Exp) Option b is the correct answer.

Article 12 defines the term ‘State’ for the purpose of different provisions concerning the fundamental rights.

Statement 1 is correct: The Supreme Court has held that the term ‘state’ is wide enough to include all authorities created by the Constitution or statute on whom powers are conferred by law. Thus, even a private body or an agency working as an instrument of the State falls within the meaning of the ‘State’ under Article 12. It is not necessary that the statutory authority should be engaged in performing governmental or sovereign function.

Statement 2 is correct: All local authorities, that is, municipalities, panchayats, district boards, improvement trusts, etc. are included under the definition of state under Article 12. According to List II of VII Schedule ‘local government’ includes a municipal corporation, urban improvement trust, district boards, mining settlement authorities and other local authorities for the purpose of local self-government or village administration.

Statement 3 is incorrect: In Article 12, the expression ‘other authorities’ is used after mentioning the Government, Parliament of India, the Government and Legislature of each of the State and all local authorities. The Madras High Court has held that ‘other authorities’ could only mean authorities exercising governmental or sovereign functions. It cannot include persons, natural or juristic, such as, a university unless it is ‘maintained by the State’.