Government company - Companies Law Ready Reckoner - Companies Law

As per section 2(45) of the Companies Act, 2013, unless the context otherwise requires, Government company means- any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company; AK BINDAL VERSUS UNION OF INDIA- [ 2003 (4) TMI 406 - SUPREME COURT Para 17. The legal position is that identity of the Government Company remains distinct from the government. The Government Company is not identified with the Union but has been placed under a special system of control and conferred certain privileges by virtue of the provisions contained in sections 619 and 620 of the Companies Act. Merely because the entire shareholding is owned by the Central Government will not make the incorporated company as Central Government. It is also equally well-settled that the employees of the Government Company are not civil servants and so are not entitled to the protection afforded by article 311 of the Constitution Pyare Lal Sharma Versus Managing Director, Jammu Kashmir Industries Ltd. - 1989 (7) TMI 339 - Supreme Court . Since employees of Government Companies are not Government servants they have absolutely no legal right to claim that Government should pay their salary or that the additional expenditure incurred on account of revision of their pay scale should be met by the Government.