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Hindustan v. Union of India - WP.No.34712 of 2005 [2007] RD-TN 1611 (25 April 2007)

IN THE HIGH COURT OF JUDICATURE AT MADRAS



DATED: 25.4.2007

CORAM:

THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA

AND

THE HONOURABLE MR.JUSTICE V.DHANAPALAN

W.P.No.34712 of 2005

and

W.P.M.P.Nos.37626 of 2005 and 18283 of 2006

Hindustan Teleprinters Employees Union

Represented by its General Secretary

Affiliated to C.I.T.U.,

No.24, Lawyer Jaganathan Street,

Guindy, Chennai-600 032. .. Petitioner vs.

1. Union of India,

Represented by its Secretary,

Ministry of Communications,

Department of Telecommunication,

Sanchar Bhavan, 20, Ashoka Road,

New Delhi-110 001.

2. The Secretary,

Ministry of Finance,

Jeevan Deep Building,

Parliament Street,

New Delhi-110 001.

3. Himachal Futuristics Company Limited,

Represented by its Managing Director,

BAH-Nahata,

No.8/21, Sarvapriya Vihar,

New Delhi-110 017.

4. H.T.L. Limited,

(formerly Hindustan Teleprinters Ltd),

Represented by its Chief Operating Officer,

G.S.T. Road, Guindy,

Chennai-600 032.

5. Central Bureau of Investigation,

Rep. by its Director

BLK 3, CGO Complex,

Lodhi Road,

New Delhi-110 003.

6. State Bank of India,

Represented by its Chairman

and Managing Director,

Central Office, N.P.A.Management,

Madam Cama Road,

Mumbai.

7. M/s.Jones Lang La Salle,

Represented by its Managing Director,

Level 2, Temple Tower,

No.672, Anna Salai,

Nandanam, Chennai-600 035.

(Respondents 6 and 7 impleaded as per order

dated 4.1.2007 in M.P.No.3 of 2006 in

W.P.No.34712 of 2005)

.. Respondents Writ Petition filed under Article 226 of the Constitution of India, praying for issuance of a Writ of Declaration, as stated therein. For petitioner : Mr.V.Prakash, Senior Counsel for Mr.S.Vasudevan For respondents 1 & 2 : Mr.V.T.Gopalan, Addl. Solicitor General assisted by Mr.S.Udayakumar, SCCG For respondents 3 & 4 : Mr.P.S.Raman, Senior Counsel for Mr.J.Srinivasa Mohan For respondent-6 : Mr.N.Rajendran ORDER



(The Order of the Court was made by F.M.Ibrahim Kalifulla,J) This is a Public Interest Litigation preferred by the Employees' Union, representing the workmen of the erstwhile fourth respondent, which is now under the management of the third respondent-Company.

2. The prayer of the petitioner is for issuance of a Writ of Declaration to declare the decision of the first respondent of disinvesting its shares in the fourth respondent in favour of the third respondent as illegal and void and consequently direct the first respondent to take appropriate action for re-transfer of 74 of holdings from the third respondent to itself, apart from recovering all funds and damages suffered by the fourth respondent during the period when it was under the management of the third respondent. The petitioner also seeks for a further direction to the fifth respondent-CBI to investigate the transaction of disinvestment for offences and prosecute those responsible for the said transaction.

3. At the outset, it will have to be stated that the disinvestment was ordered as early as on 16.10.2001, while the Writ Petition came to be filed on 25.10.2005, i.e. four years after the disinvestment came to be made. Therefore, in the foremost, the question that arises for consideration is whether this Public Interest Litigation should be rejected at the threshold on the ground of delay and laches. Apart from the said question, considerable submissions were made by the respective counsel on both sides as regards the merits of the case involved in the Writ Petition.

4. Mr.V.Prakash, learned Senior Counsel appearing for the petitioner, in his submissions, fairly admitted that the petitioner does not allege any mala-fides as regards the factum of disinvestment made by the first respondent in favour of the third respondent. In fact, it is not in dispute that the petitioner-Union had full knowledge about the disinvestment, though it is stated that the minute details of such disinvestment were not known to the petitioner-Union. In order to overcome the hurdle of delay and laches, the learned Senior Counsel wanted to place reliance upon the report of the Comptroller and Auditor General of India (hereinafter referred to as "the CAG") to contend that very many details found in the said report really strengthen the allegations of the petitioner and therefore, the petitioner's prayer in the Writ Petition should not be rejected merely on the ground of delay and laches.

