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2002 DIGILAW 740 (CAL)

Jogesh Ch. Mondal v. Union of India

2002-12-24

TARUN CHATTERJEE

body2002
JUDGMENT T. Chatterjee, J. 1. The question that needs to be decided in these cases is whether Balmer Lawrie & Co. Ltd. is a 'State' within the meaning of Article 12 of the Constitution of India. This question has been referred by the Hon'ble Chief Justice to me due to difference of opinion between him and Hon'ble Mr. Justice Subhra Kamal Mukherjee. An appeal was preferred by Balmer Lawrie & Co. Ltd. being APO No. 408 of 2001 which was respondent No.1 in the writ application filed under Article 226 of the Constitution. The said writ petition was registered as W. P. No. 778 of 1992. The said appeal was preferred against a judgment and order dated 27th March, 2001 passed by Ashim Kumar Banerjee, J. on which the aforesaid question as noted hereinearlier was also raised by the parties. On the question, whether Balmer Lawrie & Co. Ltd. is a 'State' within the meaning of Article 12 of the Constitution, Ashim Kumar Banerjee, J. felt that this question should be referred to a larger Bench to be constituted by the Hon'ble Chief Justice, as Ashim Kumar Banerjee, J. expressed dissent with the views expressed by Pinaki Ch. Ghosh, J. in another matter. Accordingly the matter was heard by the Hon'ble Chief Justice and the Hon'ble Justice Subhro Kamal Mukherjee. Again there was a difference of opinion between the Hon'ble Chief Justice and Subhro Kamal Mukherjee, J. and accordingly the matter has been referred to me by the Hon'ble Chief Justice for decision. It appears that after hearing a batch of writ petitions including the present one on the point of reference as noted hereinearlier and the said appeal and another appeal in the case of Shri Parthsarthi Sen Roy, the Appellate Court presided over by Hon'ble Mr. Ashok Kumar Mathur, CJ. and the Hon'ble Mr. Justice Subhro Kamal Mukherjee delivered separate judgments wherein the Hon'ble Chief Justice relying on the decisions in the case of Sabhajit Tewari vs. Union of India & Ors., AIR 1975 SC 1329 and in cases of Anupam Ghosh vs. Union of India, 1991 (II) CHN 451 , Chairman, W.D.S.M. Ltd. vs. Goutam Deb, reported in 1991 (1) CHN 465 and Raj Behari Ram vs. Westinghouse Saxby Farmer Ltd., 2000(1) CHN 131 , found that the Constitution Bench decision in the case of Sabhajit Tewari (supra) was identical to the case in hand. The Hon'ble Chief Justice further held that keeping in view the parity between the two companies namely Andrew Yule Company Ltd. and Balmer Lawrie Company Ltd. and further keeping in view the fact that way back in the year 1991 a Division Bench of this Court had taken a decision which was followed by two other Division Benches of this Court and in view of the fact that this case also had fallen in line with the other decisions given by the Division Bench of this Court, the view taken by Pinaki Chandra Ghosh, J. holding that Balmer Lawrie & Co. Ltd. is not a "State" within the meaning of Article 12 of the Constitution was a correct exposition of law, and, accordingly, it was held by the Hon'ble Chief Justice that Balmer Lawrie & Company Ltd. could not be said to be a State within the meaning of Article 12 of the Constitution whereas Subhro Kamal Mukherjee, J. held that Balmer Lawrie & Co. Ltd. must be held to a 'State' within the meaning of Article 12 of the Constitution. According to Subhro Kamal Mukherjee, J. that decision in Sabhajit Tewari vs. Union of India & Ors. (supra) on which the Hon'ble Chief Justice strongly relied upon has been explained by the Supreme Court in a subsequent decision in the name of Ramana Dayaram Shetty and in the decision it was held that the decision in the case of Sabhajit Tewari vs. Union of India & Ors. (supra) did not lay down any-principle or test for the purpose of determining when a corporation could be said to be an 'authority'. It was further held by Subhro Kamal Mukherjee, J. in his Lordship's judgment that if at all any taste could be gleaned from the said decision it was whether the corporation was really an agency of the Government. Subhro Kamal Mukherjee, J. further observed that in that decision it was held that on the facts of that case the corporation was not an agency of the Government and was therefore, not an authority. In view of the aforesaid difference of opinion between two Hon'ble Judges of this Court the matter came up for hearing before me as the third Judge. In view of the aforesaid difference of opinion between two Hon'ble Judges of this Court the matter came up for hearing before me as the third Judge. It is now a settled law by various decisions of the Supreme Court, as well as of this Court that the concept of instrumentality or agency of the Government is not limited to a corporation created by statute but is equally applicable to a company or a society. In a given case it would have to be decided on a consideration of the following relevant factors whether the company or society is an instrumentality or agency of the Government so as to come within the ambit of Article 12 of the Constitution. The factors which need to be considered for the purpose of coming to a positive conclusion whether a particular company or a society or a corporation is an instrumentality or agency of the Government so as to come within the ambit of Article 12 of the Constitution of India, in various decisions of the Supreme Court are as follows: a. Financial Control. b. Business Monopoly. c. Administrative Control. 2. In a very recent decision of the Supreme Court other earlier decisions of the Supreme Court were duly considered. The Supreme Court considered the above aspect of the matter and laid down the principle how a company or a corporation or a society can be brought into the ambit of 'State' under Article 12 of the Constitution. Therefore, let us first consider the factual position in respect of the financial control of the Government in order to come to a proper conclusion whether Balmer Lawrie and Co. Ltd. is a 'State' within the meaning of Article 12 of the Constitution. In the supplementary affidavit of the petitioner which was at page 189 of the paper book which fact was not however denied factually by the Balmer Lawrie and Co. Ltd. was a Government company viz. IBP Ltd. was holding 61.60% of the shares, the financial institutions and banks were holding 22.98% shares and UP State Government was holding .02% which if calculated would come to 84.80%. Let us now consider the supplies of fund to this company. From the records it appears that the company received grant of Rs. Ltd. was a Government company viz. IBP Ltd. was holding 61.60% of the shares, the financial institutions and banks were holding 22.98% shares and UP State Government was holding .02% which if calculated would come to 84.80%. Let us now consider the supplies of fund to this company. From the records it appears that the company received grant