Judicial Dictionary - L
Mere performance of governmental functions by an organisation will not automatically convert an organisation into a instrumentality or 'agency' of the Government or a local authority... The preponderant considerations for pronouncing an entity as State agency or instrumentality are (i) financial resources of the State being the chief funding source (ii) functional character being governmental in essence, (iii) plenary control residing in Government, (iv) prior history of the same activity having been carried on by Government and made over to the new body and (v) some element of authority or command… Lifting of veil of incorporation of a company is necessary for determination of facts necessary to conclude whether or not a company incorporated is an instrumentality or agency of the Government or a public authority… The following conditions will determine whether company is an 'instrumentality' or 'agency' of the Government or a 'local authority':
(1) If the entire share capital of the company is held by the Government, it will go a long way towards indicating that the company is an instrumentality or agency of the Government.
(2) Existence of deep and extensive control of the Government.
(3) The true rationale in setting up the company.
(4) The company is fully dependent on the financial assistance of the Government.
(5) The company is not run by its Memorandum of Association and Articles of Association.
(Arif Sultan Vs. DESA, 60 DLR (HCD) (2008) 431)
|Created On||June 15, 2014, 2:48 AM|