TaxTMI 
TaxTMI 
2012 (6) TMI 907
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....6/1989). 2. A perusal of the said judgment in J.S. Shamim (supra) case would reveal that the Division Bench has relied upon the judgment of Supreme Court in Chander Mohan Khanna Vs. NCERT AIR 1992 SC 76. 3. Learned Counsel for the appellant states that judgment of J.S. Shamim is no longer a good law in view of Constitution Bench judgment (rendered by Seven-Judge Bench) of the Supreme Court in Pradeep Kumar Biswas & ors. Indian Institute of Chemical Biology & ors. 2002 (5) SCC 111. He further submits that in J.M. Shamim (supra) the Division Bench did not go into the status and character of National Book Trust and simply relied upon the judgment of Supreme Court in Chander Mohan Khanna (supra) which case related to NCERT. 4. We are of the opinion that the matter requires to be considered by Larger Bench. Accordingly, Registry is directed to place the matter before the Acting Chief Justice for constitution of the Larger Bench. It is apparent from the above that the issue is: Whether National Book Trust (hereinafter referred to as "NBT") is a "State" or "another authority" within the meaning of Article 12 of the Constitution of Indi....
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....he Executive Committee comprising of Government servants and educationists. The Executive Committee would enter into arrangements with Government, public or private organizations or individuals in furtherance of the objectives for implementation of programmes. The funds of the NCERT consist of: (i) grants made by the Government, (ii) contribution from other sources and (iii) income from its own assets. It is free to apply its income and property towards the promotion of its objectives and implementation of the programmes. The Government control is confined only to the proper utilization of the grant. The NCERT is thus largely an autonomous body. 4. The ratio of the aforesaid decision was commented upon by the Seven-Judge Bench of the Supreme Court in Pradeep Kumar Biswas (supra). This Seven-Judge Bench judgment of the Supreme Court settles the parameters which have to be taken into consideration for determining as to whether an authority can be called "State" within the meaning of Article 12 of the Constitution. In Pradeep Kumar Biswas (supra), the Court held that: From this perspective, the logical sequitur is that it really does not matter what guise the State a....
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....applying those tests in the case of NBT. Article 12 of the Constitution of India gives the definition of "the State", which is inclusive one, as under: 12. Definition. - In this part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India. 8. Formation of NBT was on the basis of decision of the Government of India which decided to establish NBT vide resolution dated 15.6.1957. Thereafter, the Government of India had taken a decision to reorganize the NBT vide resolution No.F.14-9/62-S.W. 2, dated 28.9.1962 thereby enlarging the objectives which it seeks to achieve. Para 2 of these objectives states that the Trust shall be an autonomous body, created by and supported by funds placed at its disposal by the Government, though at the same time, permitted to receive donations and bequests as well. 9. NBT is not "Government of India" or "Government of a State". It is not a "local authority" as well. We, therefore, have to determine as to whether it fall....
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....rticle 12 should not be stressed so as to bring in every autonomous body which has some nexus with the Government within the sweep of the expression "State". Reference was made to some other judgments, wherein a discordant note was struck with the observations that a wide enlargement of the meaning must be tempered by a wise limitation. The line of thinking was that it must not be lost sight of that in the modern concept of Welfare State, independent institution, corporation and agency are generally subject to State Control. The State control does not render such bodies as "State" under Article 12 and the State Control, however, vast and pervasive is not determinative. Even the financial contribution by the State is also not conclusive. The combination of State aid coupled with an unusual degree of control over the management and policies of the body, and rendering of an important public service being the obligatory functions of the State may largely point out that the body is "State". On this touchstone, the two-Judge Bench of the Supreme Court discussed various provisions on Memorandum of Association and the rules of the NCERT and came to the conclusion that its activities are no....
