Private Governments and the Indian Constitution – Rethinking ‘State’ under Article 12
– Siddharth S. Aatreya*
Constitutional rights have traditionally been applied vertically, acting as a citizen’s weapon against her State. However, with the increased concentration of power in private hands and privatisation of hitherto State functions, there is a growing need for these rights to be applied horizontally, such that they also govern relationships between private citizens. In this context, this essay will demonstrate that Indian Courts’ approach to the horizontal application of fundamental rights under the Indian Constitution is inadequate to address this growing private governmental power. It will then attempt to fill this gap through a living originalist interpretation of the definition of ‘State’ in Art. 12 of the Constitution that could make fundamental rights directly enforceable against private parties in select circumstances.
Why Expand the Scope of Art. 12?
Part III of the Indian Constitution grants fundamental rights to citizens. These rights have been made directly enforceable only against bodies covered by the definition of ‘State’ in Art. 12. Consequently, the Supreme Court’s judicial review powers extend only to the actions of these bodies that allegedly violate citizens’ fundamental rights.
The Court’s jurisprudence under Art. 12 has tapered with time, making the test to determine which bodies fall within the definition of ‘State’ increasingly narrow. First, in Ajay Hasia v. Khalid Mujib Sehravardi, the Court adopted a broad view, holding that where the “control of the State and the Central Governments is so deep and pervasive” that the body in question is in effect an agent of the State, it would fall within the scope of Art. 12. This was subsequently diluted by the Court in Pradeep Kumar Biswas v. Indian Institute of Chemical Biology. Differing from Ajay Hasia, the Court held that only bodies under the direct “functional, financial or administrative” control of the Government would fall within the scope of State under Art. 12. This narrow approach recognizes only de jure links (and not de facto links, as Ajay Hasia did) between a body and the Government/State. In doing so, it has significantly limited the breadth of authorities brought under Art. 12 and ensured that fundamental rights remain enforceable only “vertically”, i.e. by a citizen against only the State itself. For instance, in Zee Telefilms v. Union of India, the Court observed that the Board of Control for Cricket in India performs a “public function” and has a consequent duty to “act fairly”, but refused to bring it within Art. 12 due to the absence of a de jure link between BCCI and the Government.
There are two exceptions to this rule. First, certain provisions in the Constitution explicitly apply horizontally. For instance, the text of Art. 15(2) itself makes it applicable to all shops and restaurants. As a member noted in the Constituent Assembly, this Article was always intended to bind private persons, providing a sound constitutional basis for its horizontal application. Second, expansive judicial interpretations have required that some rights be applied horizontally. For instance, a worker’s right to health and a woman’s right against sexual harassment at the workplace have both been read into the right to life and personal liberty under Art. 21 as being directly enforceable against private employers. However, these decisions fail to articulate a constitutional justification for this position, simply holding that it is necessary for them to be applied in this fashion to be realised.
This necessity test has resulted in a direct horizontal application of fundamental rights, such that judicial review is exercised directly against a private party that allegedly breaches a right. The other alternative is an indirect approach, in which the State regulates private actions to ensure fundamental rights compliance and judicial review is limited to State actions taken in that regard. While the choice between these is contested across jurisdictions, this essay argues that rampant regulatory capture by private parties in India makes the direct horizontality approach likelier to succeed, since isolated Courts are better placed to ensure fundamental rights compliance by private parties.
While leading to a desirable outcome, the absence of a justification for the horizontal application of these rights under Art. 12 has left the decision to extend a right horizontally entirely to the Court’s discretion. This has resulted in it often not being considered when necessary. For instance, in its recent judgment that read the right to privacy into Art. 21, the Supreme Court did not even enter into the necessity question and restricted privacy to being a vertical right, despite the capability of private data aggregators to breach the right possibly necessitating that it be applied horizontally. Thus, bringing private parties, when they are in a position to affect a citizen’s fundamental rights, within Art. 12 would ensure that rights are automatically extended horizontally when necessary.
Living Originalism and Art. 12
Constitutions provide a broad framework for governance, within which different terms perform different functions. Rules are determinate and cannot ever be deviated from, while standards and principles leave a wide scope for interpretation open. Jack Balkin argues that in using ambiguous language in standards and principles, the framers of Constitutions delegated the determination of how to specifically apply these to future generations, who can account for society’s changing needs. Thus, under Balkin’s living originalist approach to constitutional interpretation, subsequent interpretations of ambiguous terms in a Constitution must stay true to the basic principle(s) underlying them, but can vary with fundamental changes in context over time.
When looked at from this perspective, Art. 12 contains a conspicuous ambiguity – the term “other authorities”. Opposing the use of this term in the Constituent Assembly, a member observed:
“Is there any need for us to include the term ‘other authorities’, which has not been defined here or anywhere else? State has been defined in a manner that is comprehensive of all institutions, whether they are legislative bodies, executive bodies or executive authority… The use of the term ‘other authorities’ provides too wide a definition to the term ‘State’”.
