Ajay Hasia v Khalid Mujib

The case of Ajay Hasia v Khalid Mujib, (1981) 1 SCC 722, was a significant ruling by the Supreme Court of India. In this case, the Court established a test to figure out if an individual, corporation, or society could be considered an instrumentality or agency of the government. This determination is important because it decides whether they can be treated as a “State” under Article 12 of the Constitution of India. When an entity is regarded as a “State” under Article 12, it can be subject to a writ petition if it violates the Constitution.

The Court’s decision, which Justice P. N. Bhagwati presented, essentially summarised Bhagwati’s perspective in the case of R. D. Shetty v International Airport Authority of India. Ajay Hasia condensed the International Airport Authority case into a six-factor test for identifying whether an entity qualifies as an instrumentality or agency of the State.

Facts of Ajay Hasia v Khalid Mujib

Ajay Hasia v Khalid Mujib involves the Regional Engineering College in Srinagar, which is one of 15 colleges in the Union Territory of Jammu and Kashmir. These colleges are registered and managed as “societies” under government oversight. They are registered under the J&K Registration of Societies Act of 1898. The government has direct or indirect control over the management and administrative functions of these colleges. The funding for these colleges comes from both the central government and the J&K state government. Faculty and staff recruitment for the college are typically carried out by government representatives and many faculty members are government appointees themselves.

The current situation arises from a writ petition filed by the petitioners, who seek to invoke Article 32 against the college authorities on the grounds that the college falls under the definition of “the state.” The petitioners applied for admission to the B.E. Course at the college in response to a notice issued by the college authorities regarding available admission vacancies. However, they argue that the admission process and the subsequent results lack validity. The procedure included a qualifying examination worth 100 marks and a viva voce examination (an oral examination) worth 50 marks. The petitioners claim that this process was unfairly implemented to their disadvantage.

The petitioners allege that the college authorities determined the results of both the qualifying examination and the viva voce examination unjustly. They contend that they scored higher marks in the qualifying examination compared to the applicants who were admitted solely on the basis of the viva voce examination, which accounts for almost 50% of the total evaluation. The viva voce examination, which lasted only 2 or 3 minutes, consisted of questions unrelated to the course and, in the petitioners’ view, cannot be considered a reliable test for determining admissions. This has raised questions about the maintainability of the petitioners’ claims and the reliability of the admission procedure.

Legal Provisions Referred

This case revolves around the admission process at the Regional Engineering College in Srinagar, Jammu & Kashmir, which is registered as a society under the Jammu & Kashmir Registration of Societies Act, 1898. The main issue in question is whether this college qualifies as a “State” under Article 12 of the Constitution of India and, as a result, is subject to writ jurisdiction.

The admission procedure involved conducting viva voce interviews, where each candidate was interviewed for a very short duration, typically lasting only two or three minutes. The questions asked during these interviews were merely formal and related to the candidate’s background and residence. These questions had no relevance to the subject for which marks were allocated. The key question is whether this viva voce process was arbitrary.

Additionally, 1/3 of the total marks were allocated to the viva voce examination and this allocation is being questioned as potentially bad, unreasonable and arbitrary.

Another issue raised in this case is whether the practice of prescribing different admission procedures for candidates from Jammu & Kashmir and candidates from other states violates the Equality Clause under Article 14 of the Indian Constitution.

Issues Raised

The issues raised in Ajay Hasia v Khalid Mujib were:

1. Whether the said college comes under the definition of state under article 12 and hence whether the writ is maintainable or not?
2. Whether the admission procedure of the college is violative of Article 14 as alleged by the petitioners?

Arguments Made by the Petitioner

In the case of Ajay Hasia v Khalid Mujib, the petitioners aimed to challenge the classification of the Regional Engineering College, Srinagar, asserting that it should indeed be regarded as a ‘State’ within the meaning of Article 12 of the Indian Constitution.

The primary argument presented by the petitioners in Ajay Hasia v. Khalid Mujib was that, despite being officially registered as a society, the college essentially functioned as a governmental entity. They argued that the college’s establishment was a result of government initiatives and a significant portion of its funding came from the Governments of India and Jammu and Kashmir.

Furthermore, the petitioners pointed to the composition of the Board of Governors as evidence of government control over the college. The Board was predominantly composed of government appointees, including representatives from various government bodies and officials appointed by the two governments. This, they contended, demonstrated that the college was not merely a passive recipient of government funds but was directly under government control.

According to the petitioners in Ajay Hasia vs Khalid Mujib, the genuine nature and character of the college were governmental in nature, thus categorising it as a ‘State’ under Article 12. They argued that the formal registration of the college as a society under the Jammu and Kashmir Registration of Societies Act, 1898, should not alter the core essence of the institution. They maintained that the court should delve beyond the legal form and take into consideration the actual operations and control of the college, which, in their view, fell firmly within the scope of governmental authority.

Arguments Made by the Respondents

In contrast, the Respondents in Ajay Hasia v Khalid Mujib put forth the argument that the Regional Engineering College, Srinagar, should not be classified as a ‘State’ under Article 12. Their primary contention was based on the formal legal status of the college. They maintained that, despite substantial government influence, the college was officially registered as a society and, therefore, should not be considered a government entity.

The Respondents acknowledged that the government played a pivotal role in establishing the college, provided significant funding and had government appointees on the Board of Governors. However, they argued that the college functioned as an autonomous entity. They contended that the link between the college and the government was more in name than in substance and did not transform the college into a ‘State’.

