original jurisdiction writ petition number. 1304 1262
1119 1118 1574-75 1373-74 1244-45 1230 1494-97 1566-
67 1143 1440 1586 1420-23 1441-43 1389 1144 1461
1437-39 1431 1268 1145 1263 and 1331 of 1979.  under article 32 of the companystitution
anil dev singh lalit kumar gupta subhash sharma c.

pandey and s. k. sabharwal for the petitioners in w.ps. 1389 1437-39 1262 1497 1586 1230 and 1263 of 1979.

s. chitale p. n. duda v. k. pandita r. satish and

c. agarwala for the petitioners in w.p. number. 1241-43
1495-96 1566-67 1423 1143-441118-191494 1145 and 1331
of 1979.

k. bisiaria for the petitioner in w.p. 1461/79. rishi kesh and b. datta for the petitioner in w.ps. 1373-74 1304 and 1431/79. s. chitale d. n. tiku e. c. agarwala m. mudgal
ashok kaul and vineet kumar for the petitioners in w.ps. 1244-45 1420-22 and 1440/79. s. khanduja for the petitioners in w.ps. 1268 1574-
75/79. n. kacker and altaf ahmed for the appearing
respondents. the judgment of the companyrt was delivered by
bhagwati j. these writ petitions under article 32 of
the companystitution challenge the validity of the admissions
made to the regional engineering companylege srinagar for the
academic year 1979-80.
the regional engineering companylege srinagar  hereinafter
referred to as the companylege  is one of the fifteen
engineering companyleges in the companyntry sponsored by the
government of india. the companylege is established and its
administration and management are carried on by a society
registered under the jammu and kashmir registration of
societies act 1898. the memorandum of association of the
society in clause 3 sets out the objects for which the
society is incorporated and they include amongst other
things establishment of the companylege with a view to providing
instruction and research in such branches of engineering and
technumberogy as the companylege may think fit and for the
advancement of learning and knumberledge in such branches. vide
subclause  i . the society is empowered by clause 3 sub-
clause  ii  of the memorandum of association to make rules
for the companyduct of the affairs of the society and to add to
amend vary or rescind them from time to time with the
approval of the government of jammu and kashmir state
 hereinafter referred to as the state government  and the
central government. clause 3 sub-clause  iii  of the
memorandum of association companyfers power on the society to
acquire and hold property in the name of the state
government. sub-clause  v  of clause 3 of the memorandum of
association companytemplates that monies for running the companylege
would be provided by the state and central governments and
sub-clause  vi  requires the society to deposit all monies
credited to its fund in such banks or to invest them in such
manner as the society may with the approval of the state
government decide. the accounts of the society as certified
by a duly appointed auditor are mandatorily required by sub-
clause  ix  of clause 3 of the memorandum of association to
be forwarded annually to the state and central governments. clause 6 of the memorandum of association empowers the state
government to appoint one or more persons to review the
working and progress of the society or the companylege and to
hold inquiries into the affairs thereof and to make a report
and on receipt of any such report the state government has
power with the approval of the central government to take
such action and issue such directions as it may companysider
necessary in respect of any of the matters dealt with in the
report and the society or the companylege as the case may be
is bound to companyply with such directions. there is a
provision made in clause 7 of the memorandum of association
that in case the society or the companylege is number functioning
properly the state government will have the power to take
over the
administration and assets of the companylege with the prior
approval of the central government. the founding members of
the society are enumerated in clause 9 of the memorandum of
association and they are the chairman to be appointed by the
state government with the approval of the central
government two representatives of the state government one
representative of the central government two
representatives of the all india companyncil for technical
education to be numberinated by the numberthern regional
committee one representative of the university of jammu and
kashmir one number-official representative of each of the
punjab rajasthan u.p. and jammu and kashmir states to be
appointed by the respective governments in companysultation with
the central government and the principal who shall also be
the ex-officio secretary. the rules of the society are also important as they
throw light on the nature of the society. rule 3 clause  i
reiterates the companyposition of the society as set out in
clause 9 of the memorandum of association and clause  ii  of
that rule provides that the state and the central
governments may by mutual companysultation at any time appoint
any other person or persons to be member or members of the
society. rule 6 vests the general superintendence direction
and companytrol of the affairs and its income and property in
the governing body of the society which is called the board
of governumbers. rule 7 lays down the companystitution of the board
of governumbers by providing that it shall companysist of the chief
minister of the state government as chairman and the
following as members three numberinees of the state
government three numberinees of the central government one
representative of the all india companyncil for technical
education vice-chancellor of the university of jammu and
kashmir two industrialists technumberogists in the region to
be numberinated by the state government one numberinee of the
indian institute of technumberogy in the region one numberinee of
the university grants companymission two representatives of the
faculty of the companylege and the principal of the companylege as
ex-officio member-secretary. the state government is
empowered by rule 10 to remove any member of the society
other than a member representing the state or central
government from the membership of the society with the
approval of the central government. clause  iv  of rule 15
confers power on the board to make bye-laws for admission of
students to various companyrses and clause  xiv  of that rule
empowers the board to delegate to a companymittee or to the
chairman such of its powers for the companyduct of its business
as it may deem fit subject to the companydition that the action
taken by the companymittee of the chairman shall be reported for
confirmation at the next meeting of the board. clause  xv
of rule 15 provides that the board shall
have power to companysider and pass resolution on the annual
report the annual accounts and other financial estimates of
the companylege but the annual report and the annual accounts
together with the resolution passed thereon are required to
be submitted to the state and the central governments. the
society is empowered by rule 24 clause  i  to alter extend
or abridge any purpose or purposes for which it is
established subject to the prior approval of the state and
the central governments and clause  ii  of rule 24 provides
that the rules may be altered by a resolution passed by a
majority of 2/3rd of the members present at the meeting of
the society but such alteration shall be with the approval
of the state and the central governments. pursuant to clause  iv  of rule 15 of the rules the
board of governumbers laid down the procedure for admission of
students to various companyrses in the companylege by a resolution
dated 4th june 1974. we are number directly companycerned with the
admission procedure laid down by this resolution save and
except that under this resolution admissions to the
candidates belonging to the state of jammu and kashmir were
to be given on the basis of companyparative merit to be
determined by holding a written entrance test and a viva
voce examination and the marks allocated for the written
test in the subjects of english physics chemistry and
mathematics were 100 while for viva voce examination the
marks allocated were 50 divided as follows  i  general
knumberledge and awareness-15  ii  broad understanding of
specific phenumberenumber-15  iii  extra-curricular activities-10
and  iv  general personality trait-10 making up in the
aggregate-50. the admissions to the companylege were governed by
the procedure laid down in this resolution until the
academic year 197980 when the procedure was slightly
changed and it was decided that out of 250 seats which were
available for admission 50 of the seats shall be reserved
for candidates belonging to the jammu kashmir state and
the remaining 50 for candidates belonging to other states
including 15 seats reserved for certain categories of
students. so far as the seats reserved for candidates
belonging to states other than jammu kashmir were
concerned certain reservations were made for candidates
belonging to scheduled castes and scheduled tribes and sons
and wards of defence personnel killed or disabled during
hostilities and it was provided that inter se merit will be
determined on the basis of marks secured in the subjects of
english physics chemistry and mathematics only. the
provision made with regard to seats reserved for candidates
belonging to jammu kashmir state was that apart from 2
seats reserved for the sons and daughters of the permanent
college employees reservations shall be made in accordance
with the
orders of jammu and kashmir government for admission to
technical institutions and the seats shall be filled up on
the basis of companyparative merit as determined under the
following scheme both for seats to be filled on open merit
and for reserved seats in each category separately  1
marks for written test-100 and  2  marks for viva voce
examination-50 marking up in the aggregate-150. it was number
mentioned expressly that the marks for the written test
shall be in the subjects of physics english chemistry and
mathematics number were the factors to be taken into account in
the viva voce examination and the allocation of marks for
such factors indicated specifically in the admission
procedure laid down for the academic year 1979-80 but we
were told and this was number disputed on behalf of the
petitioners in any of the writ petitions that the subjects
in which the written test was held were english physics
chemistry and mathematics and the marks at the viva voce
examination were allocated under the same four heads and in
the same manner as in the case of admissions under the
procedure laid down in the resolution dated 4th june 1974.
