The judgment decides only that the Trust is 'State' within Article 12 for the purposes of Part III of the Constitution. It does not decide the underlying service dispute that gave rise to the reference, and it does not make the Trust a Government department or its employees civil servants.
- Case
- Chairman, National Book Trust, India v. A.R. Abdul Gaffar
- Court
- Supreme Court of India
- Decision
- Citation
- 2026 INSC 1202
- Bench
- Prashant Kumar Mishra; Augustine George Masih
- Judgment by
- Prashant Kumar Mishra
- Case numbers
- C.A. 14369/2015
- Outcome
- Civil Appeal No. 14369 of 2015 dismissed; Delhi High Court Full Bench judgment dated 1 June 2012 upheld.
The decision
The Supreme Court has held that the National Book Trust, India is an 'other authority' within the meaning of Article 12 of the Constitution, and is consequently 'State' for the purposes of Part III. A Bench of Justices Prashant Kumar Mishra and Augustine George Masih delivered the judgment on 6 November 2026, upholding the Delhi High Court's Full Bench ruling of 1 June 2012 and dismissing the Trust's appeal.
The Court held that the Trust satisfies the test of being financially, functionally and administratively dominated by, or under the control of, the Government, with that control being particular to the Trust and pervasive in character. Its registration as a society, and its independent publication income, cannot displace that cumulative character.
Background
The only question was whether the National Book Trust is 'State' under Article 12. A Full Bench of the Delhi High Court had answered it in the affirmative, applying Ramana Dayaram Shetty, Ajay Hasia and Pradeep Kumar Biswas, and concluding that the Government exercised deep and pervasive control over the Trust, making it in substance an instrumentality or alter ego of the Government.
The Trust was created by Government of India resolutions dated 15 June 1957 and 28 September 1962, and its Rules showed substantial governmental involvement in its constitution, composition, administration and financial affairs. Its Chairman was appointed by the Government and held office at its pleasure, its governing body and Executive Committee contained several Government nominees including representatives of the concerned Ministries, and its rule-making framework, financial administration, accounts and audit remained subject to governmental involvement or approval. Its objects principally involved the production, publication and dissemination of literature and knowledge at moderate prices, including the publication and translation of Indian and foreign works.
The issue
The Trust argued that it is a society or trust, not a juristic person in the same manner as a statutory corporation, and that Government grants constitute only one of its sources of income — in certain years its own receipts formed a substantial part of its total income. It contended that the Full Bench was therefore not justified in treating the receipt of Government grants as conclusive of its status.
The question was whether a body created by executive resolution, registered as a society, and partly self-financing could nevertheless be 'State' under Article 12, and what test decides that question.
The rule
Article 12 gives 'State' an inclusive definition extending beyond the Government and the legislatures to 'all local or other authorities' within India or under Government control. The expression was deliberately cast in wide terms so that constitutional obligations attaching to the State could not be avoided merely by transferring the performance of governmental or public functions to a separate legal form.
In Ajay Hasia, the Court set out six indicative tests for when a corporation is an instrumentality or agency of Government: Government holding of the entire share capital; State financial assistance meeting almost the entire expenditure; State-conferred or State-protected monopoly status; deep and pervasive State control; functions of public importance closely related to Governmental functions; and the transfer of a Government department to the corporation. The tests are indicative, not conclusive; a wide enlargement of the meaning must be tempered by a wise limitation.
In Pradeep Kumar Biswas, a seven-judge Bench explained that the Ajay Hasia tests are not a rigid checklist. The real inquiry is whether, on the cumulative facts, the body is financially, functionally and administratively dominated by or under the control of the Government, and whether such control is particular to the body and pervasive. Mere regulatory control does not make a body 'State', and a public function alone is insufficient (Zee Telefilms).
The reasoning
The Court first rejected the argument from legal form. Ajay Hasia establishes that registration as a society under the Societies Registration Act, 1860 does not place a body beyond Article 12, and the State may act through a company or a society as well as a statutory corporation. The inquiry is directed at the substance of the relationship between the body and the Government, not at the legal form adopted for its activities.
The Trust's very creation was attributable to the Government: it was conceived and structured by the Government to pursue a national objective of producing and disseminating literature at moderate prices, rather than a private initiative later brought under regulation. Under its Rules, the Chairman is appointed by the Government and holds office at its pleasure, ministry representatives sit on its governing body, and the Government may nominate other members. The Executive Committee, which runs the Trust's affairs, includes representatives of those Ministries, with the Finance Ministry representative also functioning as Financial Adviser, and its rule-making needs the Government's previous approval.
The financial framework pointed the same way. Financial matters must be placed before the Financial Adviser, with disagreements referable to the Ministers of Education and Finance. The annual report and audited accounts must be submitted to the Government, the accounts follow the form prescribed by the Government in consultation with the Comptroller and Auditor-General, which may audit them with Government-audit powers. Governmental approval is also required for specified alterations to the Trust's rules and purposes.
Taken together, the Court held, these features disclose a relationship substantially different from that between the Government and an ordinary private society under mere regulatory legislation. Financial autonomy in one aspect cannot be isolated from the structure governing the body's composition, management and supervision, and the Trust's publication revenue does not by itself displace the pervasive governmental control disclosed by its governing framework. Its functions — promoting literature at moderate prices, publishing classical Indian literature, translating important works — were relevant alongside its creation and control; later programmes such as PM-YUVA were treated only as corroborative material.
What happens next
The Court upheld the Full Bench's conclusion that the National Book Trust is an 'other authority' within Article 12 and consequently 'State' for that purpose, and dismissed the appeal, holding that no interference was called for. It placed on record its appreciation for the assistance rendered by Sanjay Jain, senior counsel, as amicus curiae, assisted by Harshita Sukhija.
The Court also clarified the limits of its holding: the declaration does not convert the Trust into a Government department, nor does it make its employees civil servants or confer on them the protections of Part XIV, including Articles 309, 310 and 311. Article 12 performs a distinct constitutional function for Part III, with no automatic consequence under those provisions.
BANTHRY ANALYSISFor law students
This judgment is the clearest recent illustration of the form-versus-substance approach to Article 12. The Trust's strongest arguments were all about form: it is a society, not a statutory corporation; it earns its own money; publishing books is not a sovereign function. The Court accepted each premise and still held against the Trust, because the test is cumulative — no single factor decides the question.
Two practical consequences follow. First, the Trust is now subject to Part III, so a person complaining of a violation of a fundamental right by the Trust can invoke the writ jurisdiction. Second, the clarification in paragraph 22 matters just as much: 'State' under Article 12 is a functional label for Part III, not a finding that the body is part of the Government for service-law purposes.
READING PROMPTSQuestions for a closer reading
- Why did the Court hold that the Trust's registration as a society does not keep it outside Article 12?
- What is the difference between the cumulative control test in Pradeep Kumar Biswas and a mechanical checklist of the Ajay Hasia factors?
- Why does holding the Trust to be 'State' under Article 12 not make its employees civil servants?