5. As far as the merits of the case in attacking the process of disinvestment is concerned, here again, apart from the submissions of the learned Senior Counsel appearing for the petitioner, the averments in the affidavit filed in support of the Writ Petition disclose that the sole allegation is perversity and arbitrariness in applying the valuation methodology, namely 'Discounted Cash Flow' method (hereinafter referred to as "the DCF method"). In fact, in paragraph 13 of the affidavit filed in support of the Writ Petition, it is categorically stated that the petitioner is not questioning the policy of privatisation or even the valuation methodology chosen, namely the DCF method. Apart from the said averments contained in paragraph 13 of the affidavit, the only other averment, where certain allegations are made, are found in paragraph 11 of the affidavit, where the petitioner would only contend that the balance sheet of the fourth respondent-Company as on 31.3.2001 discloses a surplus of more than Rs.125 crores and in the circumstances, the disinvestment made by fixing the value at Rs.55 crores in favour of the third respondent, would amount to undue favouritism shown to the third respondent. The learned Senior Counsel appearing for the petitioner, while making his submissions, therefore contended that the said factor would go to show that there was perversity and arbitrariness in applying the valuation methodology, namely the DCF method, while ordering disinvestment in favour of the third respondent.

6. In support of his submissions, the learned Senior Counsel appearing for the petitioner took us through the report of the CAG, dated 17.8.2006 in-extenso, apart from the account details available in the balance sheet for the year ending 31.3.2001. By referring to the report of the CAG, the learned Senior Counsel wanted to highlight that in respect of the fourth respondent, in the assessment of the CAG verification, the land values of the properties of the fourth respondent were practically under-valued to an extent of more than 50 and such under-valuation of the properties of the fourth respondent would have caused serious impact in arriving at the market value of the fourth respondent even as per the DCF method and when constitutional authority functioning under Article 151 of the Constitution had come forward with such an adverse report in regard to the valuation made about the fourth respondent, it would be in the interest of the public at large to countenance the claim of the petitioner and this Court should grant the declaration as prayed for, apart from ordering for an investigation by the fifth respondent-agency.

7. In support of his submissions relating to the defence of delay and laches, the learned Senior Counsel appearing for the petitioner relied on AIR 1964 SC 1006 (State of Madhya Pradesh vs. Bhailal Bhai), 2000 (10) SCC 664 (Narmada Bachao Andolan vs. Union of India) and 2006 (3) SCC 434 (Bombay Dyeing & Mfg. Co. Ltd.(3) vs. Bombay Environmental Action Group). As regards the financial status of the fourth respondent and the allegation of irregularities, the learned Senior Counsel appearing for the petitioner relied upon the proposition stated on the scope of judicial review as stated in the decisions of the Supreme Court reported in AIR 1996 SC 11 (Tata Cellular vs. Union of India) and AIR 1986 SC 1370 (L.I.C. of India vs. Escorts Ltd).

8. As against the above submissions, Mr.P.S.Raman, learned Senior Counsel appearing for the respondents 3 and 4 would contend that in order to get over the defence of laches, the petitioner should have either explained the reasons which prevented the petitioner for the period of four years from preferring the Writ Petition or at least, disclosed what was the startling information that suddenly provoked the petitioner to come forward with this Writ Petition after a period of four years. The period that looms large in this case is between October 2001 and October 2005. The learned Senior Counsel appearing for the respondents 3 and 4 also pointed out that the petitioner cannot place reliance upon the report of the CAG to cover up the period of laches, inasmuch the said report came into existence long after the filing of the Writ Petition.

9. The learned Senior Counsel appearing for the respondents 3 and 4 also contended that if the only other material relied upon by the petitioner was the balance sheet, there was absolutely no justification for the petitioner to have remained silent for the whole period of four years. The learned Senior Counsel appearing for the respondents 3 and 4 therefore contended that without anything more, the Writ Petition is liable to be dismissed on the ground of laches.

10. The learned Senior Counsel appearing for the respondents 3 and 4 then contended that as far as the disinvestment was concerned, nothing was done secretly and there is no allegation of any mala-fides or fraud in the manner in which the process was either mooted or finalised, that in applying the methodology of DCF, when the process had no nexus to singular issue of land valuation and when the DCF method was properly worked out, there could be no scope for finding fault with the ultimate decision in finalising the disinvestment and ordering the same in favour of the third respondent. The learned Senior Counsel pointed out that the contention of the petitioner based on the under-valuation of the landed properties of the fourth respondent, may have some relevance vis-a-vis the methodology of asset valuation process, while it has absolutely no relevance to the DCF method. It was also contended that as regards the other contention of the learned Senior Counsel appearing for the petitioner based on the surplus funds as disclosed in the balance sheet, here again, according to the learned Senior Counsel appearing for the third and fourth respondents, that will have relevance if the balance sheet methodology is applied and can have no relevance to the DCF method. The learned Senior Counsel appearing for the respondents 3 and 4 lastly contended that there is absolutely total lack of pleadings in order to allege any mal-practice or perversity or arbitrariness in the process of disinvestment made by the first respondent in favour of the third respondent and therefore, no interference is called for.