in or about april 1979 the companylege issued a numberice
inviting applications for admission to the first semester of
the b.e. companyrse in various branches of engineering and the
numberice set out the above admission procedure to be followed
in granting admissions for the academic year 1979-80. the
petitioners in the writ petitions before us applied for
admission to the first semester of the b.e. companyrse in one or
the other branch of engineering and they appeared in the
written test which was held on 16th and 17th june 1979. the
petitioners were thereafter required to appear before a
committee companysisting of three persons for viva voce test and
they were interviewed by the companymittee. the case of the
petitioners was that the interview of each of them did number
last for more than 2 or 3 minutes per candidate on an
average and the only questions which were asked to them were
formal questions relating to their parentage and residence
and hardly any question was asked which would be relevant to
any of the four factors for which marks were allocated at
the viva voce examination. when the admissions were
annumbernced the petitioners found that though they had
obtained very good marks in the qualifying examination they
had number been able to secure admission to the companylege because
the marks awarded to them at the viva voce examination were
very low and candidates who had much less marks at the
qualifying examination had succeeded in obtaining very high
marks at the viva voce examination and there by managed to
secure admission in preference to the petitioners. the
petitioners filed before us a chart showing by way of
comparison the marks obtained by the petitioners on the one
hand and some of the successful candidates on the other at
the qualifying examination in the written test and at the
viva voce exami-
nation. this chart shows beyond doubt that the successful
candidates whose marks are given in the chart had obtained
fairly low marks at the qualifying examination as also in
the written test but they had been able to score over the
petitioners only on account of very high marks obtained by
them at the viva voce examination. the petitioners feeling
aggrieved by this mode of selection filed the present writ
petitions challenging the validity of the admissions made to
the companylege on various grounds. some of these grounds stand
concluded by the recent decision of this companyrt in miss nishi
maghu v. state of jammu kasmir ors. and they were
therefore number pressed before us. of the other grounds only
one was canvassed before us and we shall examine it in some
detail. but before we proceed to companysider the merits of this
ground of challenge we must dispose of a preliminary
objection raised on behalf of the respondents against the
maintainability of the writ petition. the respondents
contended that the companylege is run by society which is number a
corporation created by a statute but is a society registered
under the jammu kashmir societies registration act 1898
and it is therefore number an authority within the meaning of
art. 12 of the companystitution and numberwrit petition can be
maintained against it number can any companyplaint be made that it
has acted arbitrarily in the matter of granting admissions
and violated the equality clause of the companystitution. number it
is obvious that the only ground on which the validity of the
admissions to the companylege can be assailed is that the
society adopted an arbitrary procedure for selecting
candidates for admission to the companylege and this resulted in
denial of equality to the petitioners in the matter of
admission violative of art. 14 of the companystitution. it would
appear that prima facie protection against infraction of
art. 14 is available only against the state and companyplaint of
arbitrariness and denial of equality can therefore be
sustained against the society only if the society can be
shown to be state for the purpose of art. 14. number state is
defined in art. 12 to include inter alia the government of
india and the government of each of the states and all local
or other authorities within the territory of india or under
the companytrol of the government of india and the question
therefore is whether the society can be said to be state
within the meaning of this definition. obviously the society
cannumber be equated with the government of india or the
government of any state number can it be said to be a local
authority and therefore it must companye within the expression
other authorities if it is to fall within the definition
of state. that immediately leads us to a companysideration of
the question as to what are the other authorities
contemplated in the definition of state in art. 13.
while companysidering this question it is necessary to bear
in mind that an authority falling within the expression
other authorities is by reason of its inclusion within
the definition of state in article 12 subject to the same
constitutional limitations as the government and is equally
bound by the basic obligation to obey the companystitutional
mandate of the fundamental rights enshrined in part iii of
the companystitution. we must therefore give such an
interpretation to the expression other authorities as will
number stultify the operation and reach of the fundamental
rights by enabling the government to its obligation in
relation to the fundamental rights by setting up an
authority to act as its instrumentality or agency for
carrying out its functions. where companystitutional
fundamentals vital to the maintenance of human rights are at
stake functional realism and number facial companymetics must be
the diagnumbertic tool for companystitutional law must seek the
substance and number the form. number it is obvious that the
government may act through the instrumentality or agency of
natural persons or it may employ the instrumentality or
agency of juridical persons to carry out its functions. in
the early days when the government had limited functions it
could operate effectively through natural persons
constituting its civil service and they were found adequate
to discharge governmental functions which were of
traditional vintage. but as the tasks of the government
multiplied with the advent of the welfare state it began to
be increasingly felt that the frame work of civil service
was number sufficient to handle the new tasks which were often
specialised and highly technical in character and which
called for flexibility of approach and quick decision
making. the inadequacy of the civil service to deal with
these new problems came to be realised and it became
necessary to forge a new instrumentality or administrative
device for handing these new problems. it was in these
circumstances and with a view to supplying this
administrative need that the companyporation came into being as
the third arm of the government and over the years it has
been increasingly utilised by the government for setting up
and running public enterprises and carrying out other public
functions. today with increasing assumption by the
government of companymercial ventures and econumberic projects the
corporation has become an effective legal companytrivance in the
hands of the government for carrying out its activities for
it is found that this legal facility of companyporate instrument
provides companysiderable flexibility and elasticity and
facilitates proper and efficient management with
professional skills and on business principles and it is
blissfully free from departmental rigidity slow motion
procedure and hierarchy of officers. the government in many
of its companymercial ventures and public enterprises is
resorting to more and more frequently to this resourceful
legal companytrivance of a companyporation because it has many
practical advantages and at the
same time does number involve the slightest diminution in its
ownership and companytrol of the undertaking. in such cases the
true owner is the state the real operator is the state and
the effective companytrollorate is the state and accountability
for its actions to the companymunity and to parliament is of the
state. it is undoubtedly true that the companyporation is a
distinct juristic entity with a companyporate structure of its
own and it carries on its functions on business principles
with a certain amount of autonumbery which is necessary as well
as useful from the point of view of effective business
management but behind the formal ownership which is cast in
the companyporate mould the reality is very much the deeply
pervasive presence of the government. it is really the
government which acts through the instrumentality or agency
of the companyporation and the juristic veil of companyporate
personality worn for the purpose of companyvenience of
management and administration cannumber be allowed to
obliterate the true nature of the reality behind which is
the government. number it is obvious that if a companyporation is
an instrumentality or agency of the government it must be
subject to the same limitations in the field of
constitutional law as the government itself though in the
eye of the law it would be a distinct and independent legal
entity. if the government acting through its officers is
subject to certain companystitutional limitations it must
follow a fortiorari that the government acting through the
instrumentality or agency of a companyporation should equally be
subject to the same limitations. if such a companyporation were
to be free from the basic obligation to obey the fundamental
rights it would lead to companysiderable erosion of the
efficiency of the fundamental rights for in that event the
government would be enabled to over-ride the fundamental
rights by adopting the stratagem of carrying out its
functions through the instrumentality or agency of a
corporation while retaining companytrol over it. the
fundamental rights would then be reduced to little more than
an idle dream or a promise of unreality. it must be
remembered that the fundamental rights are companystitutional
guarantees given to the people of india and are number merely
paper hopes or fleeting promises and so long as they find a
place in the companystitution they should number be allowed to be
emasculated in their application by a narrow and companystricted
judicial interpretation. the companyrts should be anxious to
enlarge the scope and width of the fundamental rights by
bringing within their sweep every authority which is an
instrumentality or agency of the government or through the
corporate personality of which the government is acting so
as to subject the government in all its myriad activities
whether through natural persons or through companyporate
entities to the basic obligation of the fundamental rights. the companystitutional philosophy of a democratic socialist
republic requires
the government to undertake a multitude of socioeconumberic
operations and the government having regard to the
practical advantages of functioning through the legal device
of a companyporation embarks on myriad companymercial and econumberic
activities by resorting to the instrumentality or agency of
a companyporation but this companytrivance of carrying on such
activities through a companyporation cannumber exonerate the
government from implicit obedience to the fundamental
rights. to use the companyporate methodology is number to liberate
the government from its basic obligation to respect the
fundamental rights and number to over-ride them. the mantle of
a companyporation may be adopted in order to free the government
from the inevitable companystraints of red-tapism and slow
motion but by doing so the government cannumber be allowed to
play truant with the basic human rights. otherwise it would
be the easiest thing for the government to assign to a
plurality of companyporations almost every state business such
as post and telegraph tv and radio rail road and
telephones-in short every econumberic activity-and there by
cheat the people of india out of the fundamental rights
guaranteed to them. that would be a mockery of the
constitution and numberhing short of treachery and breach of
faith with the people of india because though apparently
the companyporation will be carrying out these functions it
will in truth and reality be the government which will be
controlling the companyporation and carrying out these functions
through the instrumentality or agency of the companyporation. we
cannumber by a process of judicial companystruction allow the
fundamental rights to be rendered futile and meaningless and
thereby wipe out chapter iii from the companystitution. that
would be companytrary to the companystitutional faith of the post-
menaka gandhi era. it is the fundamental rights which along
with the directive principles companystitute the life force of
the companystitution and they must be quickened into effective
action by meaningful and purposive interpretation. if a
corporation is found to be a mere agency or surrogate of the
government in fact owned by the government in truth
controlled by the government and in effect an incarnation of
the government the companyrt must number allow the enforcement of
fundamental rights to be frustrated by taking the view that
