GSFC,GNFC not state agencies,rules HC

The issue cropped up again in March 2008 when the state government issued a resolution and asked the public sector units to take permission from it before taking any important decision on administrative,financial or corporate affairs. The state authorities also sent a letter to this effect to certain PSUs,including GSFC and GNFC.

Following this,three officers from GNFC and GSFC moved writ petitions in HC,demanding that the two organisations must be considered state agencies and the government’s policies should be made applicable to them in the changed circumstances.

To decide if the HC’s earlier judgment was binding or not to the concerned parties,the issue was referred to a three-judge bench.

During the hearing of these fresh petitions,the state government filed an affidavit,saying has no control over the two companies which have been founded under the Company Act. The state government also stated that it has control over these companies only to the extent of its shareholding and the broad objective of the state can be taken care of by directing its officers posted in such companies to seek prior approval of the government before putting up the matters concerning the interest of the state government before the Board of such companies.

Considering the state government’s affidavit,the three-judge bench confirmed the earlier order of the division bench and held that neither GSFC nor GNFC can be considered as state instrumentality.