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Is ONGC a State Under Article 12 of the Indian Constitution? A Clear Explanation

Is ONGC is a State under Article 12 of the Indian Constitution? -Yes, ONGC qualifies as a State under article 12. ONGC is a State under article 12.
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Is ONGC a State Under Article 12 of the Indian Constitution?
Hey There! Are you searching for Is ONGC a State Under Article 12 of the Indian Constitution or no?. So, you are the right place. Here at Agaz (accessible with www.agaz.in), your all queries regarding whether the ONGC is considered a "State" under Article 12 or not going to be crystal cleared.

Listen, Ever heard of ONGC? It stands for the Oil and Natural Gas Corporation, and it's a huge deal in India's energy world. Basically, it's the main company owned by the Indian government that focuses on finding and bringing up crude oil and natural gas. Also mind it, in India’s legal landscape, the interpretation of the term “State” under Article 12 of the Constitution holds great significance, especially when determining the applicability of fundamental rights. One commonly debated question in this context is: Is ONGC (Oil and Natural Gas Corporation) a "State" under Article 12?

Is ONGC a State Under Article 12 of the Indian Constitution?

Yes, Oil and Natural Gas Corporation (ONGC) falls under the definition of "State" as per Article 12 of the Indian Constitution. This conclusion is based on the definition of state, Test to determine state, judicial interpretations and the criteria (mentioned below) established by the Supreme Court or apex court to determine whether a body qualifies as a "State." Stay with us (Agaz.in) to know the reasons and key indicators of Why ONGC is a State under article 12 of the Indian Constitution.

What is ONGC? / What is Oil and Natural Gas Corporation Limited (ONGC)?

चलो शुरू करें, ONGC stands for Oil and Natural Gas Corporation Limited, a Maharatna Public Sector Undertaking (PSU) under the administrative control of the Ministry of Petroleum and Natural Gas. It is India’s largest oil and gas exploration and production company. ONGC, or the Oil and Natural Gas Corporation, is India's primary government-owned company for oil and gas. It is said that, the main job of it- is exploring for and producing crude oil and natural gas right here in India. Based out of New Delhi (headquarter), ONGC is the country's top producer, responsible for roughly 70% of India's oil and 84% of its natural gas output. Established back on August 14, 1956, it operates under the government's petroleum ministry. Its importance is recognized with the 'Maharatna' title, marking it as a cornerstone of India's energy sector.

Definition of State in Indian Constitution

The said Definition of State in Indian Constitution under Article 12 is crucial and pivotal because it determines accountability for fundamental rights violations. So, what is State under Article 12? It encompasses:

  • The Government and Parliament of India,
  • The Government and Legislature of each State,
  • Local authorities, and
  • Other authorities under Article 12 within India’s territory or under the control of the Government of India.

अच्छा ! But what is State according to Article 12 when it comes to the ONGC? 

The phrase "other authorities" has been interpreted by courts to include entities that:

  • Perform public duties or functions of public importance
  • Are substantially financed or controlled by the government
  • Exercise statutory powers

Why ONGC is a State as per article 12?

Yes, ONGC has been judicially recognized as a "State" under Article 12 of Indian constitution by Indian courts. Here’s why:

1. Government Ownership and Control

  • ONGC is wholly owned (100%) and controlled by the Government of India.
  • The government appoints its top management and exercises substantial financial and administrative control.

2. Public Duty and National Interest

  • Plus, ONGC performs functions of public importance like exploration, production, and distribution of natural resources, which are vital for the economy and welfare of the public.

3. Judicial Precedents

If we see behind, in several landmark judgments, courts have held that bodies like ONGC (Oil and Natural Gas Corporation Ltd), even though incorporated under company law, are instrumentalities or agencies of the State due to their structure and functioning.

Also, a key case is Ajay Hasia v. Khalid Mujib Sehravardi (1981), where the Supreme Court laid down certain tests to determine whether an entity is a “State”. These include:

  • Financial assistance from the government.
  • Deep and pervasive control by the state.
  • Public function performed by the entity.

We can say, ONGC satisfies these tests, as confirmed in cases like R. D Shetty v. International Airport Authority (1979), which clarified that government-controlled entities qualify as State. Courts have reiterated ONGC’s status as an instrumentality of the State, even though it’s incorporated under the Companies Act.

Criteria to Determine ‘State’ under Article 12

The Supreme Court has laid down several criteria in cases like Ajay Hasia v. Khalid Mujib Sehravardi (1981) and Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002) to determine whether a body is a State:

  • Function Test – Is the body performing a public or governmental function?
  • Financial Control – Is it funded entirely or substantially by the government?
  • Administrative Control – Does the government have deep and pervasive control?

Applying these tests to ONGC or PSU shows that:

  • The government or state owns and controls it.
  • It performs a public function — offering oil to the citizens.
  • Its policy decisions are subject to government approval.

Thus, PSU or the ONGC satisfies all the criteria for being considered a 'State' under Article 12.

Is PSU a State under Article 12?

Yes, PSU (that is Public Sector Undertakings) is a "State" under Article 12 of the Indian Constitution,

Why is a PSU a 'State' Under Article 12? – A Brief Explanation

A Public Sector Undertaking (PSU) is considered a "State" under Article 12 of the Indian Constitution because:

  1. Government Ownership: Most PSUs are fully or majorly owned by the Government of India or State Governments.
  2. Financial Support: They are funded by public money, either through budgetary grants or government investments.
  3. Government Control: The government exercises deep and pervasive control over their policies, administration, and management.
  4. Public Function: PSUs often perform duties of public importance, such as supplying essential goods or services (e.g., oil, power, banking).
  5. Judicial Precedents: Courts have held that if a PSU meets the tests laid down in Ajay Hasia v. Khalid Mujib, like government funding, control, and public duty, it qualifies as a "State".
Since PSUs or Public Sector Undertaking (example Indian oil, Coil, NTPC, Electricity, LIC, etc.), operate as instruments or agencies of the government, they are accountable under Part III of the Constitution and can be challenged for violating fundamental rights.

Implications of ONGC Being a “State”

Since ONGC is considered a “State” under Article 12:

  • Citizens can approach the High Court or Supreme Court if their fundamental rights are violated by ONGC.
  • It must act fairly and reasonably, especially in public dealings like recruitment, contracts, and services.
  • ONGC’s actions are subject to judicial review.
All the above exactly same applies to PSU also to make them State.

Conclusion

To sum up, ONGC is really and indeed a “State” under Article 12 of the Indian Constitution. Remember, this classification ensures that while it operates as a commercial entity, it is still bound by the constitutional obligation to respect the fundamental rights of citizens,समझे ?.

So, the next time someone asked you whether a PSU like ONGC can be challenged in a constitutional court — the answer is a confident “Yes”. 

Have questions about ONGC’s legal status or Article 12? Share your thoughts in the comments or explore our related articles for deeper insights!

*Note: Here, in this article title "Is ONGC a State Under Article 12 of the Indian Constitution? A Clear Explanation", I have tried to explore and answer this mentioned below frequently asked queries:

  1. Is ONGC a State under article 12?
  2. Is PSU State under article 12?
  3. What comes under State in article 12?
  4. Is PSU a State under Article 12
  5. Is oil and natural gas Corporation (ongc) a State under Article 12
  6. What is Article 12 of Indian Constitution
  7. what is a State under Article 12
  8. Other authorities under Article 12.

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