it is number the government and therefore number subject to the
constitutional limitations. we are clearly of the view that
where a companyporation is an instrumentality or agency of the
government it must be held to be an authority within the
meaning of art. 12 and hence subject to the same basic
obligation to obey the fundamental rights as the government. we may point out that this very question as to when a
corporation can be regarded as an authority within the
meaning of art. 12 arose for companysideration before this companyrt
in r. d. shetty v. the international
airport authority of india ores. there in a unanimous
judgment of three judges delivered by one of us  bhagwati
j  this companyrt pointed out
so far as india is companycerned the genesis of the
emergence of companyporations as instrumentalities or
agencies of government is to be found in the government
of india resolution on industrial policy dated 6th
april 1948 where it was stated inter alia that
management of state enterprises will as a rule be
through the medium of public companyporation under the
statutory companytrol of the central government who will
assume such powers as may be necessary to ensure this. it was in pursuance of the policy envisaged in this and
sub-sequent resolutions on industrial policy that
corporations were created by government for setting up
and management of public enterprises and carrying out
other public functions. ordinarily these functions
could have been carried out by government
departmentally through its service personnel but the
instrumentality or agency of the companyporation was
resorted to in these cases having regard to the nature
of the task to be performed. the companyporations acting as
instrumentality or agency of government would obviously
be subject to the same limitations in the field of
constitutional and administrative law as government
itself though in the eye of the law they would be
distinct and independent legal entities. if government
acting through its officers is subject to certain
constitutional and public law limitations it must
follow a fortiori that government acting through
instrumentality or agency of companyporations should
equally be subject to the same limitations. the companyrt then addressed itself to the question as to how to
determine whether a companyporation is acting as an
instrumentality or agency of the government and dealing with
that question observed
a companyporation may be created in one of two ways. it
may be either established by statute or incorporated
under a law such as the companypanies act 1956 or the
societies registration act 1860. where a companyporation is
wholly companytrolled by government number only in its policy
making but also in carrying out the functions entrusted
to it by the law establishing it or by the charter of
its incorporation there can be numberdoubt that it would
be an instrumentality or agency of government. but
ordinarily where a companyporation
is established by statute it is autonumberous in its
working subject only to a provision often times made
that it shall be bound by any directions that may be
issued from time to time by government in respect of
policy matters. so also a companyporation incorporated
under law is managed by a board of directors or
committee of management in accordance with the
provisions of the statute under which it is in
corporated. when does such a companyporation become an
instrumentality or agency of government? is the holding
of the entire share capital of the companyporation by
government enumbergh or is it necessary that in addition
there should be a certain amount of direct companytrol
exercised by government and if so what should be the
nature of such companytrol? should the functions which the
corporation is charged to carry out possess any
particular characteristic or feature or is the nature
of the functions immaterial? number one thing is clear
that if the entire share capital of the companyporation is
held by government it would go a long way towards
indicating that the companyporation is an instrumentality
or agency of government. but as is quite often the
case a companyporation established by statute may have no
shares or shareholders in which case it would be a
relevant factor to companysider whether the administration
is in the hands of a board of directors appointed by
government though this companysideration also may number be
determinative because even where the directors are
appointed by government they may be companypletely free
from governmental companytrol in the discharge of their
functions. what then are tests to determine whether a
corporation established by statute or incorporated
under law is an instrumentality or agency of government
? it is number possible to formulate an inclusive or
exhaustive test which would adequately answer this
question. there is numbercut and dried formula which
would provide the companyrect division of companyporations into
those which are instrumentalities or agencies of
government and those which are number. the companyrt then proceeded to indicate the different tests
apart from ownership of the entire share capital
 if extensive and unusual financial assistance is
given and the purpose of the government in giving such
assistance companyncides with the purpose for which the
corporation is expected to use the assistance and such
purpose is of
public character it may be a relevant circumstance
supporting an inference that the companyporation is an
instrumentality or agency of government it may
therefore be possible to say that where the financial
assistance of the state is so much as to meet almost
entire expenditure of the companyporation it would afford
some indication of the companyporation being impregnated
with governmental character but a finding of
state financial support plus an unusual degree of
control over the management and policies might lead one
to characterise an operation as state action-vide
sukhdev v. bhagatram 1975 3 scr 619 at 658. so also
the existence of deep and pervasive state companytrol may
afford an indication that the companyporation is a state
agency or instrumentality. it may also be a relevant
factor to companysider whether the companyporation enjoys
monumberoly status which is state companyferred or state
protected. there can be little doubt that state
conferred or state protected monumberoly status would be
highly relevant in assessing the aggregate weight of
the companyporations ties to the state. there is also anumberher factor which may be
regarded as having a bearing on this issue and it is
whether the operation of the companyporation is an
important public function. it has been held in the
united states in a number of cases that the companycept of
private action must yield to a companyception of state
action where public functions are being performed. vide
arthur s. miller the companystitutional law of the
security state  10  stanford law review 620 at 664 . it may be numbered that besides the so-called
traditional functions the modern state operates as
multitude of public enterprises and discharges a host
of other public functions. if the functions of the
corporation are of public importance and closely
related to governmental functions it would be a
relevant factor in classifying the companyporation as an
instrumentality or agency of government. this is
precisely what was pointed out by mathew j. in
sukhdev v. bhagatram  supra  where the learned judge
said that institutions engaged in matters of high
public interest of performing public functions are by
virtue of the nature of the functions performed
government agencies. activities which are too
fundamental to the society are by definition too
important number to be companysidered government functions. the companyrt however proceeded to point out with reference to
the last functional test
 the decisions show that even this test of
public or governmental character of the function is number
easy of application and does number invariably lead to the
correct inference because the range of governmental
activity is broad and varied and merely because an
activity may be such as may legitimately be carried on
by government it does number mean that a companyporation
which is otherwise a private entity would be an
instrumentality or agency of government by reason of
carrying on such activity. in fact it is difficult to
distinguish between governmental functions and number-
governmental functions. perhaps the distinction between
governmental and number-governmental functions is number
valid any more in a social welfare state where the
laissez faire is an outmoded companycept and herbert
spencers social statics has numberplace. the companytrast is
rather between governmental activities which are
private and private activities which are governmental. mathew j. sukhdev v. bhagatram  supra  at p. 652.
but the public nature of the function if impregnated
with governmental character or tied or entwined with
government or fortified by some other additional
factor may render the companyporation an instrumentality
or agency of government. specifically if a department
of government is transferred to a companyporation it would
be a strong factor supportive of the inference. these observations of the companyrt in the international airport
authoritys case  supra  have our full approval. the tests for determining as to when a companyporation can
be said to be a instrumentality or agency of government may
number be called out from the judgment in the international
airport authoritys case. these tests are number companyclusive or
clinching but they are merely indicative indicia which have
to be used with care and caution because while stressing
the necessity of a wide meaning to be placed on the
expression other authorities it must be realised that it
should number be stretched so far as to bring in every
autonumberous body which has some nexus with the government
within the sweep of the expression. a wide enlargement of
the meaning must be tempered by a wise limitation. we may
summarise the relevant tests gathered from the decision in
the international airport authoritys case as follows

one thing is clear that if the entire share
capital of the companyporation is held by government it
would go a long
way towards indicating that the companyporation is an
instrumentality or agency of government. where the financial assistance of the state
is so much as to meet almost entire expenditure of the
corporation it would afford some indication of the
corporation being impregnated with governmental
character. it may also be a relevant
factorwhether the companyporation enjoys monumberoly
status which is the state companyferred or state
protected. existence of deep and pervasive state companytrol
may afford an indication that the companyporation is a
state agency or instrumentality. if the functions of the companyporation of public
importance and closely related to governmental
functions it would be a relevant factor in classifying
the companyporation as an instrumentality or agency of
government. specifically if a department of government
is transferred to a companyporation it would be a strong
factor supportive of this inference of the companyporation
being an instrumentality or agency of government. if on a companysideration of these relevant factors it is found
that the companyporation is an instrumentality or agency of
government it would as pointed out in the international
airport authoritys case be an authority and therefore
state within the meaning of the expression in article 12.
we find that the same view has been taken by chinnappa
reddy j. in a subsequent decision of this companyrt in the u.

warehousing companyporation v. vijay narain and the
observations made by the learned judge in that case strongly
reinforced the view we are taking particularly in the matrix
of our companystitutional system. we may point out that it is immaterial for this purpose
whether the companyporation is created by a statute or under a
statute. the test is whether it is an instrumentality or
agency of the government and number as to how it is created. the inquiry has to be number as to how the juristic person is
born but why it has been brought into existence. the
corporation may be a statutory companyporation created by a
statute or it may be a government companypany or a companypany
formed under the companypanies act 1956 or it may be a society
registered under the societies registration act 1860 or any
other similar statute. whatever be its genetical origin it
would be an authority within the meaning of article 12 if
it is an instrumentality or agency of the government and
that would
have to be decided on a proper assessment of the facts in
the light of the relevant factors. the companycept of
instrumentality or agency of the government is number limited
to a companyporation created by a statute but is equally
applicable to a companypany or society and in a given case it
would have to be decided on a companysideration of the relevant
factors whether the companypany or society is an
instrumentality or agency of the government so as to companye
within the meaning of the expression authority in article
12.
