2002 (8) TMI 574 - HC - Companies Law

Issues Involved:
1. Validity of the disinvestment of VSNL shares.
2. Allegations of violation of Articles 298 and 299 of the Constitution of India.
3. Applicability of the doctrine of unjust enrichment.
4. Transparency in the disinvestment process.
5. Applicability of Section 4 of the Telegraph Act, 1885.

Detailed Analysis:

1. Validity of the Disinvestment of VSNL Shares:
The petitioner questioned the sale of VSNL shares by the Government of India to a private entity under the disinvestment plan. The petition was based on newspaper reports and lacked concrete evidence. The court noted that the petitioner had not conducted any independent research and the allegations were vague. The court emphasized that economic policy decisions, such as disinvestment, are within the purview of the government and are not typically subject to judicial review unless there is a clear illegality or violation of statutory provisions.

2. Allegations of Violation of Articles 298 and 299 of the Constitution of India:
The petitioner contended that the disinvestment violated Articles 298 and 299, which pertain to the executive power of the Union and the States to carry on trade and business. The court found no basis for this claim, stating that the petitioner failed to present any concrete facts or evidence to support the allegation. The court reiterated that a writ petition could not be based solely on opinions published in newspapers.

3. Applicability of the Doctrine of Unjust Enrichment:
The petitioner argued that the shares purchased by the Tata Group were not invested fairly and invoked the doctrine of unjust enrichment under Section 70 of the Indian Contract Act, 1872. The court dismissed this argument, stating that the doctrine of unjust enrichment was not applicable in this case. The court highlighted that the petitioner had not demonstrated how the doctrine was relevant to the disinvestment process.

4. Transparency in the Disinvestment Process:
The petitioner alleged a lack of transparency in the disinvestment process and suspected an undisclosed deal between the Ministry of Telecommunication and the Tata Group. The court referred to the Supreme Court's judgment in the Balco Employees Union case, which affirmed that transparency does not mean conducting government business in public but ensuring that the decision-making process is clear and fair. The court found that the disinvestment process followed by the government was transparent, involving global advertisements and scrutiny by high-powered committees.

5. Applicability of Section 4 of the Telegraph Act, 1885:
The petitioner cited Section 4 of the Telegraph Act, which grants the Central Government exclusive privilege to establish, maintain, and work telegraphs, and argued that VSNL's disinvestment violated this provision. The court clarified that Section 4 allows the government to grant licenses for telegraph operations and that VSNL, as a licensee, retained its corporate identity and license even after disinvestment. The court concluded that the disinvestment did not affect VSNL's right to carry on its business.

Conclusion:
The court dismissed the writ petition, finding no merit in the allegations. The court upheld the validity of the disinvestment process, stating that it was a policy decision of the government and not subject to judicial review in the absence of clear evidence of illegality or violation of statutory provisions. The court also emphasized the importance of transparency in the decision-making process and found that the disinvestment of VSNL shares was conducted in a fair and transparent manner.

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