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TMI Blog2002 (1) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... n administrative grounds, when the plea of alleged mala fides and vindictiveness has not been substantiated. 2. The second respondent, said to be a post-graduate in chemistry, joined the services of the appellant-company on 10-8-1991, as management trainee and after successive career prospects came to be promoted as Senior Superintendent (D.M. Plant) which came to be redesignated as the Assistant Manager (D.M. Plant) on 7-9-1991. By a memorandum bearing reference No. FPA/TRF/97/384, dated 27-11-1997, he was transferred to the regional office, Calcutta. The said order came to be challenged as vitiated by mala fides and illegality and one made with a view to victimise and prevent him from functioning as an executive member of the M.P.M. Officers' Association. Certain allegations to support such a claim were also made, and it is not necessary to advert to all those details, in view of certain subsequent developments and turn of events. In the writ petition filed by the respondents, a learned single Judge of the High Court by an order dated 4-3-1998, granted stay of the order of transfer dated 27-11-1997 confirming thereby the ex parte interim order of stay earlier granted on 24-2-199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poly status, which is State conferred. (c)The functions entrusted to the appellant-company go to show that the Government operates behind a corporate veil carrying out the Governmental functions of vital importance and therefore, there is no difficulty in identifying the appellant-company to be 'State' within the meaning of article 12 of the Constitution of India. (d) The summarised balance-sheets for the years 1993-94, 1994-95 and 1995-96 disclosed that more than 97 per cent of the share capital has been contributed by the State of Karnataka and the financial institutions controlled and belonging to Government of India. (e) The business of the company which has to be managed by the Board of Directors (article 114 of the articles of association) shall have the chairman of the board and managing director (article 119) and four directors of whom one will be the chairman will be nominated by the Government of Karnataka who shall not retire by rotation or be removed from office except under the orders of the Government of Karnataka (article 94). The Directors to whom the management is entrusted shall not be more than 12 or less than 9, inclusive of the Government nominees and nomine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company were found actually carried on (noticed in para 12 of the judgment of the High Court) the Full Bench came to the inevitable conclusion that the entire company is run as part or an enterprise of the State Government and that everyone of the schemes of the company are also to be approved by the Government. Total financial control of the company by the Government has also been found. The fact that the State Government has notified the premises of the company at Bhadravathi as 'public premises' under the provisions of the Karnataka Public Premises (Eviction of Unauthorized Occupants) Act, 1974, and appointment of five of its officers as competent officers for the purpose of the Act, has been also taken due note and consideration to come to the ultimate conclusion that the company is an authority and instrumentality or agency of the State, so as to attract article 12 of the Constitution of India. 6. Heard, the learned senior counsel, appearing on either side who tried to reiterate the very stand taken before the High Court relying upon one or the other of the decisions noticed by the High Court and some subsequent decisions, to which a reference will be made hereinafter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary to look into the Constitution of the body, the purpose for which it has been constituted, the manner of its functioning including the mode of its funding and the broad features which have been found by this Court to be relevant for such purpose though it is not necessary that all those tests should be satisfied in every case to arrive at a conclusion either way. 8. In Ajay Hasia v. Khalid Mujib Sehravardi AIR 1981 SC 487 this Court while approving the tests laid down in Ramana Dayaram Shetty v. International Airport Authority of India [1979] 3 SCC 489 as to when a corporation can be said to be an instrumentality or agency of Government observed as hereunder' : "9. The tests for determining as to when a corporation can be said to be an instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority AIR 1979 SC 1628. These tests are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression 'other authorities', it must be realized that it should not be stretched so far as to bring in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e caution was also administered that the wide enlargement of the meaning must be tempered by wise limitation and mere State control however vast and pervasive is not by itself determinative and the financial contribution by the State is also not conclusive. In VST Industries Ltd. v. VST Industries Workers' Union [2001] 1 SCC 298, this Court was only concerned with the question as to whether, a canteen run in the factory of the company concerned pursuant to an obligation cast under section 46 of the Industrial Disputes Act, 1947, can be said to constitute a person or authority to attract judicial review under article 226 of the Constitution of India in respect of its action/activities and the answer was that the company concerned therein manufacturing and selling cigarettes or running the canteen for the welfare of workmen was not performing any public activity, function or duty so as to render it amenable to article 226. This, in our view, does not in any manner help to support the stand of the appellant before us. 10. Instead of multiplying reference to several authorities of decided cases, it would be useful to advert to a latest decision of this Court rendered by a Constitution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Central Government; (b) they were completely under the control of the Central Government; and (c) they were performing public or statutory duties for the benefit of the public and not for private profit; and concluded that they were in effect acting as the agencies of the Central Government and the service regulations made by them had the force of law, which would be enforced by the court by declaring that the dismissal of an employee of the corporation in violation of the regulations, was void. 33. In Ramana Dayaram Shetty v. International Airport Authority of India, a three-judge Bench of this Court laid down that the corporations created by the Government for setting up and management of public enterprises and carrying out public functions, act as instrumentalities of the Government; they would be subject to the same limitations in the field of constitutional and administrative laws as Government itself, though in the eye of law they would be distinct and independent legal entities. There, this court was enforcing the mandate of article 14 of the Constitution against the respondent-a Central Government Corporation. 34. Managing Director, Uttar Pradesh State Warehousin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Inland Water Transport Corporation Ltd. v. Brojo Nath Ganguly2, C.V. Raman v. Bank of India, 3 Lucknow Development Authority v. M.K. Gupta4 , Star Enterprises v. City & Industrial Development Corporation of Maharashtra Ltd.5 , LIC of India v. Consumer Education & Research Centre6 and G.B. Mahajan v. Jalgaon Municipal Council. We do not propose to burden this judgment by adding to the list and referring to each case separately. 37. We wish to clear the air that the principle, while discharging public functions and duties the Government companies/corporations/societies which are instrumentalities or agencies of the Government, must be subjected to the same limitations in the field of public law-constitutional or administrative law-as the Government itself, does not lead to the inference that they become agents of the Central/State Government for all purposes so as to bind such Government for all their acts, liabilities and obligations under various Central and/or State Acts or under private law." (p. 25) 11. A careful consideration of the principles of law noticed supra and the factual details not only found illustrated from the memorandum as well as articles of association of th ..... 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