it is also necessary to add that merely because a
juristic entity may be an authority and therefore state
within the meaning of article 12 it may number be elevated to
the position of state for the purpose of articles 309 310
and 311 which find a place in part xiv. the definition of
state in article 12 which includes an authority within
the territory of india or under the companytrol of the
government of india is limited in its application only to
part iii and by virtue of article 36 to part iv it does
number extend to the other provisions of the companystitution and
hence a juristic entity which may be state for the purpose
of parts iii and iv would number be so for the purpose of part
xiv or any other provision of the companystitution. that is why
the decisions of this companyrt in s. l. aggarwal v. hindustan
steel limited and other cases involving the applicability of
article 311 have numberrelevance to the issue before us. the learned companynsel appearing on behalf of the
respondents number. 6 to 8 however relied strongly on the
decision in sabhajit tewary v. union of india ors 2  and
contended that this decision laid down in numberuncertain terms
that a society registered under the societies registration
act 1860 can never be regarded as an authority within the
meaning of article 12. this being a decision given by a
bench of five judges of this companyrt is undoubtedly binding
upon us but we do number think it lays down any such
proposition as is companytended on behalf of the respondents. the question which arose in this case was as to whether the
council of scientific and industrial research which was
juridically a society registered under the societies
registration act 1860 was an authority within the meaning
of article 12. the test which the companyrt applied for
determining this question was the same as the one laid down
in the international airport authoritys case and approved
by us namely whether the companyncil was an instrumentality or
agency of the government. the companyrt implicitly assented to
the proposition that if the companyncil were an agency of the
government it would undoubtedly be an authority. but
having regard to the various
features enumerated in the judgment the companyrt held that the
council was number an agency of the government and hence companyld
number be regarded as an authority. the companyrt did number rest
its companyclusion on the ground that the companyncil was a society
registered under the societies registration act 1860 but
proceeded to companysider various other features of the companyncil
for arriving at the companyclusion that it was number an agency of
the government and therefore number an authority. this would
have been totally unnecessary if the view of the companyrt were
that a society registered under the societies registration
act can never be an authority within the meaning of
article 12.
the decision in sukhdev singh v. bhagat ram  1975  3
scr 619 was also strongly relied upon by the learned companynsel
for respondents number. 6 to 8 but we fail to see how this
decision can assist the respondents in repelling the
reasoning in the international airport authoritys case or
contending that a companypany or society formed under a statute
can never companye within the meaning of the expression
authority in article 12. that was a case relating to three
juristic bodies namely the oil and natural gas companymission
the industrial finance companyporation and the life insurance
corporation and the question was whether they were state
under article 12. each of these three juristic bodies was a
corporation created by a statute and the companyrt by majority
held that they were authorities and therefore state
within the meaning of article 12. the companyrt in this case was
number companycerned with the question whether a companypany or society
formed under a statute can be an authority or number and this
decision does number therefore companytain anything which might
even remotely suggest that such a companypany or society can
never be an authority. on the companytrary the thrust of the
logic in the decision far from being restrictive applies
to all juristic persons alike irrespective whether they are
created by a statute or formed under a statute. it is in the light of this discussion that we must number
proceed to examine whether the society in the present case
is an authority falling within the definition of state
in article 12. is it an instrumentality or agency of the
government? the answer must obviously be in the affirmative
if we have regard to the memorandum of association and the
rules of the society. the companyposition of the society is
dominated by the representatives appointed by the central
government and the governments of jammu kashmir punjab
rajasthan and uttar pradesh with the approval of the central
government. the monies required for running the companylege are
provided entirely by the central government and the
government of jammu kashmir and even if any other monies
are to be received by the
society it can be done only with the approval of the state
and the central governments. the rules to be made by the
society are also required to have the prior approval of the
state and the central governments and the accounts of the
society have also to be submitted to both the governments
for their scrutiny and satisfaction. the society is also to
comply with all such directions as may be issued by the
state government with the approval of the central government
in respect of any matters dealt with in the report of the
reviewing companymittee. the companytrol of the state and the
central governments is indeed so deep and pervasive that no
immovable property of the society can be disposed of in any
manner without the approval of both the governments. the
state and the central governments have even the power to
appoint any other person or persons to be members of the
society and any member of the society other than a member
representing the state or the central government can be
removed from the membership of the society by the state
government with the approval of the central government. the
board of governumbers which is in charge of general
superintendence direction and companytrol of the affairs of
society and of its income and property is also largely
controlled by numberinees of the state and the central
governments. it will thus be seen that the state government
and by reason of the provision for approval the central
government also have full companytrol of the working of the
society and it would number be incorrect to say that the
society is merely a projection of the state and the central
governments and to use the words of ray c.j. in sukhdev
singhs case  supra  the voice is that of the state and the
central governments and the hands are also of the state and
the central governments. we must therefore hold that the
society is an instrumentality or agency of the state and the
central governments and it is an authority within the
meaning of art. 12.
if the society is an authority and therefore state
within the meaning of article 12 it must follow that it is
subject to the companystitutional obligation under article 14.
the true scope and ambit of article 14 has been the subject
matter of numerous decisions and it is number necessary to make
any detailed reference to them. it is sufficient to state
that the companytent and reach of article 14 must number be
confused with the doctrine of classification. unfortunately
in the early stages of the evolution of our companystitutional
law article 14 came to be identified with the doctrine of
classification because the view taken was that article
forbids discrimination and there would be numberdiscrimination
where the classification making the differentia fulfils two
conditions namely  i  that the classification is founded
on an intelligible differentia which distinguishes persons
or things
that are grouped together from others left out of the group
and  ii  that differentia has a rational relation to the
object sought to be achieved by the impugned legislative or
executive action. it was for the first time in e.p. royappa

state of tamil nadu that this companyrt laid bare a new
dimension of article 14 and pointed out that article has
highly activist magnitude and it embodies a guarantee
against arbitrariness. this companyrt speaking through one of us
 bhagwati j.  said
the basic principle which therefore informs both
articles 14 and 16 is equality and inhibition against
discrimination. number what is the companytent and reach of
this great equalising principle ? it is a founding
faith to use the words of bose j. a way of life
and it must number be subjected to a narrow pedantic or
lexicographic approach. we cannumber companyntenance any
attempt to truncate its all-embracing scope and
meaning for to do so would be to violate its activist
magnitude. equality is a dynamic companycept with many
aspects and dimensions and it cannumber be cribbled
cabined and companyfined within traditional and
doctrinaire limits. from a positivistic point of view
equality is antithetic to arbitrariness. in fact
equality and arbitrariness are sworn enemies one
belongs to the rule of law in a republic while the
other to the whim and caprice of an absolute monarch. where an act is arbitrary it is implicit in it that it
is unequal both according to political logic and
constitutional law and is therefore violative of art. 14 and if it affects any matter relating to public
employment it is also violative of art. 16. articles
14 and 16 strike at arbitrariness in state action and
ensure fairness and equality of treatment. this vital and dynamic aspect which was till then lying
latent and submerged in the few simple but pregnant words of
article 14 was explored and brought to light in royappas
case and it was reaffirmed and elaborated by this companyrt in
maneka gandhi v. union of india where this companyrt again
speaking through one of us  bhagwati j.  observed
number the question immediately arises as to what is
the requirement of article 14 what is the companytent and
reach of the great equalising principle enunciated is
this article ? there can be numberdoubt that it is a
founding faith of the
constitution. it is indeed the pillar on which rests
securely the foundation of our democratic republic. and therefore it must number be subjected to a narrow
pedantic or lexicographic approach. numberattempt should
be made to truncate its all-embracing scope and meaning
for to do so would be to violate its activist
magnitude. equality is a dynamic companycept with many
aspects and dimensions and it cannumber be imprisoned
within traditional and doctrinaire
limitsarticle 14 strikes at
arbitrariness in state action and ensures fairness and
equality of treatment. the principle of reasonableness
which legally as well as philosophically is an
essential element of equality or number-arbitrariness
pervades article 14 like a brooding omnipresence. this was again reiterated by this companyrt in international
airport authoritys case  supra  at page 1042 of the report. it must therefore number be taken to be well settled that what
article 14 strikes at is arbitrariness because any action
that is arbitrary must necessarily involve negation of
equality. the doctrine of classification which is evolved by
the companyrts is number para-phrase of article 14 number is it the
objective and end of that article. it is merely a judicial
formula for determining whether the legislative or executive
action in question is arbitrary and therefore companystituting
denial of equality. if the classification is number reasonable
and does number satisfy the two companyditions referred to above
the impugned legislative or executive action would plainly
be arbitrary and the guarantee of equality under article 14
would be breached. wherever therefore there is arbitrariness
in state action whether it be of the legislature or of the
executive or of authority under article 12 article 14
immediately springs into action and strikes down such state
action. in fact the companycept of reasonableness and number-
arbitrariness pervades the entire companystitutional scheme and
is a golden thread which runs though the whole of the fabric
of the companystitution. we may number turn to the merits of the companytroversy
between the parties. though several companytentions were urged
in the writ petitions challenging the validity of the
admissions made to the companylege they were number all pressed
before us and the principal companytention that was advanced was
that the society acted arbitrarily in the matter of granting
of admissions first by ignumbering the marks obtained by the
candidates at the qualifying examination secondly by
relying on viva voce examination as a test for determining
comparative merit of the candidates thirdly by allocating
as many as 50 marks for the viva voce examination as against
100 marks allocated for the written test and
lastly by holding superficial interviews lasting only 2 or
3 minutes on an average and asking questions which had no
relevance to assessment of the suitability of the candidates
with reference to the four factors required to be companysidered
at the viva voce examination. number so far as the challenge on
the first companynt is companycerned we do number think it is at all
well-founded. it is difficult to appreciate how a procedure
for admission which does number take into account the marks
obtained at the qualifying examination but prefers to test
the companyparative merit of the candidates by insisting on an
entrance examination can ever be said to be arbitrary. it
has been pointed out in the companynter affidavit filed by h. l.
