Writ maintainability depends on real governmental control, not majority shareholding, where a company performs commercial functions.
A company does not become "State" or "other authority" under articles 12 and 226 merely because a government-controlled body holds a majority shareholding or has nominees on the board. The decisive factors are the company's constitution, real management control, the extent of governmental dominance, and whether its functions are public or governmental in character. Where management remains with the board of directors, there is no pervasive governmental control, and the business is commercial rather than public in nature, the company remains outside articles 12 and 226. On that basis, a writ petition challenging termination of service against such a company is not maintainable.
Issues: Whether Periyar Latex (P.) Ltd. was State or other authority within the meaning of articles 12 and 226 of the Constitution of India, and whether the writ petition challenging termination of service was maintainable.
Analysis: The determination depended on the constitution, functions and actual control of the company. The mere fact that the Rubber Board held more than 50% of the shares and had some nominees on the board was held insufficient. The company's management remained with the board of directors, the Rubber Board was only in a minority, there was no pervasive governmental control, the company was a privately subscribed private company, and its business of production, manufacture and sale of rubber was commercial rather than governmental or public in character. Applying the settled tests for identifying State or authority, the company did not answer that description.
Conclusion: The company was not State or authority for the purposes of articles 12 and 226, and the writ petition was not maintainable.
Final Conclusion: The challenge to the termination could not be pursued in writ jurisdiction against the company, and the petition stood rejected at the threshold.
Ratio Decidendi: A company is not State or authority merely because a government-controlled body holds a majority shareholding or has nominees on the board; decisive factors are real governmental control, public character of functions, and the overall institutional nature of the body.
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