11. Mr.V.T.Gopalan, learned Additional Solicitor General appearing for the respondents 1 and 2, at the outset, contended that the very Writ Petition seeking for declaration cannot lie, inasmuch as a declaratory relief in a Writ Petition can only be in regard to the illegality or vires of any statutory provision or rules or regulations and not for the relief as prayed for in this Writ Petition. According to the learned Additional Solicitor General, the prayer of the petitioner is in the nature of a suit for declaration, which cannot be made in a Writ jurisdiction. The learned Additional Solicitor General contended that the claim of the petitioner based on the affidavit averments as well as the submissions, was very narrow in its scope, namely to the extent stated in paragraphs 11 and 13 of the affidavit filed in support of the Writ Petition and that when the grievances of the employees represented by the petitioner-Union were fully taken care of by entering into an agreement even at the time of disinvestment, the petitioner has absolutely no locus to prefer this Writ Petition.

12. The learned Additional Solicitor General by drawing our attention to the tests laid down in Balco Employees' Union (Regd.) vs. Union of India (2002 (2) SCC 333), contended that the case of the petitioner does not come within any of the tests laid down therein. On the other hand, the tests laid down therein were fully taken care of while making the disinvestment of the fourth respondent in favour of the third respondent herein. The learned Additional Solicitor General also contended that when admittedly the petitioner has not chosen to challenge the very act of privatisation and when there is no specific ground of attack as regards the DCF method applied in the case of the fourth respondent and when no discrepancies were pointed out in applying the said methodology, the Writ Petition does not merit any consideration. According to the learned Additional Solicitor General, while on the one hand, the petitioner faintly stated that in applying the DCF method, there were perversity and arbitrariness, there being no specific allegation in support of such contention, the averments contained in paragraph 11 of the affidavit filed in support of the Writ Petition, are only based on certain account details found in the balance sheet, which methodology is totally different from the methodology relating to DCF.

13. It was also contended by the learned Additional Solicitor General that there is total lack of bona-fides on the part of the petitioner in preferring this Public Interest Litigation and therefore, applying the ratio of the Supreme Court reported in 2003 (7) SCC 546 (Guruvayoor Devaswom Managing Committee vs. C.K.Rajan), 2005 (1) SCC 590 (Dattaraj Nathuji Thaware vs. State of Maharashtra) and 2002 (2) SCC 333 (Balco Employess' Union (Regd.) vs. Union of India), the Writ Petition should be dismissed at the threshold. Reliance was also placed on the decision reported in 2000 (1) SCC 633 (Duncans Industries Ltd. vs. State of U.P.) in support of the submission that the valuation etc., are all questions of fact, to which the Court should be very reluctant to enter upon. Equally, reliance was also placed upon the decision of the Supreme Court reported in 1987 (Supp) SCC 476 (Gupta Sugar Works vs. State of U.P.) to contend that the Court cannot be expected to act as Auditors on the financial aspects of commercial establishments. On the scope of judicial review, reliance was also placed upon 1990 (3) SCC 223 (Shri Sitaram Sugar Co. Ltd. vs. Union of India), a Constitution Bench decision of the Supreme Court, which was consistently followed by the Supreme Court in the subsequent decisions.

14. Having heard learned counsel appearing for the respective parties, at the outset, when we consider the contention of the learned Additional Solicitor General as regards the maintainability of the Writ Petition, while the learned Additional Solicitor General relied upon 1984 (4) SCC 251 (Prabodh Verma vs. State of U.P), which was a converse case where a Writ of Certiorari was prayed for while challenging the statutory provisions and the Supreme Court stated that for such relief, the appropriate prayer would be one for declaration. The Supreme Court went ahead and stated that when parties were not diligent in coming forward with proper pleadings and relief, the Courts should not show extraordinary indulgence for moulding the relief.