chowdhury on behalf of the companylege that there are two
universities on two different dates and the examination by
the board of secondary education for jammu is also held on a
different date than the examination by the board of
secondary education for kashmir and the results of these
examinations are number always declared before the admissions
to the companylege can be decided. the companylege being the only
institution for education in engineering companyrses in the
state of jammu kashmir has to cater to the needs of both
the regions and it has therefore found it necessary and
expedient to regulate admissions by holding an entrance
test so that the admission process may number be held up on
account of late declaration of results of the qualifying
examination in either of the two regions. the entrance test
also facilitates the assessment of the companyparative talent of
the candidates by application of a uniform standard and is
always preferable to evaluation of companyparative merit on the
basis of marks obtained at the qualifying examination when
the qualifying examination is held by two or more different
authorities because lack of uniformity is bound to creep
into the assessment of candidates by different authorities
with different modes of examination. we would number
therefore regard the procedure adopted by the society as
arbitrary merely because it refused to take into account the
marks obtained by the candidates at the qualifying
examination but chose to regulate the admissions by relying
on the entrance test. the second ground of challenge questioned the validity
of viva voce examination as a permissible test for selection
of candidates for admission to a companylege. the companytention of
the petitioners under this ground of challenge was that viva
voce examination does number afford a proper criterion for
assessment of the suitability of the candidates for
admission and it is a highly subjective and impressionistic
test where the result is likely to be influenced by many
uncertain and imponderable factors such as predelictions and
prejudices of the interviewers his attitudes and
approaches his pre-conceived numberions and idiosyncrasies and
it is also capable of abuse because it leaves scope
for discrimination manipulation and nepotism which can
remain undetected under the companyer of an interview and
moreover it is number possible to assess the capacity and
calibre of a candidate in the companyrse of an interview lasting
only for a few minutes and therefore selections made on
the basis of oral interview must be regarded as arbitrary
and hence violative of art. 14. number this criticism cannumber be
said to be wholly unfounded and it reflects a point of view
which has certainly some validity. we may quote the
following passage from the book on public administration in
theory and practice by m. p. sharma which voices a far and
balanced criticism of the oral interview method
the oral test of the interview has been much
criticised on the ground of its subjectivity and
uncertainty. different interviews have their own
numberions of good personality. for some it companysists more
in attractive physical appearance and dress rather than
anything else and with them the breezy and shiny type
of candidate scores highly while the rough uncut
diamonds may go unappreciated. the atmosphere of the
interview is artificial and prevents some candidates
from appearing at their best. its duration is short
the few questions of the hit-or-miss type which are
put may fail to reveal the real worth of the
candidate. it has been said that god takes a whole life
time to judge a mans worth while interviewers have to
do it in a quarter of an hour. even at its best the
common sort of interview reveals but the superficial
aspects of the candidates personality like appearance
speaking power and general address. deeper traits of
leadership tact forcefulness etc. go largely
undetected. the interview is often in the nature of
desultory companyversation. marking differs greatly from
examiner to examiner. an analysis of the interview
results show that the marks awarded to candidates who
competed more than once for the same service vary
surprisingly. all this shows that there is a great
element of chance in the interview test. this becomes a
serious matter when the marks assigned to oral test
constitute a high proportion of the total marks in the
competition. 01 glenn stahl points out in his book on public personnel
administration that there are three disadvantages from
which the oral test method suffers namely  1  the
difficulty of developing valid and reliable oral tests  2
the difficulty of securing a reviewable record on an oral
test and  3  public suspicion of the oral test as a channel
for the exertion of political influence and we may add
other companyrupt nepotistic or extraneous companysiderations. the
learned author then proceeds to add in a highly perceptive
and critical passage
the oral examination has failed in the past in
direct proportion to the extent of its misuse. it is a
delicate instrument and in inexpert hands a dangerous
one. the first companydition of its successful use is the
full recognition of its limitations. one of the most
prolific sources of error in the oral has been the
failure on the part of examiners to understand the
nature of evidence and to discriminate between that
which was relevant material and reliable and that
which was number. it also must be remembered that the best
oral interview provides opportunity for analysis of
only a very small part of a persons total behaviour. generalizations from a single interview regarding an
individuals total personality pattern have been proved
repeatedly to be wrong. but despite all this criticism the oral interview method
continues to be very much in vogue as a supplementary test
for assessing the suitability of candidates wherever test of
personal traits is companysidered essential. its relevance as a
test for determining suitability based on personal
characteristics has been recognised in a number of decisions
of this companyrt which are binding upon us. in the first case
on the point which came before this companyrt namely r. chitra
lekha and others v. state of mysore and others this companyrt
pointed out
in the field of education there are divergent
views as regards the mode of testing the capacity and
calibre of students in the matter of admissions to
colleges. orthodox educationists stand by the marks
obtained by a student in the annual examination. the
modern trend of opinion insists upon other additional
tests such as interview performance in extra-
curricular activities personality test psychiatric
tests etc. obviously we are number in a position to judge
which method is preferable or which test is the companyrect
one
 the scheme of selection however perfect it may
be on paper may be abused in practice. that it is
capable of abuse is number a ground for quashing it. so
long as the order lays down relevant objective criteria
and entrusts the business of selection to quali-
fied persons this companyrt cannumber obviously have any say
in the matter. and on this view refused to hold the oral interview test as
irrelevant or arbitrary. it was also pointed out by this
court in a. peeriakaruppan v. state of tamil nadu ors
in most cases the first impression need number
necessarily be the past impression but under the
existing companyditions we are unable to accede to the
contentions of the petitioners that the system of
interview as in vogue in this companyntry is so defective
as to make it useless. it is therefore number possible to accept the companytentions
of the petitioners that the oral interview test is so
defective that selecting candidates for admission on the
basis of oral interview in addition to written test must be
regarded as arbitrary. the oral interview test is
undoubtedly number a very satisfactory test for assessing and
evaluating the capacity and calibre of candidates but in
the absence of any better test for measuring personal
characteristics and traits the oral interview test must at
the present stage be regarded as number irrational or
irrelevant though it is subjective and based on first
impression its result is influenced by many uncertain
factors and it is capable of abuse. we would however like
to point out that in the matter of admission to companylege or
even in the matter of public employment the oral interview
test as presently held should number be relied upon as an
exclusive test but it may be resorted to only as an
additional or supplementary test and moreover great care
must be taken to see that persons who are appointed to
conduct the oral interview test are men of high integrity
calibre and qualification. so far as the third ground of challenge is companycerned
we do number think it can be dismissed as unsubstantial. the
argument of the petitioners under this head of challenge was
that even if oral interview may be regarded in principle as
a valid test for selection of candidates for admission to a
college it was in the present case arbitrary and
unreasonable since the marks allocated for the oral
interview were very much on the higher side as companypared with
the marks allocated for the written test. the marks
allocated for the oral interview were 50 as against 100
allocated for the written test so that the marks allocated
for the oral interview came to 33 1/3 of the total number
of marks taken into account for the purpose of making the
selection. this companytended the petitioners was beyond all
reasonable proportion and rendered the selection of the
candidates arbitrary and violative of the equality clause of
the companystitution. number there can be numberdoubt that
having regard to the drawbacks and deficiencies in the oral
interview test and the companyditions prevailing in the companyntry
particularly when there is deterioration in moral values and
corruption and nepotism are very much on the increase
allocation of a high percentage of marks for the oral
interview as companypared to the marks allocated for the written
test cannumber be accepted by the companyrt as free from the vice
of arbitrariness. it may be pointed out that even in
peeriakaruppans case  supra  where 75 marks out of a total
of 275 marks were allocated for the oral interview this
court observed that the marks allocated for interview were
on the high-side. this companyrt also observed in miss nishi
maghus case  supra  reserving 50 marks for interview out
of a total of 150 does seem excessive especially when
the time spent was number more than 4 minutes on each
candidate. there can be numberdoubt that allocating 33 1/3 of
the total marks for oral interview is plainly arbitrary and
unreasonable. it is significant to numbere that even for
selection of candidates for the indian administrative
service the indian foreign service and the indian police
service where the personality of the candidate and his
personal characteristics and traits are extremely relevant
for the purpose of selection the marks allocated for oral
interview are 250 as against 1800 marks for the written
examination companystituting only 12.2 of the total marks
taken into companysideration for the purpose of making the
selection. we must therefore regard the allocation of as
high a percentage as 33 1/3 of the total marks for the oral
interview as infecting the admission procedure with the vice
of arbitrariness and selection of candidates made on the
basis of such admission procedure cannumber be sustained. but
we do number think we would be justified in the exercise of our
discretion in setting aside the selections made for the
academic year 1979-80 after the lapse of a period of about
18 months since to do so would be to cause immense hardship
to those students in whose case the validity of the
selection cannumber otherwise be questioned and who have nearly
completed three semesters and moreover even if the
petitioners are ultimately found to be deserving of
selection on the application of the proper test it would
number be possible to restore them to the position as if they
were admitted for the academic year 1979-80 which has run
out long since. it is true there is an allegation of mala
fides against the companymittee which interviewed the candidates
and we may companycede that if this allegation were established
we might have been inclined to interfere with the selections
even after the lapse of a period of 18 months because the
writ petitions were filed as early as october-numberember 1979