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.... that NBT is not constituted under the constitutional or statutory provisions and is not a sovereign authority, but is in fact, a registered society. The financial assistance approved by the Government is not to the extent so as to meet almost entire expenditure of the NBT. It was submitted that the Government control is confined only to the proper utilization of the grant. It is further pertinent to note that though the Government funding does form a part of the resources of the NBT, the share of financial assistance is very limited as NBT"s funding is not entirely from Government resources and other private sources form a major part of its funding. Mr. Jatant Singh submitted that the Government funding forms one out of the five sources of the funding available with the NBT. He further submitted that as far as the activities undertaken by the NBT are concerned, the same are enlisted as objects of the Trust in the Memorandum of Association and Rules of the NBT. A plain reading of the objectives makes it clear that although some of the activities undertaken by the NBT are for public welfare, yet the activities of the NBT as a whole are not closely related to Governmental/sovereign f....
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....way of a writ petition under Article 226 of the Constitution which is much wider than Article 32. XXX XXX XXX 36. In the above view of the matter, the second respondent-Board cannot be held to be a State for the purpose of Article 12. Consequently, this writ petition filed under Article 32 of the Constitution is not maintainable and the same is dismissed. 15. It was, thus, argued that not every autonomous body like the NBT, with some of Government involvement shall be construed to be State within the meaning of Article 12 of the Constitution, as the same would lead to a chaotic situation where every employee (as in the instant case as well) would seek entitlement to various benefits such as retirement benefits, etc. which are otherwise available only to Government employees. It is also argued that a Corporation is designated as an autonomous body for a specific reason. Such bodies have their own set of Rules and regulations and are not governed by Article 309 of the Constitution. In this regard, reliance is placed on the judgment of this Court in O.P. Gupta Vs. Delhi Vidyut Board & Anr. 2000 (54) DRJ, wherein the Court held that the Delhi Vidyut Boa....
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....mbers of the Trust, which is as follows: 3. Members of the Trust: The Trust shall consist of the following members: (a) The Chairman to be appointed by the Government of India; (b) One representative of the Ministry of Education; (c) One representative of the Sahitya Akademi; (d) One representative of the Ministry of Finance; (e) One representative of the Ministry of Information and Broadcasting; (f) Such other persons, not exceeding 14, as the Government of India may, from time to time, nominate. 18. The term of the Member appointed by the Government of India is three years (Rule 7). All outgoing Members are eligible for - reappointment (Rule 8). The Chairman of the Trust shall hold office at the pleasure of the Government of India (Rule 13). Functions and powers of the Chairman are stipulated in Rules 41 to 52 which read as under: 48. The Chairman shall be the chief executive officer of the Trust. 49. The Chairman shall preside over all the meetings of the Trust and its Executive Committee. 50. The Chairman shall have all necessa....
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.... the Trust which shall take such decision as may be deemed fit after the Financial Adviser has been given an opportunity to express his point of view. 23. The NBT is to maintain proper accounts in such forms as may be prescribed the Government of India in consultation with the Comptroller and Auditor General of India ("CAG" in short) or any person authorized by him in his behalf. It is mandatory that these accounts are audited annually by CAG or any person authorized in this behalf. CAG or other person authorized by him for auditing the accounts is given the same rights, privileges and authority, which it has in connection with the audit of the Government accounts. It is specifically spelt out that these rights include the right to demand the production of books, accounts cash vouchers and other documents and papers, and inspect any of the offices of the Trust. The accounts of the Trust as certified by the CAG or any person authorized by him in this behalf, together with the audit report thereon, shall be forwarded annually to the Government of India (Rule 58). 24. As per Rule 59, the Executive Committee is required to prepare annual report of the proceedings of the Trust for....
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....t has tried to play down the role of the Government by submitting that it is confined to the proper utilization of the grant. This argument stands negatived by the provisions of the Memorandum of Association and Rules highlighted above. No doubt, every autonomous body with some kind of Government involvement cannot be construed to be "State' within the meaning of Article 12 of the Constitution. However, when we find that NBT is within the tight grip of the Government and the control of the Government runs through at every stage right from the creation of the NBT, to the appointment of the members, to the fundings, to the appointment of various functionaries, to the controlling of the functioning through those appointed members and also through means of audit, etc. and further that the parameters within which NBT is to function, and even when the amendments are to be carried out, there cannot be any other conclusion but to say that it is an altar ego of the Government's instrumentality. 27. Submission of Mr. Jatan Sigh that if NBT is treated an authority under Article 12 of the Constitution, then its employees would seek entitlement to the various benefits as available to....