Public Authorities and Public Functions

Modern administrative law is no longer concerned only with traditional government departments. Public services and regulatory functions are increasingly performed through statutory authorities, public corporations, government companies, universities, professional bodies and other institutions.

This creates an important legal question: when should an organisation or activity be treated as part of the public sphere?

The answer is not always determined simply by the legal form of the organisation. An institution may have a separate corporate identity and still perform functions having a strong public character. Similarly, a private organisation may sometimes perform a function that affects the public in a way that attracts public-law principles.

The concepts of public authority and public function are therefore important for determining the application of constitutional remedies, judicial review and administrative-law standards.

Meaning of Public Authority

A public authority is broadly an institution or body that exercises public power or performs functions connected with government or public administration.

There is no single definition that applies identically in every area of Indian law. Different statutes and constitutional provisions may use the concept differently.

For constitutional purposes, Article 12 provides a particularly important framework because it defines “State” for Part III of the Constitution.

It includes:

• The Government and Parliament of India
• The Government and Legislature of each State
• Local authorities
• Other authorities within the territory of India or under the control of the Government of India

The expression “other authorities” has been interpreted by the Supreme Court through a substantial body of case law.

What Makes a Body a Public Authority?

Legal status alone does not always answer the question.

Courts have considered factors such as:

• Government ownership
• Financial dependence
• Extent of governmental control
• Whether the body enjoys a government-conferred monopoly
• Public importance of its functions
• Whether the body is performing functions closely connected with governmental responsibilities
• The statutory basis of its powers

No single factor necessarily decides the issue in every case.

The Supreme Court’s decisions in Rajasthan Electricity Board v. Mohan Lal, Sukhdev Singh v. Bhagatram, Ramana Dayaram Shetty v. International Airport Authority of India, Ajay Hasia v. Khalid Mujib Sehravardi and Pradeep Kumar Biswas v. Union of India are important in understanding this development.

Public Authority Under Article 12

Article 12 is particularly significant because a body falling within its scope is subject to the Fundamental Rights contained in Part III.

The Supreme Court initially adopted a relatively broad approach towards “other authorities”.

In Rajasthan Electricity Board v. Mohan Lal, the Court recognised that statutory bodies exercising public powers could fall within Article 12.

Later decisions developed the concept of instrumentality or agency of government.

Ajay Hasia Test

In Ajay Hasia v. Khalid Mujib Sehravardi, the Supreme Court considered several factors relevant to determining whether an entity could be regarded as an instrumentality or agency of government.

These included matters such as:

• Government ownership of the entire share capital
• Government funding meeting almost the entire expenditure
• State-conferred or State-protected monopoly
• Deep and pervasive governmental control
• Functions of public importance closely related to governmental functions
• Transfer of a government department to the corporation

These factors were not intended to operate as a rigid checklist applicable mechanically in every case.

Pradeep Kumar Biswas

The Supreme Court’s decision in Pradeep Kumar Biswas v. Union of India refined the approach.

The Court emphasised examining whether the financial, functional and administrative relationship with government showed deep and pervasive control.

The inquiry is therefore concerned with the real relationship between the body and government rather than merely its formal legal structure.

Meaning of Public Function

A public function is a function that has a public character or is closely connected with the interests and responsibilities of the community.

Public functions may include:

• Administration of public services
• Regulation of important sectors
• Exercise of statutory powers
• Public education
• Essential infrastructure
• Professional regulation
• Functions traditionally performed by government
• Activities involving significant public responsibilities

The concept is broader than the question of whether a body is formally part of government.

For example, a private organisation may perform a function of public importance, but that does not automatically mean that the organisation becomes “State” under Article 12.

This distinction is crucial.

Public Authority and Public Function Are Not the Same

The two concepts are closely connected but should not be treated as interchangeable.

Public Authority	Public Function
Focuses primarily on the nature/status of the body exercising power	Focuses on the nature of the function being performed
Article 12 is particularly important in constitutional analysis	Relevant to judicial review and public-law remedies
Government control and institutional relationship may be important	Public character and nature of the activity are important
May exist even where the body performs several different functions	A particular function may be public even when performed by a private body
Concerns the who	Primarily concerns the what

This distinction helps explain why a private body performing a public function does not automatically become “State” under Article 12.

Public Functions Performed by Private Bodies

Modern governance frequently involves private organisations providing services that have traditionally been associated with government.

Examples may include:

• Education
• Healthcare
• Infrastructure
• Utilities
• Sports administration
• Professional regulation
• Essential public services

The fact that a private organisation performs such an activity does not automatically make it subject to every constitutional obligation applicable to the State.

The courts instead examine the nature of the function, the source of the power, the legal framework and the remedy being sought.

Judicial Review and Public Functions

The concept of public function becomes particularly important in judicial review.

Traditionally, judicial review was directed mainly against public authorities.

However, the expansion of administrative activity has made the distinction between public and private functions more complex.

A private body may become amenable to judicial review where the challenged action has a sufficient public-law element.

The existence of a public function is therefore relevant, but it is not by itself an automatic rule that every dispute involving that body becomes a constitutional matter.

Andi Mukta Sadguru v. V.R. Rudani

The Supreme Court’s decision in Andi Mukta Sadguru Shri Mukta Ji Vandasji Swami Suvarna Jayanti Mahotsav Smarak Trust v. V.R. Rudani is particularly important.

The Court adopted a broader approach to the availability of mandamus under Article 226, holding that the writ could extend beyond statutory authorities in appropriate circumstances.

The focus was not confined to whether the body had been created by statute. The nature of the duty and the public character of the obligation were important.

