Invoking Fundamental Rights to Hold Companies Accountable: The Indian Experience

This paper will explore the extent to which fundamental rights (FRs) provisions in Part III of the Indian Constitution could be directly invoked against companies to hold them accountable for human rights abuses. I will examine two issues related to this question: the extent of horizontal application of FRs, and the relevance of corporate law (principles of separate corporate personality and limited liability) to this constitutional law question. The FRs are generally available against the ‘state’ as defined by Article 12 of the Indian Constitution. The definition of ‘state’ includes ‘other authorities within the territory of India or under the control of the Government of India’. The Supreme Court has extended considerably the meaning of ‘other authorities’ by developing an instrumentality test. However, I will argue that the instrumentality test is not suitable to meet the complex challenges posed the privatisation of governance and economy. The solution to achieve an optimal horizontal application of FRs might lie either in an amendment of Article 12 or the judicial enunciation of a new test that focuses more on functions of private non-state actors.  Moreover, even if an optimal horizontal application of FRs is achieved in principle, this might not result companies held accountable for human rights abuses in practice, as companies might plead principles of separate corporate personality and limited liability to deny or limit their liability. The paper will, therefore, also consider the tools that courts could employ to mitigate the negative effect of these corporate law principles on the enjoyment of constitutionally-guaranteed FRs.