THE CHAIRMAN NATIONAL BOOK TRUST, INDIA AND ANOTHER v. A.R. ABDUL GAFFAR AND OTHERS

2026 INSC 1202 REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 14369 OF 2015

THE CHAIRMAN NATIONAL BOOK TRUST, INDIA AND ANOTHER … APPELLANT(S)

VERSUS

A.R. ABDUL GAFFAR AND OTHERS ... RESPONDENT(S)

JUDGMENT

PRASHANT KUMAR MISHRA, J.

1. Shorn of any unnecessary factual matrix, the only question that arises

for our consideration is whether the National Book Trust1 is a ‘State’ or not

within the meaning of Article 12 of the Constitution of India.

2. While answering this question in reference, the Full Bench of High

Court of Delhi2 examined the Trust independently on the principles laid down

by this Court in Ramana Dayaram Shetty vs. International Airport

Authority of India and Others3, Ajay Hasia and Others vs. Khalid Mujib

Sehravardi and Others4 and, principally, Pradeep Kumar Biswas vs.

Indian Institute of Chemical Biology and Others5. It proceeded on the

basis that the inquiry was not to be determined by any single factor but by

considering, cumulatively, whether the body was financially, functionally and Signature Not Verified

Digitally signed by

For short, ‘the Trust’ MINI 1 Date: 2026.11.06 15:32:04 IST Reason: 2 For short, ‘High Court’ 3 (1979) 3 SCC 489 (3-Judge Bench) 4 (1981) 1 SC 722 (5-Judge Bench) 5 (2002) 5 SCC 111 (7-Judge Bench)

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administratively dominated by, or under the control of, the Government, and

whether such control was of a pervasive nature, in order to bring it under the

ambit of Article 12 of the Constitution.

3. In examining the Trust against these parameters, the Full Bench took

note of the following:

a) The Trust had been brought into existence pursuant to Government

resolutions dated 15.06.1957 and 28.09.1962. The scheme of its

Rules indicated substantial governmental involvement in its

constitution, composition, administration and financial affairs.

b) Chairman of the Trust was appointed by the Government and held

office at its pleasure; the Trust and its Executive Committee

contained several Government nominees, including representatives

of the concerned Ministries; and important aspects of the

functioning of the Trust, including its rule-making framework,

financial administration, accounts and audit, remained subject to

governmental involvement or approval.

c) The nature and objects of the Trust, which principally involved the

production, publication and dissemination of literature and

knowledge at moderate prices, including publication and translation

of Indian and foreign works.

The Full Bench was of the view that these functions had to be

considered alongside the manner in which the Trust had been

constituted, funded and administered, rather than in isolation from

the governmental control exercised over it.

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4. On a cumulative consideration of these circumstances, the Full Bench

vide its judgment dated 01.06.2012 concluded that the Government exercised

deep and pervasive control over the Trust. It held that the Trust was, in

substance, an instrumentality or alter ego of the Government and

consequently fell within the expression ‘other authorities’ in Article 12 of the

Constitution.

5. We have heard the learned counsel for the parties as well as the learned

Amicus Curiae Shri Sanjay Jain, learned senior counsel assisted by Ms.

Harshita Sukhija, learned counsel. We have carefully perused the judgment

rendered in reference by the Full Bench, the material placed before us and

the note tendered by the learned Amicus.

6. Before examining the status of the Trust, it is necessary to keep in view

the evolution of law under Article 12 of the Constitution. The expression

‘State’ in Article 12 is an inclusive definition and extends beyond the

Government and the legislatures to ‘all local or other authorities’ within the

territory of India or under the control of the Government of India or the State

Government. The expression was deliberately cast in wide terms so that

constitutional obligations attaching to the State could not be avoided merely

by transferring the performance of governmental or public functions to a

separate legal form.6 This Court in catena of decisions7 has progressively

recognised that the constitutional conception of State could not be confined

6 Ajay Hasia (supra) at Para 7. 7 Rajasthan State Electricity Board, Jaipur vs. Mohan Lal and Others, 1967 SCC OnLine SC 18; Sukhdev Singh and Others vs. Bhagatram Sardar Singh Raghuvanshi and Another, (1975) 1 SCC 421; and Ramana Dayaram Shetty (supra)

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to bodies which were formally departments of Government or created by

statute. The constitutional obligation under Part III of the Constitution cannot

depend merely upon the form in which governmental power or functions are

organised.

