This article is written by Prashant Prasad. It deals with the facts, issues, and arguments presented by the appellant and respondent, the various legal aspects involved, and the judgement that was delivered by the Apex Court in the case of K.C. Gajapati Narayan Deo vs. State of Orissa (1953). The article delves into the legal provisions pertaining to the Orissa Estates Abolition Act, 1952, and other relevant legal concepts, offering a comprehensive understanding of the entire case.

Introduction

In 1952, the Orissa Estate Abolition Act (hereinafter referred to as “the Act”) was introduced. The main aim of this legislation was to end the zamindari system and to bring the land under direct control of the state government. The government came up with such an Act in order to remove the intermediaries and bring the land cultivators and tenants in direct contact with the state. The landholders, aggrieved by the provisions of such an Act, challenged the constitutional validity of the Act.

The present case highlights the clash between the government’s legislation on land reform and the traditional rights of landholders on their land. The Act brought social changes in society as opposed to the conventional practice that has been perpetuated from time immemorial. The Orissa High Court, in this particular case, upheld the Act and dismissed all the claims made by the landholders. Aggrieved by such a decision of the High Court, there was an appeal to the Apex Court and finally, the judgement was delivered by the Apex Court in the case of K.C. Gajapati Narayan Deo vs. State of Orissa (1953). The present case is the finest example that depicts the fact that the judiciary can play a pivotal role in balancing the rights of an individual along with catering to the broader goals of social justice.

This case depicts the efforts to reform land ownership and redistribute surplus land so that land efficiency can be reached to its fullest. The judiciary in the present case tries to interpret some of the vital constitutional provisions on the subject, such as the right to property, just and fair compensation, and other relevant concepts that are necessary for understanding the rights related to property. On the basis of the present case, a landmark precedent has been set regarding the state’s ability to enact laws on land reform.

Details of the case 

• Case name: K.C. Gajapati Narayan Deo vs. State of Orissa
• Appellant: K.C. Gajapati Narayana Deo and other
• Respondent: The State of Orissa
• Name of the court: The Supreme Court of India

• Bench of Judges: Hon’ble M. Patanjali Sastri (Cj); Hon’ble B.K. Mukherjee; Hon’ble Sudhi Ranjan Das; Hon’ble Ghulam Hasan and H Natwarlal Bhagwati
• Case type: Civil Appeal
• Date of judgement: 29/05/1953 
• Equivalent Citations: 1954 SCR 1, 1953 AIR 375 

Facts of the case 

In the present case, the Orissa Estate Abolition Act, was introduced by the state of Orissa on 17^th January 1950 and was passed by the Orissa state legislature on 28^th September 1951 and finally, presidential assent was received on 23^rd January, 1952. After the assent, the Act thus receives protection under Article 31(4) and Article 31A (specifically under the sub-clauses of clause (1) of the Article 31A) of the Indian Constitution. However, it was not included under the list of statutes mentioned under the Ninth Schedule (the Ninth Schedule of the Constitution includes the list of central and state laws that cannot be challenged in the court). The present Act follows a similar pattern to the statute passed in the states of Bihar, Uttar Pradesh, and Madhya Pradesh Legislative Assemblies (i.e. The Bihar Land Reforms Act, 1950, Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, Madhya Pradesh Abolition of Proprietary Rights Act, 1950 etc.). The main purpose of the Act was to abolish all the zamindari and proprietary estates by eliminating all the intermediaries in order to bring the actual occupant of land in direct contact with the state government. The proprietors of the estates aggrieved by the provisions of the Act filed six appeals before the Orissa High Court under Article 226 of the Indian Constitution.     

Many grounds were put forward by the appellant regarding the unconstitutionality of the Act before the Orissa High Court. The appellant was of the view that the present Act is a piece of colourable legislation, as there is an exorbitant use of legislative power by the government. The court was of the opinion that the question regarding the validity of the similar legislation of Bihar, Uttar Pradesh, and Madhya Pradesh Legislative Assemblies was considered by the court, and all of them were held constitutional by the court except a few minor provisions of the Bihar Act. The argument that was raised by the appellant was classified in the judgement under three heads by the then Chief Justice (Hon’ble M. Patanjali Sastri), of the Orissa High Court. Under the first head, contentions were raised regarding the constitutional validity of the Act. Under the second head, the Act was challenged on the ground that it relates to certain items of property included in an estate, such as private land, buildings, wasteland, etc. Lastly, the grounds for challenging the Act are related to certain provisions of the Act regarding the procedure for determination of compensation payable to the intermediaries as enshrined under Section 37 of the Act, with reference to the calculation of gross assets or the deduction to be made for arriving at the net income. 

In a detailed judgement, the then Chief Justice discussed all the issues raised by the appellant and rejected all such contentions except a few, which remained open for further discussion. Another learned judge of the bench, Justice Narasimham, agreed with the Chief Justice on most of the points. However, he expressed his separate opinion about the Orissa Agricultural Income-tax (Second Amendment) Act, 1950. According to him, this Act appears to be a tax measure, but it may attempt to reduce the income of intermediaries, and hence further net income can be decreased. After considering various issues of the present case, it was finally decided by the Orissa High Court that all the petitions should stand dismissed. Hence, the Orissa High Court held the Act to be constitutional. Aggrieved by the decision, the petitioners filed an appeal under Article 132 and Article 133 of the Indian Constitution before the Hon’ble Supreme Court of India. 