15. However, in our view, the said issue was really dealt with by a learned single Judge of this Court in the decision reported in 1983 (I) L.L.J. 181 (Britannia Biscuit Co. Ltd. vs. Asst. Lab. Commr). In the said decision, the learned Judge had to consider the question whether a Writ of Declaration would lie while questioning the validity of a settlement between the employer and employee reached under Section 12(3) of the Industrial Disputes Act, 1947. In that case, the Writ Petition was filed by the Union of Employees and the same was resisted by the Management by contending that the declaratory relief in the form of a constitutional relief, cannot be made in Writ proceedings. In that case, after a detailed consideration of the various decisions, the learned Judge held as under in paragraph 17: "17. If this be the position with regard to Art.32 of the Constitution the same principle will apply all the more to Art.226 of the Constitution under which a writ can be issued not only for the enforcement of any of the rights conferred by Part III but also for any other purpose. Here the question that is raised is whether the conciliation officer has acted in terms of S.12(3) as explained by the Supreme Court in Bata Shoe Company case (Bata Shoe Company (Private) Ltd. vs. Ganguly (1961 (1) L.L.J. 303)(vide supra). In other words, the point for determination is whether the impugned settlement was brought about with the assistance and concurrence of the conciliation officer or whether he merely put his stamp on an agreement entered into by the parties behind his back, and had given it a seal of approval so as to bring it within the scope of S.12(3) and confer it with the legal effect as contemplated under S.18(3) of the Act. In short, the question is whether the conciliation officer has been guilty of a colourable exercise of his power. Viewed in that light, I am of the opinion that the writ petition for a declaration as prayed for is maintainable. I am supported in this respect by two decisions of the Karnataka High Court. The first decision is that of I.T.C. Employees' Association and others v. State of Karnataka and others, (1981-I-L.L.J. 431). ..." While doing so, the learned Judge placed reliance upon the decision of the Supreme Court reported in AIR 1959 SC 725 (K.K.Kochunni vs. State of Madras). The said decision of the learned single Judge reported in 1983 (I) L.L.J. 181, was confirmed by a Division Bench of this Court in the decision reported in 1984 (I) L.L.J. 349 (Brit. Biscuit Employees' Union vs. Asst. Comm. of Labour) and in paragraph 48 of the judgment, the Division Bench has stated as under: "48. As regards the maintainability of the writ petition, we are in complete agreement with the reasoning and finding given by the learned single Judge of this Court and we also hold that the writ petition as such is maintainable on the facts and circumstances of the present case." The Division Bench thus confirmed the legal position stated as regards the maintainability of a Writ of Declaration in respect of the issue other than the one relating to the validity of a statutory provision or any other statutory rule or regulation.

16. Bound as we are by the said decision of the Division Bench of this Court reported in 1984 (I) L.L.J. 349, we hold that a Writ of Declaration as preferred by the Writ Petitioner would legally lie and therefore, the said contention so raised on behalf of the respondents is rejected.

17. As far as the plea relating to the delay and laches is concerned, we are convinced that the petitioner has not satisfactorily explained the delay in preferring this Writ Petition. It is not in dispute that in the course of process of disinvestment as well as at the time when the disinvestment was finalised on 16.10.2001, the petitioner was fully aware of the whole development. In fact, in the common counter affidavit filed by the first and second respondents, in paragraph 7, it is stated that when the process of disinvestment was on the anvil, the petitioner-Union sent a letter dated 23.7.2001 giving certain suggestions and that a meeting was held in the Ministry of Communications with the petitioner-Union as well as other Unions of the fourth respondent. It is also stated therein that the Unions restricted their grievance only as regards the service conditions of their members including the petitioner herein, which was fully taken care of even at that point of time.

18. In such circumstances, it will have to be held that the petitioner must have been fully aware of the disinvestment made as well as the details relating to that. As the petitioner as well as other Unions were mainly concerned with the interest of the workmen and when such interest was duly taken care of, apparently, the petitioner was totally disinterested in the issue relating to the disinvestment. After the disinvestment which took place on 16.10.2001, the members of the petitioner-Union were continuing their services with the fourth respondent, controlled by the third respondent for the past four years, i.e. till the Writ Petition came to be filed in October 2005. At no point of time, in between, the petitioner had raised any issue as regards the manner in which the disinvestment came to be made and has not come forward with any allegation of mala-fides or fraud or any other mal-practice in the process of disinvestment made. Therefore, unless the petitioner comes forward with a satisfactory explanation covering the long period of four years, it will have to be held that the Writ Petition is clearly hit on the ground of laches. Nevertheless, we do not wish to dispose of the Writ Petition on that technical ground. In fact, in the decision of the Supreme Court reported in 2006 (3) SCC 434 (cited supra), while dealing with an identical situation, namely the case of delay and laches, the Supreme Court held in paragraph 341 that delay and laches on the part of the writ petitioners indisputably have a role to play in the matter of grant of reliefs in a writ petition and that where by reason of delay and/or laches on the part of the writ petitioners, the parties altered their positions and/or third-party interests have been created, public interest litigations may be summarily dismissed. The Supreme Court however went on to state that the delay although may not be the sole ground for dismissing a Public Interest Litigation in some cases and thus each case must be considered having regard to the facts and circumstances obtaining therein, the underlying equitable principles cannot be ignored. The Supreme Court in that case dealt with the merits of the contentions raised therein after holding as above on the issue relating to delay and laches.