of Rs. 72 lakhs (52,29,000) from Oil Industry Development Board during the year for research and development expenditure which was fully utilised and netted of under relevant heads of expenses. Therefore, it is an admitted position that the company has been receiving substantial funds from the Government or from a statutory body governed by the provisions 'of the Oil Industry (Development) Act, 1974. In this connection we also keep in mind the statement of 'objection and reason of the company which inter alia stated that the fund would be exclusively to provide for financial assistance to the organisations engaged in development programmes of the Oil Industry in all its aspects from the exploration for and the production of crude to its refining further down the stream processing distribution, marketing etc, research and development. We have also considered the other documents filed and/or produced before us on behalf of the company from which it appears to us that the board is constituted by various personnel from the Ministry of Petroleum and Chemicals, Finance, Corporations owned or controlled by the Central Government in respect of the activities referred to in clause (k) of section 2 and also other persons having special knowledge or experience of Oil Industry to be appointed by the Central Government. Section 6 deals with the functions of the Board one of which amongst others is to make grants for advancing loans to any Oil Industrial concerned which is engaged in any activity referred to in section 2(k). Section 7 lays down that before rendering any assistance to any Oil Industrial concern the board shall have regard to the directions of the Government and the same is necessary as a matter of priority in the interest of development of Oil Industry. It is of course not in doubt that Balmer Lawrie & Co. Ltd. mainly manufactures and deals in greases and lubricating oils apart from barrels and drums etc. which fall within the definition of 'petroleum product' under section 2(m) of the said Act. It is of course not in doubt that Balmer Lawrie & Co. Ltd. mainly manufactures and deals in greases and lubricating oils apart from barrels and drums etc. which fall within the definition of 'petroleum product' under section 2(m) of the said Act. From the narration of admitted facts as discussed above it cannot be disputed that the funds received by the Balmer Lawrie & Co. Ltd. has been received by it from the Oil Industry Development Board which is admittedly a limb of the Central Government for the research and development of the 'Oil Industry' and not for the company' which is a public fund given admittedly not as a loan but as a grant. 3. In this connection we may also add that in the Conduct, Discipline and Review Rules for officers of Balmer Lawrie & Co. Ltd. the Managing Director of the Company in his address to the colleague dated 31.3.1989 in his capacity as Chairman stated, 'Government directives on the subject have been suitably modified to suit the working conditions of our organisation". 4. So far as business monopoly is concerned it is also evident from the materials produced before us that Balmer Lawrie & Co. Ltd. discharges Governmental functions in the way that the petroleum products are monopoly products whose procurement and distribution are within the direct control of the Petroleum Ministry of the Central Government. So far as the administrative control of the company is concerned, it is an admitted position that the company is Government of India Enterprise, under the administrative control of the Ministry of Petroleum, Chemicals and Fertilisers, Government of India. The Directors appointed by the company are mainly from Government Service. From the annual report of the year 2000-01 it appears that the Chairman was directed by the Ministry of Petroleum to hold additional charge of Managing Director of the company w.e.f. 1st December, 2000 and one Shri Shashi Kumar Sinha was appointed as M.D. as per communication of Ministry of Petroleum. The remuneration of the Directors is determined by the direction of the President of India. The residential accommodation of the Managing Director of the company is also made in terms of the office Memo of Finance Ministry. Conveyance charge of the Managing Director is also in terms of office Memo of Ministry of Finance. The remuneration of the Directors is determined by the direction of the President of India. The residential accommodation of the Managing Director of the company is also made in terms of the office Memo of Finance Ministry. Conveyance charge of the Managing Director is also in terms of office Memo of Ministry of Finance. The communication of Administrative Ministry dated 16th December, 1993 contained in item No.2 in the Explanatory Statement annexed to the notice to the members of company advising the company to amend its Articles to make it obligatory on the part of the company to follow the Presidential directives for employment of physically handicapped persons in the Company. Article 26AA has been amended to enable the Company to comply with directives to be issued by the President of India from time to time. From the records it also appears that Balmer Lawrie and Company is "a company in which the public are substantially interested" as defined under section 2(18) of the IT Act and is, therefore; entitled to be taxed at a lower rate applicable to such companies. By virtue of this provision the Balmer Lawrie Company is holding out to the public at large that they are entitled to be taxed at a lower rate as the public are substantially interested in the said company. The pertinent provision of section 2(18) of the said Act; 1961 which is relevant for our purpose is clause (a) which runs as under: "Section 2(18). A company is said to be a company in which the public are substantially interested- (a) if it is a company owned by the Government or the Reserve Bank of India or in which not less than forty per cent of the shares are held (whether singly or taken together) by the Government or the Reserve Bank of India or a Corporation owned by the bank". 