Issues raised 

• Whether the Orissa Estate Abolition Act, 1952, is constitutionally valid?
• Whether the Orissa Estate Abolition Act, 1952, is a piece of colourable legislation?
• Is the procedure prescribed for making compensation to the proprietors valid?

Arguments of the parties

Petitioners 

Several contentions have been raised by the learned counsel of appellants, which are as follows:

• The questions were raised regarding the validity of the provisions of two statutes, namely, the Orissa Agricultural Income-tax (Amendment) Act, 1947 and the Madras Estate Land (Amendment) Act, 1947, as they affect the calculation of the net income of an estate, in order to determine the compensation to be payable under the present Act. It was contended by the appellant that such legislation is not bonafide legislation at all but is merely a piece of colourable legislation, as the real purpose of the legislation is to reduce the net income of the intermediaries.
• Some of the provisions of the Act were challenged as unconstitutional as they are applicable on the private lands and buildings of the owner, both of which form part of the estate in accordance with Section 5 of the Act.
• The manner in which the compensation is paid in accordance with Section 37 of the Act has been challenged as not valid and unconstitutional.
• Along with the above-mentioned contentions, the counsel relied on the case of State of Bihar vs. Maharaja Kameshawar Singh and Others (1952), in which two provisions, i.e. Section 4(b) and Section 23(f) of the Bihar Land Reforms Act, were held to be unconstitutional on the ground that provision constitutes fraud on the constitution. The counsel further relied on the case of Union Colliery Company of British Columbia Ltd. vs. Byrden (1899), in which the “doctrine of colourable legislation” came for consideration.

Respondent  

In reply to the contentions raised by the appellant, the learned Attorney-General contended that –

• The contentions that were raised by the appellant are not relevant for the purpose of the present case.
• It was further contended that the arguments put forward by the appellants are not the grounds to attack the validity of the Act.
• The provisions of the Act relating to the computation of gross assets based on the rent that is payable are not illegal.
• If the contentions of appellants are right, then they are free to raise objections regarding the computation of gross assets on the basis of rent settled under the provisions of the Act.
• If the prescribed rule for computing rent under the Act is found void, the rent that is set will be dismissed, and the appellant will be allowed to include the preceding year’s rent as rent settled.   

Legal provisions and concepts involved in this case

Doctrine of colourable legislation

Understanding of the concept laid under this doctrine is of crucial importance because this doctrine is involved in one of the issues of the case. The doctrine of colourable legislation is a principle that aims to prevent the exorbitant use of legislative power by the government. The primary use of this doctrine is to check the competency of the legislature on the law in question. This doctrine can be invoked in a situation when the legislature is not competent to make certain laws upon a particular matter but still makes the law on that subject either directly or indirectly. There may be instances where the law primarily appears to be within the constitutional power of the legislature, but in reality, that can be an attempt to achieve the objective beyond the jurisdiction of the legislature. Under that scenario, this doctrine can be invoked.

The doctrine of colourable legislation is derived from a Latin maxim – “quando aliquid prohibetur ex directo, prohibetur et per obliquum” which is based on the objective that the power of legislature must be exercised within the constitutional limit and if any attempt is made to exceed that limit, then such legislation will be considered as a piece of colourable legislation. Therefore, this doctrine grants the judiciary the authority to verify whether the legislation is in compliance with the jurisdictional requirement or not. Hence, the main motive of this doctrine is to ascertain that if the legislature cannot enact certain laws directly, then they cannot employ any indirect method to enact such laws.  

To know more about the doctrine of colourable legislation, click here. 

Orissa Estate Abolition Act, 1952

Various provisions of the Orissa Estate Abolition Act, 1952, were discussed by the court for clarity on the case and issues associated with it. Some of the discussed provisions of the Act are as follows:

Section 3 of Orissa Estate Abolition Act, 1952

This Section describes the notification and vesting of an estate in the state. The State Government has the power to declare, by notification, that the estate described in the notification has vested in the state free from all encumbrances. This Section further states that the notification must contain particulars of the estate, such as tauzi number (if any), name, and address of the intermediaries as recorded in the register, which is maintained by the collector.

Section 4 of Orissa Estate Abolition Act, 1952

This Section describes the surrender of an estate by an agreement. Before the issuance of notification under Section 3, the State Government must invite intermediaries to submit proposals for the surrender of their estate. If such a proposal is accepted, then the surrendered estate shall vest in the government as soon as the agreement regarding the surrender is executed. Such a proposal must be in writing, and it shall contain all the specific terms and conditions on which the surrender is proposed to be made.

Section 5 of Orissa Estate Abolition Act, 1952

This Section describes the consequences of vesting either by the issuance of notification under Section 3 or by surrender under Section 4. The entire estate, including other properties associated with it, should absolutely be vested to the state free from any encumbrances, and such intermediaries whose land is being vested shall cease to have any interest in such estate apart from those interest which is saved under the provisions of the Act.

