Judment

(for himself and on behalf of S. M. FAZAL ALI and A. D. Koshal, JJ.) :- By this petition under Article 32 of the Constitution. the petitioners challenge the legality of the sale of certain plants and equipment of the Sindri Fertilizer Factory, whereby the highest tender submitted by Respondent 4 in the sum of Rs. 4.25 crores was accepted on May 30, 1980. The relief sought by the petitioners is that the respondents should be directed not to sell away the plant and equipment, that they should be asked to withdraw their decision to sell the same and that the said decision should be quashed as being illegal and unconstitutional.

2. Petitioner 1 is a Union of the Workers of the Factory, Petitioner 2, Shri. A. K. Roy, a Member of Parliament from Dhanbad, is the President of that Union, while Petitioners 3 and 4 are workers employed in the Factory. Respondent 1 to the Writ Petition is the Union of India, Respondent 2 is the Fertilizer Corporation of India, (FCI), Respondent 3 is the Sindri Fertilizer Factory, while the added Respondent 4, Ganpatrai Agarwal, is the highest tenderer. Respondent 2, a Government of India Undertaking, is a Company incorporated under the Companies Act 1956 and is a Government Company within the meaning of Section 617 of that Act. It established the Respondent 3 Factory, which was commissioned in 1951. By Article 66 (1) of the Articles of Association of respondent 2, its directors are appointed by the President of India.

3. On January 4, 1980 the Board of Directors of respondent 2, (FCI), decided that tenders should be invited for the sale of Redundant/retired plants and equipment of respondent 3. In pursuance of that decision, an advertisement was inserted in the newspapers on February 25, 1980 inviting tenders for the sale of nine units of the "closed down chemical plants" of the Factory on "as is where is" basis. The advertisement gave to the intending purchasers the option to quote for four alternatives, one of which was the quotation for individual equipment such as pumping sets and compressors. Each tenderer was required to submit three separate envelopes : Envelope No. 1 relating to the payment of earnest money; Envelope No. 2 relating to the terms and conditions of the sale; and Envelope No. 3 relating to the amount of bid offered by the tenderer. The offers were to be valid until June 19, 1980.

4. On March 20, 1980 when the envelopes bearing No. 1 were opened, it was found that two tenderers had not complied with the term as to the payment of the earnest money. As a result, the number of valid tenders was reduced to nine. Discussions took place thereafter between the tenderers and the authorities, as a result of which an agreed formula was evolved regarding the exclusion of the weights of foundation and the exclusion of sales tax from the bids offered. A few items were also excluded from the list of articles advertised for sale. In the light of these modifications, the tenderers were asked to submit fresh quotations in a separate envelope marked No. 4.

5. On March 21, 1980 envelopes bearing No. 3 which contained the original offers and those bearing No. 4 which contained the modified offers, were opened in the presence of the tenderers. The highest original offer was that of respondent 4 in the sum of Rs. 7.6 crores. The highest modified offer of Rs. 6.2 crores was also made by respondent 4. The sale was thereafter adjourned.

6. On March 31, 1980 a letter was received by respondent 2 that a part of the plants and equipment which were advertised for sale were needed by the Fertilizer (Planning and Development) India Ltd. for the purposes of experiment and research. On April 10, 1980 a similar request was received from the Ramagundam Division of respondent 2. On May 14, 1980 the Board of Directors decided that only those items should be offered for sale which remained after meeting the requirements of the Fertilizer (Planning and Development) and the Ramagundam Division and that fresh offers should