National Book Trust Is ‘State’ Under Article 12, Supreme Court Finds Pervasive Government Control

The National Book Trust (NBT) was established pursuant to Government of India resolutions of 15 June 1957 and 28 September 1962 to promote the production and dissemination of literature and knowledge

A Full Bench of the Delhi High Court held that the Government exercised deep and pervasive control over NBT and that it was an instrumentality of the Government and therefore “State” under Article 12

NBT appealed to the Supreme Court, disputing that classification

Article 12 extends to bodies that, despite their non-governmental legal form, are in substance instrumentalities or agencies of Government.

Under Ramana Dayaram Shetty v. International Airport Authority of India and Ajay Hasia v. Khalid Mujib Sehravardi, relevant indicia include governmental financial assistance, State-conferred monopoly, deep and pervasive control, public functions closely related to governmental functions, and transfer of a government department; no single factor is conclusive, and the body’s legal form is not determinative.

Pradeep Kumar Biswas v. Indian Institute of Chemical Biology states the controlling inquiry: whether, on the cumulative facts, the body is financially, functionally and administratively dominated by or under the Government’s control, and whether that control is particular to the body and pervasive; ordinary regulatory control is insufficient.

A public function, standing alone, does not establish State status under Article 12.

The Court assessed NBT’s creation, governance, administration, finances and functions cumulatively.

The Government established NBT, appoints its Chairman—who holds office at its pleasure—and determines a substantial part of its governing and executive composition.

Governmental involvement also extends to financial administration, audit, reporting and approval of specified changes to NBT’s rules and purposes.

Although NBT earns revenue from publications and receives income from sources other than Government grants, that financial independence in one respect did not negate the wider control embedded in its governing framework.

Its literary and educational functions were relevant not in isolation, but alongside its Government-directed creation and control.

Taken together, these features showed particular and pervasive governmental control, not merely ordinary regulatory supervision.

The Court clarified that this status does not make NBT a Government department or its employees civil servants.

The appeal was dismissed, with no interference in the Full Bench’s judgment.