Section 6 of Orissa Estate Abolition Act, 1952

This Section describes some of the things that are retained by the intermediaries even after the estate is vested in the government. The intermediaries are allowed to keep homesteads, buildings, and structures that are used for residential or trading purposes, such as golas, mills, and factories, for the purpose of trade, manufacturing, commerce, etc. However, the building that is used for official or other estate purposes would vest to the government.      

Section 7 of Orissa Estate Abolition Act, 1952

This section provides that the intermediaries would be entitled to retain such land used for agriculture and horticulture purposes that are under their khas possession at the date of vesting. However, it is pertinent to note that the private land of the intermediaries, which is held by the temporary tenant under him, would be vested in the government, and the temporary tenant would be deemed to be the tenant of the government.

Section 37 of Orissa Estate Abolition Act, 1952

This Section is the most crucial and marks the core issue in the present case as it discusses the manner in which the compensation would be paid.

It has been stated under this provision that after the compensation assessment is finalised, the compensation officer needs to compensate those who are mentioned in the list. While paying compensation, the officer can deduct such an amount as specified under the different clauses of the provision. The deduction can’t exceed 35% when the compensation is an annuity. However, the deduction can go up to 50% if the debt can’t be cleared in 30 years.

This section further discusses that if the person who is entitled to the compensation dies, then their legal heirs would be entitled to such compensation. The compensation follows 2.5% annual interest, which is payable in 30 annual instalments. If the compensation remains unpaid due to legal issues, then such compensation will be deposited as a revenue deposit and will not earn interest after a specified period. The Section further elucidates that the intermediaries, by way of deed, can agree to receive compensation as reduced rent for any kind of land settlement.    

Article 31 of the Indian Constitution 

Article 31 is relevant to the present case because this Article initially provided “right to property” as a fundamental right. However, the Act involves provisions regarding the state’s acquisition of estates. 

Article 31(4) is majorly relevant because it states that if any bill is discussed in the state legislature at the commencement of the Constitution and if that bill is passed by the legislature and sent to the President for approval and, it becomes law upon the President’s approval. Such law cannot be challenged in any court for going against (2) of the Article 31 of the Indian Constitution. In the present case the Act in question received the approval of the President and was thus protected under Article 31(4), but subsequently a dispute arose which was addressed in the case.    

Initially, when the Indian Constitution was made, the right to property was one of the fundamental rights. This right was provided under Article 31 of the Indian Constitution, which dealt with the property rights of an individual, and any kind of compulsory acquisition of property was prohibited in accordance with this provision. This Article provided that no citizen can be deprived of owning their property. However, one of the exceptions provided under this Article was that if the property is being acquired by the authority of law, then it would be a legally valid acquisition. Further, reasonable compensation must be paid if any individual’s property is being acquired for a public purpose. 

However, this right was removed from the list of fundamental rights vide the 44th Amendment Act, 1978 and thereby, the right to property was made as a constitutional right under Article 300A. 

Article 31A of the Indian Constitution

Article 31A is relevant to this case because this provision provides an avenue for the acquisition of an estate and the savings related to it, and in the present case, the question arose regarding the acquisition of an estate and, further, the compensation associated with it.  

This Article was enacted with the purpose of providing an exception to the right to property, Article 14 and Article 19(1)(g). The object of this provision is to protect and validate the law that extinguishes Zamindari and other similar rights. This Article states that, notwithstanding anything contained under Article 13 of the Indian Constitution, no law providing for –

• The acquisition by the state of any estate or to change or remove such rights.
• Taking over the management of property by the state for an interim period, either for the public good or to ensure the proper management.
• The merger of two or more corporations, either for public good or for better management.
• Modify or remove the rights of managing agents, secretaries, treasurers, directors, or managers of corporations or the voting rights of shareholders.
• Change or remove the rights which are acquired by way of an agreement, lease, or licensee related to searching for or extracting minerals or mineral oils or the premature termination or cancellation of any such agreement, lease, or licence.    

The laws made on the above-mentioned subject shall be deemed void if it is inconsistent with the rights conferred under Article 14 or Article 19 of the Indian Constitution. However, it is pertinent to note that if such a law is made by the state legislature, then the President’s approval is needed to make it legally valid. It has been further stated that if any of such laws allow for the acquisition of land under personal cultivation, then such land cannot be acquired by the state within the certain ceiling limit or any building or structure on it without paying at least the market value as compensation.      

Judgement in K.C. Gajapati Narayan Deo vs. State of Orissa (1953)

The court was of the opinion that it is necessary to examine what exactly the doctrine of “colourable legislation” means. The court considers that the doctrine does not involve any question of bonafide or malafide intention on the part of the legislature. The entire doctrine revolves around the question regarding the capability of the legislature to enact any particular law. It was stated by the court that if the legislature is competent to enact any law, then in that situation, the motive that forces it to act is completely irrelevant. However, if the law enacted is such that the legislature is not competent to pass such a law, then the question of motive does not arise at all. Therefore, determining whether a statute is constitutional or not is always a question of power or competency. On this particular question, the court finally concluded that the substance of the matter is material, and if the subject matter of legislation is beyond the power of the legislature to legislate, then the form in which the law is presented would not be saved from being judged negatively. Therefore, the legislature cannot employ indirect methods to complete something which cannot be done directly.