5. Therefore, undisputedly the company understands and as such held out to the public at large that the company is owned by the Government. Memorandum of Understanding with Ministry of Petroleum and Natural Gas has targets relating to operational efficiency including gross margin, net profit 'to capital employed, turnover, gross export and net foreign exchange earnings etc. 5. Therefore, undisputedly the company understands and as such held out to the public at large that the company is owned by the Government. Memorandum of Understanding with Ministry of Petroleum and Natural Gas has targets relating to operational efficiency including gross margin, net profit 'to capital employed, turnover, gross export and net foreign exchange earnings etc. IBP and Balmer Lawrie Group of Companies being admittedly an undertaking of the Government of India falling under the jurisdiction of Ministry of Petroleum it has been declared by the Official Language Rules, 1976 that all administrative work of offices of Central Government Undertakings and Bank, etc. should be carried out in Hindi. The company has taken necessary measures to implement Hindi as Official Language in its units. So far as the vigilance of the company is concerned programmes covering preventive surveillance, detection and deterrent punitive action were undertaken in order to implement the action plan formulated by the Government. The company held "Vigilance Awareness Week” at various locations in pursuance of the instructions and guideline of the Central Vigilance Commission. Guidance and advices received from the Parliamentary Committee on the Welfare of SC/ST in January, are being implemented by the management of the Company. Article 26AA of the Articles of Association lays down that the President of India shall be entitled to issue from time to time such directives or instructions as may be considered necessary in regard to the conduct of business and affairs of the company. Article 7A of the Articles of Association lays down that notwithstanding anything contained in these Articles and so long as the company remains a Government Company, the President of India shall subject to the provisions of Article 6 thereof and section. 255 of the Act, be entitled to appoint one or more Directors by whatever named called of the company to hold office for such period and upon such terms and conditions as the President of India may from time to time decide. Section 617 of the Companies Act, 1956 defines a Government Company, which includes a company, which is a subsidiary of a Government Company. The provisions made in section 619 of the Act are made applicable to a company in which not less than 51% of the paid up share capital is held by one or more of the combinations laid down in section 619B of the said Act. The provisions made in section 619 of the Act are made applicable to a company in which not less than 51% of the paid up share capital is held by one or more of the combinations laid down in section 619B of the said Act. Subsection (4) of section 619 leaves no scope for doubt that the provisions of this section apply to1any Government company. In such circumstances, comments are invited by the respondent company from the Comptroller and Auditor General of India on the accounts of the said company under section 619(4) of the Act. 6. Keeping the above facts as stated hereinearlier in mind it was urged by Dr. Pal appearing on behalf of the writ petitioner that it would be seen from the capital structure, financial control, business monopoly, administrative control and deep and pervasive control over the day to day affairs of the company by the Government that the company is "State" or "Other Authorities" within the meaning of Article 12 of the Constitution of India. Dr. Pal submitted on the facts stated hereinbefore it must be held that the company satisfied all the tests and/or criteria laid down by the Hon'ble Supreme Court in its various decisions relating to the point in issue. The decision of the company is completely dependant upon the dictates, controls, commands, and desires of Ministry of Petroleum and Natural Gas, Government of India. The control of the Government of India percolates deeply and pervasively up to the bottom including the service and service conditions of the Directors. In respect of payments relating to the perquisites made to the Directors the guidelines of the Ministry of Finance, Government of India are followed. Thus the respondent company, which is a Government company, is under an obligation to act in consonance with the obligations arising out of the provisions contained in Part III 'of the Constitution while dealing with its employees. The Government of India has penetrated into the control of the respondent company through the other company, namely, M/s. IBP Company Limited. In support of his contention, Dr. Pal relied on the following decisions:- a. AIR 1979 SC 1628 (Ramana Dayaram Shetty vs. International Airport Authority of India & Ors.) b. AIR 1981 SC 212 (Som Prakash Rekhi vs. Union of India & Anr.) c. AIR 1981 SC 487 (Ajay Hasia etc. vs. Khalid Mujib Sehravardi & Ors. etc.). In support of his contention, Dr. Pal relied on the following decisions:- a. AIR 1979 SC 1628 (Ramana Dayaram Shetty vs. International Airport Authority of India & Ors.) b. AIR 1981 SC 212 (Som Prakash Rekhi vs. Union of India & Anr.) c. AIR 1981 SC 487 (Ajay Hasia etc. vs. Khalid Mujib Sehravardi & Ors. etc.). d. AIR 1984 SC 363 (B.S. Minhas vs. Indian Statistical Institute & Ors.) e. AIR 1984 SC 541 (P.K Ramchandra Iyer & Ors. vs. Union of India & Ors. and Dr. Y. P. Gupta vs. Union of India & Ors. with Dr. T.S. Raman vs. Union of India & Ors. and Om Prakash Chaudhuri vs. Union of India & Ors.) f. AIR 1986 SC 1571 (Central Inland Water Transport Corporation Ltd. & Anr. vs. Brojo Nath Ganguly & Anr.) g. AIR 1991 SC 101 (Delhi Transport Corporation vs. D.T.C. Mazdoor Congress & Ors.) h. (1999) 1 SCC 741 (U.P. State Co-operative Land Development Bank Ltd. vs. Chandra Bhan Dubey & Ors.). i. (2001) 2 SCC 135 (Distt. Manager, APSRTC, Vijayawada vs. K. Sivaji & Ors.) j. (2001) 7 SCC 1 (Steel Authority of India Ltd. & Ors. vs. National Union Waterfront Workers & Ors.) k. (2002) 5 SCC 111 (Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology & Ors.). 7. It was urged by Dr. Pal that in any event the Supreme Court held that the term "Authority" used in Article 226, in the context must receive a liberal meaning unlike the term in Article 12 of the Constitution. According to Dr. Pal, Article 12 is relevant only for the purpose of enforcement of fundamental rights under Article 226 which confers power on High Courts to issue writs for enforcement of fundamental rights as well as non-fundamental rights the words "any person or authority" used in Article 226 are therefore, not to be confined only to Statutory Authorities and instrumentalities of State that may cover any other person or body performing public duty. Dr. Pal has submitted that the form of the body concerned is not very much relevant what is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. Dr. Pal has submitted that the form of the body concerned is not very much relevant what is relevant is the nature of the duty imposed on the body. The duty must be judged in the light of positive obligation owed by the person or authority to the affected party. No matter by what means the duty is imposed if a positive obligation exists and the mandamus cannot be denied. Dr. Pal also in this connection submitted before us that technicalities should not come in the way of granting that relief under Article 226 of the Constitution of India. In support of his contentions reliance was placed on the decisions reported in AIR 1989 SC 1607 , Anadi Mukta Sadgura S.M.V.S.J.M.S. Trust