id=\"h-1-questions-and-debates\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Questions_and_Debates\"><\/span>1. Questions and Debates<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Members of Parliament (MPs) can question concerned Ministers on the floor of the House regarding the policies, performance, finances, or alleged irregularities of any public undertaking.<\/p>\n\n\n\n<h3 id=\"h-2-parliamentary-committees\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Parliamentary_Committees\"><\/span>2. Parliamentary Committees<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Specialised committees conduct deep-dive evaluations of PSU operations:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Committee on Public Undertakings (COPU):<\/strong> Reviews the reports, accounts, and overall efficiency of select public undertakings.<\/li>\n\n\n\n<li><strong>Public Accounts Committee (PAC):<\/strong> Examines the audit reports of the Comptroller and Auditor General (CAG) to ensure funds were spent as intended.<\/li>\n\n\n\n<li><strong>Estimates Committee:<\/strong> Scrutinises government expenditure and recommends ways to improve administrative economy and efficiency.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-3-budgetary-control\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Budgetary_Control\"><\/span>3. Budgetary Control<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Whenever a public undertaking requires capital infusion, grants, or loans from the Consolidated Fund of India, Parliament scrutinises and approves the allocation.<\/p>\n\n\n\n<h3 id=\"h-4-cag-audits\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_CAG_Audits\"><\/span>4. CAG Audits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The Comptroller and Auditor General (CAG) audits the accounts of government companies and statutory corporations, laying the findings before Parliament or the relevant State Legislature.<\/p>\n\n\n\n<h3 id=\"h-5-annual-reports\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Annual_Reports\"><\/span>5. Annual Reports<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Public enterprises must submit their annual reports and audited financial statements to the legislature, opening their performance to public and legislative scrutiny.<\/p>\n\n\n\n<h3 id=\"h-6-ministerial-responsibility\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Ministerial_Responsibility\"><\/span>6. Ministerial Responsibility<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">While ministers do not interfere in routine management, they remain answerable to Parliament for broad policy decisions and the overall health of the undertakings under their ministry.<\/p>\n\n\n\n<h2 id=\"h-judicial-control-over-public-corporations-and-psus\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Judicial_Control_Over_Public_Corporations_and_PSUs\"><\/span>Judicial Control Over Public Corporations and PSUs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Judicial control upholds the rule of law, ensuring that public corporations and PSUs act fairly, reasonably, and within constitutional boundaries. Because these bodies act as extensions of the state, citizens can challenge their arbitrary actions in court.<\/p>\n\n\n\n<h3 id=\"h-1-judicial-review\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Judicial_Review\"><\/span>1. Judicial Review<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Courts have the authority to examine the legality of decisions made by public undertakings and strike down actions that are unconstitutional, arbitrary, or ultra vires (beyond their legal powers).<\/p>\n\n\n\n<h3 id=\"h-2-enforcement-of-fundamental-rights\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Enforcement_of_Fundamental_Rights\"><\/span>2. Enforcement of Fundamental Rights<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Under Articles 32 and 226 of the Constitution, the Supreme Court and High Courts can enforce fundamental rights against any public body classified as &#8220;state&#8221; under Article 12.<\/p>\n\n\n\n<h3 id=\"h-3-writ-jurisdiction\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Writ_Jurisdiction\"><\/span>3. Writ Jurisdiction<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Higher courts can issue constitutional writs to check abuses of power:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Mandamus:<\/strong> Compels a public authority to perform a mandatory legal duty.<\/li>\n\n\n\n<li><strong>Certiorari:<\/strong> Quashes an illegal or unfair order passed by an authority or tribunal.<\/li>\n\n\n\n<li><strong>Prohibition:<\/strong> Stops a lower tribunal or authority from exceeding its jurisdiction.<\/li>\n\n\n\n<li><strong>Quo Warranto:<\/strong> Challenges the legal right of a person holding a public office.<\/li>\n\n\n\n<li><strong>Habeas Corpus:<\/strong> Protects individuals against unlawful detention.