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2002 (1) TMI 1207 - SC - Companies LawWhether the Mysore Paper Mills which is a company 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 ? Held that:- Appeal dismissed. The indisputable fact that the appellant-company is a Government company as envisaged in section 617 attracting section 619 of the Companies Act, that more than 97 per cent of the share capital has been contributed by the State Government and the financial institutions controlled and belonging to the Government of India on the security and undertaking of the State Government, that the amendments introduced to the memorandum of association in the year 1994 introducing articles 5A and 5B entrusts the appellant-company with important public duties obligating to undertake, permit, sponsor rural development and for social and economic welfare of the people in rural areas by undertaking programmes to assist and promote activities for the growth of national economy which are akin and related to the public duties of the State, that out of 12 directors 5 are Government and departmental persons, besides other elected directors also are to be with the concurrence and nomination of the Government and the various other form of supervision and control, as enumerated supra, will go to show that the State Government had deep and pervasive control of the appellant-company and its day-to-day administration, and consequently confirm the position that the appellant-company is nothing but an instrumentality and agency of the State Government and the physical form of company is merely a cloak or cover for the Government. Despite best and serious efforts made on behalf of the appellant, the decision under challenge has not been shown to suffer any infirmity whatsoever to call for interference in our hands.
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