Government company is not ‘Government’:
Government is ‘State’ only for purpose of enforcement of fundamental rights under Constitution. For all other purposes, it is not ‘Government’ or ‘Government department’.
In Steel Authority of India v. National Union Water Front Workers 2001 LLR 961 = AIR 2001 SC 3527 = 2001(7) SCC 1 = 2001 AIR SCW 3574 (SC 5 member Constitution Bench), it was held that the principle that while discharging public functions and duties, the Government companies / Corporations/ Societies which are instrumentalities or agencies of the Government must be subjected to the same limitations in the filed of public law constitutional or administrative law – as the Government itself, does not lead to the inference that they become agents of the Centre/State Government for all purposes so as to bind such Government for all their acts, liabilities and obligations under various Central and/or State Acts or under private law.
Government company is not a department of Government. It has separate legal existence and is not a Government concern. It is not an industry run under authority of Union Government – Praga Tools v. C V Imanual (1969) 39 Comp Cas 889 (SC) = (1969) 1 SCC 585 = AIR 1969 SC 1306 * Dr. S L Agarwal v. Hindustan Steel Ltd. AIR 1970 SC 1150 = (1970) 1 SCC 177 (SC Constitution Bench).
A corporation formed under an Act is not ‘Government’. It is an autonomous body. It may sue or be sued by its own name – State of Punjab v. Raja Ram AIR 1981 SC 1694.
Even if all shares of company are owned by Government of India, the company is not a department of Government. It has personality distinct from Government of India. – Steel Authority of India Ltd. v. Shri Ambica Mills Ltd. – 1998(16) SCL 429 = 1997 AIR SCW 4408 = (1998) 1 SCC 465 = 92 Comp Cas 120 (SC) * Bharat Sanchar Nigam Ltd. v. Pawan Kumar Gupta (2016) 1 SCC 363.
In Hindustan Steel Works v. State of Kerala AIR 1997 SC 2275 = (1998) 2 CLJ 383 (SC) also, it was held that a government company is not a department of Government.