These concerns were echoed by other members of the Assembly. Dr. B.R. Ambedkar, Chairman of the Constituent Assembly’s Drafting Committee, refuted this argument and justified the use of the term, observing:
“Fundamental Rights must be binding not only on the Central Government or the Governments in the Indian States…. every authority which has been created by law and has got certain power to make laws, rules or by-laws must be bound by these Rights”.
This justification was ultimately accepted by the Assembly. Thus, two basic principles were generally intended to determine when a body is encompassed by Art. 12 – first, the body must be created by law and second, it must have the power to affect fundamental rights through its rule-making power. These principles must underpin any new interpretation of Art. 12.
Private Governmental Power – Justifying a Changed Approach to Art. 12
In his Memorandum and Draft Articles on the Rights of States and Minorities, Dr. Ambedkar observed that the State being unable to delegate “powers of governance” to private persons is a fundamental premise of India’s political democracy. This premise went uncontested by the Constituent Assembly. Undeniably, therefore, the Assembly did not see Art. 12 as ever covering private parties.
The distinction between a Constitution’s “original meaning” and “original expected application” that Balkin relies on is crucial here. The latter approach (adopted by conservative originalists) gives no discretion to Courts when interpreting terms in a Constitution, limiting its application to what its framers expected.  This would, therefore, preclude the possibility of any private party being covered by Art. 12, since this was not expected at the framing stage. Balkin’s original meaning approach, however, sees only the constitutional text, and not its original expected application, as binding. Thus, fidelity must be maintained to two constants – the plain meaning of terms explicitly contained in the text of the Constitution and the basic principle(s) that underlie ambiguous terms used. Within these constraints, changed circumstances post-enactment can be used to modify the application of the same constitutional provision from time to time.
This essay argues that the increased proliferation of private governmental power in India is a fundamental change in circumstances that justifies an expansive reading of the term ‘other authorities’ in Art. 12. As Legal-Economist Robert Lee Hale wrote, governmental power is the ability to systematically coerce behaviour out of another. When the law (through mechanisms like property rights) cements and fosters vast economic inequalities, resource-rich parties acquire this governmental power over individuals who are deprived of and require resources that they control. Hale argued that the exercise of this governmental power by private parties is inevitable since those with greater access to resources will coerce behaviour that helps maintain their dominant economic position out of others. He consequently argued that private and public governmental power are equally susceptible to being used tyrannically.
Compared to 1950 (when the Indian Constitution came into force), such private governmental power has risen sharply in India in two ways. First, private bodies now often inhabit traditional State spaces, giving them wide powers over the general public. For instance, Facebook’s application of its ‘community standards’ to restrict content can have a wide impact on free speech rights and in Delhi, the delivery of some government services has been outsourced to VFS, a private corporation. Second, private bodies exercise power over specific sets of people, like their employees and consumers. Hale argued that the terms on which corporations choose to engage with these people are “binding” on them since they typically cannot afford to lose their employment or not purchase a particular product. Thus, with the growing migration of India’s formal workforce from the public to the private sector and increased privatisation of hitherto State functions, the ability for private parties to infringe upon fundamental rights and consequent need to regulate them justifies a fresh approach to Art. 12.
Conclusion – A New Test under Art. 12
Having identified a justification for a broader interpretation of Art. 12, the principles culled out previously have to be applied to a new test. First, this requires that all authorities covered be created by law. To accommodate private governmental power, this principle can be read to limit Art. 12 to relationships between private persons that are recognized and regulated by the law, either contractually or statutorily. Second, persons covered by the test must have “rule-making” power over another. This limits the proposed test’s coverage to relationships where the power imbalance between the parties entitles the dominant party to set terms that shape the behaviour of the other with little to no scope for these terms to be negotiated and mutually agreed upon, making them virtually compulsory. Indeed, Dr. Ambedkar’s implicit assumption that only State authorities can exercise rule-making powers in his original statement in the Constituent Assembly is no longer true. Terms imposed in unequal relationships between private parties and mechanisms used to ensure that they are complied with make them comparable to rules framed by the State, albeit in a private governmental context. Thus, freely and fairly negotiated contractual arrangements between independent businesses would not be covered by this test, but terms in standard form contracts between sellers and consumers, severely asymmetric employment contracts/regulations and the “community standards” that Facebook applies to control what is said on its platform would be.