19. In the case on hand, we find that the allegation of the petitioner was almost on the sole ground, namely the perversity or arbitrariness in applying the DCF method. As stated by us in the earlier paragraph of this order, except stating certain grounds in paragraph 13 of the affidavit filed in support of the Writ Petition, as rightly contended by the learned Additional Solicitor General appearing for respondents 1 and 2 as well as learned Senior Counsel for respondents 3 and 4, there was absolutely no specific allegation of any defect or any other serious mal-practice or fraud or any other infirmity pointed out either in the affidavit or in any other material documents in support of the said allegation. The only other allegation is stated in paragraph 11 of the affidavit filed in support of the Writ Petition. A cumulative content of the averments contained in the said affidavit filed in support of the Writ Petition, is only to the effect that as on 31.3.2001, the balance sheet discloses the availability of the surplus funds to an extent of more than Rs.125 crores, while the disinvestment was ordered for a meagre sum of Rs.55 crores and that, that would amount to virtually gifting away the fourth respondent to the third respondent. While making the said averment in paragraph 11 of the affidavit filed in support of the Writ Petition, the petitioner seems to have completely lost sight of the fact that the disinvestment ordered in favour of the third respondent was based on the DCF method, while whatever allegations found in paragraph 11, may have some application and relevance on the balance sheet method.

20. In the above context, it will be worthwhile to refer to paragraphs 65 to 67 of the decision of the Supreme Court reported in Balco's case (2002 (2) SCC 333). For better appreciation of the contention as well as the stand of the respondents, we feel it appropriate to extract the said paragraphs 65 to 67, which read as under: "65. It is clear from the facts enumerated above that at each stage of disinvestment, public notices were issued in appointing the Global Adviser and then in selecting the strategic partner. The Global Adviser, after inviting quotations, selected a valuer, Shri.P.V.Rao. Simultaneously, with the process of valuation, steps were taken for selecting the strategic partner by calling for expression of interest after advertisements in leading journals and newspapers. Nevertheless contention is sought to be raised that the method of valuation was faulty, some assets were not taken into consideration and that Rs.551.5 crores offered by M/s.Sterlite did not represent the correct value of 51 shares of the Company along with its controlling interest. It is not for this Court to consider whether the price which was fixed by the Evaluation Committee at Rs.551.5 crores was correct or not. What has to be seen in exercise of judicial review of administrative action is to examine whether proper procedure has been followed and whether the reserve price which was fixed is arbitrarily low and on the face of it, unacceptable.

66. Assets including shares can be sold in a number of ways i.e. they can be sold by public auction, tenders or sealed offers or by negotiations. The exercise which was undertaken to appoint valuers and to get a value of this controlling interest of 51 of the shares was presumably to arrive at the reserve price. What the assets will fetch, is ultimately reflected in the offer which is received. Despite global advertisement, initially only eight companies submitted their expression of interest. The IMG, consisting of high officials rejected the bids of two of the eight parties and ultimately only three viz. ALCOA/USA, HINDALCO, Sterlite conducted due diligence on BALCO between September and October 2000. After carrying out the necessary inspection (due diligence), it is only two out of three applicants who gave their bid. ALCOA having dropped out, the bid of Sterlite industry was more and double of the bid of HINDALCO. The bidders at the time of furnishing their bids did not know what will be the reserve price which had to be fixed. It is only after the receipt of the bids that the reserve price was made known. The perception in the market, therefore, clearly was that 51% shares of BALCO along with its management was not worth more than Rs.550.5 crores. The only other bidder who had expressed interest was HINDALCO whose bid was only Rs.275 crores. Under the circumstances, when the Government had decided to disinvest in BALCO by accepting a bid far in excess of the reserve price which was fixed by the Evaluation Committee, the said decision cannot, under any circumstances, be faulted. Whether the reserve price should have been 514.4 crores or more appears to be immaterial when the best price which has been offered for the sale of 51% stake in BALCO after global advertisement was only Rs.551.5 crores. There is no suggestion that there was any other company or institution which had or could offer more than the said sum. When proper procedure has been followed, as in this case, and an offer is made of a price more than the reserve price then there is no basis for this Court to conclude that the decision of the Government to accept the offer of Sterlite is in any way vitiated.

