Corporation Qualifies as "State" Under Article 12 for Writ Jurisdiction

The Supreme Court held that the Corporation qualifies as a "State" under Article 12 of the Constitution of India due to its deep and pervasive state control. Consequently, the Corporation is amenable to writ jurisdiction under Article 226. The appeal was allowed, the High Court's order was set aside, and the case was remitted for a decision on the merits, with each party bearing their own costs.

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Issues Involved:
1. Whether U.P. Rajya Karmachari Kalyan Nigam (the Corporation) is covered by the definition of "State" under Article 12 of the Constitution of India.
2. Whether the Corporation is amenable to writ jurisdiction of the High Court under Article 226 of the Constitution of India.

Issue-wise Detailed Analysis:

1. Definition of "State" under Article 12:
The primary issue was whether the Corporation qualifies as a "State" under Article 12 of the Constitution of India. The High Court had dismissed the writ petition based on the precedent set by the Lucknow Bench in Vijay Kumar Verma vs. U.P. Government Employees Welfare Corporation. However, the Supreme Court revisited the scope of Article 12 in light of the Constitution Bench judgment in Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology, which overruled the earlier decision in Sabhajit Tewary vs. Union of India. The Pradeep Kumar Biswas case laid down a multiple test to determine whether a body is financially, functionally, and administratively dominated by or under the control of the Government. If such control is pervasive, the body is considered a "State" under Article 12.

2. Application of the Multiple Test:
The Corporation was not created by a statute but was registered under the Societies Registration Act, 1860. The Supreme Court examined the objects, administrative control, financial control, and functional control to determine if the Corporation is an "instrumentality or agency of the State."

Administrative Control:
The Corporation was formed by a government decision to provide essential commodities to government employees at reasonable rates. The governing body consisted of high-ranking government officials, and any changes to the rules required prior government approval. The administrative control was evident from the fact that the Corporation's activities were supervised by state officials.

Financial Control:
The Corporation was heavily funded by the State Government, receiving 100% grants for employee salaries and substantial working capital. The financial support and control were significant, indicating the Corporation's dependence on the State.

Functional Control:
The Corporation's functional control was also under the State, as its activities were directed and supervised by government officials. The Corporation acted as an agent for the government in various capacities, and its day-to-day operations were under state supervision.

Conclusion:
The Supreme Court concluded that the Corporation is an "instrumentality and agency of the State" with deep and pervasive state control. Therefore, it falls within the definition of "State" under Article 12 and is amenable to writ jurisdiction under Article 226.

Outcome:
The appeal was allowed, and the High Court's order dismissing the writ petition was set aside. The case was remitted to the High Court for a decision on the merits. The parties were directed to bear their own costs.

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