For constitutional reasons, the term "State" is defined under Article 12 of the
Indian Constitution. "State" includes the following, according to Article 12:
- The Indian Parliament and government
- Each state's legislature and executive branch in India
- All local governments and other organizations operating on Indian soil or under their jurisdiction
- Other authorities
So, the question was raised 'Is airport authority a state'?
- Rajasthan Electricity Boars vs Mohanlal
In this case, the court explained the qualification criteria of other
authorities, it held that if a body is created by the constitution or any law
then it can qualify as 'other authorities, it doesn't matter if it performing
the government matter or not.
- R.D Shetty vs International Airport Authority
The airport authority invited many tenders. R.D Shetty also applied for the same
but because of some discriminatory nature, his tender wasn't accepted so,
against that he filed the case for violation of fundamental rights.
The court observed that International authority was formulated within the
airport authority act which is a parliamentary act and the central government
had a lot of power plus they had the power to transfer the management of the
- Degree of control
- Extra-ordinary financial assistance
So, it held that the International airport authority is an airport.
Ajay Hasia vs Khalid Mujib
In a significant ruling known as Ajay Hasia v. Khalid Mujib
, the Supreme Court
of India established a standard for determining whether a person, business, or
society qualifies as a state for the purposes of Article 12 of the Indian
Constitution by being an instrument or agency of the government.
The Court's decision was given by Justice P. N. Bhagwati. The six-factor test
summary, which is the most important part of the ruling, is largely the reason
why it is frequently referenced above Justice Bhagwati's earlier decision in the
International Airport Authority case.
The six were as follows:-
- Whether the share capital of the corporation is held by the Government
- Whether the financial assistance of the State meets almost the entire expenditure of the corporation
- Whether the corporation enjoys a state-conferred or state-protected monopoly status
- Whether there is deep and pervasive state control
- Whether the functions of the corporation are of public importance and closely related to Governmental functions
- Whether a department of Government has been transferred to a corporation