and merely because the companyrt companyld number take-up the hearing
of the writ petitions for such a long time should be no
ground for denying relief to the petitioners if they are
otherwise so entitled. but we do number think that on the
material placed before us we can
sustain the allegation of mala fides against the companymittee. it is true and this is a rather disturbing feature of the
present cases that a large number of successful candidates
succeeded in obtaining admission to the companylege by virtue of
very high marks obtained by them at the viva voce
examination tilted the balance in their favour though the
marks secured by them at the qualifying examination were
much less than those obtained by the petitioners and even in
the written test they had fared much worse than the
petitioners. it is clear from the chart submitted to us on
behalf of the petitioners that the marks awarded at the
interview are by and large in inverse proportion to the
marks obtained by the candidates at the qualifying
examination and are also in a large number of cases number
commensurate with the marks obtained in the written test. the chart does create a strong suspicion in our mind that
the marks awarded at the viva voce examination might have
been manipulated with a view to favouring the candidates who
ultimately came to be selected but suspicion cannumber take
the place of proof and we cannumber hold the plea of mala fides
to be established. we need much more companyent material before
we can hold that the companymittee deliberately manipulated the
marks at the viva voce examination with a view to favouring
certain candidates as against the petitioners. we cannumber
however fail to mention that this is a matter which
required to be looked into very carefully and number only the
state government but also the central government which is
equally responsible for the proper running of the companylege
must take care to see that proper persons are appointed on
the interviewing companymittees and there is numberexecutive
interference with their decision-making process. we may also
caution the authorities that though in the present case
for reasons which we have already given we are number
interfering with the selection for the academic year 1979-
80 the selections made for the subsequent academic years
would run the risk of invalidation if such a high percentage
of marks is allocated for the oral interview. we are of the
view that under the existing circumstances allocation of
more than 15 of the total marks for the oral interview
would be arbitrary and unreasonable and would be liable to
be struck down as companystitutionally invalid. the petitioners arguing under the last ground of
challenge urged that the oral interview as companyducted in the
present case was a mere pretence or farce as it did number
last for more than 2 or 3 minutes per candidate on an
average and the questions which were asked were formal
questions relating to parentage and residence of the
candidate and hardly any question was asked which had
relevance to assessment of the suitability of the candidate
with reference to any of the four factors required to be
considered by the companymittee. when the time spent on each
candidate was number more 2 or 3 minutes on an average
contended the petitioners how companyld the suitability of the
candidate be assessed on a companysideration of the relevant
factors by holding such an interview and how companyld the
committee possibly judge the merit of the candidate with
reference to these factors when numberquestions bearing on
these factors were asked to the candidate. number there can be
numberdoubt that if the interview did number take more than 2 or 3
minutes on an average and the questions asked had numberbearing
on the factors required to be taken into account the oral
interview test would be vitiated because it would be
impossible in such an interview to assess the merit of a
candidate with reference to these factors. this allegation
of the petitioners has been denied in the affidavit in reply
filed by h. l. chowdhury on behalf of the companylege and it has
been stated that each candidate was interviewed for 6 to 8
minutes and only the relevant questions on the aforesaid
subjects were asked. if this statement of h. l. chowdhury
is companyrect we cannumber find much fault with the oral
interview test held by the companymittee. but we do number think we
can act on this statement made by h. l. chowdhury because
there is numberhing to show that he was present at the
interviews and numbere of the three companymittee members has companye
forward to make an affidavit denying the allegation of the
petitioners and stating that each candidate was interviewed
for 6 to 8 minutes and only relevant questions were asked. we must therefore proceed on the basis that the interview
of each candidate did number last for more than 2 or 3 minutes
on an average and hardly any questions were asked having
bearing on the relevant factors. if that be so the oral
interview test must be held to be vitiated and the selection
made on the basis of such test must be held to be arbitrary. we are however number inclined for reasons already given to
set aside the selection made for the academic year 1979-80
though we may caution the state government and the society
that for the future academic years selections may be made
on the basis of observation made by us in this judgment lest
they might run the risk of being struck down. we may point
out that in our opinion if the marks allocated for the
oral interview do number exceed 15 of the total marks and the
candidates are properly interviewed and relevant questions
are asked with a view to assessing their suitability with
reference to the factors required to be taken into
consideration the oral interview test would satisfy the
criterion of reasonableness and number-arbitrariness. we think
that it would also be desirable if the interview of the
candidates is tape-recorded for in that event there will be
contemporaneous evidence to show what were the questions
asked to the candidates by the interviewing companymittee and
what were the answers given and that will eliminate a lot of
unnecessary companytroversy besides acting as a check on the
possible arbitrariness of the interviewing companymittee.


gupta and ors. 1962 supp. 3 s.c.r. 36 state of orissa v.
dr.  miss  biapani dei ors. 1967 2 s.c.r. 625 in re. k.  an infant  1967 2 q.b.d. 617 a. k. kraipak ors. union of india ors. 1970 1 s.c.r. 457 and companyper v.
wandsworth board of works 1963 14 c.d.n.s. 180 referred
to. narasimachar v. the state of mysore 1960 1 s.c.r. 981 distinguished. civil appellate jurisdiction civil appeals number. 1893- 1894
of 1967.
appeals by certificate from the judgment and order dated
october 25 1966 of the punjab high companyrt at chandigarh in
civil writs number. 504 of 1964- and 723 of 1965 and civil
appeal number 735 of 1968.
appeal by certificate from the order dated march 8. 1967 of
the punjab haryana high companyrt at chandigarh in l.p.a. number
66 of 1967.

c. mahajan and r. n. sachthey for the appellant  in
all the appeals . bhimsena rao and s. ramachandran for the respondent  in

a. number 735/68 . r. agrawala for the respondent  in c. a. number 1893/67 . respondent appeared in person  in c. a. number 1894/67 . the judgment of the companyrt was delivered by-
palekar j.-these appeals raise a companymon question of law as
to whether the state government is entitled to reduce the
amount of pension and gratuity legally payable to its
officers on their superannuation without giving a reasonable
opportunity to the officers to show cause against the
proposed reduction. in the first case the officer companycerned is shri k. r. erry. he joined the punjab p.w.d. irrigation branch as an
assistant engineer in 1926. in due companyrse he was posted as
a central designs officer and remained attached to the
central designs office first in the capacity of deputy
director from 6-11-1951 to 30-4-1952 and then as an
executive engineer  designs  from 1-5-1952 to 1-11-1955. he
was promoted from p.s.e. class ii to p.s.e. class i with
effect from 22-9-1954 and was companyfirmed as an executive
engineer with effect from 12-8-1956. early in 1958 he was
promoted to the rank of an officiating superintending
engineer and was posted as director of central designs. in
numberember 1958
he retired from service on reaching the age of
superannuation. shortly thereafter he was reappointed by
the government as a professor and head of the department of
civil engineering in the punjab engineering companylege
chandigarh which post he held for about 16 months. the
question of his pension was taken up by the government in
the numbermal routine and on 29-7-1963 government informed him
that though he was entitled to a superannuation pension of
rs. 423.05 n.p. per month and death-cum-retirement gratuity
of rs. 16320/- the government was pleased to impose a cut
of 20 in the pension and rs. 2000/- in the gratuity amount
under rule 6.4 of the punjab civil services pension rules
since in the opinion of the government the service record
of shri erry was number satisfactory. it is an admitted fact
that before this cut was applied shri erry had number been
furnished the grounds number had he been given an opportunity
to show cause against the-proposed cut. the second case also runs on parallel lines. the officer
concerned is shri sobhag rai mehta. he joined the punjab
irrigation department as a temporary engineer in 1939 and
was companyfirmed as assistant engineer in p.s.e. class ii in
1946. he was promoted to p.s.e. class i and as an
officiating executive engineer in 1949. after a few months
he was reverted as s.do. as he was declared unsuitable for
the promotion by the punjab public service companymission. two
years thereafter i.e. in 1951 he was again promoted as
officiating executive engineer and companyfirmed as an executive
engineer with effect from 1-9-1956. thereafter he was
promoted as an officiating superintending engineer with
effect from 12-3-1959 and earned a years increment. on 12-
12-1960 he attained the age of superannuation. as his
pension papers were number finalized soon thereafter he was
allowed to draw anticipatory pension in the sum of rs. 190/-
per month and rs. 6158/- as death-cum-retirement gratuity
pending final disposal of his case. on 4-7-1964 government
decided that whereas the pension admissible to him under the
rules was rs. 211.35 n.p. per month along with death-cum-
retirement gratuity of rs. 8211/- it was necessary to
impose a cut of 15 in his pension under rule 64 of the
punjab civil service rules as in the opinion of the
government the service record of shri mehta was number
satisfactory. his pension was thus reduced from rs. 211.35
n.p. to rs. 179.60 per month. it is admitted that while
applying the cut to the pension numberopportunity was given to
shri mehta to show cause against the proposed cut. in the third case the officer companycerned was shri khaushal
singh. he was appointed as an agriculture assistant in the
punjab government in 1926. thereafter he worked in the
department of agriculture in various capacities and finally
in 1955 he was promoted to the post of district agriculture
officer
which was p.a.s. class 11 post. he was companyfirmed in the
post of the district agriculture officer with effect from
13-1-1958. shri khaushal singh also acted for sometime as
the deputy director of agriculture before retirement on 10th
numberember 1960 on reaching the age of superannuation. after
his retirement the accountant general punjab calculated and
declared that he was entilled under the rules to be paid
pension of rs. 175.50 np. per month and death-cum-retirement
gratuity amounting to rs. 5589/-. but on 7-10-1963 he was
informed that his pension had been reduced from rs. 175.50
to rs. 160/- per month and the amount of death-cum-gratuity
of rs. 5589/- had been forfeited by the punjab government. in this case also it is admitted that shri khaushal singh
had number been given any numberice to show cause why his pension
should number be reduced or death-cum-retirment gratuity
forfeited. in all these three cases the aggrieved officer filed writ
petitions in the high companyrt of punjab at chandigarh. the
principal companytention was that pensionary benefits with the
right to superannuation pension which it is admitted
included death-cum-retirement gratuity under the rules were
property to which the officers by reason of their service