vs. V.R. Rudani and in the case of U. Krishnan, J.P. vs. State of A.P., (1993) 1 SCC 645 . In U. Krishnan's case of the Supreme Court in was held that public funds which are given as grant and not as loan carry the public character wherever they go. Public funds cannot be donated for private purpose. According to Dr. Pal the element of public character necessarily means a fair conduct in all respects consistent with the constitutional mandate of Articles 14 and 15. From the judgment of the Hon'ble Chief Justice it is evident that His Lordship relied heavily on the decision of the Andrew Yule Company Ltd. in the present case. In our view in view of the various decisions of the Supreme Court and considering the recent Full Bench decision of the Supreme Court wherein the concept of "State" under Article 12 of the Constitution has been expanded the judgments cited on behalf of the company including the decision of the Division Bench decision of this Court in the case of Anupam Ghosh vs. Andrew Yule & Co. Ltd., reported in 1991 (II) CHN 451 . From the judgment of the Hon'ble Chief Justice and from the judgment of Andrew Yule & Co. Ltd. it is also evident that the following points were considered and on the basis of such points it was held that Andrew Yule & Co. Ltd. was not a "State" under Article 12 of the Constitution which are as under:- (i) The company did not receive any grant-in-aid or subsidy at least in the Seventh Plan period from the Central Government. Ltd. was not a "State" under Article 12 of the Constitution which are as under:- (i) The company did not receive any grant-in-aid or subsidy at least in the Seventh Plan period from the Central Government. (ii) The company also functions as a holding company of a large number of tea growing and manufacturing companies. (iii) There are number of competitors in the market and the company does not enjoy any privilege of monopoly in its trading activity. (iv) The company also does not get any preferential treatment in the matter of contract or orders from the Government. (v) The company generates its own funds from financial corporations, whatever money has come from the Central Government, has been credited to the company's account as loan repayable with interest. (vi) In the matter of policy and management, the company is wholly independent. (vii) The whole time Directors are appointed by the President of India, who holds 86.31% ordinary shares. (viii) Its account is liable to audit and scrutiny by the Comptroller and Auditor General of India as provided in the Companies Act, 1956. (ix) There is no other control by the Central Government. (x) In regard to the functioning of the company, it is neither of public importance nor closely related to Government functions. (xi) The entire share capital of the company is not held by the Government. (xii) The management of the company rests with the Board of Directors and the decisions are also of the Board and not by the Government. (xiii) No department of the Government has been transferred to the company. (xiv) The company is a trading company like similar other companies in the field and its functions cannot be termed to be the functions of public importance and of nature closely related to the Governmental functions. 8. So far as Balmer Lawrie Company is concerned the points of difference are as follows:- a) The 1st issue, Balmer Lawrie has been receiving grant-in-aid from the Oil Industry Development Board by way of funds and not as loan. b) The 3rd issue, Balmer Lawrie does not enjoy a privilege of monopoly in its trading activity as the company is discharging Governmental functions in the way that the petroleum products are monopoly products whose procurement and distribution are within the direct control of the Petroleum Ministry of the Central Government. b) The 3rd issue, Balmer Lawrie does not enjoy a privilege of monopoly in its trading activity as the company is discharging Governmental functions in the way that the petroleum products are monopoly products whose procurement and distribution are within the direct control of the Petroleum Ministry of the Central Government. c) The 4th issue, Balmer Lawrie does get preferential treatment in the matter of contract or orders from the Government relating to greases, lubricating oil, etc. d) The 5th issue, Balmer Lawrie has been receiving funds from the Oil Industry Development Board-it cannot be stated that the Company solely generates its own funds. e) The 6th issue, in the matter of policy and management the company is controlled by the Central Government through the Administrative Ministry and also by the Finance Ministry. f) The 7th issue, not only the whole time Directors but also the Additional Directors' appointment are subject to the approval of the Administrative Ministry or as per Presidential directives. g) The 9th issue, there are other controls by the Central Government relating to appointment of Additional Directors, remuneration of the Directors is determined by Presidential directives, residential accommodation of the Managing Director, conveyance of the Managing Director, alterations of the Articles of Association, vigilance, welfare of weaker section etc. are as per the directives of the Administrative Ministry or Finance Ministry. h) The 10th issue, relating to the functioning of the company it is of public importance inasmuch as admittedly the company in which the public are substantially interested. i) The 11th issue, the major portion of the share of the company was held by the IBP-majority of whose shares were held by the President of India till recently. Presently the company is under Balmer Lawrie Investment Ltd. Majority of whose shares are held by the President of India viz. 49,940 and further 30 shares are held by the Deputy Secretary & Under Secretary, Ministry of Disinvestment and Joint Advisor, Ministry of Petroleum and Natural Gas Co. 10 shares each. j) The 12th issue, the management of the company does not solely rest with the Board of Directors and the decisions of the Board are either as per Presidential directives or Administrative Ministry or Finance Ministry. 10 shares each. j) The 12th issue, the management of the company does not solely rest with the Board of Directors and the decisions of the Board are either as per Presidential directives or Administrative Ministry or Finance Ministry. k) The 14th issue, the company though being a trading company its functions are of public importance as admittedly the public are substantially interested therein and the nature of the functions of the company are closely related to Governmental functions amongst others, it relates to development of Oil Industry as it is an oil industrial concern. 9. Before we proceed further we may take into consideration the decision of Justice G.N. Ray as His Lordship then was in which it was held that the Andrew Yule and Company Ltd. is not 'State' within the meaning of Article 12 of the Constitution had referred the following decisions: 1. Praga Tools Corporation vs. C.A. Imanul & Ors., reported in AIR 1969 SC 1306 . 