2006 (10) TMI 486 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the sale of Hotel Agra Ashok by ITDC.
2. Adequacy of the sale price of Hotel Agra Ashok.
3. Implementation of the Voluntary Retirement Scheme (VRS) for employees.
4. Protection of service conditions of employees post-sale.
5. Transfer of employees to the new company without consent.
6. Judicial review of the Government's disinvestment policy.

Issue-wise Detailed Analysis:

1. Legality of the Sale of Hotel Agra Ashok by ITDC:
The employees of Hotel Agra Ashok challenged the sale of the hotel to a private party, alleging it was arbitrary and illegal. They argued that the sale would severely affect their service conditions. The court held that disinvestment was a policy decision of the Government of India and should be least interfered with in judicial review. It was noted that the employees were not government servants but employees of a public sector undertaking, and their service conditions were protected under the new management.

2. Adequacy of the Sale Price of Hotel Agra Ashok:
The employees contended that the sale price of Rs. 3.90 crores was inadequate compared to the market valuation of over Rs. 20 crores. The court referred to the Balco Employees' Union case, emphasizing that it is not for the court to determine the adequacy of the sale price if the proper procedure was followed. The court found no basis to conclude that the decision to accept the offer was vitiated.

3. Implementation of the Voluntary Retirement Scheme (VRS) for Employees:
The employees argued for the implementation of the VRS, similar to that applied to Ashok Travels & Tours. The court noted that there was no obligation for the new management to introduce a VRS for Hotel Agra Ashok employees, as the scheme was never made applicable to them. The court cited the case of the Board of Trustees, Visakhapatnam Port Trust, emphasizing that the acceptance of VRS applications was at the discretion of the employer.

4. Protection of Service Conditions of Employees Post-Sale:
The court examined Clause 9.4 of the share purchase agreement, which ensured that the terms and conditions of the employees would not be inferior post-transfer. The court found that the service conditions were adequately protected, and the employees' apprehensions were baseless. The court noted that any breach of obligations under the scheme could be addressed through appropriate forums.

5. Transfer of Employees to the New Company Without Consent:
The employees argued that their consent was necessary for the transfer to the new company. The court distinguished the case from Jawaharlal Nehru University v. Dr. K.S. Jawatkar, noting that the transfer was within the same shareholding pattern and did not affect the employees' terms and conditions. The court held that the employees' claims of retrenchment were not appropriate for writ petitions and should be addressed through industrial/labour laws.

6. Judicial Review of the Government's Disinvestment Policy:
The court reiterated that economic policy decisions, such as disinvestment, are not ordinarily subject to judicial review unless they are contrary to statutory provisions or the Constitution. The court referred to the Balco case, emphasizing that the wisdom and advisability of economic policies are for the Parliament to consider, not the courts. The court found no illegality in the Government's decision to disinvest its shares in ITDC.

Conclusion:
The writ petitions were dismissed, affirming the Government's policy decision to transfer Hotel Agra Ashok to the private party. The court found no merit in the employees' contentions, emphasizing the protection of their service conditions and the legality of the disinvestment process. No order as to costs was made.