7. In Ajay Hasia (supra), this Court made it clear that even a society

registered under the Societies Registration Act, 1860 could, depending upon

the facts, constitute an instrumentality or agency of Government and

consequently fall within Article 12. The form of incorporation was thus not

treated as determinative. Placing reliance on the decision in Ramana

Dayaram Shetty (supra), this Court in Ajay Hasia (supra) had documented

some tests to determine as to when a corporation or authority can be regarded

as an instrumentality of a State. The relevant observations are reproduced

herein below:

“9. The tests for determining as to when a corporation can be said to be an instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority case [(1979) 3 SCC 489] . These tests are not conclusive 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 not be stretched so far as to bring in every autonomous 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 Authority case [(1979) 3 SCC 489] as follows:

“(1) One thing is clear that if the entire share capital of the corporation is held by Government, it would go a long way towards indicating that the corporation is an instrumentality or agency of Government. (SCC p. 507, para 14)

(2) 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

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corporation being impregnated with Governmental character. (SCC p. 508, para 15)

(3) It may also be a relevant factor ... whether the corporation enjoys monopoly status which is State conferred or State protected. (SCC p. 508, para 15)

(4) Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality. (SCC p. 508, para 15)

(5) 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 corporation as an instrumentality or agency of Government. (SCC p. 509, para 16)

(6) ‘Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference’ of the corporation being an instrumentality or agency of Government.” (SCC p. 510, para 18)

If on a consideration of these relevant factors it is found that the corporation is an instrumentality or agency of Government, it would, as pointed out in the International Airport Authority case [(1979) 3 SCC 489] , be an “authority” and, therefore, ‘State’ within the meaning of the expression in Article 12.”

11. We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality or agency of the Government and not as to how it is created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a government Company or a Company formed under the Companies 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 concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a Company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the Company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression “authority” in Article 12.”

(emphasis supplied)

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8. The tests laid out in Ajay Hasia (supa) were later considered by this

Court in Pradeep Kumar Biswas (supra), wherein this Court explained that

these tests are not rigid set of principles or mechanical checklist. In Pradeep

Kumar Biswas (supra), the real inquiry is whether, having regard to the

cumulative facts, the body is financially, functionally and administratively

dominated by or under the control of the Government, and whether such

control is particular to the body and pervasive. Conversely, where the

Government exercises merely regulatory control of the kind ordinarily

exercised over autonomous bodies, such control would not bring the body

within Article 12 of the Constitution. The relevant observations are

reproduced hereinbelow:

“40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia [Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722 : 1981 SCC (L&S) 258] are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article

12. The question in each case would be — whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State.”

(emphasis supplied)

9. The above decisions of this Court bring to fore the liberal interpretation

afforded to the phrases of ‘State’ and ‘other authorities’ under Article 12 of the

Constitution for over the years. The inquiry essentially centres on the nature

and degree of control exercised by the State over the authority in question, as

well as the nature of the functions discharged by it. For an authority to fall

within the ambit of Article 12, the State’s control must be sufficiently deep

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and pervasive so as to establish that the authority is, in substance, an

instrumentality or agency of the State, with its autonomy substantially

circumscribed by such control.

10. Reverting to the case at hand, the Trust before us has argued that it is

a society/trust and is not a juristic person in the same manner as a statutory

corporation. We find no substance in this submission as the decision of this

Court in Ajay Hasia (supra) itself establishes that registration as a society

does not place a body mandatorily beyond Article 12 of the Constitution.8

More so, it is trite that the State may act through a corporation incorporated

under the Companies Act, 2013 or a society formed under the Societies

Registration Act, 1860. The constitutional inquiry is therefore directed at the

substance of the relationship between the body and the Government, and not

at the nomenclature or legal form adopted for carrying on its activities.

