Judgment

K. JAGANNATHA SHETTY, J.:- Whether the National Council of Educational Research and Training (NCERT) is "State" as defined under Art. 12 of the Constitution? This is the only question that calls for decision in this appeal. The appellant was an employee of the NCERT. His services were terminated by the Secretary of NCERT. Challenging the termination he moved the Delhi High Court under Article 226 of the Constitution . The NCERT raised a preliminary objection as to the maintainability of the writ petition. The objection was that the NCERT is not amenable to the writ jurisdiction of the High Court as it is not an instrumentality or other authority within the meaning of Art. 12 of the Constitution. The High Court has upheld the preliminary objection and dismissed the writ petition. The decision of the High Court has been challenged in this appeal.

2. There are only general principles but not exhaustive test to determine whether a body is an instrumentality or agency of the Government. Even in general principles, there s no cut and dried formula which would provide correct division of bodies into those which are instrumentalities or agencies of the Government and those which are not. The powers, functions, finances and control of the Government are some of the indicating factors to answer the question whether a body is "State" or not. Each case should be handled with care and caution. Where the financial assistance from the State is so much as to meet almost entire expenditure of the institution, or the share capital of the corporation is completely held by the government, it would afford some indication of the body being impregnated with governmental character. It may be a relevant factor if the institution or the corporation enjoys monopoly status which is State conferred or State protected. Existence of deep and pervasive State control may afford an indication. If the functions of the institution are of public importance and related to governmental functions, it would also be a relevant factor. These are merely indicative indicia and are by no means conclusive or clinching in any case [See (i) Sukhdev Singh v. Bhagat Ram, (1975) 1 SCC 421; (ii) R. D. Shetty v. International Airport Authority, (1979) 3 SCC 489; (iii) Ajay Hasia v. Khalid Mujib Sehravardhi, (1981) 1 SCC 722 and (iv) Som Prakash Rekhi v. Union of India, (1981) 1 SCC 449].

3. Art. 12 should not be stretched so as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression "State". A wide enlargement of the meaning must be tempered by a wise limitation. It must not be lost sight of that in the modern concept of Welfare State, independent institution, corporation and agency are generally subject to State control. The State control does not render such bodies as "State" under Article 12. The State control, however vast and pervasive, is not determinative. The financial contribution by the State is also not conclusive. The combination of State aid coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is "State". If the Government operates behind a corporate veil, carrying out governmental activity and governmental functions of vital public importance, there may be little difficulty in identifying the body as "State" within the meaning of Art. 12 of the Constitution. [See : (1) P. K. Ramachandra lyer v. Union of India, (1984) 2 SCC 141; (ii) Central Inland Water Transport Corporation v. Brojonath Gangoli, (1986) 3 SCC 156; and (iii) Tekraj Vasandhi alias K. L. Basandhi v. Union of India, (1988) 2 SCR 260.

4. The NCERT is a society registered under the Societies Registration Act. Like all societies, it has a Memorandum of Association. It has Rules for internal management. The High Court has elaborately examined the Memorandum of Association and the rules of th