67. It was contended by the learned Advocate General that the whole process lacked transparency. We are not able to appreciate this contention. The disinvestment of BALCO commenced with the recommendation by the Disinvestment Committee in its second Report suggesting that the Government may disinvest BALCO. It is by global advertisement that the Global Adviser and the strategic partner were chosen. At every stage, the matter was looked into by the IMG and ultimately by the Cabinet Committee on Disinvestment. The system which was evolved was completely transparent. It was made known. Transparency does not mean the conducting of the Government business while sitting on the cross roads in public. Transparency would require that the manner in which decision is taken is made known. Persons who are to decide are not arbitrarily selected or appointed. Here we have the selection of the Global Adviser and the strategic partner through the process of issuance of global advertisement. It is the Global Adviser who selected the valuer who was already on the list of valuers maintained by the Government. Whatever material was received was examined by high-Power Committee known as the IMG and the ultimate decision was taken by the Cabinet Committee on Disinvestment. To say that there has been lack of transparency, under these circumstances, is uncharitable and without any basis."

21. A reading of paragraph 16 of the common counter affidavit filed by respondents 1 and 2 discloses that the first respondent was initially interested in the disinvestment of only 50 of the equity of the fourth respondent and it made an advertisement in the journals, apart from feeding the same into the DoT website. Since the response was not as expected, the first respondent decided to enhance the offer from 50% to 74% on 26.5.2000 and once again made a wide publication both in the local journals and in the journals published in the international level.

22. A reading of the averments contained in paragraphs 17, 18 and 19 of the common counter affidavit filed by the respondents 1 and 2 discloses that as many as six bidders responded to present their credentials before the Inter Ministerial Group (I.M.G) formed for that purpose and submitted their fees in a sealed cover. Thereafter, only five bidders stated to have made their presentation before the I.M.G. The members of the I.M.G. evaluated the performance of all the five bidders individually and based on the average marks scored by the five bidders, M/s.KPMG India Limited came to be retained as a Global Adviser for the Cabinet, who was retained when the disinvestment was enhanced from 50 to 74%. Subsequently, asset valuers were appointed for valuation of the assets of the fourth respondent. It is also stated that M/s.KPMG India Limited, as Adviser to the first respondent for the transaction, carried out the valuation of the shares of the fourth respondent through the methods of the DCF, Asset Valuation, Balance Sheet and Comparable Companies. It is on the abovesaid basis, ultimately the Evaluation Committee, based on the recommendations of the Adviser, fixed the reserve price of RS.38.80 crores for 74% of the equity of the fourth respondent and recommended acceptance of the highest bid of Rs.55 crores offered by the third respondent. The Cabinet Committee accorded its approval in its meeting held on 5.10.2001 and thus the process applied by the first respondent in the matter of disinvestment of the fourth respondent, is stated to have undergone a meticulous follow up of the required procedures, as has been set out and elaborately stated in the decision of the Supreme Court relating to BALCO's case (cited supra).

23. It is also relevant to note that having regard to the fact that the first respondent continues to retain 26 of its equity holding in the fourth respondent, the third respondent cannot have 'free-for-all', in the matter of the handling of the assets of the fourth respondent-Company. Sufficient checks and balances appear to have been provided in order to ensure that the public interest in respect of the public sector undertaking, namely the fourth respondent, is fully protected. In fact, the workmen represented by the petitioner-Union seem to have got no grievance at all as regards their service conditions existing in the fourth respondent-Company as on date. Though it is stated that the proceedings are pending before the B.I.F.R., having regard to the finalisation of the sale of certain lands belonging to the fourth respondent, it is stated that whatever the financial deficiencies that exist as on date, are likely to be fully wiped out by resorting to such sale and that the fourth respondent would turn out to be a viable proposition immediately after the sale of the said property.

24. In fact, the process resorting to the disinvestment, has been succinctly set out in the abovesaid paragraphs 65 to 67 of the decision and therefore, when we apply the principles set out therein to the case on hand, we find from the common counter affidavit of the first and second respondents, in particular, paragraphs 16 to 19 of the counter affidavit, we find that the whole process of disinvestment was meticulously carried out strictly adhering to the various stages involved in the said process.

25. As rightly contended by Mr.P.S.Raman, learned Senior Counsel appearing for the respondents 3 and 4, there would have been very little scope for the third respondent to have had anything to do with the valuation process as regards the lands at the stage, when the Global Advisor resorted to the publication calling for bids. In such circumstances, when admittedly the affidavit averments of the Writ Petition make it abundantly clear that the petitioner is not questioning the valuation method, namely the DCF method applied in the process of disinvestment of the fourth respondent and in the absence of any specific allegation of mal-practice, fraud or glaring infirmity in the said methodology adopted in the process of disinvestment, it will be too late in the day for the petitioner in seeking to question the disinvestment at this distant point of time.

