2001 Supreme(SC) 1660

2001(8) Supreme 660
Supreme Court of India
B.N. Kirpal, Shivaraj V. Patil, P. Venkatarama Reddi, JJ.
BALCO Employees Union (Regd.) —Petitioner
versus
Union of India & Ors. —Respondents
Transferred Case (C) No. 8 of 2001
With
T.C. (C) Nos. 9 and 10 of 2001
And
W.P. (C) No. 194 of 2001
Decided on 10-12-2001
Counsel for the Parties :
For the Appearing Parties : Soli J. Sorabjee, Attorney General, Harish N. Salve, Solicitor General, Dipankar P. Gupta, G.L. Sanghi, C.A. Sundaram, P. Chidambaram, Anoop G. Chaudhary, Ranjit Kumar, Dr. A.M. Singhvi, Senior Advocates, Jaideep Gupta, Sanjay Sen, Rana S. Biswas, Ms. Sheetal Sharma, Sitesh Mukherjee, Ms. Indra Sawhney, S.S. Ray, Ms. Rakhi Ray, Ms. P.S. Shroff, Ms.Ritu Bhalla, Sidharth Datta, Manish Singhvi, Ankur Talwar, Maninder Singh, Ms. Pratibha M. Singh, Ms. Kavita Wadia, Siddharth Goswami, Siddharth Chowdhury, B.V. Balram Das, Rajiv K. Garg, Annam D.N. Rao, Ravindra Shrivastava, Advocates, General for Chhattisgarh, Prakash Shrivastava, Piyush Dharmadhikari, Ms. Suparna Shrivastava, Harsh Verma, R.M. Sharma, Sanjay Parikh, R.R. Chandrachud, Arun Beriwal, Sudhir Walia, Mahinder Singh Dahiya, Jaideep Gupta, Shahid Rizvi and Ms. Sarla Chandra, Advocates.
For the Petitioner in T.C. (C) No. 9/2001 : In person.

Very Important Point
The decision of the Union of India to disinvest and transfer 51 shares in BALCO is valid for the reasons stated in this judgment.

Headnote:(i) Constitution of India—Articles 26 and 32—Writ petitions against—Decision of Union of India to disinvest and Transfer 51 shares of M/s. Bharat Aluminium Co. Ltd. (BALCO) in favour of Sterlite Industries Ltd.— Whether such a decision is amenable to judicial review and if so within what parameters and to what extent? Case law reviewed—Constitution of India Articles 14, 16, 311—Company Law—Labour Law.

       Held : It is evident from the above that it is neither within the domain of the Courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our Courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Process of disinvestment is a policy decision involving complex economic factors. The Courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the Courts would decline to interfere. In matters relating to economic issues, the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within limits of authority. There is no case made out by the petitioner that the decision to disinvest in BALCO is in any way capricious, arbitrary, illegal or uninformed. Even though the workers may have interest in the manner in which the Company is conducting its business, inasmuch as its policy decision may have an impact on the workers’ rights, nevertheless it is an incidence of service for an employee to accept a decision of the employer which has been honestly taken and which is not contrary to law. Even a government servant, having the protection, of not only Articles 14 and 16 of the Constitution but also of Article 311, has no absolute right to remain in-service. For example, apart from cases of disciplinary action, the services of government servants can be terminated if posts are abolished. If such employee cannot make a grievance based on part III of the Constitution or Article 311 then it cannot stand to reason that like the petitioners, non-government employees working in a company which by reason of judicial pronouncement may be regarded as a State for the purpose of part III of the Constitution, can claim a superior or a better right than a government servant and impugn it’s change of status. In taking of a policy decision in economic matters at length, the principles of natural justice have no role to play. While it is expected of a responsible employer to take all aspects into consideration including welfare of the labour before taking any policy decision that, by itself, will not entitle the employees to demand a right of hearing or consultation prior to the taking of the decision. Merely because the workmen may have protection of Articles 14 and 16 of the Constitution, by regarding BALCO as a State, it does not mean that the erstwhile sole shareholder viz., Government had to give the workers prior notice of hearing before deciding to disinvest. There is no principle of natural justice which requires prior notice and hearing to persons who are generally affected as a class by an economic policy decision of the Government. If the abolition of a post pursuant to a policy decision does not attract the provisions of Article 311 of the Constitution as held in State of Haryana vs. Shri Des Raj Sangar and Another, (1976) 2 SSC 844, on the same parity of reasoning, the policy of disinvestment cannot be faulted if as a result thereof the employees lose their rights or protection under Articles 14 and 16 of the Constitution. In other words, the existence of rights of protection under Articles 14 and 16 of the Constitution cannot possibly have the effect of vetoing the Government’s right to disinvest. Nor can the employees claim a right of continuous consultation at different stages of the disinvestment process. If the disinvestment process is gone through without contravening any law, then the normal consequences as a result of disinvestment must follow. The Government could have run the industry departmentally or in any other form. When it chooses to run an industry by forming a company and it becomes its shareholder then under the provisions of the Companies Act as a shareholder, it would have a right to transfer its shares. When persons seek and get employment with such a company registered under the Companies Act, it must be presumed that they accept the right of the directors and the shareholders to conduct the affairs of the company in accordance with law and at the same time they can exercise the right to sell their shares. (Paras 45, 46, 46, 47, 48)

