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Under Article 12, the expression 'the State' has been judicially expanded to cover certain bodies that are not formally part of the Government. Which test was laid down by the Supreme Court in 'Ajay Hasia v. Khalid Mujib' for identifying an instrumentality or agency of the State?

Answer & Solution
Correct answer: B.
1. The Court in *Ajay Hasia v. Khalid Mujib*, AIR 1981 SC 481, laid down a **multi-factor test**. 2. The factors include (i) entire share capital held by the Government, (ii) deep financial assistance meeting almost the entire expenditure, (iii) State-protected monopoly status, (iv) deep and pervasive State control, (v) functions of public importance closely related to government functions, (vi) a department transferred to the corporation. 3. No **single** factor is conclusive; the cumulative weight of these indicia decides whether the corporation is an instrumentality of the State. 4. Option A is the older 'sovereign-function' test which has been superseded. Options B and D rest on form (registration, service status) rather than substance and have never been the constitutional test. _Source: ICSI CS Executive — Lesson 2, 'Definition of State', p. 30 ¶5 (Ajay Hasia six-fold test)._
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