26. Having regard to our above conclusions, we are constrained to hold that this Public Interest Litigation does not satisfy the tests laid down by the Supreme Court in the numerous decisions right from the one reported in 2002 (2) SCC 333 (cited supra) to the decisions reported in 2003 (7) SCC 546 (cited supra) and 2005 (1) SCC 590 (cited supra).

27. In fact, in the decision reported in 2003 (7) SCC 546 (cited supra), the Supreme Court has stated the principles evolved in relation to the Public Interest Litigation, which are as under: "(i) The Court in exercise of powers under Article 32 and Article 226 of the Constitution of India can entertain a petition filed by any interested person in the welfare of the people who is in a disadvantaged position and, thus, not in a position to knock the doors of the Court. The Court is constitutionally bound to protect the fundamental rights of such disadvantaged people so as to direct the State to fulfil its constitutional promises. S.P.Gupta v. Union of India, 1981 Supp SCC 87; People's Union for Democratic Rights v. Union of India, (1982) 2 SCC 494 : 1982 SCC (L&S) 262; Bandhua Mukti Morcha v. Union of India, (1984) 3 SCC 161 : 1984 SCC (L&S) 389: (1984) 2 SCR 67; Janata Dal v. H.S.Chowdhary, (1992) 4 SCC 305 : 1993 SCC (Cri) 36, relied on (ii) Issues of public importance, enforcement of fundamental rights of a large number of the public vis-a-vis the constitutional duties and functions of the State, if raised, the Court treats a letter or a telegram as a public interest litigation upon relaxing procedural laws as also the law relating to pleadings. On the administrative side of this Court, certain guidelines have been issued to be followed for entertaining letters/petitions received by this Court as public interest litigation. Charles Sobraj v. Supdt., Central Jail, (1978) 4 SCC 104 : 1978 SCC (Cri) 542; Hussainara Khatoon(I) v. Home Secy. State of Bihar, (1980) 1 SCC 81 : 1980 SCC (Cri) 23, relied on (iii) Whenever injustice is meted out to a large number of people, the Court will not hesitate in stepping in. Articles 14 and 21 of the Constitution of India as well as the International Conventions on Human Rights provide for reasonable and fair trial. (Para 50) Maneka Sanjay Gandhi v. Rani Jethmalani, (1979) 4 SCC 167 : 1979 SCC (Cri) 934 : AIR 1979 SC 468; Dwarka Prasad Agarwal v. B.D.Agarwal, (2003) 6 SCC 230 : (2003) 5 Scale 138, relied on (iv) The common rule of locus standi is relaxed so as to enable the Court to look into the grievances complained on behalf of the poor, the deprived, the illiterate and the disabled who cannot vindicate the legal wrong or legal injury caused to them for any violation of any constitutional or legal right. (Para 50) Fertilizer Corpn. Kamgar Union (Regd.) v. Union of India, (1981) 1 SCC 568 : AIR 1981 SC 344; S.P.Gupta v. Union of India, 1981 Supp SCC 87; People's Union for Democratic Rights v. Union of India, (1982) 2 SCC 494 : 1982 SCC (L&S) 262; D.C.Wadhwa (Dr) v. State of Bihar, (1987) 1 SCC 378; BALCO Employees' Union (Regd.) v. Union of India, (2002) 2 SCC 333, relied on (v) When the Court is prima facie satisfied about variation of any constitutional right of a group of people belonging to the disadvantaged category, it may not allow the State or the Government from raising the question as to the maintainability of the petition. Bandhua Mukti Morcha v. Union of India, (1984) 3 SCC 161 : 1984 SCC (L&S) 389 : (1984) 2 SCR 67, relied on (vi) Although procedural laws apply to PIL cases but the question as to whether the principles of res judicata or principles analogous thereto would apply depends on the nature of the petition as also facts and circumstances of the case. Rural Litigation and Entitlement Kendra v. State of U.P., 1989 Supp (1) SCC 504; Forward Construction Co. v. Prabhat Mandal(Regd.), (1986) 1 SCC 100, relied on (vii) The dispute between two warring groups purely in the realm of private law would not be allowed to be agitated as a public interest litigation. Ramsharan Autyanuprasi v. Union of India, 1989 Supp (1) SCC 251; Sachidanand Pandey v. State of W.B., (1987) 2 SCC 295; Janata Dal v. H.S.Chowdharay, (1992) 4 SCC 305 : 1993 SCC (Cri) 36, relied on (viii) However, in an appropriate case, although the petitioner might have moved a court in his private interest and for redressal of the personal grievances, the Court in furtherance of the public interest may treat it necessary to enquire into the state of affairs of the subject of litigation in the interest of justice. Shivajirao Nilangekar Patil v. Dr.Mahesh Madhav Gosavi, (1987) 1 SCC 227, relied on (ix) The Court in special situations may appoint a Commission, or other bodies for the purpose of investigating into the allegations and finding out facts. It may also direct management of a public institution taken over by such Committee. (Para 50) Bandhua Mukti Morcha v. Union of India, (1984) 3 SCC 161 : 1984 SCC (L&S) 389 : (1984) 2 SCR 67; Rakesh Chandra Narayan v. State of Bihar, 1989 Supp (1) SCC 644; A.P.Pollution Control Board v. Prof.M.V.Nayudu, (1999) 2 SCC 718, relied on (x) The Court would ordinarily not step out of the known areas of judicial review. The High Court although may pass an order for doing complete justice to the parties, it does not have a power akin to Article 142 of the Constitution of India. The Court will not ordinarily transgress into a policy. It shall also take utmost care not to transgress its jurisdiction while purporting to protect the rights of the people from being violated. Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664; M.C.Mehta v. Kamal Nath, (2000) 6 SCC 213; Supreme Court Bar Assn. v. Union of India, (1998) 4 SCC 409, relied on Vinay Chandra Mishra, Re, (1995) 2 SCC 584, referred to (xi) Ordinarily, the High Court should not entertain a writ petition by way of public interest litigation questioning the constitutionality or validity of a statute or a statutory rule. (Para 50) It is not intended to lay down any strict rule as to the scope and extent of a public interest litigation, as each case has to be judged on its own merits. Furthermore, different problems may have to be dealt with differently. (Paras 53 to 55). BALCO Employees' Union (Regd.) v. Union of India, (2002) 2 SCC 333, discussed."

