Book sales do not shield National Book Trust: Supreme Court holds it is State under Article 12

Justice Prashant Kumar Mishra and Justice Augustine George Masih dismiss the Trust appeal against a 2012 Delhi High Court Full Bench ruling, citing Government control over its Chairman, committee, accounts and rules.

The Supreme Court on 6 November 2026 held that the National Book Trust, India is ‘State’ within the meaning of Article 12 of the Constitution. Its registration as a society, and the money it earns by selling books, do not take it outside the Article.

A bench of Justice Prashant Kumar Mishra and Justice Augustine George Masih dismissed the Trust’s appeal. It upheld a Full Bench judgment of the Delhi High Court dated 1 June 2012. Justice Mishra wrote the judgment, which is marked reportable.

The bench also drew a line around the ruling. State status under Article 12 does not turn the Trust into a department of the Government, and it does not make its employees civil servants.

One question, left deliberately narrow

The judgment does not recount the dispute that produced the appeal. Its first paragraph strips the case down to a single question, whether the National Book Trust:

“is a ‘State’ or not within the meaning of Article 12 of the Constitution of India” (para 1)

The appeal is Civil Appeal No. 14369 of 2015. The Trust and another appellant challenged the Full Bench ruling, which had answered the same question on a reference. A.R. Abdul Gaffar and others are the respondents.

The Court heard counsel for the parties and Senior Advocate Sanjay Jain, who appeared as Amicus Curiae assisted by Ms. Harshita Sukhija. The judgment does not name counsel for the Trust or for the respondents.

What the Delhi High Court found

The Full Bench examined the Trust independently on the principles in Ramana Dayaram Shetty, Ajay Hasia and, principally, Pradeep Kumar Biswas. It said no single factor decides the matter. The question is whether the body is financially, functionally and administratively dominated by the Government, and whether that control is pervasive.

It noted that the Trust was created under Government resolutions dated 15 June 1957 and 28 September 1962. The Chairman is appointed by the Government and holds office at its pleasure. The Trust and its Executive Committee include Government nominees, among them representatives of the concerned Ministries.

It also found that the rule-making framework, financial administration, accounts and audit all involve governmental participation or approval. The Trust’s objects are the production, publication and spread of literature at moderate prices, including translations of Indian and foreign works.

The Full Bench read those functions together with how the Trust was constituted, funded and run. On 1 June 2012 it concluded that the Government exercises deep and pervasive control. The Trust was, in substance, an instrumentality or alter ego of the Government and fell within ‘other authorities’ in Article 12.

The tests the bench restated

The bench began with Article 12 itself. The expression is inclusive and reaches beyond the Government and the legislatures to ‘all local or other authorities’. It was cast widely so that constitutional obligations could not be avoided by moving public functions into a separate legal form (para 6).

It reproduced the six indicia that Ajay Hasia, a five-judge bench ruling, drew from Ramana Dayaram Shetty. They cover government-held share capital, near-total state funding, state-conferred monopoly, deep and pervasive control, functions of public importance, and a department transferred to a corporation.

Ajay Hasia called these indicia to be used with care, not conclusive. It also held that even a society registered under the Societies Registration Act, 1860 can be an instrumentality of the Government, and that how a body was created is not the test (para 7).

The bench then turned to Pradeep Kumar Biswas, a seven-judge bench ruling. That decision treats the tests as no rigid checklist. The question is whether, on the cumulative facts, the body is financially, functionally and administratively dominated by the Government, and whether the control is particular to the body and pervasive.

Where control is merely regulatory, the body does not become State. The inquiry therefore centres on the nature and degree of control and on the functions performed, the bench said. The control must be deep enough to show the body’s autonomy is substantially circumscribed (paras 8 and 9).

A society is a label, not a shield

The Trust argued that it is a society or trust and not a juristic person like a statutory corporation. The bench found no substance in that. Ajay Hasia itself shows that registration as a society does not place a body beyond Article 12.

The State may act through a company incorporated under the Companies Act, 2013 or through a society under the 1860 Act. The inquiry looks at the substance of the relationship with the Government, not at the name or legal form of the body (para 10).

Chairman, committee and the Rules

The bench examined the Trust’s Memorandum of Association and Rules. The Trust was brought into existence by a Government of India resolution of 15 June 1957 and reorganised by another of 28 September 1962. Its creation was therefore attributable to the Government (para 11).

The objects, the bench said, were not the result of independent private initiative later made subject to regulation. The Government conceived and structured the Trust to pursue an identified national objective: producing and spreading literature at moderate prices.