<\/li>\n<\/ul>\n\n\n\n<h3 id=\"h-4-fairness-in-contracts-and-tenders\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Fairness_in_Contracts_and_Tenders\"><\/span>4. Fairness in Contracts and Tenders<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Courts strictly monitor how PSUs award contracts and distribute state largesse, intervening if tenders are handled with bias, opacity, or discrimination.<\/p>\n\n\n\n<h3 id=\"h-5-protection-against-mala-fide-actions\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Protection_Against_Mala_Fide_Actions\"><\/span>5. Protection Against Mala Fide Actions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Any decision driven by bad faith, personal malice, or abuse of discretion can be overturned by the judiciary.<\/p>\n\n\n\n<h3 id=\"h-6-compensation-and-remedies\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Compensation_and_Remedies\"><\/span>6. Compensation and Remedies<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Where unlawful or negligent actions by a public body cause direct harm to an individual, courts can award damages and legal relief.<\/p>\n\n\n\n<h2 id=\"h-landmark-judicial-precedents-on-public-corporations-and-psus\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Landmark_Judicial_Precedents_on_Public_Corporations_and_PSUs\"><\/span>Landmark Judicial Precedents on Public Corporations and PSUs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Over the decades, the Supreme Court of India has shaped the scope of judicial control over public bodies through several defining rulings:<\/p>\n\n\n\n<h3 id=\"h-1-rajasthan-electricity-board-v-mohan-lal-1967\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_Rajasthan_Electricity_Board_v_Mohan_Lal_1967\"><\/span>1. Rajasthan Electricity Board v. Mohan Lal (1967)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Held that statutory authorities created by law fall within the definition of &#8220;state&#8221; under Article 12 and are bound by fundamental rights.<\/p>\n\n\n\n<h3 id=\"h-2-sukhdev-singh-v-bhagatram-1975\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Sukhdev_Singh_v_Bhagatram_1975\"><\/span>2. Sukhdev Singh v. Bhagatram (1975)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Ruled that statutory corporations like LIC and ONGC are agencies of the State under Article 12, making their actions subject to constitutional discipline.<\/p>\n\n\n\n<h3 id=\"h-3-ramana-dayaram-shetty-v-international-airport-authority-of-india-1979\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_Ramana_Dayaram_Shetty_v_International_Airport_Authority_of_India_1979\"><\/span>3. Ramana Dayaram Shetty v. International Airport Authority of India (1979)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Established that public corporations cannot act like private individuals when awarding contracts; they must follow fair, non-arbitrary standards.<\/p>\n\n\n\n<h3 id=\"h-4-ajay-hasia-v-khalid-mujib-sehravardi-1981\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"4_Ajay_Hasia_v_Khalid_Mujib_Sehravardi_1981\"><\/span>4. Ajay Hasia v. Khalid Mujib Sehravardi (1981)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Laid down clear tests\u2014such as share capital ownership, financial assistance, and deep state control\u2014to determine when a body is an &#8220;instrumentality of the State&#8221;.<\/p>\n\n\n\n<h3 id=\"h-5-pradeep-kumar-biswas-v-indian-institute-of-chemical-biology-2002\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"5_Pradeep_Kumar_Biswas_v_Indian_Institute_of_Chemical_Biology_2002\"><\/span>5. Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Clarified that a body comes under Article 12 when it is financially, functionally, and administratively dominated by the government in a pervasive manner.<\/p>\n\n\n\n<h3 id=\"h-6-federal-bank-ltd-v-sagar-thomas-2003\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"6_Federal_Bank_Ltd_v_Sagar_Thomas_2003\"><\/span>6. Federal Bank Ltd. v. Sagar Thomas (2003)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Held that a private entity performing a public function does not automatically become &#8220;state&#8221; under Article 12 unless backed by substantial government control or statutory duty.<\/p>\n\n\n\n<h2 id=\"h-parliamentary-control-vs-judicial-control\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Parliamentary_Control_vs_Judicial_Control\"><\/span>Parliamentary Control vs. Judicial Control<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Both parliamentary control and judicial control are essential mechanisms for ensuring accountability in public corporations and PSUs. However, they operate through different institutions and serve distinct purposes.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Basis<\/th><th>Parliamentary Control<\/th><th>Judicial Control<\/th><\/tr><\/thead><tbody><tr><td><strong>Exercised By<\/strong><\/td><td>Parliament or State Legislatures.