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TMI Blog2003 (2) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... ement. 2. The respondent is Maharashtra Industrial and Technical Consultancy Organisation Limited. Unless the respondent falls within the meaning of the State or Agency/instrumentality of the State within the meaning of Article 12 of the Constitution of India, the claim of the petitioner does not deserve to be examined on merits. We shall, therefore, first see whether Maharashtra Industrial and Technical Consultancy Organisation Limited (respondent) is a State or Agency/instrumentality of the State within the meaning of Article 12 of Constitution or not. 3. In this regard, the averment made by the petitioner is that the respon-dent is deemed Government company registered under the Companies Act; it is a joint venture of the Industrial Credit and Investment Corpora-tion of India (ICICI), Industrial Development Bank of India (IDBI), Indus- trial Finance Corporation of India (IFCI) and other Corporations of the Government of Maharashtra and Nationalised Banks and the entire share capital is held amongst themselves. It is on this basis alone that according to the petitioner the respondent is a State or Agency/instrumentality of the State within the meaning of Article 12 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iswas v. Indian Institution of Chemical Biology [2002] 5 SCC 111. We do not intend to burden our judgment by referring to all those judgments since in our view consideration of two recent judgments wherein all these judgments have been considered would bring home the point we want to convey. 6. In Mysore Paper Mills Ltd. s case ( supra ) inter alia the question posed before the Apex Court, whether Mysore Paper Mills which was a company incorporated under the Companies Act, 1956 and was a Government Company as defined in section 617 of the Companies Act was covered within the meaning of the word State as defined in Article 12 of the Constitution of India. In that case, in the judgment of the High Court as noted by the Apex Court the following facts were adverted before its status was held as of State within the meaning of Article 12 : "( a )That the appellant-company is a governmental company as per section 617 of the Companies Act, 1956. ( b )The declared objects of the company viz. 1, 1A, 3, 4, 4A, 5, 5A and 5B established that the company has been entrusted within an important function of public interest closely related to governmental functions and it enjoys ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmission or approval of the Government of Karnataka. The general manager also may be appointed on such terms and remunerations as may be fixed, only subject to the approval of the Government of Karnataka. ( i )For any investment or expenditure above Rs. 25 lakhs the approval of the Government of Karnataka is required. Any revision of pay scales and allowances of employees and officers also have to be done only with the approval of KSBPE. Recruitments to posts carrying pay scales above Rs. 4,700 can only be with the permission of the Government and reservation policies under Article 16(4) of the Constitution are also applicable to recruitments by the company. Deputation to Government and vice versa are also permitted. All foreign tours of officers have to be approved by the Government. ( j )All loans taken by the appellant-company are guaranteed by the Government of Karnataka. ( k )The Company Secretary of the appellant-company has in his communication Annexure GGG declared that the same is an undertaking under the control of the Government of Karnataka." (p. 171) 7. The Apex Court in paragraph 11 of the report observed, The concept of instrumentality or agency of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny viz. Mysore Paper Mills was nothing but an instrumentality or agency of the State and the physical form of the company is merely a cloak or cover for the Government. 9. The seven Judge Bench of the Supreme Court in Pradeep Kumar Biswas was dealing with the question whether the Council for Scientific and Industrial Research (CSIR) is a State within the meaning of Article 12 of the Constitution of India. Paragraph 40 of the majority judgment reads : "40. The picture that ultimately emerges is that the tests formulated in Ajay Hasia are not a rigid set of principles so that if a body falls within any one of them it must, ex hypothesi, be considered to be a State within the meaning of Article 12. The question in each case would be whether in the light of the cumulative facts as established, the body is financially, functionally and administratively dominated by or under the control of the Government. Such control must be particular to the body in question and must be pervasive. If this is found then the body is a State within Article 12. On the other hand, when the control is merely regulatory whether under statute or otherwise, it would not serve to make the body a State." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the payment of the share of royalties arising out of the development of the results of researches to those who are considered as having contributed towards the pursuit of such researches; ( f )the establishment, maintenance and management of laboratories workshops, institutes and organisation to further scientific and industrial research and utilize and exploit for purposes of experiment or otherwise any discovery or invention likely to be of use to Indian industries; ( g )the collection and dissemination or information in regard not only to research but to industrial matters generally; ( h )publication of scientific papers and a journal of industrial research and development; and ( i )any other activities to promote generally the objects of the resolution mentioned in ( a ) above." 11. As regards, "Management and Control" in paragraphs 48 and 49 of the report, the majority judgment noted thus : "48. When the Government of India resolved to set up CSIR on 26-2-1942, it also decided that the Governing Body would consist of the following members : (1)The Honourable Member of the Council of his Excellency the Governor-General in charge of the portfolio of Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, donations or benefactions, royalties, etc., received from the development of the results of industrial research, and miscellaneous receipts. The Council of Scientific and Industrial Research will exercise full powers in regard to the expenditure to be met out of the Industrial Research Fund subject to its observing the bye-laws framed by the Governing Body of the Council, from time to time, with the approval of the Governor-General-in-Council, and to its annual budget being approved by the Governor-General-in-Council." 13. In the light of the review of the judicial opinion as noted in the judgment, the majority view ultimately held that CSIR was a State within the meaning of Article 12 of the Constitution of India. 14. As regards the respondent-company nothing is produced by the petitioner indicating formation of the respondent-company, its objects and functions and management and control which may lead us to hold that respondent-company is a State within the meaning of Article 12. The primary burden was on the petitioner to produce material to establish that the respondent-company was a State within the meaning of Article 12, of the Constitution of India, which he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udit report. 619B. Provisions of section 619 to apply to certain companies. The provisions of section 619 shall apply to a company in which not less than fifty-one per cent of the paid-up share capital is held by one or more of the following or any combination thereof, as if it were a Government company, namely : ( a )the Central Government and one or more Government companies; ( b )any State Government or Governments and one or more Government companies; ( c )the Central Government, one or more State Governments and one or more Government companies; ( d )the Central Government and one or more corporations owned or controlled by the Central Government; ( e )the Central Government, one or more State Government and one or more corporations owned or controlled by the Central Government; ( f )one of more corporations owned or controlled by the Central Government or the State Government; ( g )more than one Government company." 15. What is provided by section 619B is that the provisions of section 619 shall be applicable to a company wherein not less than 51 per cent of the paid up share capital is held by one or more of the combinations provided in clauses ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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