Supreme Court Rules Government-Controlled Societies Are Subject to Constitutional Rules

The Supreme Court has ruled that an organisation cannot escape constitutional scrutiny simply because it is registered as a society rather than a government department. A bench of justices Prashant Kumar Mishra and Augustine George Masih delivered the judgment on November 6.

Court Rulings

The court upheld a Delhi High Court ruling from 2012 that declared the National Book Trust (NBT) an instrumentality of the government and therefore 'State' under Article 12 of the Constitution. The bench stated that the true test is whether the government exercises deep and pervasive control over an organisation's functioning, finances, and decision-making.

NBT Case

The NBT argued that its registration as a society and its independent income from book sales meant it was not a government body. The Supreme Court rejected this, pointing out that the NBT was set up through a government resolution in 1957 and reorganised in 1962. The government appoints its chairman, places ministry representatives on its governing body, and oversees its accounts through the Comptroller and Auditor General.

Context

Article 12 of the Indian Constitution defines what constitutes the 'State' for the enforcement of fundamental rights. When an entity is deemed an instrumentality of the State, its actions must comply with constitutional standards of fairness and non-discrimination.