1998 (10) TMI 443 - HC - Companies Law

Issues Involved:
1. Legality and jurisdiction of the Government of India's decision to transfer the mining lease of Deposit 11-B to a joint venture company (JVC).
2. Allegations of mala fides and misuse of power by the Government in the transfer process.
3. Compliance with the National Mineral Policy and Industrial Policy Resolution.
4. The necessity and legality of floating tenders for the transfer of government property.
5. The role and authority of NMDC versus the Government of India in the decision-making process.
6. Judicial review of economic policy decisions and administrative actions.

Detailed Analysis:

1. Legality and Jurisdiction of the Government's Decision:
The petitioner questioned the transfer of the mining lease of Deposit 11-B by NMDC to a private sector JVC, arguing it was without jurisdiction and illegal. The court noted that the decision to transfer the deposit to the private sector was initially taken in 1991, and reiterated that the Government of India had the final authority to decide on such matters. The decision was part of a broader policy of economic liberalization and privatization, consistent with the National Mineral Policy of 1993 and the Industrial Policy Resolution of July 1991.

2. Allegations of Mala Fides and Misuse of Power:
The petitioner alleged that the Government's decision to transfer the lease to the 'M' group was a "naked sell-out" intended to enrich the private entity at the expense of the national exchequer. The court examined the decision-making process and found that various viewpoints, including those of NMDC, were considered over a period of five years. The court concluded that the final decision was not arbitrary, mala fide, or contrary to public interest, and thus did not warrant judicial interference.

3. Compliance with National Mineral Policy and Industrial Policy Resolution:
The petitioner argued that the transfer violated the guidelines of the National Mineral Policy and Industrial Policy Resolution, which preferred the allocation of undeveloped "green field" areas to the private sector. The court held that the policy did not prohibit the transfer of developed or semi-developed blocks and noted that the cost of development incurred by NMDC was to be reimbursed. The court found no contradiction with the policy guidelines.

4. Necessity and Legality of Floating Tenders:
The petitioner contended that the transfer should have been conducted through a public tender to ensure transparency and maximize revenue. The court acknowledged that while tenders or auctions are the normal methods for transferring government property, they are not the only methods. The court cited precedents where exceptions were made, provided the government acted fairly and in the best available arrangement. The decision to transfer the lease without a tender was deemed justified given the specific circumstances and national interest considerations.

5. Role and Authority of NMDC versus the Government of India:
The petitioner argued that NMDC, being an autonomous body, should have the final say in the transfer of its property, and that any directive should come from the President of India. The court referred to case law establishing that directives from the Government of India, expressed in the name of the President, are valid and binding. The court found that the Government's decision, including the letter dated 24-5-1994, did not require cabinet approval and was within its jurisdiction.

6. Judicial Review of Economic Policy Decisions and Administrative Actions:
The court emphasized the principle of judicial restraint in reviewing economic policy decisions and administrative actions. It reiterated that judicial review is concerned with the decision-making process, not the merits of the decision itself. The court cited multiple precedents affirming that the government has the latitude to make economic decisions, including privatization, provided they are not arbitrary or mala fide. The court concluded that the decision to transfer the lease to the 'M' group was a policy decision beyond the scope of judicial review, as it did not violate any constitutional or statutory provisions.

Conclusion:
The court dismissed the writ petition, finding no grounds to interfere with the Government's decision to transfer the mining lease of Deposit 11-B to the private sector JVC. The decision was deemed consistent with national policies, not arbitrary or mala fide, and within the Government's jurisdiction. The court emphasized the importance of judicial restraint in economic policy matters and upheld the Government's authority to make such decisions.

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