Crucially, this new test does not unreasonably impinge upon the freedom of contract. Indeed, the unconscionability rule in contract law that renders contracts between unequally placed parties containing unfair terms invalid on public policy grounds already creates a similar restraint on the contractual freedoms of such parties. This test simply builds on that foundation by introducing fundamental rights as the basis on which the terms of such unequal relationships are regulated. Thus, parallels can be drawn to public governmental power to determine when private governmental power has been exercised, as against mere contractual freedom. For instance, in Marsh v Alabama, the US Supreme Court struck down a limitation on distributing religious flyers in a private township created by its owners, observing that the owners’ power over those entering the township resembled the State’s and therefore required that they respect citizens’ First Amendment rights. Such an enquiry would subsume the Indian Supreme Court’s existing “necessity” test – once it is established that the power between unequally placed parties is legally sanctioned, resembles rule-making power as against contractual freedom and has resulted in a breach of fundamental rights, it will be “necessary” to place the obligation of respecting the subordinate party’s fundamental rights on the dominant party.
The Court’s decision to directly extend fundamental rights horizontally is laudable, but requires a sound constitutional basis to yield consistent results. This essay has attempted to provide a living originalist interpretation to the term ‘other authorities’ in Art. 12 to do this. In covering private parties only when they exercise governmental power and infringe upon citizens’ fundamental rights, the test proposed by this essay will result in the framers’ intention of ensuring judicial review over bodies that can breach citizens’ fundamental rights being adequately fulfilled in today’s context.
Siddharth Aatreya is a graduate in B.A. LL.B (Hons.), National Law School of India University and is an LL.M Candidate, Christ’s College, University of Cambridge. He is also a former Editor of the National Law School of India Review.
 See generally Samuel Moyn, The Last Utopia 4 (Harvard University Press, 2012).
 Durga Das Basu, Introduction to the Constitution of India 47-49 (Lexis Nexis, 22nd edn., 2015).
 Art. 15(2), Constitution of India, which reads:
“No citizen shall, on grounds only of religion, race, caste, sex, place of birth or any of them, be subject to any disability, liability, restriction or condition with regard to
- access to shops, public restaurants, hotels and palaces of public entertainment; or
- the use of wells, tanks, bathing ghats, roads and places of public resort maintained wholly or partly out of State funds or dedicated to the use of the general public
 Per Sardar Vallabhai Patel “The first clause [of Article 15] is about the State obligation; the Second clause deals with matters that have nothing to do with the State- such as public restaurants which are not run by the State” CAD Vol. VII 426-427 (29 April, 1947).
 Consumer Education and Research Centre v. Union of India, (1995) SCC 3 42.
 Vishakha v. State of Rajasthan, AIR 1997 SC 3011.
 Stephen Gardbaum, The Indian Constitution and Horizontal Effect in The Oxford Handbook on the Indian Constitution 34 (Sujit Choudhry, Madhav Khosla and Pratap Mehta eds., Oxford University Press, 2016).
 Stephen Gardbaum, The “Horizontal Effect” of Constitutional Rights, 102(3) Michigan Law Review 387 (2003); Mark Tushnet, The Issue of State Action/Horizontal Effect in Comparative Constitutional Law, 1 International Journal of Constitutional Law 79 (2003).
 Sudhir Krishnaswamy, Horizontal Application of Fundamental Rights and State Action in India in Human Rights, Justice and Constitutional Empowerment 47 (C. Raj Kumar and K. Chokkalingam ed., Oxford University Press, 2010).
 K. S. Puttaswamy v. Union of India, (2017) 10 SCC 1.
 Mariyam Kamil, Puttaswamy: Jury Still out on some Privacy Concerns?, 1(2) Indian Law Review (2017).
 Jack Balkin, Living Originalism 21-34 (Harvard University Press, 2011).
 Art. 12, Constitution of India, which reads:
“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.”
 Per Mehboob Ali Baig CAD Vol. VII (25 November, 1948).
 Per Naziruddin Ahmad CAD Vol. VII (25 November, 1948): “I also intend to remove the term other authorities used in the definition in Art. 7” [Art. 7 of the Draft Constitution before the Assembly defined the term ‘State’ and is consequently analogous to Art. 12 the Constitution passed by the Assembly].
 Per B. R. Ambedkar CAD Vol. VII (25 November, 1948).
 B. Shivarao, The Framing of the Indian Constitution 100 (Vol. 1, Universal Law Publishing House, 2015).
 Balkin, supra note 12 at 7-8.
 Balkin, supra note 12 at 7-8.
 Balkin, supra note 12 at 9.
 Robert Lee Hale, Legal Factors in Economic Society 44-58 (1935).
 Warren J. Samuels, The Economy as a System of Power and its Legal Bases: The Legal Economics of Robert Lee Hale, 27 University of Miami Law Review 261 (1973).
 Robert Lee Hale’s Personal Papers, Folder 80-16 at 8 as cited in Id., at 297.
 David L. Hudson Jr., In the Age of Social Media, Expand the Reach of the First Amendment, 43(4) American Bar Association Human Rights Magazine (2018).
 Samuels, supra note 24.
 Supra text accompanying note 17.
 Pollock and Mulla’s Indian Contract and Specific Relief Act, 35-37 (Vol. 1, Lexis Nexis Publishers, 2012).