28. The abovesaid principles relating to the Public Interest Litigation have been further reiterated and are stated in the subsequent decision reported in 2005 (1) SCC 590 (cited supra), wherein, in paragraph 12, the Supreme Court made it clear that the Public Interest Litigation is a weapon which has to be used with great care and circumspection and the judiciary has to be extremely careful to see that behind the beautiful veil of public interest, an ugly private malice, vested interest and/or publicity-seeking is not lurking, that it is to be used as an effective weapon in the armoury of law for delivering social justice to citizens, that it should be aimed at redressal of genuine public wrong or public injury and not be publicity-oriented or founded on personal vendetta. The Supreme Court in that decision also made it clear that the Court must be careful to see that a body of persons or member of the public, who approaches the court is acting bona fide and not for personal gain or private motive or political motivation or other oblique considerations and that the Court must not allow its process to be abused for oblique considerations by masked phantoms who monitor at times from behind.

29. Applying the above principles laid down by the Supreme Court to the case on hand, we are convinced that there is absolutely no public interest involved, inasmuch as we do not find any infirmity at all in the process of disinvestment made as early as on 16.10.2001 in favour of the third respondent.

30. As far as the report of the CAG is concerned, on a perusal of the said report, we find that it related to disinvestment of as many as nine public sector undertakings. It does refer to under-valuation of some of the landed properties of the fourth respondent, as carried out by the concerned person who was entrusted with such valuation process. Even if we show our anxious consideration to the said report, as pointed out by us earlier, as against the four methods available while resorting to disinvestment, the one followed was the DCF method. Any infirmity pointed out as regards the valuation of the landed properties of the fourth respondent, may have some relevance relating to the method, namely the asset valuation method. In any event, even the report of the CAG only seems to have been made by way of guidance to the first respondent to act with much more circumspection and diligence in the implementation of disinvestment in respect of public sector undertakings and that it should not be exposed to any serious allegation and that in order to ensure that better practices are carried out in future while resorting to disinvestment of public sector undertakings. Nowhere in the said CAG report, we have found any indictment by the CAG to state that the report has gone to such an extent that the disinvestment made as far back as in the year 2001, should be set at naught at this distant point of time.

31. In view of our above conclusions, since the main prayer in the Writ Petition, for declaration, does not merit any consideration, there is no scope for granting any consequential relief for ordering any enquiry by the C.B.I. Therefore, the said prayer cannot also be granted.

32. Looked at from any angle, we do not find any merit in this Writ Petition. The Writ Petition fails and the same is dismissed. No costs. The Miscellaneous Petitions are closed. cs

Copy to

1. Union of India,

Represented by its Secretary,

Ministry of Communications,

Department of Telecommunication,

Sanchar Bhavan, 20, Ashoka Road,

New Delhi-110 001.

2. The Secretary,

Ministry of Finance,

Jeevan Deep Building,

Parliament Street,

New Delhi-110 001.

3. Central Bureau of Investigation,

Rep. by its Director

BLK 3, CGO Complex,

Lodhi Road,

New Delhi-110 003.


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