M K PAULOSE Vs. COCHIN REFINERIES LTD

JUDGEMENT

(1.) IN an earlier decision reported in Thomas v. Cochin Refineries Ltd. (1982 2llj-233) (Ker) it was held that the Cochin Refineries Ltd. is not an "instrumentality of the State" within the meaning of Article 12 of the Constitution. These Original Petitions were filed under Article 226 of the Constitution challenging the administrative action of the Cochin Refineries Ltd. The petitioners seek re-consideration of the view taken in Thomas v. Cochin Refineries Ltd. (supra) and they contend that the Cochin Refineries Ltd. is an instrumentality of the State under Article 12 of the Constitution. The Learned Single Judge before whom these petitions came up for consideration was pleased to refer the matter to the Division Bench.

(2.) PETITIONERS in these Original Petitions contend that the view taken by the learned Judge in Thomas' case is not correct in view of the various decisions of the Supreme Court on the point and also due to the subsequent change of ownership of shares of the respondent company.

(3.) THE Cochin Refineries Ltd. is a Company incorporated under the Companies Act. The Company is engaged in refining petroleum products. As far as the shareholding pattern of the Company is concerned, 61. 17% of shares are held by Union Government, 5. 08% by the State of Keraia and some shares are held by the State owned Corporations and other authorities such as L. I. C. Unit Trust etc. and 16. 03% shares are held by public. Formerly, 26% of the shares were held by Philips Petroleum Company of United States of America. The shares held by Philips Petroleum Company were distributed among other share holders and for the time being the shares of the respondent Company are not held by any foreign company. The members of the Board of Directors are appointed by the Government of India and in all policy matters the fi-nal decision is taken by the Government of India i. e. , to secure repayment of borrowings, to undertake works involving capital expenditure exceeding Rupees Fifty lakhs, to invest money in securities, to set apart any part of profits to provide fund to provide pensions, gratuities etc. The Board of Directors can elect one of them as Managing Director. Respondent Company is a Government Company as defined under Section 617 of the Companies Act which says that the Government company means any company in which not less than fifty one percent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by Central Government and partly by one or more State Governments and includes a company which is a subsidiary of a Government company as the case may be.