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TMI Blog1994 (8) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... of declaration to declare that the action of the 2nd respondent, as contained in the advertisement in 'Indian Express' dated 22-6-1994 to privatise and sell the 3rd respondent-corporation illegal, unconstitutional and violative of provisions of the Act. 4. The actual prayer in W.P. No. 12568 of 1994 is for a writ of certiorari to call for the records of the respondents relating to the abovesaid very same advertisement and for quashing said advertisement. 5. The said advertisement states that the 2nd respondent proposes to privatise the 3rd respondent-company, whose turnover is Rs. 72 crores per annum and invites submission of bids for the same within 30 days from the date of advertisement, from companies with manufacturing background and minimum annual turnover of Rs. 25 crores. 6. To the supporting affidavit filed in W.P. No. 12129 of 1994, the 1st Respondent filed counter-affidavit and the 2nd respondent also filed a counter-affidavit dated 22-7-1994. The 3rd respondent by its memo dated 22-7-1994 adopted the counter of the 2nd respondent. The petitioners also filed a rejoinder affidavit. To this rejoinder affidavit dated 25-7-1994, the 2nd respondent filed a rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy decision, taken in public interest, and is not amenable to judicial review and the grounds set out in the supporting affidavit do not justify such a review by this Court under article 226. The judgment on this aspect given by this Court in W.P. No. 18696 of 1992, dated 15-6-1994 where the privatisation of Southern Structural Ltd., was challenged, applies on all fours to this case. 10. The contentions of the 2nd Respondent, in its two counter-affidavits are mainly as follows : The abovesaid decision to privatise is a policy decision of 3rd Respondent, taken in public interest and in good faith taking into account of the paramount interest and the welfare of the State. The petitioners cannot rush to Court when the matter is at its embryo stage. The petitioners do not have any vested right in the matter, nor any fundamental right is infringed. The decision of privatisation will in no way affect the freedom of workers to work as industrial workers, since the disinvestment does not mean the closure of the company. One of the objects of the disinvestment is to bring in a sound and capable entrepreneur who can run the company on a sound commercial line. Even if the company were to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided to privatise the company to enable the promoter to pump in further funds. The decision taken is a policy decision and the policies of the Government are not static and the Government can alter or change their policies to meet the situation and conditions, in public interest. The various depart-ments to which the 3rd Respondent was supplying the materials after the abovesaid privatisation could very well get those materials at the lowest cost by floating tenders, instead of purchasing them at higher rates from the 3rd Respondent-company as they have been doing so far. 11. Pursuant to my request, in order to save time, the counsel have also filed written arguments and they were also allowed to make necessary oral arguments reiterating the salient points adverted to in the written arguments. 12. I have considered the rival submissions in the light of the abovesaid rival affidavits. One important feature which I want to point out even at the outset is that this Court has gone into more or less a similar question and has rendered the judgment dated 15-6-1994 in Southern Structural Staff Union Rep. by its General Secretary, C. Panneersivam v. Manage-ment of Southern St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not lose their right to seek redressal through courts for any wrongs done to them . . . The employees have no vested right in the employer-company continuing to be a Government company . . . Public interest is the paramount consideration, and if in the public interest Government thought it fit to take over a sick company to preserve the productive unit and the jobs of those employees therein, Government can in public interest, with a view to reduce the continuing drain on its limited resources, or with a view to raise funds for its priority welfare or developmental projects, or even as a measure of mobilising the funds needed for running the Government to disinvest from the public sector companies." In the abovesaid case, this Court also relied on the following observation in Fertilizer Corpn. Kamagar Union's case ( supra ) : ". . . The right to pursue a calling or to carry on an occupation is not the same thing as the right to work in a particular post under a contract of employment. If the workers are retrenched consequent upon and on account of the sale, it will be open to them to pursue their rights and remedies under the Industrial Laws . . . Even assuming that so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se policy which will fully effectuate the purpose of the enactment or it may be lacking in effectiveness and hence calling for revision and improvement. But any drawbacks in the policy incorporated in a rule or regulation will not render it ultra vires and the Court cannot strike it down on the ground that in its opinion, it is not a wise or prudent policy, but is even a foolish one, and that it will not really serve to effectuate the purposes of the Act. The Legislature and its delegate are the sole repositories of the power to decide what policy should be pursued in relation to matters covered by the Act and there is no scope for interference by the Court unless the particular provision impugned before it can be said to suffer from any legal infirmity, in the sense of its being wholly beyond the scope of the regulation-making power or its being inconsistent with any of the provisions of the parent enactment or in violation of any of the limitations imposed by the Constitution. None of these vitiating factors are shown to exist in the present case . . . ." [Emphasis supplied] (p. 1551): 16. Further, the observation in A.S. Sangwan's case ( supra ) is as follows: "A polic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be able actively to enforce the Directive Principles of State Policy by compelling the State to apply them in the governance of the country or in the making of laws, the Court can, if the State commits a breach of its duties by acting contrary to these Directive Principles, prevent it from doing so. State actions, including actions of the instrumentalities and agencies of the State, must not only be in conformity with the fundamental rights guaranteed by Part III, but must also be in accordance with the Directive Principles of State Policy prescribed by Part IV." 18. But, by the above referred to privatisation, taking into account the above referred to facts and the exposition of law given by the Supreme Court itself it cannot be held that clause ( b ) or ( c ) of article 39 has been violated. It cannot also be held that the abovesaid privatisation goes against the preamble of the Constitution. The policy decision taken as above, according to the averments in the above referred to counter- affidavit of the 2nd respondent is that it is for the larger public good, and this Court, particularly in light of the facts and figures given above, cannot go into the wisdom behind the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39 illustrate the latter doctrine. The Industrial policy resolution of 1948 clearly contemplated the State controlling the commanding heights. It is in pursuance of this policy that substantial resources of the State were diverted to establishment of key industries. . . . In mid 80s, our Government veered round to the view that a sheltered and protected economy, which may have served us well at the initial stages of development, is not longer workable. . . . Even taking an overall picture, the public sector as a whole has not been yielding a profit of more than 2 to 3 per cent of the capital invested in it. Several economists, Committees and Commissions have gone into the causes of this poor performance, and have suggested several steps to redress it. A brief discussion of this aspect is found in paras 29 to 31 of a judgment rendered by one of us (Jeevan Reddy, CJ.) in Grindwell Norton v. A.P.S.E.B. AIR 1989 AP 14. But nothing meaningful could be done to repair the situation. Meanwhile, our economy has been steadily going downhill, which developed its own compulsions which we need not refer to here. Willy nilly, we seem to have embarked on a process of disinvestment by Stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany because of the superior quality of its steels and that there was a recession in the world steel market and despite the said grim scenario in the overall market, the 3rd respondent- company has been showing consistent profits. 23. But, I cannot go into all these questions of fact for coming to conclusion one way or other. However, one thing is clear that there was net loss consistently for six years from 1984 to 1990 and that there was also artificial fixation of higher sale price, by the Government, together with compulsion for the Government departments, etc., to buy at that price. 24. The further averment in the abovesaid rejoinder is that modernisation has so far been funded by loans from various banks and that the overdraft enjoyed by the 3rd respondent from the various consortium of banks is over Rs. 7 crores. But, as also observed in the above referred decision in Churk Cement Mazdoor Sangh's case ( supra ), the abovesaid bank money is also public money. 25. Coming to W.P. No. 12568 of 1994, there is no necessity to set out the averments in the affidavit therein. The arguments of the learned counsel in this writ petition also are not very much different f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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