Under Rule 3, the Government of India appoints the Chairman. The governing body carries representatives of the Ministries of Education, Finance and Information and Broadcasting, and the Government may nominate other members (para 12).

Members hold office for three years. The Chairman holds office at the pleasure of the Government and is the chief executive officer of the Trust (Rules 7, 13, 48 and 50).

The bench rejected the idea that a Government officer merely happens to be associated with an independent body. Under Rule 26, the Executive Committee administers, directs and controls the Trust’s affairs. It includes the same three Ministries, with the Finance representative also serving as Financial Adviser. Its other non-official members are Government nominees too (para 13).

The Executive Committee’s regulatory power needs the previous approval of the Government of India under Rule 42. The bench said governmental representatives sit at the heart of decision-making.

On finance, matters go before the Financial Adviser under Rule 57. In specified cases of disagreement they can travel to the Ministers of Education and Finance (Rule 51). The annual report and audited accounts must be submitted to the Government under Rule 59.

Accounts are kept in the form the Government prescribes in consultation with the Comptroller and Auditor-General. The CAG, or a person authorised by it, audits them with powers like those used for Government accounts (Rule 58). Specified changes to the rules and purposes need Government approval under Rule 60 (para 14).

The bench did not treat these as isolated instances of ordinary regulatory supervision. The Government takes part in constituting the body, fixes a substantial part of its governing composition, appoints its Chairman and controls his tenure. It also takes part in financial administration, audits through the CAG, receives reports and accounts, and approves changes to the framework (para 15).

Book sales do not answer the question

The Trust stressed that Government grants are only one source of income. In some years, it said, its own receipts made up a substantial part of the total. It argued that the Full Bench was wrong to treat grants as conclusive.

The bench accepted that financial assistance is important but not the only factor. It said the Trust’s income from selling publications does not settle the constitutional question in its favour. Financial autonomy in one respect cannot be separated from the governing structure, management and supervision (para 16).

It endorsed the Amicus’s approach, which asked not whether Government funding was the whole of the income but how the Trust relates to the Government financially, functionally and administratively. The accounts rules and CAG audit show Government involvement built into the structure, not confined to conditions on an occasional grant (para 17).

Public purpose counts, but only with control

The bench said it was not proceeding on the basis that publishing books is a sovereign or exclusively governmental function. It also did not accept that every educational or public-utility activity turns its body into State. It cited Zee Telefilms for the point that a public function in isolation is not enough (para 18).

The functions mattered because of what they were when read with the Trust’s creation and control. Its objects include promoting good literature at moderate prices, publishing classical Indian literature and translating important Indian and foreign works. They also include book exhibitions, seminars and measures to make books accessible (para 19).

These were not incidental activities of a private commercial publisher. They reflected the public and national purposes for which the Government set up the Trust, the bench said.

The Amicus also placed material on later programmes, including the PM-YUVA scheme for mentoring young authors. The bench said it did not rest its conclusion on developments after the Full Bench judgment. It treated them only as corroboration that the governmental purpose was not merely formal or historical (para 20).

It noted that decisions cited before it both brought societies within Article 12 and kept them out. A society is not State merely because it is associated with the Government. The Court has to examine how it is constituted and how far the Government controls its working (para 21).

State, but not a department of Government

The Trust had also worried that a declaration of State status would make it a Government department. The bench said it would not. Article 12 serves a distinct function for Part III, the fundamental rights chapter, and has no automatic consequence under Articles 309, 310 or 311.

Employees of the Trust do not become civil servants or gain the protections of Part XIV. The question before the Court was narrower, the bench said: whether the Trust is sufficiently an instrumentality of the Government to attract the discipline of Part III (paras 22 and 23).

It agreed with the Full Bench for placing emphasis on the cumulative effect of Government control, which, it said:

“is not the limited or general regulatory supervision” (para 24)

The bench held that the Trust is financially, functionally and administratively dominated by, or under the control of, the Government, with control that is particular to it and pervasive. Registration as a society, or the fact that it earns part of its income independently, cannot displace that character (para 25).

Order

The Supreme Court upheld the Full Bench’s conclusion that the National Book Trust is an ‘other authority’ within Article 12 and is therefore ‘State’ for that purpose. It found no ground for interference and dismissed the appeal (paras 26 and 27).

The bench recorded its appreciation of the assistance given by Mr. Sanjay Jain as Amicus Curiae (para 28). The judgment records no order on costs.