R.D. Shetty v International Airport Authority (1979)

Administrative Law · Parliamentary Committees, Civil Services & Other Accountability

Facts.

The International Airport Authority, a statutory corporation, invited tenders for a restaurant and then accepted a tender that did not meet its own eligibility condition. A rejected tenderer challenged the arbitrary award.

Issue.

Is a statutory corporation “the State” under Article 12, so that it is bound by fundamental rights and the duty to act non-arbitrarily?

Held.

Yes. A corporation that is an instrumentality or agency of the Government — judged by financial, functional and administrative control and public function — is “State” under Article 12, and its actions must satisfy Article 14 (no arbitrariness).

Why it matters.

It laid down the instrumentality test that brings public corporations and undertakings within the reach of fundamental rights and the writ jurisdiction — the doctrinal key to Unit 5’s control of public undertakings.

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