<\/td><td>The Supreme Court and High Courts.<\/td><\/tr><tr><td><strong>Primary Objective<\/strong><\/td><td>Ensures democratic, policy, and financial accountability.<\/td><td>Ensures legality, fairness, and constitutional compliance.<\/td><\/tr><tr><td><strong>Key Mechanisms<\/strong><\/td><td>Questions, debates, legislative committees, and CAG audits.<\/td><td>Judicial review, fundamental rights enforcement, and writs.<\/td><\/tr><tr><td><strong>Guiding Principle<\/strong><\/td><td>Democratic supervision and responsible use of public money.<\/td><td>Rule of law and protection of individual rights.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 id=\"h-conclusion-balancing-autonomy-and-accountability-in-public-sector-governance\" class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion_Balancing_Autonomy_and_Accountability_in_Public_Sector_Governance\"><\/span>Conclusion: Balancing Autonomy and Accountability in Public Sector Governance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Public Corporations and PSUs succeed best when operational autonomy is balanced with structured accountability. Parliamentary oversight keeps these institutions aligned with national priorities and fiscal discipline, while judicial oversight guarantees that they treat citizens and businesses fairly under the Constitution. Together, these twin mechanisms safeguard transparency, efficiency, and good governance in India&#8217;s public sector.<\/p>\n\n\n\n<ul class=\"wp-block-yoast-seo-related-links yoast-seo-related-links\">\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/civil-contempt-india-breach-court-undertakings\/\">Civil Contempt in India: Breach of Court Undertakings, Wilful Disobedience &amp; Supreme Court Judgements<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/uk-digital-identity-system-privacy-transparency-uk-gdpr\/\">UK Digital Identity System Under Scrutiny: Privacy, Transparency, UK GDPR &amp; Constitutional Challenges<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/corporate-personality-nature-theories-legal-status-liability-and-advantages\/\">Corporate Personality: Nature, Theories, Legal Status, Liability and Advantages<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/doctrine-of-checks-and-balances-a-comparative-study-of-the-usa-uk-and-india\/\">Doctrine of Checks and Balances: A Comparative Study of the USA, UK, and India<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/bail-jurisprudence-in-saudi-arabia-provisional-release-detention-and-judicial-control\/\">Bail Jurisprudence in Saudi Arabia: Provisional Release, Detention, and Judicial Control<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Public Corporations and Public Sector Undertakings (PSUs): Parliamentary and Judicial Control Public Corporations and Public Sector Undertakings (PSUs) form the backbone of public administration and economic infrastructure in India. Established or owned by the government, they exist to deliver essential services, drive industrial growth, generate employment, and safeguard public interest. While these bodies require day-to-day<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_forum_subforum_count":0,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"two_page_speed":[],"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_memberships_contains_paid_content":false,"_joinchat":[],"footnotes":""},"categories":[2],"tags":[11196],"class_list":["post-36292","post","type-post","status-publish","format-standard","category-administrative","tag-administrative-law"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.8 (Yoast SEO v28.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Public Corporations and Public Sector Undertakings: Parliamentary and Judicial Control - Legal Service India - Articles<\/title>\n<meta name=\"description\" content=\"Understand parliamentary and judicial control over PSUs in India, including constitutional provisions, CAG audits and landmark judgements.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Public Corporations and Public Sector Undertakings: Parliamentary and Judicial Control\" \/>\n<meta property=\"og:description\" content=\"Understand parliamentary and judicial control over PSUs in India, including constitutional provisions, CAG audits and landmark judgements.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.legalserviceindia.com\/Legal-Articles\/public-corporations-and-public-sector-undertakings-parliamentary-and-judicial-control\/\" \/>\n<meta property=\"og:site_name\" content=\"Legal Service India - Articles\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/legalservicesind\" \/>\n<meta property=\"article:published_time\" content=\"2026-11-15T03:14:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-11-15T03:19:15+00:00\" \/>\n<meta name=\"author\" content=\"Md. 