The main legal point established in the judgment is that the question of whether an entity is considered 'State' under Art.12 of the Constitution depends on factual evidence and the characteristic features and circumstances to distinguish an authority as an instrumentality or agency of the Government. The absence of deep and pervasive State control, substantial financial assistance by the Government, or public importance of the function allied to Governmental activity indicates that the entity is not 'State' within the meaning of Art.12.

1. The short question in these three writ appeals is whether the Banks, the Catholic Syrian Bank Ltd., and the South Indian Bank Ltd., included in the schedule to the Reserve Bank of India Act, is 'State' within the meaning of Art.12 of the Constitution. These Banks are not nationalised under the Bank Nationalisation

Act.

2. The Appellants employed in these Banks were not selected for promotion to higher categories and filed these writ petitions against the two Banks, challenging their supersession. At the threshold, the question of jurisdiction arose. All the three writ petitions have been dismissed on the ground that these banks are not'State' under Art.12 of the Constitution and therefore not amenable to the writ jurisdiction of this Court. It is against these decisions that these appeals have been filed.

3. At the outset, it has to be stated that factual basis has not been made in the pleadings to lead to the conclusion that these Scheduled Banks are 'other authorities' and therefore "State" under Art.12. In fact, there is no averment in O. P. No. 1912 of 1982 that the South Indian Bank Ltd.. is 'State'. In the other two writ petitions the only averments are that the two Scheduled Banks are under the strict control of the Reserve Bank of India and that the Chairman of these Banks are appointed by the Reserve Bank. The Bank's stand is seen from Para.7 of the counter affidavit in O. P. No. 5964 of 1983:

"The contentions in Para.10 of the petition are not correct. The Chairman of the Bank is appointed by the Board of Directors and the fact that in certain circumstances provision is made in the Banking Regulations Act empowering the Reserve Bank to nominate the Chairman does not make the first respondent Bank an Authority of the Government. The Bank has been incorporated under the Indian Companies Act and not formed under the provisions of the Banking Regulations Act as stated in the petition. The entire management of the Company and its affairs are vested in the Chairman of the Board of Directors of the Company who exercises his powers subject to the superintendence, control and direction of the Board of Directors. The entire share holding of the Company is owned by private parties, the finances of the Bank are raised by its own efforts and the profits of the Bank are utilised by the Bank for its purposes. The fact that the regulatory provisions of the Indian Companies Act, 1956 or the Banking Regulations Act, 1949 are applicable to the Company does not make it an instrumentality of the Government or ' other Authority" within the meaning of either Art.12 or Art.226 of the Constitution. Like any other Company functioning under the Indian Companies Act the first respondent Bank is also functioning under the said Act and being a Banking Company it is subjected to the regulatory provisions of the Banking Regulations Act also. It performs no sovereign functions nor can it exercise any authority over third persons. The regulatory provisions of Me enactments referred to above are intended only for the proper functioning of the Company and are relatable to the police power of the State. None of the tests which are usually applied by the Courts to ascertain whether a concern is to be deemed an Authority or an instrumentality of the Government is satisfied in the case of the first respondent Bank. It is no more than a Company under the Company Law in like manner as a registered Society or a Co-operative Society registered under the applicable Acts. The Bank exercises no jurisdiction of a public nature. It cannot by its own will alter the duties, liabilities or other legal relations of third persons or even of itself. It is merely engaged in a commercial undertaking of receiving deposits from the public and advancing loans and performing other ancillary monetary transactions. It is therefore respectfully submitted that neither Art.12 nor Art.226 of the Constitution of India is attracted".

4. The question as to whether a Schedule