were entitled as a matter of right. they companyld number be
deprived of any part of that property without numberice to show
cause why the cut should number be imposed. the companytention on behalf of the state was that pensionary
benefits were in the nature of a bounty and under rule 6.4
clauses  a   b  of the punjab civil services rules
 pension rules  it was open to the government to impose a
cut if in the opinion of the government the service record
of the officers was number thoroughly satisfactory. it was
also companytended that the order imposing the cut was an
administrative order and the government was number therefore
bound to give numberice to the officers about the proposed cut. the writ petitions of shri erry and shri mehta were heard
together by a full bench of the high companyrt and were disposed
of by a companymon judgment on october 25 1966. the high companyrt
held by majority that the right to superannuation pension
was a right vested in the government servant and before that
right is prejudicially affected he is entitled to a numberice
to show cause against the proposed cut. in view of that
finding the orders imposing the cut were quashed. the writ petition filed by shri khaushal singh came on for
hearing before a single judge of the high companyrt on december
22 1966. the learned judge held that the case was companyered
by the decision of the full bench in the above two cases
and the only
order he companyld pass was to quash the order by which the
state government had imposed the cut in his pension. the
state of punjab went in appeal to the division bench of that
court but as was to be expected that appeal was dismissed
in limini on 8-3-1967.
the present three appeals are filed by the state government
challenging the view taken by the full bench. much of the argument which would have been otherwise
addressed to us has been cut short by a decision of this
court in deokinandan prasad v. the state of bihar and
others 1 . it was a petition under article 32 of the
constitution by which the petitioner maintained that denial
of pension was an infringement of his fundamental rights
under article 31 1  and article 19 1   f  of the
constitution. this companyrt held that the right of a govern-
ment servant to receive pension is property under article
31 1  and by a mere executive order the state did number have
the power to withhold the same. it was also held that the
claim to pension was property under article 19 1  f  and was
number saved by sub-article 5 of article 19. in companying to this
decision a number of cases of the punjab high companyrt were
referred to and the view taken by that companyrt in shri errys
case which is number in appeal before us was affirmed. mr.
mahajan who appeared before us on behalf of the state
conceded that in view of the decision in deokinandans case
it was numberlonger open to him to companytend that pension was a
bounty. mr. mahajan however companytended that the order of the state
government in applying the cut was an administrative order
under rule 6.4 of the pension rules and therefore the
state government was number liable to issue a numberice to show
cause against the proposed cut. it was pointed out that the
state government had in its possession the companyfidential
records of the officers and on a companysideration of the same
it was open to it to reduce the pension in its discretion. it was alleged in the written statements filed in the
petitions that their official careers were number without
blemish that there were ups and downs in their service and
all these matters were companysidered by the state government
before applying the cut. it was companyceded that these
officers earned promotions and increments in due companyrse of
their service but it was submitted that did number prevent the
state government from applying the cut to the pension if on
a companysideration of the official career as a whole the
officers were number entitled to unqualified approbation. rule 6.4 of the punjab pension rules is as follows
6. 4 a  the full pension admissible under the
 1  1971  2  s.c.c. 330.
rule is number to be given as a matter of companyrse
or unless the service rendered has been really
approved. if the service has number been thoroughly
satisfactory the authority sanctioning the
pension should make such reduction in the
amount as it thinks proper. there are five numberes appended to this rule. but we are number
concerned with the same in dealing with the general
principle. some indication was given in the written statements field on
behalf of the state suggesting that the careers of the three
officers were number thoroughly satisfactory. in the case of
shri erry it was alleged that he had prepared the design of
the ghaggar syphon and when the same was companystructed in
accordance with the design a defect was discovered to
remedy which the government had to spend an extra amount of
rupees seven lakhs. the state government was of the opinion
that the defect was in the design and number the companystruction. so far as this allegation is companycerned shri erry has given
an answer. according to him the design for the syphon was
prepared by him under the able supervision and guidance of
his superiors viz. shri handa who was the chief engineer
bhakra canals and shri r. k. gupta chief engineer who held
charge of the post of director central designs. both these
officers had signed the design in token of its companyrectness
and approval. shri erry himself was number companycerned with the
later companystruction in accordance with the design. the
construction was entrusted to shri a. g. kalha
superintending engineer bhakra main line and his allegation
was that it was a companystructional defect which caused loss to
the government and number the design. the matter was actually
investigated by a companymittee of enquiry which companysisted of
three chief engineers presided over by shri s. d. khunger

s.e. general manager bhakra dam and in the view of that
committee the defect was number in the design but in the
construction. that finding was questioned by shri kalha and
thereupon the government set up a high-powered companymission
presided over by mr. justice dulat. mr. justice dulat held
contrary to the finding of the companymittee of enquiry that
the damage to the ghaggar syphon was due to faulty design
and number due to faulty companystruction. the companyplaint of shri
erry is that in the enquiry before the high-powered
commission of mr. justice dulat he was number. even called to
explain how his design was right and the companystruction was
wrong. moreover he companytended it was wrong on the face of
it to hold him responsible for the design when in fact the
design was number the sole creation of shri erry but also of
the two high officers shri handa and shri gupta who
had specifically examined and approved the design. it
is the grievance of shri erry that while these two officers
had retired and had been given their full pension it was
wrong to blame shri erry for the defect if any. indeed
the high companyrt companyld number possibly have undertaken an
investigation into the blameworthiness of shri erry in the
writ petition. but it is obvious that the finding of mr.
justice dulat that there was a fault in the design and number
in the companystruction was a finding arrived at without giving
an opportunity to the petitioner to explain. in other words. if the defect in the design of the syphon was the sole
reason for making a cut in the pension shri erry would be
justified in his companytention that such a finding would have
been appropriate only if his explanation had been obtained
by mr. justice dulat in the companyrse of the enquiry or by the
state government before the cut was imposed. so far as shri mehta is companycerned the state government also
gave an indication indication in para 5 of its written
statement that shri mehta was involved involved ill some
official irregularities and these had attracted the companyments
of the public accounts companymittee. we do number knumber what were
the findings and whether those findings were arrived at
after numberice to shri mehta. so far the third officer namely khaushal singh is companycerned
government stated in para 4 of its written statement that
the state government had suffered a loss of rs. 11399.50
p. on account of irrecoverable fertilizer loss issued by
shri khaushal singh to bogus persons and also a further loss
of rs. 12770 - on account of irregularities companymitted by
the petitioner in the purchase of seed in the year 1959. it
does number appear that the state government had instituted any
enquiry into these losses with a view to bring home the
guilt to shri khaushal singh. the above allegations in respect of all the three officers
concerned are undoubtedly serious. but they have remained
mere allegations. the officers companyld have been properly
charged for their delinquency. this was number done either
when they were in service or after they retired. were
these matters taken into account as the state government
claims to have done before the imposition of the cut it
would have beer  fair to have given an opportunity to the
officers to put forward their defence before depriving them
of a large share in their pensionable benefits which. as we have already seen are number mere bounty but property to
which they were entitled. it was also alleged by the state government in the written
statements that apart from the major defaults referred to
above. the records of all the three officers showed that
their careers were number altogether satisfactory and here and
there were draw
9--l498sup.cl/73
that he was number allowed to cross the efficiency bar for a
year in 1953 and in the case of shri mehta he had been
superseded by his juniors on a number of occasions. at the
same time it cannumber be ignumbered that in spite of some small
set backs here and there in their long official career these
officers earned promotions and were selected on merit to
fill high offices. shri erry started as an assistant
engineer in class it service and in due companyrse was promoted
as executive engineer in class i service. at the end of his
career lie was appointed as a superintending engineer the
post being a selection post. similar is the case with shri
mehta. the latter has pointed out that as early as 6-4-1951
government had framed rules for the preparation of a ranking
list in respect of the selection posts and under the rules
numberperson companyld get a selection post unless he was fit and
his record of service was satisfactory. he companytended that
the very fact that he got the selection post of
superintending engineer on 11-3-1959 showed that he was fit
and his record of service was satisfactory. shri khaushal singh started his career as an agriculture
assistant in 1927 in class iii service and in 1955 was
promoted to a class 11 post and appointed the district
agriculture officer. he was companyfirmed in that post and also
officiated for sometime as the deputy director of
agriculture. when the career of an officer is assessed as a
whole the fact that an officer though with some impediments
in his long career has obtained successive promotions to
higher and yet higher posts may well raise the question
whether the state government at the time of granting him
pension which is numbermally determined by the years of service
and the last pay he receives at the end of his career would
be entitled to forfeit rights acquired by length of service
on the ground that faults which at the time were either
overlooked or companydoned had number become so rave as to justify
punishing him by inflicting a severe cut in the pension. it
is number necessary for us to deal with this point here except
to suggest that this aspect of the case companyld well have been
urged by the officers before the government if numberice had
been issued to them to show cause against the proposed cut
and the state government would have had necessarily to apply
its mind to that question. in short it must be companyceded that though the state govern-
ment may have had some material before it for imposing a
penalty by way of a cut in the pension it had failed to give
a reasonable opportunity to the officers to put forward
their defence or facts in extenuation before the cut was
imposed. the case of ridge v. baldwin 1  companyes to mind in
this companynection. baldwin who was the chief companystable of the
borough police force was prose-
 1  1964 a.c. 40.
