What is the Constitutional Position of a Public Corpora­tion in India?

Constitutional position of Public Corporation Article 19 (1) (g) of the Constitution lays down that all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business.

Article 19 (6) provides that:

(a) The operation of any existing law shall not be affected in so far as it imposes, or prevents the State from making any law imposing, in the interests of the general public, reasonable restriction on the exercise of the right conferred by Art. (1) (f), and

(b) In particular, the operation of any existing law shall not be affected in so far as it relates to, or prevents the State from making any law relating to:

(i) Professional or technical qualifications necessary for practising any profession or carrying on any occupa­tion, trade or business;

(ii) The carrying on:

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1. By the State, or

2. By a Corporation owned or controlled by the State, of any trade, business, industry or service,

Whether to the exclusion, complete or partial, or citizens or otherwise.

Art. 19 (6) is a mere saving provision. Its function is not to cre­ate a power but to immune from attack the exercise of legislative power falling within its ambit.

The right of the State to carry on trade or business to the exclusion of others does not arise by virtue of Art. 19 (6) but has been recognised by Art. 298 which states that the ex­ecutive power of the Union and of each State shall extend to the car­rying on of any trade or business.

It is quite clear from Article 19 (6) that the Corporation can carry on trade or business.

The test for determining the constitutional position of a Public Corporation as either a Department of Government or as a servant of the State may be summarised as below:

(i) If the statute in terms answers the question (as it did in the case of the Central Land Board under the Company & Town Planning Act, 1917), the need for any further enquiry is obviated.

(ii) In the absence of such statutory declaration or provision, the intention of Parliament as to be gathered from the provisions of the statute constituting the Cor­poration.

These provisions have to be judged in the light of the following:—

(a) The incorporation of the body, though not determina­tive, is of some significance, as an indication by Parlia­ment of its intention to create a legal entity with a personality of its own, distinct from the State;

(b) The degree of control exercised by the Minister over the functioning of the Corporation is a very relevant factor. A complete dependence on him marks it was real­ly a government body while comparative freedom to pursue its administration is treated as an element negative an intention to constitute it as a Government agent.

(c) The degree of dependence of the Corporation on the Government for its financial needs is the third factor.