11. In this regard, the material relating to the Trust has to be examined.

the Trust was brought into existence pursuant to a Government of India

resolution dated 15.06.1957 and was thereafter reorganised by another

Government resolution dated 28.09.1962. Its very creation was thus

attributable to the Government. The objects for which it was established were

not the consequence of an independent private initiative subsequently

subjected to governmental regulation, rather, the Trust was conceived and

structured by the Government to pursue an identified national objective

relating to the production and dissemination of literature at moderate prices.9

8Ajay Hasia (supra) at Para 11. 9Introduction of the Trust See official website: https://www.nbtindia.gov.in/aboutus__5__history.nbt

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12. Moreover, the administrative structure (under the Rules10) of the Trust

is particularly significant. Rule 3 provides for the appointment of its Chairman

by the Government of India and places representatives of the Ministries of

Education, Finance and Information and Broadcasting in its governing body.

The Government is further empowered to nominate other members. More so,

members appointed by the Government hold office for a prescribed term of 3

years and the Chairman holds office at the pleasure of the Government.11 The

Chairman is the chief executive officer of the Trust and exercises the powers

necessary for its day-to-day functioning.12

13. This is not merely a case where a Government officer happens to be

associated with an otherwise independent organisation. The governing

structure of the Trust itself places governmental representatives at the heart

of the decision-making process. Rule 26 itself provides for the Executive

Committee, which is entrusted with the administration, direction and control

of the affairs of the Trust, includes representatives of the Ministries of

Education, Finance and Information and Broadcasting, with the Finance

Ministry representative also functioning as the Financial Adviser. Other non-

official members of the Executive Committee are also nominated by the

Government. The Executive Committee exercises the principal managerial

powers of the Trust, while its regulatory power is itself subject to the previous

approval of the Government of India.13

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14. The extent of governmental involvement becomes even more apparent

from the provisions governing the financial and institutional framework of the

Trust. Financial matters are required to be placed before the Financial Adviser

as per Rule 57; in specified cases of disagreement, the matter may travel to

the Ministers of Education and Finance.14 The annual report and audited

accounts are required to be submitted to the Government under Rule 59.

More so, the accounts are to be maintained in the form prescribed by the

Government in consultation with the Comptroller and Auditor-General of

India15, and the CAG or a person authorised by it is empowered to audit the

accounts with powers analogous to those available in the audit of Government

accounts.16 The governing framework further requires governmental approval

under Rule 60 for specified alterations to the rules and purposes of the Trust.

15. These provisions cannot, in our view, be characterised as isolated

instances of ordinary regulatory supervision. They operate cumulatively as

the Government participates in the constitution of the body; determines a

substantial part of its governing composition; appoints its Chairman; retains

control over the tenure of that office; participates in its financial

administration; exercises oversight through the audit mechanism; receives its

annual reports and accounts; and retains a measure of control over alteration

of the very framework within which the Trust functions. When these features

are viewed together, they disclose a relationship substantially different from

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that which exists between the Government and an ordinary private society

subject merely to regulatory legislation.

16. We are conscious that financial assistance is an important, but not an

exclusive, factor in the inquiry under Article 12 of the Constitution. The Trust

has emphasised that Government grants constitute only one of its sources of

income and that, for certain years, its own receipts constituted a substantial

part of its total income. It has been argued that the Full Bench of the High

Court was therefore not justified in treating the mere receipt of Government

grants as conclusive. But according to us, neither does the fact that the Trust

generates income from the sale of its publications answer the constitutional

question in its favour. There has to be a cumulative understanding i.e.,

financial autonomy in one aspect cannot be isolated from the statutory or

regulatory structure governing the body, its composition, management and

governmental supervision.17

17. The material placed by the learned Amicus is relevant in this regard.

The Amicus has correctly approached the question not by asking whether

Government funding constitutes the entirety of the Trust's income, but by

examining its financial, functional and administrative relationship with the

Government cumulatively. The rules concerning the Trust's accounts and the

audit by the CAG further demonstrate that Government involvement in its

financial affairs is structurally embedded and is not confined merely to

imposing conditions upon an occasional grant. The fact that the Trust earns

17 Pradeep Kumar Biswas (supra) at Para 40.

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revenue from its publications therefore does not, by itself, displace the

pervasive governmental control disclosed by its governing framework.

18. We do not proceed on the basis that publication of books, by itself, is a

sovereign or exclusively governmental function. Nor do we accept the

proposition that every activity having educational or public utility necessarily

converts the body undertaking it into ‘State’. This Court in Zee Telefilms Ltd.

and Another vs. Union of India and Others18, made it clear that the

existence of a public function, in isolation, is insufficient; what is required is

the cumulative satisfaction of the test under Article 12 of the Constitution.