After critically analysing and taking into consideration various facts and circumstances of the case, it was ruled by the court that Section 37 of the Act, which states regarding the payment of compensation along with interest in 30 annual equated instalments, leaving open for the state to make payment any time before the expiration of period is not a piece of colourable legislation. The court, on this particular ruling, relied on the reasoning that this legislation comes under Entry 42 of List III of Schedule VII of the Indian Constitution.

The court was of the opinion that if any bill receives the assent of the President, then it is protected from any attack on the ground that Article 31(2) has not been complied with. The court, on one of the contentions made by the parties, that the bill was passed without any alteration, and hence Article 31(4) is attracted. The court ruled that the expression “passed by such Legislature” must mean “passed with or without alterations” in accordance with the procedures as enshrined under Article 107 of the Indian Constitution. Therefore, it was ruled that all the requirements of Article 31(4) have been complied with, and there is no scope for any objection on the grounds that the compensation provided was inadequate. It was further ruled that the State Legislature is empowered under Article 31(2) of the Indian Constitution to place buildings under the ambit of the estate in order to cater to the management or administration purpose of the government. Finally, the Supreme Court of India ruled that there was no substance in the contentions, and the court had no hesitation in overruling it. Therefore, all the points raised by the appellant were dismissed. However, some important constitutional question was involved in the case which needed to be cleared, and apart from that, the appeal stands dismissed. 

Relevant judgements referred in the case

Union Colliery Company of British Columbia Ltd. vs. Bryden (1899) 

In this case, the question arose regarding Section 4 of the British Columbia Coal Mines Regulation Act, 1890, which prohibited the entry of Chinese men of full age from employment in underground coal work. It was contended that such provision is ultra vires of the Provincial legislature. The present question was answered by the court in an affirmative way, and it was ruled that such prohibition was indeed beyond the Provincial legislature’s power. It was further stated that if it were merely regarded as a coal-working regulation, then it could certainly come under Section 92(10) or Section 92(13) of the British North America Act, 1867. However, since the current provision in question specifically targeted Chinese men, then it fell into Section 91(25) of the Act, which is the exclusive domain of the federal Parliament. Subsequently, it was clarified by the Judicial Committee that the British Columbia Coal Mines Regulation Act, 1890 was not actually about coal mine safety, but instead, it was a way to discriminate against the Chinese.

The State of Bihar vs. Maharaja Kameshwar Singh and Ors. (1952)

In this case, the Bihar Land Reforms Act, 1950 was challenged on the grounds that there were classifications of zamindars for the purpose of giving them compensation. It was contended that such classification is discriminatory, and it denies equal protection of law as guaranteed under Article 14 of the Indian Constitution. As a result, two provisions, namely Section 4(b) and Section 23(f) of the Bihar Land Reforms Act, were held to be unconstitutional on the grounds that these provisions constitute a fraud on the constitution. The court in the present case observed that although some of the provisions of the Act are harsh and bad against Zamindars, they do not render the whole Act a fraud on the Constitution. 

Attorney-General for Ontario vs. Reciprocal Insurers and Others (1924)

In this case, it was opined by Duff J. that if the law-making authority is of a limited or qualified character, then under those conditions, it may be necessary to examine with strictness the substance of such legislation in order to get a clear idea as to what the legislature is actually doing. 

Conclusion 

The Supreme Court of India, through its decision in the present case, has demonstrated that the Act in question is one of the vital legislation and is significant for the land reforms in India. This case highlighted the government’s commitment to abolish the perpetuating zamindari system, ensuring that the persons who are actual cultivators or tenants get benefits through the Act. The landholder’s challenge regarding the Act’s unconstitutionality couldn’t be sustained, and the court ruled that the state legislature was competent to make such laws and did not violate the principles of the Constitution.

Therefore, the major issue persistent in the case regarding compensation was resolved, and it was clarified that the state has the authority to implement reforms like this and that the modes of payment for compensation were fair and legally valid. However, it was admitted by the court that there are a few constitutional questions that need to be addressed in the present case, but merely on the basis that the Act cannot be held to be violative of the Indian Constitution. This case marks a landmark decision aimed at eradicating poverty along with supporting the marginalised section of society.

Frequently Asked Questions

What is the implication of this judgement on the zamindari system in Orissa?

After the Orissa Estate Abolition Act, 1952 was held to be legally valid, the zamindari system was abolished, and thereby, the cultivators and the tenants benefitted hugely from the decision of Apex Court, marking a great step towards land distribution and social justice.

How did the Apex Court interpret the right to property in relation to the issues present in this case?

The Supreme Court of India was of the opinion that, although the right to property is the right of an individual. However, along with that, the government has the power to acquire certain property for public purposes, and such an act of acquiring must be compensated with reasonable compensation, which was given in the present case in accordance with Section 37 of the Act.

What is the relevance of the decision given in The State of Bihar vs. Maharaja Kameshwar Singh and Ors. in the present case?

The State of Bihar vs. Maharaja Kameshwar Singh and Ors. is one of the cases referred to in the present case and has helped in shaping the decision of the case because it involves similar questions of the constitutional validity of land reforms and issues regarding compensation.