Furthermore, the Respondents in Ajay Hasia versus Khalid Mujib highlighted that the college had its own set of rules and regulations and was not directly bound by government rules. They also emphasised that the college had a degree of flexibility in its operations and was not under the government’s direct control in its day-to-day activities.

Therefore, the core of the Respondents’ argument was that the college’s formal registration as a society and its operational autonomy set it apart from a government body, thereby excluding it from the scope of ‘State’ under Article 12. They urged the court to consider the legal form of the college and its self-governing nature, asserting that the level of government influence was insufficient to classify the college as a ‘State’.

Judgement in Ajay Hasia v Khalid Mujib

Issue 1

The court in Ajay Hasia v Khalid Mujib ruled in favour of the petitioners on the first issue, affirming that the present writ petition was legally maintainable because the Regional Engineering College fell within the scope of Article 12 under the category of “other authorities.”

In their analysis, the court examined various clauses within the memorandum of understanding and rules of conduct governing the registered college authority. They highlighted that the composition of the Society was predominantly influenced by delegates chosen by the Central Government and the governments of Jammu and Kashmir, Punjab, Rajasthan and Uttar Pradesh, with the Central Government’s agreement. The financial resources required to operate the college were provided entirely by the Central Government and the Government of Jammu and Kashmir. The Society could only secure additional funds with the concurrence of both the State and Central Governments. Furthermore, the rules of the Society needed approval at both government levels.

Taking into consideration the arguments presented by the petitioners and analysing them in the context of how the college operated under the overall control of the government, the court in Ajay Hasia v Khalid Mujib concluded that the Regional Engineering College, as a registered society, could be considered a “State” under Article 12 and thus the present writ petition was maintainable. They emphasised that it did not matter whether the corporation was established by legislation or statute for this purpose; what mattered was whether it acted as a government instrumentality or agency. The key question was not how the juristic person came into existence but why it was created.

Furthermore, the court laid out a test to determine whether an entity falls within the category of an instrumentality or agency of the state under Article 12:

• If the government owns the entire share capital of the body, it strongly suggests that the body is an instrument of the government.
• When the government provides financial aid that covers nearly all of the body’s expenses, it may imply that the body possesses a governmental character.
• It’s a relevant factor if the body has a monopoly status granted or protected by the state.
• The presence of profound and widespread state control may indicate that the body is a state instrument.
• If the body’s functions are of public importance and closely connected to governmental functions, it is a relevant factor to consider the body as an instrumentality of the government.

Issue 2

On the second issue, the court’s ruling in Ajay Hasia v Khalid Mujib leaned slightly in favour of the respondents but maintained a lawful and impartial stance. The bench laid down specific guidelines to determine whether the selection procedure violated Article 14 of the Indian Constitution.

The court provided justifications for its order, taking into account the evidence presented. It emphasised that it’s well established that a state authority or institution has the discretion to establish its own selection procedures without rigid restrictions. In this case, the college acted correctly by conducting both exams and there was no clear evidence of bias. However, the court found that allocating 50 out of 150 marks to the viva voce examination was excessive and should be reviewed for future admission tests at the college. The court also noted that the current admissions of students should not be reversed, as it would be unfair to those who were admitted and the petitioners should not be allowed to gain admission benefits solely on the suspicion of bias by the respondents.

Regarding the violation of Article 14, the court in Ajay Hasia v Khalid Mujib closely examined the distinction between the doctrine of classification and Article 14. It explained that the mere classification or ranking of things by hierarchy or value does not necessarily imply unequal or unjust treatment under Article 14 of the Indian Constitution. The court also dismissed the petitioners’ argument that interview rounds were unsuitable for assessing a person’s suitability for a position, stating that oral interviews are an integral part of the Indian selection process, as long as they are conducted fairly.

The court found no concrete evidence to support the petitioners’ claim that the viva voce examination was too brief or irrelevant. The respondents clarified that the average interview time was 4 to 5 minutes and candidates were appropriately assessed for their suitability for the course. The court concluded that the potential for interviews to be abused or manipulated is not a sufficient reason to eliminate them from the selection procedure.

However, the court in Ajay Hasia v Khalid Mujib issued overall guidelines to prevent future discrepancies. It directed the college to review its selection procedure, with the viva voce examination holding a smaller proportion of the total marks allocated.

Ajay Hasia v Khalid Mujib Summary

Justice P. N. Bhagwati delivered the Ajay Hasia v Khalid Mujib judgment and it’s most notably known for introducing the summarised six-factor test. This test has become influential and is frequently cited, even more so than the previous International Airport Authority case, also authored by Justice Bhagwati.

The six factors in this test in Ajay Hasia v Khalid Mujibare as follows:

• Whether the share-capital of the corporation is held by the Government.
• Whether the financial assistance from the State covers nearly all the corporation’s expenses.
• Whether the corporation enjoys a monopoly status granted or protected by the state.
• Whether there is significant and extensive state control over the corporation.
• Whether the functions of the corporation are of public importance and closely linked to governmental functions.
• Whether a department of the government has been transferred to the corporation.

These factors serve as a guideline to determine whether an entity can be regarded as an instrumentality or agency of the state and, therefore, subject to the provisions of Article 12 of the Indian Constitution.