2. Heavy Engineering Mazdoor Union vs. State of Bihar, reported in AIR 1970 SC 82 . 3. Sabhajit Tewari vs. Union of India, reported in AIR 1975 SC 1329 . 4. Tekraj Vasandi vs. Union of India & Ors., reported in AIR 1988 SC 469 . (Emphasis supplied). 10. In this connection we may also quote paragraph 8 of the judgment of Justice G.N. Ray in the aforesaid decision which runs as follows: "If the company is a non-statutory body but incorporated under the Companies Act there is neither any statutory nor a public duty imposed on it by a statute in respect of which enforcement could be sought for by means of a mandamus. The learned Judge observes that similar view has been taken in Heavy Engineering Mazdoor Union vs. State of Bihar. reported in AIR 1970 SC 82 . Praga Tools Corporation vs. Shri Engineering Mazdoor Union's case have been approved by the Constitution Bench in Sabhajit Tewari vs. Union of India, reported in AIR 1975 SC 1329 . The decision in the aforesaid cases has also been approved in the case of Tekrai Vasandi vs. Union of India & Ors. reported in AIR 1988 SC 469 ." (Emphasis Supplied). 11. In view of our discussions made hereinabove of the aforesaid decisions on which the Division Bench relied on are now to be considered as overruled by the Supreme Court. reported in AIR 1988 SC 469 ." (Emphasis Supplied). 11. In view of our discussions made hereinabove of the aforesaid decisions on which the Division Bench relied on are now to be considered as overruled by the Supreme Court. Hence the decision in the case of Andrew Yule Company Ltd. cannot be regarded as good law even latest judgment of the Constitution Bench in the case of Pradip Kumar Biswas & Ors. vs. Indian Institute of Chemical Biology & Ors., 2002(3) Supreme 293 , have categorically disapproved all the aforesaid decisions at its paragraphs 19, 20, 36 and 37. That being the position the decision in the Andrew Yule Company Ltd. is no longer good law. As noted hereinearlier the ratio in the case of Anupam Ghosh cannot also be applied in the instant case as Balmer Lawrie and Company Ltd. is admittedly a member of IBP Company Ltd. and IBP Company Ltd. has already been held to be a state within the meaning of Article 12 of the Constitution. So far as Balmer Lawrie Company Ltd., I also emphasise that the President of India is empowered to issue not only directives but also to appoint one or more Directors of the company and at the same time the company is under the administrative control of Ministry of Petroleum, Government of India. Therefore, in view of the aforesaid distinguishing features of Balmer Lawrie and Andrew Yule Company Ltd. the reliance on the decision of the Andrew Yule Company Ltd. by the Hon'ble Chief Justice was misplaced. Any reliance on the said decision would tend to narrow down the scope of "State" within the meaning of Article 12 of the Constitution of India. So far as the question whether Andrew Yule Company is a "State" within the meaning of Article 12 of the Constitution of India is concerned the Supreme Court in Civil Appeal No. 976 of 1991 had the occasion to deal with this question. However, from the said judgment of the Supreme Court it appears that the Supreme Court was pleased not to decide the same and left the matter open for future decision. However, from the said judgment of the Supreme Court it appears that the Supreme Court was pleased not to decide the same and left the matter open for future decision. In any view of the matter, in view of the very recent seven Judges decision of the Supreme Court in the case of Pradeep Kumar Biswas wherein the decisions of Sabhajit Tewari & Chandra Mohan Khanna which were practically disapproved by the Hon'ble Supreme Court and the decision of the Andrew Yule Company which was rendered on the basis of amongst others, the said two decisions cannot also be good law any more. From the judgment of the Hon'ble Chief Justice it appears to us that all the previous decisions either of this Court or of the Supreme Court were duly considered and finally the Hon'ble Chief Justice relied heavily on a decision of the Division Bench of this Court in the case of Anupam Ghosh vs. Union of India & Ors., 1991 (2) CHN 451 . From the Division Bench judgment of this Court it was noted that the Memorandum and Articles of Association of Andrew Yule & Company Ltd. indicated that Andrew Yule & Co. Ltd. was not a "State" within the meaning of Article 12 of the Constitution. The learned Counsel for the Company emphasised that the aforesaid. Division Bench decision of this Court was almost identical as that of the present case. Relying heavily on the aforesaid Division Bench decision of this Court the learned lawyer argued before the Hon'ble Chief Justice that the Memorandum and Articles of Association of Andrew Yule and Company Ltd. and compared it with the Memorandum of Articles of Association of Balmer Lawrie & Co. Ltd. would conclusively prove that Andrew Yule & Co. Ltd. and Balmer Lawrie & Co. Ltd. cannot be held to be a "State" within the meaning of Article 12 of the Constitution. In order to show that Andrew Yule & Co. Ltd. and Balmer Lawrie & Co. Ltd. are of same nature, the Hon'ble Chief Justice has noted certain admitted facts of the two companies and finally came to a conclusion that Balmer Lawrie & Co. Ltd. is not a "State" within the meaning of Article 12 of the Constitution. In order to show that Andrew Yule & Co. Ltd. and Balmer Lawrie & Co. Ltd. are of same nature, the Hon'ble Chief Justice has noted certain admitted facts of the two companies and finally came to a conclusion that Balmer Lawrie & Co. Ltd. is not a "State" within the meaning of Article 12 of the Constitution. While coming to this conclusion the Hon'ble Chief Justice also noted that the following decision of Chandra Mohan Khanna vs. NCERT, AIR 1992 SC 76 , the Supreme Court held that it is not a "State" within the meaning of Article 12 of the Constitution. The Hon'ble Chief Justice in his Lordships judgment after reviewing the objects of the company for which it was established came to a conclusion that they were in the nature of a trading company, which any trading company can undertake. According to the Hon'ble Chief Justice. there is no special activity in the Balmer Lawrie & Co. Ltd. except that produces grease and lubricants for the core petroleum sector. The Hon'ble Chief Justice further held that for the purpose of holding the particular company a "State" within the meaning of Article 12 of the Constitution the decisive factor was incorporation and the activities undertaken by it. According to the Hon'ble Chief Justice, if the company is purely a monopolistic company like defence industry or the likes of Oil & Natural Gas Commission, Life Insurance Corporation. Food Corporation of India, etc, then it is a "state" within the meaning of