References

• INDIAN CONSTITUTIONAL LAW by M.P. Jain

This article was written by Pruthvi Ramkanta Hegde. This article explains the facts, issues, and judgement of the case of G. Basi Reddy v. International Crops Research Institute based on the interpretation of the scope of ‘State’ under the Constitution. The article also covers the definition of ‘State’ under Article 12 and some important judicial pronouncements in this regard. 

Introduction 

Judicial pronouncements are always made in accordance with the provisions of the Constitution since the Constitution of India is considered the mother law of India. Article 12 of the Constitution is one of the important provisions that define what constitutes the “State” under the Constitution. This definition determines the scope of governmental authority under Article 12 of the Constitution. In this regard, the case of G. Basi Reddy vs. International Crops Research Institute & Another (2003) is one of the most important for understanding how Article 12 of the Indian Constitution works. This case also explains the rules for identifying which organisations are considered “States” under the Constitution. 

Details of the case 

Name of the case

G. Basi Reddy vs. International Crops Research Institute and Another

Date of judgement

February 14, 2003

Court name

Honourable Supreme Court of India

Supreme Court Bench

Honourable Justice Ruma Pal 

Honourable Justice B.N. Shrikrishna

Parties to the case

Petitioner

G. Bassi Reddy

Respondent

International Crops Research Institute. & Another

Equivalent citations

AIR 2003 SUPREME COURT 1764, 2003 (4) SCC 225, 2003 AIR SCW 1197, 2003 LAB. I. C. 1157, 2003 (2) UPLBEC 1185, 2003 (2) ALL CJ 1476, 2003 (3) COM LJ 90 SC, 2003 (2) SCALE 136, 2003 (2) ACE 421, (2003) 4 ALLINDCAS 809 (SC), 2003 (4) ALLINDCAS 809, 2003 (2) SLT 435, (2003) 1 SCR 1174 (SC), (2003) 2 JT 180 (SC), 2003 (5) SRJ 153, (2003) 2 LABLJ 1123, (2003) 2 ALL WC 1199, (2003) 2 CURLR 290, (2003) 98 FACLR 488, (2003) 2 LAB LN 1083, (20 03) 3 SERVLR 220, (2003) 2 UPLBEC 1185, (2003) 2 SUPREME 42, (2003) 2 SCALE 136, (2003) 3 INDLD 879

Author of the judgement

Honourable Justice Ruma Pal

Facts of the case

The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) was a centre for research and training institutions focused on helping countries dealing with dry areas fight poverty and hunger in a sustainable way. The idea came from the Consultative Group on International Agricultural Research (CGIAR), a cluster of almost fifty institutions and intergovernmental organisations, including but not limited to the UN and the World Bank. This was mainly for improving sorghum, millet, pigeon peas and chickpeas, which are very important in many less developed regions, especially within India, some parts of Africa, and Latin American areas. To fund ICRISAT, certain members of CGIAR entered into agreements with organisations such as the International Bank for Reconstruction and Development (IBRD) and the Ford Foundation.

In March 1972, the Government of India and the Ford Foundation reached an agreement facilitated by CGIAR, called the March Agreement, leading to the establishment of ICRISAT in Hyderabad, India. According to this agreement, ICRISAT would serve as the primary centre for global research and training on these crops. Under the March Agreement, ICRISAT was established in India as an autonomous institution engaged in agricultural research, education and training. The director of the institute is chosen by a board of governors who supervise its overall functioning, while the director is responsible for managing its daily operations. Programmes were run by this board, its policies were developed and implemented, and its budgeting capacity determined how well senior staff members received appointments.

The Governing Board of ICRISAT, which could have up to fifteen members, included representatives from India, where ICRISAT is based, as well as from CGIAR and other supporting countries or organisations. A smaller group from CGIAR set up this board when ICRISAT first started. ICRISAT’s main offices and labs were constructed on land allocated by the Indian Government. The initial funding to establish ICRISAT came from the UK, USA, UNDP, and IBRD, with additional support from CGIAR members. India provided comparatively smaller financial contributions compared to these other countries.

ICRISAT also works in several African countries and has additional centres there established through agreements with those nations. Its team consists of people from twenty-two countries, including India, and they work in Asia, Africa, and Latin America. ICRISAT has offered training to many researchers and students from different countries, including India. Its board includes individuals of diverse nationalities, with additional members appointed by the Indian government. In addition, there are also representatives from Norway, Zambia, the Philippines, Germany, France, Sweden, the USA, Canada, Australia, Japan, Brazil, and Nigeria.

According to clause 6 of that March agreement, the Indian government would grant ICRISAT immunity under the United Nations (Privileges and Immunities) Act, 1947. It also stated that it recognised ICRISAT as an international body with non-profit status.

In the March Agreement, it was agreed that this institution would be recognised as a charity by the Government of India, but not to make a profit. It was also agreed that it should have certain rights under the United Nations (Privileges and Immunities) Act of 1947. On October 28, 1972, the Indian Government officially announced that it would extend these protections to ICRISAT and its international staff. However, there were a few exceptions when it came to solving legal disputes. Despite having these legal provisions, ICRISAT established its own regulations in 1976 regarding the management and discipline of its staff. These regulations took into consideration both international standards and local practices.