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Imran Wahab\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.legalserviceindia.com\\\/Legal-Articles\\\/wp-content\\\/uploads\\\/avatars\\\/49\\\/1777837060-bpfull.jpg\",\"url\":\"https:\\\/\\\/www.legalserviceindia.com\\\/Legal-Articles\\\/wp-content\\\/uploads\\\/avatars\\\/49\\\/1777837060-bpfull.jpg\",\"contentUrl\":\"https:\\\/\\\/www.legalserviceindia.com\\\/Legal-Articles\\\/wp-content\\\/uploads\\\/avatars\\\/49\\\/1777837060-bpfull.jpg\",\"caption\":\"Md. Imran Wahab\"},\"description\":\"\ud83d\udc6e Md. Imran Wahab, IPS Inspector General of Police (IGP), Provisioning, West Bengal Md. Imran Wahab is a distinguished Indian Police Service officer with extensive experience in law enforcement, administration, prison management, and public service. He has held several senior positions in the West Bengal Police, Kolkata Police, and Barrackpore Police Commissionerate, and served as Special IG and IGP of Correctional Services, West Bengal. \ud83c\udf93 Academic Excellence: He holds degrees in Science, Arts, Law, and Business Administration, along with multiple postgraduate diplomas in specialised fields, including Human Rights, Psychology, Public Administration, and Disaster Management. He has also undergone specialised training at SVPNPA, IIM Ahmedabad, and in Singapore. \ud83d\udcda Author &amp; Research Scholar: He has authored Police Investigation &amp; Allied Matters and Alternative Dispute Resolution: Evolving Trends and Innovations. With over 1,000 articles to his credit, his research and writings cover law, policing, criminal justice, prison administration, politics, and international affairs. His contributions have appeared in reputed police and research journals. \ud83d\uddf3\ufe0f Election Management &amp; Leadership: As an Election Commission of India observer, he has contributed to election management across several Indian states. He has also chaired and served on recruitment boards for Kolkata Police and West Bengal Police. 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Imran Wahab","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-content\/uploads\/avatars\/49\/1777837060-bpfull.jpg","url":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-content\/uploads\/avatars\/49\/1777837060-bpfull.jpg","contentUrl":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-content\/uploads\/avatars\/49\/1777837060-bpfull.jpg","caption":"Md. Imran Wahab"},"description":"\ud83d\udc6e Md. Imran Wahab, IPS Inspector General of Police (IGP), Provisioning, West Bengal Md. Imran Wahab is a distinguished Indian Police Service officer with extensive experience in law enforcement, administration, prison management, and public service. He has held several senior positions in the West Bengal Police, Kolkata Police, and Barrackpore Police Commissionerate, and served as Special IG and IGP of Correctional Services, West Bengal. \ud83c\udf93 Academic Excellence: He holds degrees in Science, Arts, Law, and Business Administration, along with multiple postgraduate diplomas in specialised fields, including Human Rights, Psychology, Public Administration, and Disaster Management. He has also undergone specialised training at SVPNPA, IIM Ahmedabad, and in Singapore. \ud83d\udcda Author &amp; Research Scholar: He has authored Police Investigation &amp; Allied Matters and Alternative Dispute Resolution: Evolving Trends and Innovations. With over 1,000 articles to his credit, his research and writings cover law, policing, criminal justice, prison administration, politics, and international affairs. His contributions have appeared in reputed police and research journals. \ud83d\uddf3\ufe0f Election Management &amp; Leadership: As an Election Commission of India observer, he has contributed to election management across several Indian states. He has also chaired and served on recruitment boards for Kolkata Police and West Bengal Police. His professional interests span law, governance, correctional administration, international affairs, and management, reflecting a sustained commitment to institutional development, knowledge sharing, and public service.","url":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/author\/md-imranwahab\/"}]}},"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/36292","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/comments?post=36292"}],"version-history":[{"count":5,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/36292\/revisions"}],"predecessor-version":[{"id":36319,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/posts\/36292\/revisions\/36319"}],"wp:attachment":[{"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/media?parent=36292"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/categories?post=36292"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.legalserviceindia.com\/Legal-Articles\/wp-json\/wp\/v2\/tags?post=36292"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}