Article 12 of the Constitution. Relying in the case of Som Prakash Rekhi vs. Union of India (supra) and Sabhajit Tewari vs. Union of India (supra) it was held by the Hon'ble Chief Justice that Balmer Lawrie and Company Ltd. was at par with Andrew Yule and Company Ltd. and, therefore, a "State" within the meaning of Article 12 of the Constitution. After reviewing the decisions of the Supreme Court as well as of this Court and particularly relying on a Division Bench decision of this Court, which was delivered way back in 1991 and the same was followed by two other Division Benches of this Court in the cases of Chairman, WDSM Ltd. vs. Goutam Deb (supra) and Raj Behan Ram vs. Westinghouse Saxby Farmer Ltd. (supra). The Hon'ble Chief Justice was of the view that Balmer Lawrie & Co. The Hon'ble Chief Justice was of the view that Balmer Lawrie & Co. Ltd. must be held to be a "State" within the meaning of Article 12 of the Constitution. Therefore, from the above discussion it appears to us that the judgment of the Hon'ble Chief Justice was practically delivered relying on a Division Bench judgment of this Court in the case of Anupam Ghosh vs. Union of India (supra). In our view the decision of Anupam Ghosh vs. Union of India (supra) at this stage cannot be relied on in view of the subsequent decision of the Supreme Court where Sabhajit Tewari vs. Union of India (supra) was practically found to be not good law. It also appears that Andrew Yule's decision was practically based on the decision of the Supreme Court in the case of Sabhajit Tewari vs. Union of India (supra). In the case of Pradeep Kumar Biswas & Ors. vs. Indian Institute of Chemical Biology & Ors., 2002(3) Supreme 293 , a Constitutional Bench of the Supreme Court, while dealing with Sabhajit Tewari's case, in paragraph 60 at page 309 observed as follows:- "60. From whichever perspective the facts are considered there can be no doubt that the conclusion reached in Sabhajit Tewari was erroneous. If the decision of Sabhajit Tewari had sought to lay down as a legal principal that the society registered under the Societies Act or a company incorporated under the Companies Act is, by that reason alone, excluded from the concept of state under Article 12, it is a principle which has long since been discredited Judges have made worthy, if shamefaced, efforts, while giving lip service to the rule, to riddle it with exceptions and by distinctions reduce it to a shadow." 12. In paragraph 61 of the said decision namely Pradeep Kumar Biswas (supra) the Supreme Court also observed as follows:- Had the facts been closely scrutinised in the proper perspective, it could have led and can only lead to the conclusion that CSIR is a State within the meaning of Article 12 of the Constitution. Although the Supreme Court also in that decision while considering the fact that Sabhajit Tewari was controlling the field for 25 years even then it was held that it was the duty to say that the Sabhajit Tewari's decision was erroneously made and cannot allow to continue the mistake made by the Supreme Court. Although the Supreme Court also in that decision while considering the fact that Sabhajit Tewari was controlling the field for 25 years even then it was held that it was the duty to say that the Sabhajit Tewari's decision was erroneously made and cannot allow to continue the mistake made by the Supreme Court. In fact paragraph 67, the majority views of the Supreme Court observed as follows:- "Sabhajit Tewari's decision must be and is in the circumstances overruled." 13. Therefore, it can now be said to be an admitted position that the Sabhajit's case was overruled by the Supreme Court in the case of Pradeep Kumar Biswas's case and that being the position, and in view of the admitted fact that Sabhajit Tewari's (supra) case was relied on in Anupam Ghosh's (supra) case it must be held that the decision rendered in Anupam Ghosh's (supra) cannot be said to be a good law. 14. In any view of the matter, in view of the recent decision of the Supreme Court as referred to hereinabove wherein the concept of "State" under Article 12 of the Constitution has been expanded, the judgment cited on behalf of the company including the decision of the Division Bench of this Court in the case of Anupam Ghosh vs. Andrew Yule & Co. Ltd., 1991(2) CHN 451 , in my view, cannot be of any help to the company. If we read the Constitutional Bench judgment of the Supreme Court in the case of Pradeep Kumar Biswas (supra) and after considering the principles laid down by it which had followed and/or accepted certain principles of law rendered by earlier decisions of the Supreme Court and after applying the said principles and the facts stated hereinabove there cannot be any doubt that the Balmer Lawrie and Company Ltd. is a State within the meaning of Article 12 of the Constitution. Mr. ............... appearing on behalf of the Balmer Lawrie & Co. Ltd. with Mr. Partha Sarathi Sengupta while submitted that Balmer Lawrie & Co. Ltd. is not a "State" within the meaning of Article 12 of the Constitution however accepted that the salient points and principles to be applied in a particular case which are as follows:- a) Origin of Company b) Nature of Business c) Monopoly Business d) Financial aid e) Deep and pervasive control of Government. 15. Ltd. is not a "State" within the meaning of Article 12 of the Constitution however accepted that the salient points and principles to be applied in a particular case which are as follows:- a) Origin of Company b) Nature of Business c) Monopoly Business d) Financial aid e) Deep and pervasive control of Government. 15. Origin of Company It is true that Balmer Lawrie and Company was first formed as a partnership firm. Thereafter, it was converted into a private limited company in the year 1924 and thereafter a public limited company. But that does not mean that the said company cannot be said to be a "State" only because it is a public limited company. Law is well settled that even a society or a public limited company can be said to be a "State" within the meaning of Article 12 of the Constitution if certain broad salient points are existing in the case of a particular company. So far as share holding of the company is concerned it is an admitted position that the company is a Government company and majority of the shares of the company are held by IBP Ltd. which is a Government of India Undertaking. The nature of business of Balmer Lawrie and Co. Ltd. is that it carries on business of manufacture of barrels, grease, marine, freight container, tea export, air cargo, LPG cylinder. According to Mr. Mallick the company is only involved in trading business and therefore the business transacted by the company is hardly of a public nature. We have already discussed this aspect of the matter in this judgment hereinearlier in which we have clearly held' on consideration of facts and materials on record that although the company is