A few terminated former employees of ICRISAT tried to challenge this decision in the High Court of Karnataka on two occasions. However, their petitions were dismissed. The Court ruled that ICRISAT enjoys immunity from lawsuits because it is recognised as an international organisation under the 1972 Act. The court further held that ICRISAT functions similarly to an international organisation. Therefore, under Article 226, the court concluded that it did not have the authority to instruct or interfere with ICRISAT’s decisions or actions. Consequently, this present appeal was filed before the Supreme Court.

Issues

1. Whether ICRISAT fall under the purview of Article 12 of the Constitution of India?
2. Whether the agreement between the Government of India and ICRISAT enforceable in domestic courts even if it is not part of any domestic law?
3. What kind of organisation is ICRISAT?

Law surrounding G. Basi Reddy vs. International Crops Research Institute (2003)

Article 12 of the Indian Constitution

Article 12 of the Constitution explains what the word “State” includes. It includes the central government, state governments, and any local authorities in India or under the control of the central government.

The term “other authorities” in Article 12 of the Constitution is clarified by important court cases. For instance, in the Rajasthan State Electricity Board, Jaipur vs. Mohan Lal (1967) case, it was decided that “other authorities” include any entity created by a law that performs governmental functions and operates in India or under the Indian government’s control.

The court in the Ramana Dayaram Shetty vs. The International Airport of India and Others  (1979) case laid out some guidelines for identifying an entity as an “other authority” under Article 12. In this case, the International Airport Authority of India (IAAI) issued a public notice by inviting tenders for setting up and running a second-class restaurant and two snack bars at the Bombay International Airport. The petitioner submitted a tender, but it did not meet the specified conditions. Despite this, the IAAI accepted the petitioner’s non-conforming tender.

The main issue was whether the IAAI could be considered an “authority” under the definition of “State” in Article 12 of the Indian Constitution.

These guidelines include several criteria, one is whether the government owns most of the entity’s shares, and the other is whether the government mostly funds the entity. It also analyses whether the company has received government monopoly status or if the entity is highly managed by the government. The enumerated factors also consider whether the function of that state activity is important to the public at large. It was held in this case by the Supreme Court of India that IAAI is an “instrumentality of the state.” The court further emphasised that if authorities are exercising sovereign powers similar to those of the state,  whether they are constitutional or statutory bodies, they are considered ‘other authorities’. The central government exerted deep and pervasive control over the administrative affairs of IAAI; it qualifies as an ‘authority’ under Article 12. Thus, any agreement based on a nonconforming tender accepted by IAAI would be subject to constitutional limitations, including Article 14, which deals with the right to equality.

Over time, Indian courts have expanded the scope of “State” in various situations to protect fundamental rights. For example, in the case of the University of Madras by Registrar vs. Shanta Bai and another (1953) case, the Madras High Court introduced the principle of ejusdem generis, which means “similar in nature.” This principle indicates that entities performing governmental functions are covered under “Other Authorities.” Similarly, in the Sukhdev Singh & Ors. vs. Bhagatram Sardar Singh & Ors. (1975) case, entities like LIC, ONGC, and IFC were considered “State” because they performed functions similar to those of the government. 

There has been debate about whether the judiciary should be considered part of the “State”. Some legal experts, like H.M. Seervai and V.N. Shukla, argue that the judiciary should be included. They point to Articles 145 and Article 146 of the Constitution, which give the Supreme Court the power to make rules and appointments. In the Prem Chand Garg vs. Excise Commissioner, U. P. Allahabad (1962) case, the Supreme Court held that when the judiciary makes rules, it is considered part of the “State”. The Supreme Court ruled that the judiciary’s rule-making under Articles 145 and 146 qualifies as part of the “State,” subject to constitutional scrutiny. Conversely, in the Ratilal Panachand Gandhi vs. The State Of Bombay and Others (1954) case, it was decided that the judiciary is not part of the “State” under Article 12. However, in the A.R. Antulay vs. R.S. Nayak (1988) and Naresh Shridhar Mirajkar And Ors vs. State of Maharashtra (1966) cases, courts held that while judicial rule-making and administrative actions may be considered part of the “State” for constitutional purposes, the actual judicial acts of adjudication and trial proceedings generally do not meet this criterion. 

In the case of Zee Telefilms Ltd. and Another vs. Union of India and Others, (2005), the Honourable Supreme Court of India addressed the issue of whether the Board of Control for Cricket in India (BCCI) should be considered a “State” under Article 12 of the Constitution. The main question was whether the BCCI meets Article 12’s definition of a governmental body in spite of its prominent role and monopoly in cricket administration. The BCCI argued that it operates independently without government control or financial aid. The court agreed that because the BCCI functions on its own, without direct government involvement or a legal foundation provided by the government, it does not qualify as a “State” under Article 12 of the Constitution. Therefore, the court ruled that BCCI is not a state within the meaning of Article 12 of the Constitution.

Over time, there have been different judicial interpretations and discussions about what constitutes ‘State’ under Article 12 in Indian courts. 