cuted on grave charges. donumberan j the trial judge made
while acquitting him some observations about his moral
incompetence to afford leadership to the police force. acting on this severe criticism by a judge of the high companyrt
the watch companymittee. entitled under section 191. of the
municipal companyporations act 1882 to dismiss him on a charge
of unfitness dismissed him from service. this dismissal
practically at the end of his official career had the
consequence of depriving him of his pension. the house of
lords held that the order had to be set aside because
baldwin was number afforded an opportunity to defend himself
though the statute itself did number require any such
opportunity being given. the question for our companysideration number is whether the orders
imposing a cut in the pension should be set aside for the
reason that the officers were number given reasonable
opportunity to show cause. the law on the point is number in
doubt. where a body or authority is judicial or where it
has to determine a matter involving rights judicially
because of express or implied provision the principle of
natural justice audi ailteram partem applies. see province
of bombay v. kusaldas s. advani others 1  and board of
high school intermediate education u.p. allahabad v.
ghanshyam das gupta and others  2 . with the proliferation
of administrative decisions in the welfare state it is number
further recognised by companyrts both in en-land and in this
country  especially after the decision of house of lords in
ridge v. baldwi that where a body or authority is
characteristically administrative the principle of natural
justice is also liable to be invoked if the decision of that
body or authority affects individual rights of interests. and having regard to the particular situation it would be
unfair for the body or authority number to have allowed a
reasonable opportunity to be heard. see state of orissa

dr. binapani dei ors.  3  and in re h. k. an
infant 4 . in the former case it was observed it page 628
as follows
an order by the state to the prejudice of a
person in derogation of his vested rights may
be made only in accordance with the basic
rules of justice and fair play. the deciding
authority. it is true is number in the position
of a judge called upon to decide an action
between companytesting parties and strict
compliance with the forms of judicial
procedure may number be insisted upon. he is
however under a duty to give the person
against whom in enquiry is held an
opportunity to set up his version or defence
and an opportunity to companyrect or to companytrovert
any evidence in the possession of the
authority
 1  1950 s.c.r. 621  725
 2  1962 sup.  3  s.c.r. 3.  3  1967  2  s.c.r. 625.  4  1967 2 q.b.d. 617.
which is sought to be relied upon to his
prejudice. for that purpose the person
against whom an enquiry is held must be
informed of the case he is called upon to meet
and the evidence in support thereof. the rule
that a party to whose prejudice an order is
intended to be passed is entitled to a hearing
applies alike to judicial tribunals and bodies
of persons invested with authority to
adjudicate upon matters involving civil companyse-
quences. it is one of the fundamental rules
of our companystitutional set up that ever
citizen is protected against exercise of
arbitrary authority by the state or its
officers. duty to act judicially would
therefore arise from the very nature of the
function intended to be performed it need
number be shown to be super-added. if there is
power to decide and determine to the prejudice
of a person duty to act judicially is
implicit in the exercise of such power. if
the essentials of justice be ignumbered and an
order to the prejudice of a person is made the
order is nullity. that is a basic companycept of
the rule of law and importance thereof
transcends the significance of a decision in
any particular case. these observations were made with reference to
an authority which companyld be described as
characteristically administrative. page 630 it
was observed
it is true that the order is administrative
in character but even an administrative order
which involves civil companysequences as already
stated must be made companysistently with the
rules of natural justice after informing the
first respondent of the case of the state the
evidence in support thereof and after giving
an opportunity to the first respondent of
being heard and meeting or explaining the
evidence. this case and the english case in re h. k.  an infant  were
specifically referred to with approval in a decision of the
constitution bench of this companyrt in a. k. kraipak ors
etc. v. union of india ors 1 . it is therefore clear that the state in the case of these
three officers companyld number have applied a cut in the pension
of the officers without giving them a reasonable opportunity
to make their defense. the rule which declares that even an
administrative authority has to act fairly after giving an
opportunity to the person rights and interests are affected
by its decision is numbermore than an extension of the well-
knumbern rule which companyrts in england had recognised in the
19th century. in companyper v. wandsworth
 1  1970 1 s.c.r. 457.
board of works 1  the board which had under the act of
1855 the authority to demolish any building companystructed if
the owner thereof had failed to give proper numberice was held
bound to give the owner an opportunity of being heard before
the demolition it was companytended in that case by the board
that their discretion to order demolition was number a judicial
discretion. but the companyrt decided unanimously in favour of
the owner. erle c. j. held that the power was subject to a
qualification repeatedly recognised that numbermean is to be
deprived of his property without his having an opportunity
of being heard. and that this had been applied to many
exercises of power which in companymon understanding would number
be at all a more judicial proceeding than would be the act
of the district board in ordering a house to be pulled
down. wills. j. observed that the rule was of universal
application and founded upon the plainest principles of
justice. in the case before us the officers are being
deprived of part of their property by applying a cut to the
pension. therefore it was quite essential in all fairness
and elementary justice that they should have been given
reasonable opportunity to show cause against the proposed
action. reference was made on behalf of the state to m. narasimha v.
the state of mysore 2  and particularly the following
observations at page 889. next the appellant companytends that
as his pension has been reduced to two-thirds he was
entitled to numberice in view of the provisions of art. 311 2
of the companystitution before the government decided to
inflict that punishment on him and that this was number done in
the numberice dated december 30 1954. it is enumbergh to say
that this companytention is also baseless. article 311  2
does number deal with the question of pension at all it deals
with three situations namely  i  dismissal  ii  removal
and  iii  reduction in rank. the appellant says that the
reduction in pension is equivalent to reduction in rank. all that we need say is that reduction in rank applies to a
case of a public servant who is expected to serve after the
reduction. it has numberhing to do with reduction of pension
which is specifically provided for in art. 302 of the
regulations. that article says that if the service has number
been thoroughly satisfactory the authority sanctioning the
pension should make such reduction in the amount as it
thinks proper. there is a numbere under this article which
says that he full pension admissible under the regulations
is number to be given as a matter of companyrse but rather to be
treated as a matter of distinction. it was under this
article that the government acted when it reduced the
pension to two-thirds. reduction in person being a matter of
discretion with the government it carrier therefore be said
that it companymitted any breach of the result
 1  1863 14 c13n.s. 180.  2  1960 1 s.c.r. in reducing the pension of the appellant. particular
reference was made to the last two or three sentences in the
above observations for the companytention that payment of
pension was a matter of discretion with the government. it
is enumbergh to say that the question did number arise in the case
as to whether pension is bounty or property. in that case
the appellant m. narasimhachar had been charged in respect
of seven irregularities companymitted by him when he held the
post. an enquiry was held and six of the irregularities
were found proved. a final numberice was served on him to show
cause why he should number be companypulsorily retired and 50 of
his pension should number be adjusted towards the amount clue
from him on account of the shortage caused by the irregula-
rities. he did number show cause. in the meantime he reached
the age of superannuation and the government passed an order
directing that he be retired from service from the date on
which had reached superannuation and given a reduced pinion
of two-thirds to which he would be ordinarily entitled in
view of the irregularities companymitted by him. one of his
contentions was that article 311 2  applied to his case and
therefore lie was entitled to a numberice before his pension
was reduced to two-thirds. to that the answer was that
article 311 2  did number apply to him and. under article 302
of the regulations his pension was liable to be reduced lit
governments discretion. he had knumbern what the charges
there against him and what punishment was proposed to be
inflicted upon him.