19. The relevance of the Trust's functions lies in their character when

considered alongside its creation and governmental control. Its objects

include production and promotion of good literature, making such literature

available to the public at moderate prices, publication of classical Indian

literature, translation of important Indian and foreign works, dissemination

of knowledge, book exhibitions and seminars, and measures directed towards

making books accessible to the public. These functions are not merely

incidental activities of a private commercial publisher, rather they reflect the

very public and national purposes for which the Trust was established by the

Government.

20. The subsequent material placed by the learned Amicus reinforces,

rather than creates, this functional character. The Trust has continued to

undertake programmes connected with the dissemination of educational

18 (2005) 4 SCC 649 at Para 22 to 24.

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material, promotion of Indian languages and reading culture, and

implementation of governmental initiatives such as the PM-YUVA (Young

Authors Mentorship Scheme).19 We do not rest our conclusion upon

developments occurring after the Full Bench judgment, however, they are

relevant only as corroborative material demonstrating that the governmental

purpose underlying the Trust's creation and functioning has not been merely

formal or historical.

21. The learned Amicus has also drawn our attention to various decisions

of this Court where societies and other non-statutory bodies were brought

within the ambit of Article 12 of the Constitution on an examination of their

actual relationship with the Government. Conversely, several other decisions

have been placed before us which demonstrate that registration as a society

and association with Government are not, by themselves, sufficient. The

lesson from this line of decisions establish that a society is not automatically

“State” merely because it is associated with the Government; the Court must

examine how it is constituted and how far the Government controls its

functioning.

22. We may also clarify an aspect which appears to have weighed with the

appellant before the Full Bench and has been reiterated before us. The

declaration that the Trust is ‘State’ under Article 12 of the Constitution does

not convert the Trust into a department of the Government of India, nor does

it make every employee of the Trust a civil servant or confer upon such

19 Ministry of Education, ‘Government Launches YUVA – Prime Minister’s Scheme for Mentoring Young Authors’ (PIB, 29.05.2021-Press Release) See: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1722644&reg=48&lang=2

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employees all constitutional protections available to Government servants

under Part XIV of the Constitution. Article 12 of the Constitution performs a

distinct constitutional function for the purposes of Part III of the Constitution,

and has no automatic consequence under Articles 309, 310 or 311 of the

Constitution.20

23. There will be, consequently, no merit in the submission that recognising

the Trust as ‘State’ would necessarily lead to all consequences associated with

Government employment. The question before us is narrower extending to

whether the Trust is sufficiently an instrumentality of the Government so as

to attract the constitutional discipline of Part III of the Constitution. On that

question, the cumulative features of the Trust's constitution and functioning

point in only one direction.

24. We, therefore, find that the Full Bench of the High Court was correct in

placing emphasis not upon any one individual factor but upon the cumulative

effect of the Government’s control over the Trust. The Government’s role

begins with the creation of the Trust, extends to its governing composition

and appointment of its principal functionary, permeates its executive and

financial administration, and continues through audit, reporting and

governmental approval over aspects of its governing framework. This is not

the limited or general regulatory supervision which can be excluded from the

ambit of Article 12 of the Constitution.

20 Ajay Hasia (supra) at Para 12; Pradeep Kumar Biswas (supra) at Para 20.

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25. In our considered view, the Trust accordingly satisfies the test of being

financially, functionally and administratively dominated by or under the

control of the Government, with that control being particular to the Trust and

pervasive in character. Its registration as a society, or the fact that it generates

part of its income independently cannot displace the cumulative

constitutional character of the institution.

26. We therefore uphold the conclusion of the Full Bench of the High Court

that National Book Trust is an ‘other authority’ within the meaning of Article

12 of the Constitution and is consequently a ‘State’ for that purpose.

27. Therefore, no interference is called for. The Appeal is, accordingly,

dismissed.

28. We place on record our sincere appreciation for the valuable assistance

rendered by Shri Sanjay Jain, learned senior counsel, as Amicus Curiae to

this Court.

………………………………………J. (PRASHANT KUMAR MISHRA)

.………………………………………J. (AUGUSTINE GEORGE MASIH)

NEW DELHI; NOVEMBER 06, 2026.

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