Parties contentions

Petitioner contention

Petitioners contended that ICRISAT should be directed to frame rules aligning with Indian customs and fulfil Clause 6(a)(2) of the March agreement, which assured the governing authority over ICRISAT. The petitioner argued that the immunity granted to ICRISAT under the International Organizations (Privileges and Immunities) Act, 1947, was not applicable because ICRISAT was not an organ of the United Nations or a specialised agency as per Article 57 of the U.N. Charter. It was further contended that even if immunity was granted, it should not extend to employment disputes and should not prevent judicial review by the courts. They contended that the agreement violated fundamental rights under Articles 14, 21, and 311 of the Constitution. 

The petitioner argued that the immunity granted to ICRISAT violated his constitutional and fundamental rights in several ways. The petitioner claimed that the immunity granted to ICRISAT resulted in unequal treatment of his employees compared to employees of other organisations. 

He further argued that the immunity granted to ICRISAT deprived him of the ability to seek legal action in court to challenge his dismissal. He claimed it was a fundamental aspect of equality under the law. He claimed this was unequal treatment compared to employees of other organisations who could access judicial remedies for similar grievances. Thereby, his fundamental right under Article 14 was violated.  

The petitioner also claimed that the arbitrary termination of his employment without proper procedural safeguards violated his right to life and personal liberty, as confirmed under Article 21 of the Indian Constitution. It was further contended that employment is essential to his livelihood, which is a fundamental aspect of his right to life. 

It was further contended that the immunity granted to ICRISAT effectively prevented him from seeking protection under Article 311 of the Constitution, which safeguards government employees from arbitrary dismissal. 

The petitioner further contended that the absence of an independent and impartial tribunal to resolve employment problems at ICRISAT was an obvious breach of his right to a fair hearing. Further argued that unfair procedures at ICRISAT undermined the principles of justice and fairness. This situation also violated his basic rights, as outlined in Articles 14 and 21 of the Constitution. He also argued that his termination from the job was completely random and unfair and went against the principles of natural justice. 

Respondent contention

Respondents objected that ICRISAT was outside the jurisdiction of the municipal courts under Article 226. Besides, it was not a government agency and was not controlled financially or administratively by the government. The Union of India maintained that the immunity granted to ICRISAT was based on an agreement with the Consultative Group on International Agricultural Research (CGIAR) and could not be altered unilaterally. ICRISAT contended that it was not subject to the court’s jurisdiction under Article 226 because it was neither a government body nor under government control. Both ICRISAT and the Union of India contended that a writ petition was not maintainable against ICRISAT, as it was not a ‘State’ or authority under Article 12 of the Constitution. ICRISAT further contended that the disciplinary action against the petitioner was carried out according to its internal rules, which were fair and consistent with domestic laws like the Industrial Employment (Standing Orders) Act of 1946.

The respondents considered that ICRISAT was not discharging governmental or statutory functions that would be amenable to the issuing of a writ under Article 226. Rather, they contended, ICRISAT engaged in voluntary agricultural research and training and benefitted not only the Indian populace but also people around the world. The respondents further submitted that the employee-employer relationship between the petitioner and ICRISAT was contractual and that, therefore, the dispute must be resolved through contractual remedies and not through a writ petition under Article 226.

Judgement in G. Basi Reddy vs. International Crops Research Institute (2003)

The court examined whether ICRISAT, a global agricultural research institution, can be considered a “State” under Article 12 of the Indian Constitution. This examination is important because if ICRISAT were a “State,” it would be bound to observe the obligations of the Constitution.

The court reasoned that ICRISAT was formed to combat hunger and poverty in less developed countries and not act on behalf of India. India contributed a very small portion of the financial contribution, between 0.3% and 2% of the total budget of ICRISAT. Because of this small financial contribution, India had narrow control over the decisions and operations of ICRISAT. The court further observed that the state’s influence was primarily through acts of parliament, not direct control of the government. The court therefore decided that ICRISAT could not be considered a part of the government under Article 12 of the Constitution.

Further, the petitioner sought relief against the Union of India. The court said this claim was substantially identical to the one against ICRISAT and was not sustainable. The court is querying further whether the agreement between the government and ICRISAT is enforceable in Indian courts. These agreements amount to instruments; they do not fall into the category of domestic law.

The court concluded that the petitioner’s legal rights were not violated because ICRISAT was not considered a “State” under the Constitution. Therefore, a writ petition under Article 226 against ICRISAT could not be maintained. The court also noted that the complaint against the Union of India was not valid because it mainly involved ICRISAT.

The court referred to Clause 6(2) of the March agreement and held that ICRISAT’s Personnel Policy Statement (PPS) on internal discipline could not be questioned. According to the court, a writ under Article 226 cannot be used to enforce contractual rights unless a statutory body acts against a mandatory legal duty when terminating the contract.

The court decided that ICRISAT could not be classified as a “State” under Article 12 of the Indian Constitution because  it had limited financial ties to India and was not directly controlled by the Indian government. Therefore, it was not subject to the constitutional obligations that apply to government entities in India. Consequently, the petitioner was unable to use Article 226 to seek redress against ICRISAT. Furthermore, the court emphasised that writ petitions cannot generally be used to settle disputes arising from contracts. However, such writ petitions may be invoked if the disputes involve statutory bodies that have failed to fulfil their legal obligations.