       The policies of the Government ought not to remain static. With the change in economic climate, the wisdom and the manner for the Government to run commercial ventures may require reconsideration. What may have been in the public interest at a point of time may no longer be so. The Government has taken a policy decision that it is in public interest to disinvest in BALCO. An elaborate process has been undergone and majority shares sold. It cannot be said that public funds have been frittered away. In this process, the change in the character of the company cannot be validly impugned. While it was a policy decision to start BALCO as a company owned by the Government, it is as a change of policy that disinvestment has now taken place. If the initial decision could not be validly challenged on the same parity of reasoning, the decision to disinvest also cannot be impugned without showing that it is against any law or mala fide. (Para 50)

       (ii) Decision of Union of India to disinvest and transfer 51 shares in BALCO to Sterlite Industries Ltd.—Challenged by employees as against their interest—Whether correct? (No).

       Held : We find that in the shareholders agreement between the Union of India and the strategic partner, it is provided that there would be no retrenchment of any worker in the first year after the closing date and thereafter restructuring of the labour force, if any, would be implemented in a manner recommended by the Board of Directors of the company. The shareholders Agreement further mandates that in the event reduction in the strength of its employees is required, then it is to be ensured that the company offers its employees an option to voluntarily retire on terms that are not in any manner less favourable than the Voluntary Retirement Scheme offered by the company on the date of the arrangement. Apart from the conditions stipulated in the shareholders agreement, Shri Sundaram, learned senior counsel on behalf of the company has stated in the Court that it will not retrench any worker(s) who are in the employment of BALCO on the date of takeover of the management by the strategic partner, other than any dismissal or termination of the worker(s) of the company from their employment in accordance with the applicable staff regulations and standing orders of the company or other applicable laws. We record the said statement. We are satisfied that the workers’ interests are adequately protected in the process of disinvestment. Apart from the aforesaid undertaking given in the Court, the existing laws adequately protect workers’ interest and no decision affecting a huge body of workers can be taken without the prior consent of the State Government. Further more, the service conditions are governed by the certified orders of the company and any change in the conditions thereto can only be made in accordance with law. The demands made by the employees of BALCO were considered by the IMG in its meeting held on 25th January, 2001 and the issues emanating therefrom were placed by the Department of Disinvestment before the Cabinet Committee on Disinvestment which held its meeting on 1st February, 2001. A note containing the comments of the Ministry of Mines which was endorsed by the IMG of the Cabinet Committee on Disinvestment was forwarded by the Minister of Mines, Government of India to Shri Tara Chand Viyogi, President, M.P. Rashtriya Mazdoor Congress. The said note, apart from setting out reasons for disinvestment of BALCO, also refers how the interest of the employees of BALCO has been protected in the process of disinvestment. (Paras 53 & 54)

       As a result of disinvestment of 51 of the shares of the company, the management and control, no doubt, has gone into private hands. Nevertheless, it cannot, in law, be said that the employer of the workmen has changed. The employees continue to be under the company and change of management does not in law amount to a change in employment. (Para 59)

       (iii) Decision of Union of India to disinvest and Transfer 51 shares in BALCO to Sterlite Industries Ltd.—Grievance of alleged non-consultation of State Government in the process of disinvestment of BALCO—Is a matter between State & Union—Facts show wide publicity—Reserve price is properly fixed—Mode of sale is not faulty—Proper procedure has been followed (see paras 61 to 65)—There is no lack of transparency (Para 66)—Transfer of land is not in violation of the M.P. Land Revenue Code. (Paras 67 to 74)

       (iv) Decision of Union of India to disinvest and Transfer 51 of shares in BALCO to Sterlite Industries Ltd.—Challenged by one B.L. Wadhera by filing what he termed as a public interest litigation—History—Nature—Scope—Tendency of misusing it as publicity—Interest litigation—Case law (Paras 75 to 95)—Whether present writ petition falls within the parametres of PIL? (No).

