INTRODUCTION
The Supreme Court of India, in The Chairman, National Book Trust, India v. A.R. Abdul Gaffar, Civil Appeal No. 14369 of 2015, 2026 INSC 1202, dated 6 November 2026, which was decided by a Bench comprising Justices Prashant Kumar Mishra and Augustine George Masih, has opined that NBT falls under the definition of ‘State’ in Article 12 of the Constitution of India. The Court has held that registration of a society and earning independent income cannot exclude any organisation from being considered a State where there is extensive governmental control. The Court has rejected the appeal and affirmed the judgment passed by the Delhi High Court.
BACKGROUND
The controversy raised questions regarding whether the National Book Trust, which is a society formed by the Government of India for the promotion of literature and for the availability of books at affordable prices, could be deemed to be a ‘State’ within the meaning of Article 12. This issue was significant in view of the fact that the organisations coming within the purview of Article 12 have to be compliant with the fundamental rights enshrined in Part III of the Constitution of India. The National Book Trust contested the ruling that the society is an instrumentality of the Government, on the ground that the Trust is a registered society and is engaged in carrying out functions different from those of a government department.
In the Delhi High Court’s Full Bench case decided on 1st June 2012, the Trust was considered by applying the guidelines provided in Ramana Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC 489, and Ajay Hasia v. Khalid Mujib Sehravardi, (1981) 1 SCC 722. The court decided that there was considerable and pervasive interference by the Government in the matter of the Trust, which made the Trust an instrumentality of the Government under Article 12.
This decision was appealed by the Trust to the Supreme Court of India. The key issue before the Supreme Court was whether the Trust was eligible to be treated as a ‘State’ even though it had been registered as a society and earned independent revenue. In deciding this case, the Supreme Court primarily referred to Pradeep Kumar Biswas v. Indian Institute of Chemical Biology, (2002) 5 SCC 111, where it was stated that the courts must examine whether there is any financial, functional and administrative control over the body in question that is particular and pervasive.
The appeal was rejected by the Supreme Court, which upheld the conclusion that the National Book Trust is a ‘State’ under Article 12.
KEY POINTS
- Society registration does not, in itself, rule out an organisation from Article 12 considerations.
- The Government must have financial, functional and administrative dominance in control.
- Self-generated revenue through publication will not preclude an organisation from being considered a State in terms of Article 12.
- Public performance of governmental functions will not suffice; consideration must be given to the character and degree of governmental control.
- Being categorised as a State under Article 12 will not make the organisation a government agency or the employee’s civil servants.
ANALYSIS
This decision followed from the rulings in the cases of Ajay Hasia v. Khalid Mujib Sehravardi and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology. The Court made clear that no single feature can decide whether an organisation is State or not. Instead, courts need to consider the cumulative impact of the government’s control over the organization’s creation, governance, administration, financial management and functions.
It emerged that the National Book Trust had been created through government resolutions, and its chairman was appointed by the government. Government officials were also part of the trust’s governing and executive committees. In addition, the government had power over the financial administration of the trust, its accounts, audit and some amendments to the rules for governing the trust.
The court additionally ruled that the trust’s status as an institution falling under Article 12 of the Constitution does not transform it into a government department or provide its members with the benefits enjoyed by civil servants as provided in Articles 309, 310 and 311 of the Constitution. These articles address the manner of appointment and service conditions of government personnel (Article 309), the principle of tenure of government personnel, which states that government personnel are appointed during the pleasure of the President or Governor, subject to constitutional limitations (Article 310), and protection against dismissal, termination and demotion of certain civil servants (Article 311).
This judgment only seeks to establish whether the Trust comes within the meaning of state as per the Constitution.
CONCLUSION
The ruling by the Supreme Court strengthens the position that it is the actual link between the organisation and the Government that carries more weight than any other consideration. It cannot escape its duty under the Constitution simply on the ground that it is not a department of the Government. However, being an organ of the government or performing governmental duties does not necessarily mean that all organisations become State entities.
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WRITTEN BY: DEBARATI CHATTERJEE