Cases referred to in the judgement

In Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology & Ors. (2002) case provided tests to determine if an organisation is controlled by the government and thus considered a “State” under Article 12 of the Constitution. The court used these tests to conclude that ICRISAT is not controlled by the Indian government and thus not a “State.”

In Calcutta Gas Company (Proprietary) Ltd. vs. State of West Bengal and Others (1962) case, it was provided that a writ under Article 226 can only be issued if a fundamental or legal right is infringed. The court used this principle to determine that the writ petition could not be maintained against ICRISAT since it was not a “State” and no fundamental right was violated.

In Praga Tools Corporation vs. Shri C.A. Imanual and Others (1969) case, it was ruled that a writ can be issued to enforce statutory duties, but not to resolve private disputes or contractual obligations. The court concluded that since ICRISAT’s activities were not statutory, a writ could not be issued against it for a contractual employment dispute.

In Anandi Mukta Sadguru Shree Mukta Jeevananda Swami Suvarna Jaya vs. V.R. Rudani and others (1989) case, it was provided that a writ can be issued to any person performing a public function or duty. The court noted that ICRISAT’s activities were voluntary and not public duties, so a writ could not be issued against it.

The Vst Industries Ltd. vs. Vst Industries Workers Union & Anr. (2001) case reinforced the principle that a writ can be issued if a public function or statutory duty is involved. The court reiterated that ICRISAT’s functions were not public or statutory duties.

In S.R. Tewari vs. District Board Agra And Another (1963), case it was held that a writ under Article 226 cannot be used to quash an order terminating a contract of service. The court used this to support its decision that the petition could not be maintained to challenge the employment termination. In the Executive Committee of Vaish Degree College, Shamli vs. Lakshmi Narain (1976) is the same as the S.R. Tewari case regarding the non-maintainability of writ petitions to enforce contractual rights. The court reinforced that a writ petition cannot be used to resolve employment contract disputes.

In Vidya Ram Mishra vs. Managing Committee, Shri Jai Narain College (1972) case, exceptions exist where statutory bodies act in breach of mandatory legal obligations. The court noted that since ICRISAT is not a statutory body, this exception did not apply.

In Dadu @ Tulsidas vs. State Of Maharashtra (2000) case, it was provided that international agreements must conform to domestic constitutional principles. The court noted that international agreements like the one with ICRISAT could not override constitutional rights, but this did not apply here since ICRISAT was not considered a “State.”

In Nain Sukh Das And Another vs. The State Of Uttar Pradesh And Others (1953) case, the court ruled that the scope of Article 226 is broader than Article 32, which is limited to fundamental rights. The court reinforced that Article 226 could be used broadly, but still not for enforcing purely contractual rights.

Conclusion

Determining the scope of authorities considered “State” under Article 12 is not easy, as the term ‘State’ has been interpreted by courts as per changing times. Through various case laws and judgements, as well as different viewpoints of judges and legal scholars, the meaning of “other authorities” has expanded. One of the primary tests applied by the judiciary to determine whether an entity is a ‘State’ is whether the entity performs functions that are performed by the state in its sovereign capacity or not. If certain entities perform functions that are typically done by the government, they can be seen as similar to the government itself.

Certain entities can be considered as part of the “State” if they are controlled or owned by the Indian government. If an entity is not under such direct control or ownership, it is generally not considered as a “State”. As a result, individuals cannot file a lawsuit against such organisations under Article 226 of the Constitution to enforce fundamental rights. 

Frequently Asked Questions (FAQs)

Does Article 12 of the Indian Constitution consider the judiciary as part of the ‘State’?

Under Article 12 of the Indian Constitution, the term “State” does not specify that it includes the judiciary. However, the judiciary can be seen as part of the “State” when it performs non-judicial functions. However, there is ongoing debate about whether judicial decisions can be challenged as violations of fundamental rights.

What is the difference between the terms ‘instrumentality or agency’ and ‘other authorities’ as used in Article 12 of the Indian Constitution?

“Instrumentality or agency” of the State is a narrower term and refers to bodies performing State functions. It would include government companies or statutory corporations that are closely associated with the State. “Other Authority” is a more general term and includes authorities that impact people or are affected by an authority that is not a state government entity, for example, the municipal committee or panchayat. An authority could be an “instrumentality or agency” of the State, but all instrumentalities or agencies would not be authorities.

Can International Agreements be enforced in the domestic courts of India?

An international agreement can only be enforced in the Indian courts if it has been incorporated into the domestic law of India by the legislature. If the international agreement has not been incorporated into the domestic law, it will not be directly applied or used in the domestic courts in India.

References

• https://lawplanet.in/g-basi-reddy-v-international-crops-research-institute/
• http://courtverdict.com/supreme-court-of-india/g-basi-reddy-etc-etc-vs-international-crops-research-instt-anr#google_vignette
• https://www.lawctopus.com/academike/authorities-article-12-constitution/
• https://lawtimesjournal.in/concept-of-state-under-article-12-of-the-indian-constitution/#google_vignette
• https://www.researchgate.net/publication/339499550_State_under_Article_12