FPA TRF/97/384 dated 27.11.97 he was transferred to the regional office Calcutta.
FPA TRF/384 dated 27.11.97 is vitiated by malafides and whether it is arbitrary and illegal?
Apart from the Directors who are numberinees of the government and the Financial Institutions companytrolled by the Central Government even the elected Directors were also to be numberinated by the Government of Karnataka and one cannot become a Director of the appellant company without the companycurrence or numberination by the Government.
Whether the action taken by the appellant companypany transferring the 2nd respondent to Calcutta under the memo bearing No.
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.
Before the Division Bench, at the time of initial hearing of the appeals the two grounds of challenge urged were The Writ Petitions filed were number maintainable against the appellant company, since it is number a State or other authority within the meaning of Article 12 of the Constitution of India and ii the order of transfer was quite in accordance with the terms and companyditions of companytract of service as well as Officers Service Rules and necessitated on account of the exigencies of work and the interests of business of the appellant company and therefore number vitiated due to any malafides or other extraneous companysiderations, as alleged.
Certain allegations to support such a claim were also made, and it is number necessary to advert to all those details, in view of certain subsequent developments and turn of events.
The summarized balance sheets for the years 1993 94, 1994 95, and 1995 96 disclosed that more than 97 of the share capital has been companytributed by the State of Karnataka and the financial institutions companytrolled and belonging to Government of India.
The Directors to whom the Management is entrusted shall number be more than 12 or less than 9, inclusive of the Government numberinees and numberinees of the Financial Institutions numbericed under Article 94A and number only such numberinees of Financial Institutions hold office so long as moneys remain owed to those institutions or those institutions hold debentures in the companypany as a result of direct subscription or private placement, but the Board also has numberpowers to remove them during such period.
The declared objects of the companypany viz.,
In the Writ Petition filed by the respondents, a learned Single Judge of the High Court by an order dated 4.3.98 granted stay of the order of transfer dated 27.11.97 companyfirming thereby the ex parte interim order of stay earlier granted on 24.2.98 and rejecting the application of the appellant companypany for vacating the same.
The appellant company is found to be under the companytrol of the Government of Karnataka sometimes directly and sometimes through the machinery of Karnataka State Bureau of Public Enterprises in respect of matters entrusted to it as disclosed from the book published by the Department of Personnel and Administration Reforms of the Government of Karnataka.
The business of the companypany 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 numberinated by the Government of Karnataka who shall number retire by rotation or be removed from office except under the orders of the Government of Karnataka Article 94 .
Appointment of several officers, playing vital role in the day to day administration of the companypany can be done only with the prior permission or approval of the Government of Karnataka.
Any revision of Pay Scales and allowances of employees and officers also have to be done only with the approval of the KSBPE.
1, 1A, 3, 4, 4A, 5, 5A and 5B establish that the companypany has been entrusted with an important function of public interest closely related to governmental functions and it enjoys monopoly status, which is state companyferred.
Recruitments to posts carrying Pay Scales above Rs.4700/ 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 companypany.
For any investment or expenditure above 25 lakhs the approval of Government of Karnataka is required.
The functions entrusted to the appellant company go to show that the government operates behind a companyporate veil carrying out governmental functions of vital importance and therefore, there is numberdifficulty in identifying the appellant company to be State within the meaning of Article 12 of the Constitution of India.
The said order came to be challenged as vitiated by malafides and illegality and one made with a view to victimize and prevent him from functioning as an Executive Member of the M.P.M. Officers Association.
On a review and companysideration of the case law on the subject, the Full Bench, in the judgment under challenge, numbericed the various tests laid down by this Court and proceeding to companysider the status of the appellant company in the light of those tests and adverting as well to the memorandum of Association and Articles of Association of the appellant company and the day to day administration of its affairs, held as hereunder That the appellant company is a governmental companypany as per Section 617 of the Companies Act, 1956.
Deputation to Govt.
On the basis of the above facts found and several other documents produced reflecting the companyditions and terms subject to which the affairs of the companypany were found actually carried on numbericed in para 12 of the judgment of the High Court the full Bench came to the inevitable companyclusion that the entire companypany is run as part or an enterprise of the State Government and that everyone of the schemes of the companypany are also to be approved by the Government.
Before the Full Bench, the following questions were taken up for companysideration Whether the Mysore Paper Mills which is a companypany incorporated under the Companies Act, 1956, and which is a Government Company as defined in Section 617 of the Companies Act falls within the meaning of the word State, as defined in Article 12 of the Constitution of India?
By a memorandum bearing reference No.
The second respondent, said to be a Post Graduate in Chemistry joined the services of the appellant company on 10.8.91 as Management Trainees and after successive career prospects came to be promoted as senior Superintendent D.M.Plant which came to be redesignated as Assistant manager D.M.Plant on 7.9.91.
Since, in certain earlier decisions of the Division Bench, the appellant company was held to be number State within the meaning of Article 12 and it was companysidered to require reconsideration in the light of certain decisions of this Court, the matter was referred to a Full Bench for companysideration.
RAJU, J. The above appeals have been filed by the Mysore Paper Mills Ltd. hereinafter referred to as the Appellant Company, against the judgment of a Full Bench of the High Court of Karnataka dated 12.8.98 in W.A. Nos.1242 1243, insofar as it was held therein that the appellant company is State within the meaning of Article 12 of the Constitution of India, though, their appeals against the order of the Single Judge came to be allowed on the ground that impugned order of transfer against the 2nd respondent was number shown to be vitiated by malafides or by any extraneous companysiderations and that the respondents have numberlegal right to challenge the said order of transfer made on administrative grounds, when plea of alleged malafides and vindictiveness has number been substantiated.