       Held : It will be seen that whenever the Court has interfered and given directions while entertaining PIL it has mainly been where there has been an element of violation of Article 21 or of human rights or where the litigation has been initiated for the benefit of the poor and the underprivileged who are unable to come to Court due to some disadvantage. In those cases also it is the legal rights which are secured by the Courts. We may, however, add that Public Interest Litigation was not meant to be a weapon to challenge the financial or economic decisions which are taken by the Government in exercise of their administrative power. No doubt a person personally aggrieved by any such decision, which he regards as illegal, can impugn the same in a Court of law, but, a Public Interest Litigation at the behest of a stranger ought not to be entertained. Such a litigation cannot per se be on behalf of the poor and the downtrodden, unless the Court is satisfied that there has been violation of Article 21 and the persons adversely affected are unable to approach the Court. The decision to disinvest and the implementation thereof is purely an administrative decision relating to the economic policy of the State and challenge to the same at the instance of a busy-body cannot fall within the parameters of Public Interest Litigation. On this ground alone, we decline to entertain the writ petition filed by Shri B.L.Wadhera. (Paras 86, 87 & 88)

       (v) Writ petitions by BALCO—Whether maintainable ? (No).

       Held : This writ petition has been filed under Article 32 of the Constitution by BALCO challenging various show causes notices issued to them by authorities in the State of Chhattisgarh. In our opinion, it will not be appropriate for this Court to entertain the challenge to the said show cause notices in this petition. The petitioners have adequate remedy open to it under the Acts under which the notices had been issued and, in appropriate case, can approach the High Court under Article 226 of the Constitution. This writ petition is thus not entertained as alternative remedy is available to the petitioner. (Para 89)

       (vi) Disinvestment by the Government in BALCO—Whether valid? (Yes)—Summary of conclusions.

       Held : In a democracy, it is the prerogative of each elected Government to follow it’s own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the Court. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the Courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is the Parliament and not the Courts. Here the policy was tested and the Motion defeated in the Lok Sabha on 1st March, 2001. Thus, apart from the fact that the policy of disinvestment cannot be questioned as such, the facts herein show that fair, just and equitable procedure has been followed in carrying out this disinvestment. The allegations of lack of transparency or that the decision was taken in a hurry or there has been an arbitrary exercise of power are without any basis. It is a matter of regret that on behalf of State of Chattisgarh such allegations against the Union of India have been made without any basis. We strongly deprecate such unfounded averments which have been made by an officer of the said State. The offer of the highest bidder has been accepted. This was more than the reserve price which was arrived at by a method which is well recognised and, therefore, we have not examined the details in the matter of arriving at the valuation figure. Moreover, valuation is a question of fact and the Court will not interfere in matters of valuation unless the methodology adopted is arbitrary [see Duncans Industries Ltd. vs. State of U.P. and Others, (2000) 1 SCC 633]. The ratio of the decision in Samatha’a case is inapplicable here as the legal provisions here are different. The land was validly given to BALCO a number of years ago and today it is not open to the State of Chattisgarh to take a summersault and challenge the correctness of it’s own action. Furthermore even with the change in management the land remains with BALCO to whom it had been validly given on lease. Judicial interference by way of PIL is available if there is injury to public because of dereliction of Constitutional or statutory obligations on the part of the government. Here it is not so and in the sphere of economic policy or reform the Court is not the appropriate forum. Every matter of public interest or curiosity cannot be the subject matter of PIL. Courts are not intended to and nor should they conduct the administration of the country. Courts will interfere only if there is a clear violation of Constitutional or statutory provisions or non-compliance by the State with it’s Constitutional or statutory duties. None of these contingencies arise in this present case. In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgement of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself. Lastly, no ex-parte relief by way of injunction or stay especially with respect to public projects and schemes or economic policies or schemes should be granted. It is only when the Court is satisfied for good and valid reasons, that there will be irreparable and irretrievable damage can an injunction be issued after hearing all the parties. Even then the Petitioner should be put on appropriate terms such as providing an indemnity or an adequate undertaking to make good the loss or damage in the event the PIL filed is dismissed. It is in public interest that there should be early disposal of cases. Public Interest Litigation should, therefore, be disposed of at the earliest as any delay will be contrary to public interest and thus become counter-productive. (Paras 90 to 98)

       Held finally : For the aforesaid reasons stated in this judgment, we hold that the disinvestment by the Government in BALCO was not invalid. Transferred Case (Civil) Nos. 8, 9 and 10 of 2001 are dismissed. The parties will, however, bear their own costs. (Para 99)