Court case(1981) 1 SCC 722

Candidates who failed to gain admission to the Regional Engineering College, Srinagar, challenged the selection. The college was run by a society registered under the Societies Registration Act, with the State and Central governments nominating its members and funding it. Admission was decided on a written test and an oral interview carrying 33.3 per cent of the marks, and interviews lasted only two or three minutes. The society argued that, being a non-statutory registered society, it was not 'State' and no writ lay against it.

Bhagwati J held that the legal form of the body is immaterial: what matters is whether it is an instrumentality or agency of the government. He summarised the R.D. Shetty factors as six tests: (1) entire share capital held by government; (2) financial assistance meeting almost the entire expenditure; (3) monopoly status conferred or protected by the State; (4) deep and pervasive State control; (5) functions of public importance closely related to governmental functions; (6) a department of government transferred to a corporation. The society satisfied these tests and was 'State'. The Court held that allotting one-third of the marks to a two-minute interview was arbitrary and violative of Article 14, but declined to disturb admissions already made, directing that oral marks not exceed about 15 per cent in future.