involved in trading business but nature of business was of public nature. Since we have already held that the business of the company is of public nature, we are unable to accept the contention of Mr. Mallick that the company being involved in trading business only the company cannot be said to be a "State" within the meaning of Article 12 of the Constitution. As noted herein earlier, it is now well settled by various decisions of the Supreme Court that an entity being 'state' within the meaning of Article 12 is not precluded from carrying trading activities. As noted herein earlier, it is now well settled by various decisions of the Supreme Court that an entity being 'state' within the meaning of Article 12 is not precluded from carrying trading activities. Article 298 of the Constitution confers powers on the Union and States to carryon any trade or business. Therefore, it is within the executive competence of the State to carry on trade or business under Article 298 together with Article 19(1)(g) of the Constitution. Such being the position it must be held that there is no express embargo upon a 'State' within the meaning of Article 12 of the Constitution of India to carryon trading activities. In Rajasthan State Electricity Board, Jaipur vs. Mohan Lal, AIR 1907 SC 1857, this aspect of the matter was duly considered and in that decision the Supreme Court observed as follows: "It is not at all material that some of the powers conferred may be for the purpose of carrying on commercial activities. Under the Constitution, the State is itself envisaged as having the right to carryon trade or business as mentioned in Article 19(1) (g). In part IV. the State has been given the same meaning as in Article 12 and one of the Directive Principles laid down in Article 46 is that the State shall promote with special care the educational and economic interests of the weaker sections of the people. The State, as defined in Article 12.is thus comprehended to include bodies created for the purpose of promoting the educational and economic interests of the people. The State, as constituted by our Constitution, is further specifically empowered under Article 298 to carryon any trade or business." (Emphasis supplied). 16. In Pradeep Kumar Biswas & Ors. vs. Indian Institute of Chemical Biology & Ors., 2002(3) Supreme 293 , a Constitution Bench of the Supreme Court has approved the ratio laid down in the Rajasthan State Electricity Board, Jaipur vs. Mohan Lal (supra) at paragraph 12 of the judgment. The same view was also expressed by the Supreme Court in the case of Central Inland Water Transport Corporation Limited & Anr. vs. Brojo Nath Ganguly & Anr. and Central Inland Water Transport Corporation Limited & Anr. vs. Tarun Kanti Sengupta & Anr., 1986 (3) SCC 156 , in which the Supreme Court also held that the trading and business activities of the State constitute Public Enterprise. vs. Brojo Nath Ganguly & Anr. and Central Inland Water Transport Corporation Limited & Anr. vs. Tarun Kanti Sengupta & Anr., 1986 (3) SCC 156 , in which the Supreme Court also held that the trading and business activities of the State constitute Public Enterprise. In Workmen of the Food Corporation of India vs. Food Corporation of India, AIR 1985 SC 670 , the Supreme Court held that the Food Corporation of India which was created for the purpose of trading in food grains and other food stuffs is a 'State' within the meaning of Article 12 of the Constitution of India. Hence, in view of the Supreme Court decisions referred to above it has now become clear to me that merely because an authority carries on trading activities, it may not be held that it is not a 'State' within the meaning of Article 12 of the Constitution of India. 17. So far as the other two conditions are concerned viz. Financial Aid and deep and pervasive control of the Government over the company are concerned, we have already" elaborately discussed this aspect of the matter and such discussion has already been elaborately made by Subhro Kamal Mukherjee, J. in his judgment with which I am in full agreement. However, for my satisfaction I feel that deep and pervasive control of the Government of India over the Balmer Lawrie and Company Ltd. has to be explained. Barring facts stated earlier with regard to deep and pervasive control of the Government of India over the Balmer Lawrie and Company Ltd. I am to consider certain other salient factors which would also lead to conclude that the Government of India has deep and pervasive control over the affairs of the company. In the Annual Report of the Ministry of Petroleum and Natural Gas for 2000-01 of the company, the company has been listed as a Public Sector Undertaking in the list of Public Sector Undertakings and other organisations under the administrative control of the Ministry of Petroleum and Natural Gas, Government of India under appendix 2 and page 63 of the said Annual Report for the year 2000-01. G) It is a matter off act, that approximately 85% of the total equity share capital of the Balmer Lawrie & Co. Ltd. is held by Government or Government sponsored Financial Institution and IBP Co. G) It is a matter off act, that approximately 85% of the total equity share capital of the Balmer Lawrie & Co. Ltd. is held by Government or Government sponsored Financial Institution and IBP Co. Ltd. on its own holds 61.8% of the total equity share capital and Life Insurance Corporation holds 7.31%, General Insurance Corporation holds 11.94%, Nationalised Banks .12% shares. All the corporate bodies as stated are State within the meaning of Article 12 of the corporate bodies as stated are connection it is necessary to point out that L.I.C. and G.I.C. have been declared to be State under Article 12 of the Constitution. (Please refer to Annexure "ZI" of the said supplementary affidavit at page 119 of the Paper Book.) H) The company is a member of the IBP Group along with IBP Co. Ltd. and Balmer Lawrie and Company Ltd. (Please refer to paragraph 5 of the affidavit in reply at page 143 of the Paper Book). The company its website being www.balmerlawrie.com has made statement that the company is a prominent member of the IBP-Balmer Lawrie Group of Companies and the group is under the administrative control of the Ministry of Petroleum & Natural Gas, Government of India. A copy of the web page has been submitted before the Hon'ble Court. In the said web page it is stated that the company is managed under the overall guidance of the Ministry of Petroleum & Natural Gas, Govt. of India. The Ministry of Petroleum & Natural Gas, Government of India is the Administrative Ministry. In the Andrew Yule was subject to administration control of the Central Government. I) IBP Co. Limited has been held to be a State within the meaning of Article 12 of the Constitution by the Bombay High Court while deciding a writ petition being W.P. No. 4039 of 1987, Prabhati Das vs. General Manager, IBP Co. Ltd. & Ors. The