The argument as to how far the principles and values of Constitution can be applied on private entities has an intriguing hue to it. The next question naturally allied to is the normative relation between ‘State’ and ‘Due Process’. One cannot be thought of without the other; both have grown into a symbiotic relation.
The basis of ‘Due Process’ is that there must be some kind of fair mechanism to ensure natural justice is done, principles of audi alteram partem, rule against bias and nemo judex in causa sua are considered to be essential to this process. The mandate of Articles 14 and 21 of the Constitution brings in the concepts of just, fair and reasonability, and thus State actions are scrutinised at different levels, both substantively and procedurally.
Article 21 of the Constitution, which talks about ‘Procedure Established by Law’, initially, was given a narrow interpretation as something which did not imbibe principles of natural justice. However, after few decades this conservative approach was deshackled in the case of Maneka Gandhi v. UoI, where it was established that though the terminology used in article 21 is ‘Procedure Established by Law’ but it inculcates the principle of ‘Due Process.’
However, this is not the question we are looking into; the real question of substance which we are examining is whether these principles of justice can also rope in private entities? Can private corporations offering services of social media/search engine websites be regarded as a state? As it is already well established that the entity of ‘State’ is bound by principles of justice, yet the realm of private transactions is naturally governed by individuals through contract. Under this scenario, how can private entities be shackled under the grip of justice?
One thing which needs to be accepted is that having an unimpeded power does not give an unequivocal right to set the terms of transaction. You may choose to do that, but the terms must be reflective of ‘fairness’. MNCs are not ‘State’ but have features similar to a ‘State’. The power to deprive an individual of certain services and the power to make predictive choices for the consumer (automation) represent a form of sovereignty. So the next viable question that comes up is whether we can regard MNCs delivering social media and search engine website services as a ‘State’ under article 12 of the Indian Constitution and enforce upon them principles of natural justice.
If one looks at the wording of Article 12, one would realise it is not an exhaustive definition of ‘State’ but rather enumerative in nature with enough space to include entities that are discharging functions of high public importance. In order to assess the boundaries of Article 12, it will be important to go through the Constituent Assembly Debates (CAD) as to what functions they wanted the ‘State’ to have.
In his speech on 29 November 1948, Dr. Ambedkar replying to Dr. Kamath clearly specified that the phraseology of ‘State’ used by them has to have a wider connotation. However, many of the Constituent Assembly Members were sceptical about the approach of Dr. Ambedkar. One such founding member was Mr. Naziruddin Ahmad who was not convinced by this approach. In his speech on 9 November 1948, Mr. Ahmad questioned the idea of expanding the horizon of ‘State’ to include Taluka and local boards. For him there could only be one ‘State’, one that has sovereign power.
The approaches adopted by Mr. Ahmad and Dr. Ambedkar represent two perspective of seeing the ‘State’; academically called ‘Structuralist’ and the ‘Functionalist’. The Structuralist looks for the structure of the ‘State’ within an organization or institution for declaring it as a State, whereas the ‘Functionalist’ looks at the function of the ‘body’; if the function is that of a ‘State’, it would fall within the premise of Article 12.
The structuralist approach can also be seen adopted by the Supreme Court of India in the initial years. In the case of Rajasthan State Electricity Board, Justice Bhargava held that for declaring a particular body as ‘State’, that body must be created by a statute and must be having the power to punish. Two criteria can be seen from the above analysis 1) Statutory Body; and 2) Power to punish
Justice Bhargava was trying to find the structure within the premise of ‘Rajasthan State Electricity Board’ (RSEB), thus the criteria of ‘Power to Punish’ represents the hue of sovereignty. However, this approach came to diminish gradually by the 1980s, when Justice KK Mathew’s concurring opinion in Sukhdev Singh brought in a new dimension. Justice Mathew instead of emphasising on the criteria laid down in RSEB, focused on the functions of the body. His opinion opened the doors for the ‘functionalist’; so instead of looking at the structure the emphasis shifted to the function of a body. Thus, if a body was discharging a ‘function of high public importance’ it could be a State for Justice Mathew. The opinion of Justice Mathew turned into the majority opinion in the case of Ajay Hasia. However, by 2005, the criteria was changed again by the case of Zee Telefilms, wherein the Supreme Court stuck to the ruling given in Pradeep Kumar Biswa and laid down three criteria for determining a ‘State’: 1) Function; 2) Finance, and 3) Administration
If we keep these criteria in mind, the idea of making ‘MNCs’ accountable is not prudent as none of the MNCs will qualify as a ‘State’. However, if the arguments of Justice KK Mathew are observed – the test of ‘discharging function of high public importance’ – it might help qualify MNCs as States.
The next question which comes up is whether MNCs offering social media and search engine website services in India can be said to be discharging functions of high public importance. It is a well-known fact that social media websites have become an essential part of our life, not only do they help us in connecting with distant relatives but also help us in staying updated on events.
Facebook also offers the service of marking oneself ‘I am Safe’, under which people of different demographic areas can during a natural calamity choose this option to send a signal to other people as to his/her well-being. Similarly, by 2020 Facebook will also come up with its digital-currency by the name of ‘Libra’. This and other features of Facebook makes it an indispensable entity for modern social beings. If in the near future ‘Libra’ becomes a hit (which is predicted to happen in countries with weak exchange rates in world market) Facebook would surely become a necessity of daily social and economic life. In this role, it is difficult if not impossible to not see Facebook discharging a function of high public importance. Can we under this scenario regard social media websites as a State under our Constitutional jurisprudence?
Even the 275th law commission report analysing the ruling of the BCCI case was of the view that functionality of the body should also be looked into for deciphering its ‘State’ characteristics.
The writers are, respectively, a practicing advocate (GST) and Assistant Professor, National Law University, Odisha.