TMI Blog2024 (2) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... strial and Technical Consultancy Organisation Limited and others, the Patna High Court held that the BITCO is an instrumentality of the State, while the Bombay High Court in R.V Dnyansagar v. Maharashtra Industrial and Technical Consultancy Organisation Limited [ 2003 (2) TMI 353 - HIGH COURT OF BOMBAY] has held that the Maharashtra equivalent of the 1st respondent is not an instrumentality of the State. Though the State Government has only 3% share in the 1st respondent, it has a decisive representation in the Board by sending two directors out of twelve. Further, the policy decisions of the 1st respondent are controlled by the SIDBI which nominates 1/3rd of the Directors including the Chairman and the Managing Director. It is clear from a reading of the Articles of Association and the documents produced in the writ petition and in this writ appeal that the State and Central Governments themselves specifically consider the 1st respondent as a Central Government company. It is also discernible that the accounts of the 1st respondent are audited by the Comptroller and Auditor General of India treating it as a deemed Government company. It is recognised as an accredited Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing for the appellants drew our attention to the judgment in K.J. Johnson's case and contended that the shareholding by the State of Kerala and the control exercised by the State were only considered in the said judgment. It is stated that the deep and pervasive control exercised by the State through its instrumentalities on the 1st respondent company was completely lost sight of. It is, therefore, contended that the said finding of the learned Single Judge requires a reconsideration. Though an appeal was taken against the judgment, the Division Bench did not answer the question whether the 1st respondent is State or not but proceeded by assuming that it is State for the purpose of Article 12 of the Constitution of India. 4. It is contended that the 1st respondent is a Public Sector Undertaking/ Government Company, which was established by the Industrial Development Bank of India (IDBI) and the Government of Kerala along with other Public sector banks/financial institutions/statutory corporations. Out of the total shareholding in the 1st respondent company, roughly 49% share are held by the 2nd respondent, which is a statutory corporation established under the Small Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show that the company is listed as a Public Sector Undertaking. Ext. P4 would show that the 1st respondent is listed by the Central Government as a deemed Government Company. The Annual Report of the KITCO is also produced and it is contended that the 1st respondent company is a consultant for the Government and other public sector undertakings and enjoys a monopoly where it participates in tenders for public works as a consultant. Ext. P6 order issued by the Additional Chief Secretary (Finance) is also relied on. Ext. P7 would show that the State Chief Information Commissioner has required the 1st respondent to designate a State Assistant Public Information Officer and the State Public Information Officer as well as an appellate authority under the provisions of the RTI Act reckoning the 1st respondent as a public authority. It is further contended that the Articles of Association of the company, which is produced as Ext. P1 would clearly show that the administrative and financial control of the 1st respondent is with the Board of Directors, who are nominated by the share holder banks with the SIDBI nominated 1/3rd of the Directors, including the Chairman and the Managing Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel appearing for the 1st respondent places reliance on the decisions in Chander Mohan Khanna V. National Council of Educational Research [(1991) 4 SCC 578], Tekraj Vasandi V. Union of India Others [(1988) 1 SCC 236], Pradeep Kumar Biswas V. Indian Institute of Chemical Biology Others [(2002) 5 SCC 111], R.D.Shetty V. International Airport Authority of India Others [(1979)3 SCC 489], Zee Telefilms Ltd, Another V. Union of India Others [(2005) 4 SCC 649], Rajbir Surjbhan Singh v.Chairman IBPS [(2019) 14 SCC 189], Ramakrishna Mission Another Vs. Kago Kunya Others [(2019) 16 SCC 303], Girish. G Another V. State of Kerala and other connected cases [2020 SCC Online Ker 1903], Indian Institute of Management V. Ukakant Srivastava [2001 SCC online Guj 61; (2002) 2471 GLH 330], Shiny George Ambat V. Union of India [2023 (4) KLT 365], Chairman cum-M.D. ITI Limited V.K.Muniswamy Others [ JT 2023 (3) SC 42] R.V. Dnyansagar v. Maharashtra Industrial and Technical Consultancy Organisation Limited [2004 (2) SLR 213] Hardicon Ltd v. Madan lal [2015 SCC online Del 8063] and K.J.Johnson V. Kerala Industrial and Technical Consultancy and others [ILR (Kerala)(1992(1)]. 10. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dnyansagar v. Maharashtra Industrial and Technical Consultancy Organisation Limited has held that the Maharashtra equivalent of the 1st respondent is not an instrumentality of the State. We notice that in R.V Dnyansagar (supra) the Bombay High Court held at Paragraph 14 as follows:- 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 failed to discharge. However, in Asok Kumar Singh and others v. Bihar Industrial and Technical Consultancy Organisation Limited and others, the Patna High Court held that the BITCO can be said to be subsidiary company of the IDBI and would, therefore, also be a Government company within the meaning of Section 617 of the Companies Act. There also, the IDBI had 49.25% of the shares of the BITCO and the Articles of Association had specific pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial Credit and Investment Corporation of India, Kerala State Industrial Development Corporation, Government of Kerala and various nationalised banks. It is governed by the Board of Directors, members of which are to be nominated by the shareholders. Industrial Development Bank of India being the holder of major shares has the right to appoint five directors including the Chairman and the Managing Director. The control of the company is vested with the Board of Directors as per Art. 141 of the Memorandum and Articles of Association of the Company. The object of the respondent company is to serve the needs of small scale and medium scale industries in the State viz., to provide quality consultancy services at reasonable cost. It is run on commercial lines. Expenses are met from the income received for its services. These features sufficiently clearly show that the respondent is not an instrumentality of the State or authority under Art. 12 of the Constitution. 14. Having considered the contentions advanced on either side and having gone through the decisions which have been placed before us, we are unable to agree with the finding in K.J. Johnson that the KITCO is not an inst ..... X X X X Extracts X X X X X X X X Extracts X X X X
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