learned Single Judge decided that the IBP Co. Ltd. is a Government Undertaking falling within the ambit of Article 12 of the Constitution and hence amenable to writ jurisdiction of High Court. The Division Bench of the Bombay High Court affirmed the said judgment by an order dated 16th January, 1997, against order passed by the Division Bench of Bombay High Court Special Leave Petition was preferred by the IBP Co. The Division Bench of the Bombay High Court affirmed the said judgment by an order dated 16th January, 1997, against order passed by the Division Bench of Bombay High Court Special Leave Petition was preferred by the IBP Co. Ltd. The Supreme Court was pleased to dismiss the said Special Leave Petition. (Please refer to Annexure "Q1" of the affidavit-in-reply at page 109 of the Paper Book). This fact is also absent in the Andrew Yule case. J) Moreover, the Vigilance Annual Action Plan of the company is formulated by the Government, which is sought to be implemented with three-pronged strategy, namely preventive surveillance, detection and deterrent punishment. The company has an additional advantage being headed by Senior IPS Officials in the rank of Inspector General of Police on deputation. The company is required to follow the instructions and guidelines of the Central Vigilance Commission. [Please refer to sub-paragraph (d) at page 109 of the Paper Book and also to the Annual Report of the Balmer Lawrie and Company Ltd. for year 2000-2001 at pages 13-14]. K) On 22nd August, 1997 Shri M. Sinha, Deputy Secretary (Finance) in the Ministry of Petroleum and Natural Gas, Government of India was appointed as Additional Director of the company. [Please refer to sub-paragraph (e) of the supplementary affidavit at page 109 of the Paper Book]. L) The respondents company admittedly promoted the use of Hindi in official work in consonance with the Annual Plan Target set by the Government. [Please refer to sub-paragraph (i) of the supplementary affidavit at page 111 of the Paper Book]. Upon perusal of the Annual Report of the Ministry of Petroleum and Natural Gas for the year 2000-2001, it becomes clear that the Ministry is also responsible for the implementation of the Official Language Policy in the various offices of the Public Sector Undertakings under its administrative control. Promotion of Hindi is undertaken by Balmer Lawrie & Co. Ltd. being a State within the meaning Article 12 in discharge of its constitutional obligation under Article 351 of the Constitution of India. (Please refer to Chapter IX at page 58 of the Ministry's Annual Report, as stated above). M) That the respondent company is obliged to submit monthly/half yearly performance report to the Ministry of Petroleum, Government of India (Please refer to the supplementary affidavit at page 112 of the Paper Book). (Please refer to Chapter IX at page 58 of the Ministry's Annual Report, as stated above). M) That the respondent company is obliged to submit monthly/half yearly performance report to the Ministry of Petroleum, Government of India (Please refer to the supplementary affidavit at page 112 of the Paper Book). The Balmer Lawrie and Company Ltd. in its affidavit in opposition (in paragraph 14 at page 132 of the Paper Book) to the supplementary affidavit has admitted the said fact. N) The IBP Co. Ltd. and Balmer Lawrie and Company Ltd. has the common Chairman, as such existence of deep and pervasive control is evident on face of the records. [Please refer to bottom of left hand column of page 14 of the Annual Report of the Company for year 2000-2001]. O) That Balmer Lawrie and Company’s pay structure is in conformity with that of Indian Oil Corporation and IBP as fixed and stipulated by the Bureau of Public Enterprises, Government of India. (Please refer to sub-paragraph (ff) at page 110 of the Paper Book). P) The Ministry of Petroleum and Natural Gas in its Annual Report for year 2000-2001 has made stipulations for reservation for SC, ST, OBC and . Physically Handicapped for the Public Sector Undertakings under its administrative control in accordance with the orders issued from time to time by the Department of Personnel & Training and ensured commitment to the weaker section. Accordingly, the company in its Annual Report for year 2000-2001 has made commitment to the welfare of the weaker section as per Government guidelines at page 13 of the Company's Report. Such reservation policy has been framed to comply with the Constitutional obligation set out in Directive Principles of State Policy in Part IV under Article 16 of the Constitution (see also Article 335 of the Constitution). It has been held by the Supreme Court that an authority which is State within the meaning of Article 12 is under constitutional obligation to act in conformity with the constitutional provisions enshrined in Parts III and IV of the Constitution. Q) Upon perusal of the Annual Report of Balmer Lawrie and Company Ltd., it becomes clear that Government holds 1006.871akhs worth paid up capital. Though the ld. Q) Upon perusal of the Annual Report of Balmer Lawrie and Company Ltd., it becomes clear that Government holds 1006.871akhs worth paid up capital. Though the ld. Counsel for Balmer Lawrie and Company Ltd. has harped on the issue the borrowings are greater than the paid up capital, perhaps he has missed out an important factor that the net worth which is sum total of paid up capital and free reserves and share premium represents the correct financial status of the company is to the tune of Rs. 16710.74 and the net worth per rupee of paid up capital is 10.26. R) That as per the Public Enterprise survey issued by the Government of India for the year 1979-80, submitted by Sri Pranab Dutta, Balmer Lawrie and company features in the list of STATUTORY CORPORATION AND GOVERNMENT COMPANIES UNDER DIRECT CENTRAL GOVERNMENT MANAGEMENT under the Department of Petroleum. 18. In the case of Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology (supra) the Supreme Court considered the above facts for holding whether a particular company is a 'State' within the meaning Article 12 of the Constitution and came to a conclusion that the Indian Institute of Chemical Biology is a 'State' within the meaning of Article 12 of the Constitution of India. For the reason aforesaid and in view of the distinguishing features of Balmer Lawrie and Company Ltd. from others viz. Andrew Yule Company Ltd. and in view of the Constitutional Bench Decision of the Supreme Court in the case of Pradeep Kumar Biswas vs. Indian Institute of Chemical Biology (supra) I have no hesitation in my mind to hold that Balmer Lawrie and Company Ltd. is a 'state' within the meaning of Article 12 of the Constitution of India. 19. Let this matter be placed before the appropriate Bench for decision of the writ petitions on merits. Accordingly the references cases are disposed of. There will be no order as to costs. References cases disposed of with direction.