Authority: Calcutta High Court (Constitutional Writ Jurisdiction)

Order Date: 19.08.2026

Case Overview

  • Petitioner: Pankaj Kumar Giri (WPA 16269 of 2026) filed a writ petition seeking transfer from his present post in West Bengal to the Tezpur area office in Assam of Respondent No. 2.
  • Respondents: Union of India and others, including Respondent No. 2 – LIC Housing Finance Ltd (LIC(HFL)).
  • Core Issue: Whether LIC(HFL) can be treated as a "State" or an instrumentality of the State under Article 12 of the Constitution, thereby making the writ petition maintainable.
  • Key Facts about LIC(HFL):
  • Board of Directors: 13 members, of which only 3 are nominated by LIC.
  • Shareholding: LIC holds 45.24 % of the issued equity share capital of LIC(HFL).
  • Funding: Raises capital through private placement, public issue, rights issue, preferential issue – no financial dependence on LIC or the Government.
  • Business: Provides housing loans, a commercial activity regulated by the RBI, not a public function.
  • Arguments Presented:
  • Respondent (LIC(HFL)) (advocated by Senior Advocate Sakya Sen) argued that LIC(HFL) is not a State instrumentality because it lacks financial control, monopoly status, and performs only commercial functions.
  • Petitioner (advocated by Mr. Sudip Ghosh) contended that LIC’s 45.24 % shareholding and right to nominate directors amount to deep and pervasive control, rendering LIC(HFL) a State body.
  • Respondents No. 3 & 4 (LIC) highlighted the distinction between an associate (≥20 % shareholding) and a subsidiary (≥50 % control) under the Companies Act, 2013, asserting that LIC’s stake only makes LIC(HFL) an associate.
  • Legal Precedents Cited:
  • Balmer Lawrie & Co. Ltd. v. Partha Sarathi Sen Roy (2013) – control must be deep and pervasive.
  • S. Shobha v. Muthoot Finance Ltd. (2025) – functional test for State instrumentality.
  • Ram Chandra Choudhary v. Roop Nagar Dugdh Utpadak (2026) – regulatory control alone is insufficient.
  • Ajay Hasia v. Khalid Mujib Sehravardi (1981) – six indicia for State instrumentality.
  • Sukhdev Singh v. Bhagatram Sardar Singh Raghuvanshi (1975) – statutory corporations performing public functions may be State bodies.
  • Additional references to R.D. Shetty v. International Airport Authority of India (1979), Pradeep Kumar Biswas v. Indian Institute of Chemical Biology (2002), and others.
  • Court’s Analytical Framework:

1. Financial Assistance – No evidence of LIC providing substantial financial support to LIC(HFL).

2. State Control over Management – LIC can nominate only 3 of 13 directors; does not control board composition or >50 % voting power.

3. Monopoly Status – LIC(HFL) operates in a competitive housing‑loan market, not a State‑conferred monopoly.

4. Public Importance / Function – Business is commercial, serving customers, not a public duty of the State.

5. Arm of Government Test – No statutory provision makes LIC(HFL) an arm of the Government.

  • Statutory Interpretation:
  • Under Section 2(6) of the Companies Act, 2013, an associate company requires ≥20 % shareholding – satisfied.
  • Under Section 2(87), a subsidiary requires control of >50 % voting power or board composition – not satisfied.
  • Hence, LIC(HFL) is at best an associate of LIC, not a subsidiary or a State‑owned entity.
  • Conclusion of the Court:
  • LIC(HFL) does not meet the cumulative constitutional test for being an instrumentality or agency of the State.
  • The “function test” fails; LIC(HFL) is a private commercial entity, not a public authority.
  • Therefore, the writ petition is not maintainable under Article 226.

Final Outcome

  • The writ petition (WPA 16269 of 2026) is dismissed in its entirety.
  • No relief or order regarding the petitioner’s transfer is entertained.
  • An urgent photostat certified copy of the judgment may be obtained by the parties upon compliance with formalities.

Topics: Article 12; State Instrumentality; Housing Finance