The case therefore illustrates the distinction between:

Being “State” under Article 12

and

Being subject to a public-law remedy under Article 226.

These are not necessarily identical questions.

Federal Bank v. Sagar Thomas

In Federal Bank Ltd. v. Sagar Thomas, the Supreme Court considered whether a private bank could be subjected to writ jurisdiction under Article 226.

The Court emphasised that merely performing activities of public importance does not automatically make a private body amenable to writ jurisdiction for every matter.

The nature of the duty and the character of the particular action remain important.

This demonstrates why the concept of public function must not be applied mechanically.

Binny Ltd. v. V. Sadasivan

In Binny Ltd. v. V. Sadasivan, the Supreme Court examined the relationship between private bodies and public-law remedies.

The Court indicated that judicial review under Article 226 is primarily concerned with public-law functions and duties. A purely private contractual dispute does not ordinarily become a public-law dispute simply because one party performs an activity that has some public significance.

This distinction remains important when considering writ petitions against non-governmental bodies.

Public Duties

A public function often involves a corresponding public duty.

A public duty may arise from:

• The Constitution
• A statute
• Delegated legislation
• Regulations
• A legal relationship involving public responsibilities

Where a legal duty is imposed upon a body and the duty has a public character, courts may have grounds to examine whether it has been properly performed.

The source of the duty therefore matters.

Statutory Power and Public Function

The strongest cases for public-law control generally arise where an organisation exercises statutory power.

For example, if legislation gives an authority power to:

• Grant licences
• Impose statutory penalties
• Regulate an industry
• Allocate public resources
• Conduct statutory examinations
• Make binding regulations

its actions are closely connected with public administration.

A statutory authority cannot avoid administrative-law requirements merely by describing its activities as commercial.

Public Functions and Natural Justice

Where a body exercises public or quasi-judicial power, principles of procedural fairness may become relevant.

Depending upon the nature of the decision, this may require:

• Notice
• Opportunity to respond
• Impartial decision-making
• Disclosure of relevant material where required
• Reasons for the decision where legally required

The precise application depends on the governing law and the nature of the power.

Public Functions and Article 14

Article 14 is an important constitutional control over State action.

Where a body falls within Article 12, its exercise of public power must comply with applicable constitutional standards, including the prohibition against arbitrary State action.

However, the mere fact that an activity is socially important does not mean that every private organisation performing it becomes subject to Article 14 as “State.”

The constitutional status of the body and the nature of the particular action must be examined separately.

Public Function vs Private Function

The distinction can be illustrated simply.

Public Function	Private Function
Has a significant public or statutory character	Primarily concerns private interests
May involve exercise of public power	Usually based on private rights or contracts
May attract public-law review	Ordinarily governed by private law
Often connected with statutory duties	Usually arises from private legal relationships
May justify public-law remedies in appropriate cases	Ordinary civil or contractual remedies are generally relevant

The distinction is one of legal character, not merely social importance.

Also Read: Need and Importance of Administrative Law

Public Authorities, Public Corporations and Regulatory Bodies

These concepts overlap but should not be treated as identical.

A public corporation is generally a statutory corporate body created for specified public or commercial purposes.

A regulatory authority is established to regulate a particular sector or activity.

A statutory authority is a broader category covering bodies whose powers or functions derive from legislation.

A public authority is a broader functional concept concerned with the exercise of public power or performance of public responsibilities.

One institution may therefore fall into several of these categories simultaneously.

Important Cases at a Glance

Case	Key significance
Rajasthan Electricity Board v. Mohan Lal	Expanded understanding of “other authorities” under Article 12.
Sukhdev Singh v. Bhagatram	Examined statutory corporations and their constitutional position.
Ramana Dayaram Shetty v. International Airport Authority of India	Applied Article 14 principles to public contracting and governmental action.
Ajay Hasia v. Khalid Mujib Sehravardi	Developed factors for identifying an instrumentality or agency of government.
Pradeep Kumar Biswas v. Union of India	Refined the approach to determining whether a body is an instrumentality or agency of government.
Andi Mukta Sadguru v. V.R. Rudani	Broadened the understanding of bodies against which mandamus may be available under Article 226.
Federal Bank v. Sagar Thomas	Explained limits on writ jurisdiction against private bodies.
Binny Ltd. v. V. Sadasivan	Distinguished public-law duties from purely private disputes.

Why the Distinction Matters

The distinction between public authorities and private bodies has practical consequences.

It can affect:

Availability of writ remedies: whether a person can approach a constitutional court for a public-law remedy.

Application of Fundamental Rights: whether the body falls within Article 12.

Judicial review: whether the challenged action has a sufficient public-law character.

Natural justice: whether procedural fairness requirements apply to the particular decision.

Choice of remedy: whether the dispute belongs primarily to constitutional/public law or ordinary private law.

The answer cannot be determined simply by asking whether the organisation is government-owned or private.

Conclusion

The concepts of public authorities and public functions reflect the changing nature of modern administration. Government today operates not only through ministries and departments but also through statutory bodies, corporations, regulators and, in some areas, private organisations performing functions of public importance.

Indian administrative law therefore distinguishes between the status of a body and the nature of the function it performs. Article 12 is central to determining whether an institution is “State” for the purpose of Fundamental Rights, while Article 226 provides a broader framework in which the public character of a duty or function can become relevant.

The decisions in Ajay Hasia, Pradeep Kumar Biswas, Andi Mukta, Federal Bank and Binny Ltd. demonstrate that these questions require attention to the actual legal and functional relationship involved.

Ultimately, the central inquiry is not simply whether an organisation is formally governmental or private. It is whether the power being exercised or duty being performed has a legal and public character that brings it within the reach of public law.