Introduction 

The Supreme Court of India upheld the Bombay High Court's decision that the Automotive Research Association of India (ARAI) is not a 'State' under Article 12 of the Constitution. The bench, comprising Justices Sanjiv Khanna and Bela M. Trivedi, noted that determining whether an organization qualifies as a 'State' requires a holistic evaluation of its functions, activities, and the extent of government control. This ruling clarifies the criteria for determining 'State' status under Article 12. 

Facts 

• The Bombay High Court had refused to entertain a writ petition filed against ARAI. 
• ARAI's main objective and function relate to motor vehicles, which are not directly or indirectly connected with government functions. 
• ARAI's activities primarily benefit its members, consisting of various companies engaged in the manufacture of motor vehicles or allied products. 
• Rule 126 of the Central Motor Vehicles Rules, 1989 requires manufacturers and importers to submit vehicle prototypes to specified associations like ARAI for certification of compliance with the Motor Vehicle Act and Rules. 

Issues Involved 

• Whether ARAI can be considered a 'State' under Article 12 of the Constitution. 
• The extent to which it performs public functions or duties makes an organization amenable to being classified as 'State'. 
• The relevance of government control in determining an organization's status as 'State 

Observations 

• The Supreme Court observed that the presence of some element of public duty or function is not sufficient to bring a body within the scope of Article 12. 
• An overall and holistic view of the functions and activities, including primary functions, should be taken into consideration when determining 'State' status. 
• The court noted that ARAI is not functionally and administratively dominated or controlled by the government. 
• The Memorandum of Association indicates that ARAI's Council enjoys significant freedom and independence. 
• Government supervision of ARAI is limited and confined to specific aspects, which do not amount to deep and pervasive control. 
• The court observed that one function assigned to ARAI, which is not primary and forms a small fraction of its activities, would not be decisive in determining its status. 
• The determination of a body as 'State' is not based on a rigid set of principles but on cumulative facts establishing government control. 
• The court referred to the seven-judge bench judgment in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002) to support its reasoning. 

Conclusion 

The Supreme Court concluded that ARAI is not an agency or instrumentality of the government and does not have deep and pervasive government control. The court emphasized that to be considered a 'State' under Article 12, an organization must be financially, functionally, and administratively dominated by or under the control of the government. Mere regulatory control or the presence of some public functions does not automatically make an organization a 'State'. The court's decision underscores the importance of a comprehensive assessment of an organization's functions, activities, and the nature of government involvement, rather than focusing on isolated functions or limited government control.