(Per : HONOURABLE THE CHIEF JUSTICE MR. S.J. MUKHOPADHAYA)

The only question that arises in these cases is whether `Gujarat State Fertilizers and Chemicals Limited' and ` Narmada Valley Fertilizers Company Limited' are `State' within the meaning of Article 12 of the Constitution of I A Division Bench of this Court in Gujarat State Fertilizers Company Ltd. Vs. Association of Officers, G reported in 1995(2) GLH 179 answered the question in negative, and held that Gujarat State Fertilizers Company not a `State' within the meaning of Article 12 and not performing any public duty or function. Learned counsel parties brought to the notice of the Court a Government Circular dated 14th March 2008 bringing the af Companies within the ambit of State Public Sector Undertakings. Therefore, the question has been referred to the Bench to determine whether the Division Bench in Gujarat State Fertilizers Company Ltd. Vs. Associa Officers, G.S.F.C. reported in 1995(2) GLH 179 laid down a correct law or not.

2. For determining the issue, it is relevant to notice certain facts, majority of which were noticed by the Division in the earlier judgment. Gujarat State Fertilizers and Chemicals Limited (hereinafter referred to as `G.S.F.C.' fo was created as a Company under the Companies Act, 1956 (hereinafter referred to as `the Companies Act' for When the earlier case was decided, the Court noticed that as on 16th May 1985, following percentage of shar available with different shareholders:

(i) The Governor of Gujarat 49.2%

(ii) IDBI, LIC and other financial institutions 29.17%

(iii) Nationalised Banks 00.87%

(iv) Indian and Foreign Companies 02.51%

(v) Individual and other Non Residents and Cooperative Banks and Societies 18.44%

3. Subsequently, as on 4th July 1992, the shareholding of the Governor of Gujarat had come down and it was as fo

(i) The Governor of Gujarat 00.23%

(ii) Gujarat State Investment Corporation Ltd. 41.70%

(iii) Gujarat Industrial Investment Corporation 00.10%

(iv) Financial Institutions 38.68%

(v) Banks 00.27%

(vi) Indian and Foreign Companies 01.62%

(vii) Individual and others 19.22%

In terms of numbers, there are approximately 39,000 individual shareholders of the Company. The shares Company are listed in the Bombay Stock Exchange and are regularly quoted, and frequent transactions in shar place. It is in this background, Division Bench in the earlier case Gujarat State Fertilizers Company Ltd. rejected the contention that major portion of the shareholding is controlled by the Government.

4. The Division Bench noticed the test laid down by Supreme Court in R.D. Shetty Vs. The International A Authority of India reported in AIR 1979 SC 1628 and Ajay Hasia Vs. Khalid Mujib reported in AIR 1981 S The following factors were culled out for determination whether the Company (G.S.F.C.) can be said to instrumentality or an agency of the Government:-

(i) If the major share capital of the Company is held by the Government, it would go a long way towards indicat the Company is an instrumentality or an agency of the `State'.

(ii) If the financial assistance of the State Government is so much to meet almost the entire expenditure of the Co it would afford some indication of the Company being impregnated with Governmental character.

(iii) Whether the Company enjoys monopoly status as conferred to the `State' or protected by the `State'.

(iv) Whether deep and pervasive control of the `State' exists over the Company.

(v) If the function of the Company is of public importance and closely related to the Governmental function and

(vi) If one or other Department of the `State' is transferred to the Company. The Division Bench also referred to other decisions of Supreme Court in Somprakash Vs. Union of India rep AIR 1981 SC 212 and Tekraj Vasandi alia, K.L. Basandhi vs. Union of India reported in AIR 1988 SC Tekraj Vasandi alia, K.L. Basandhi (supra) Supreme Court was examining whether Institute of Constitutio Parliamentary Studies registe