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of <h1>Periyar Latex (P.) Ltd. Not State Entity: Supreme Court Decision</h1> <h3>TM Devassy, Secretary-Cum-Finance Manager, Periyar Latex (P.) Ltd Versus Managing Director, Periyar Latex (P.) Ltd.</h3> The Supreme Court held that Periyar Latex (P.) Ltd. does not qualify as a State or authority under articles 12 and 226 of the Constitution of India. The ... Government company Issues:1. Whether Periyar Latex (P.) Ltd. is considered a State or authority for the purpose of articles 12 and 226 of the Constitution of India.Analysis:The petitioner, who is the secretary-cum-finance manager of Periyar Latex (P.) Ltd., contested the termination of his service by the company. The main issue revolved around whether the company falls under the definition of State or authority as per articles 12 and 226 of the Constitution of India. The petitioner argued that the Rubber Board, holding more than 50% shares in the company and exerting control, makes the company a State or authority. On the other hand, the respondents contended otherwise, leading to a dispute over the classification of the company.The Supreme Court's precedents were cited to establish the criteria for determining whether a government company or entity qualifies as a State or authority. These criteria include the ownership of the entire share capital by the government, monopoly status conferred by the state, performance of governmental or public functions, substantial financial assistance from the state, and imposition of statutory duties. The judgment emphasized the need to assess the company's constitution, functions, and business nature against these criteria to determine its classification accurately.Upon examining the constitution, functions, and business operations of Periyar Latex (P.) Ltd., the judgment concluded that the company does not meet the criteria to be classified as a State or authority under articles 12 and 226 of the Constitution. The reasons provided included the lack of control by the Rubber Board over the company's affairs, the absence of governmental influence in decision-making processes, and the commercial nature of the company's activities without any significant state or public functions. Additionally, the company's status as a private entity under the Companies Act further supported its classification as a non-state entity.The judgment distinguished the case from precedents involving statutory corporations like the State Bank of India, emphasizing the unique characteristics of Periyar Latex (P.) Ltd. that do not align with statutory corporations. Ultimately, the petition was deemed not maintainable and dismissed based on the analysis of the company's structure, operations, and legal classification under the Constitution of India.
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