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SUPREME COURT OF INDIA
S.C. AGRAWAL AND Mrs. SUJATA V. MANOHAR, JJ.
U.P. State Sugar Corpn. Ltd., Appellant
Versus
U.P. State Sugar Corpn. Karamchari Assocn. and others, Respondents.
Civil Appeal No. 817 of 1995
Decided on 2-5-1995.
Secretary of the Board under Act, 1985 - Section 15(1) - Companies Act, 1956 - Section 3, - Sick Industrial Companies (Special Provisions) Act, 1985 - Section 3 - Advertisement - Government company - Company thereafter an advertisement was published in leading newspapers in country inviting tenders for outright sale of said sugar mills- In response to said advertisement offers were received but only conformed requirements- Committee presided over Principal Secretary Sugar and Cane Department after considering said offers submitted its report to Government said report was considered by Privatization Committee and later by State Government- Based on recommendations Committee State Government issued directions to Corporation on which were considered by Board of Directors Corporation said decision of Board of Directors was approved at annual general meeting of Corporation Writ Petition giving rise to present appeal was filed in High Court by respondents hereinafter referred to as petitioners- In said writ petition petitioners assailed decision for sugar mills and prayed for issuance of a writ order or direction in nature of certiorari to quash sale notice as published in newspapers and all proceedings undertaken in pursuance thereof and also prayed for a writ order or direction of a suitable nature restraining Corporation as well as respondents from taking any action on basis of impugned sale notice- said Writ Petition has been allowed by High Court by impugned judgment –Held, Case that in absence of an incentive element in State and Government run industries and enterprises barring a few exceptions state ventures have usually run amuck saddling people with a huge bill to make up for ill-advised State run industries where bureaucrats yearned to become corporate executives- But they tied themselves up in knots of red ribbon and tapes when they could neither shed their power and got entangled in use of it- To be an industrialist one has to be a floor shirt mechanic and a corporate executive both; civil servants would not like to spoil their collars and cuffs but would like to wear cravats and links on double cuffs in fashion of a corporate image Civil service has an important role administration of State- Civil servants are entrusted with task of implementation of State policies- They have been discharging their responsibilities best of their judgment and abilities- Without having a full appreciation of reasons for failure of a particular policy it would not be fair place blame for such failure on civil servants- remarks made by High Court in our opinion are unjustified and unwarranted- On a number of occasions in past this Court has expressed its disapproval of use of strong and carping language by judges while conduct of parties of their witnesses before it- It has been said that Judges must act with sobriety moderation and restraint and must have humility that they are not infallible need for mutual respect it has been observed that in order to command respect there must be respect by judiciary those who come before Court as well as other co-ordinate branches of State executive and legislature Court are constrained to say that Judges have failed to display judicial restraint that is expected from Bench in highest Court in State - Appeal allowed
JUDGMENT
S. C. AGRAWAL, J. :—This appeal, by special leave, is directed against the judgment of the Allahabad High Court dated December 9, 1994 in Civil Miscellaneous Writ Petition NO. 27998 of 1994 filed by respondents Nos. 1, 2 and 3 whereby it has been held that the U.P. State Sugar Corporation Ltd., appellant herein, (hereinafter referred to as the Corporation") was not entitled to alienate its assets in view of the pendency of the proceedings before the Board of Industrial and Financial Reconstruction (hereinafter referred to as the Board) under the provisions of the Sick Industrial Companies ( Special Provisions) Act, 1985 (hereinafter referred to as the Act).
2. The Corporation is a company registered under the Companies Act, 1956. The State of U.P. holds 99.9 shares in the Corporation. The Corporation was incorporated with the object of taking over and running the private sugar mills which had been acquired by the State of U.P. under the U.P. Sugar Undertakings (Acquisition) Act, 1971. 29 such sugar mills had been acquired and the Corporation has established 6 more units and at present it is holding 35 sugar units spread over the State of U.P. The 29 sugar mills which had been acquired were old units and some of them were established nearly forty years prior to their acquisition in1971. Their plant and machinery were obsolete and the units functioned at a very low capacity. Their operations were highly unprofitable and consequently the Corporation has been suffering continuing losses. In August 1992, the Government of U.P. took a policy decision to privatise some of the units of the Corporation and a Privatisation Committee comprising senior officials of the State Government after examining the matter came to the conclusion that the sale of continuing losses making units was absolutely necessary. The Board of Directors of the Corporation considered the matter and on February 27, 1993 they resolved that 8 of the units at Meerut, Bareilly, Barabanki, Burhwal, Nawabganj, Munderwa, Baitalpur and Ghughli be initially privatised. The said proposal for sale of units was accepted by the State Government and the said decision was communicated to the Corporation on September 4, 1993. The State Government also formed a Committee to recommend the procedure to be followed for such sale. The said Committee submitted its report on October 19, 1993 wherein the details of sale procedure to be followed was set out. This report was again considered by the Privatisation Committee on December 31, 1993 which broadly accepted the same and it was decided to set up a Committee to obtain proposals for privatisation, to negotiate with potential buyers and take appropriate action. The said Committee decided to get appropriate evaluation of each of the units proposed to be sold from independent valuers, namely, A.F. Ferguson and Company and S.R. Batliboi and Company.Thereafter, on March 20, 1994 an advertisement was published in leading newspapers in the country inviting tenders for outright sale of the said 8 sugar mills. In response to the said advertisement 41 offers were received but only 38 conformed to the requirements. The Committee presided over by the Principal Secretary, Sugar and Cane Department, after considering the said offers, submitted its report to the Government of U.P. on July 14, 1994. The said report was considered by the Privatisation Committee on July 19, 1994 and later by the State Government. Based on the recommendations of the Privatisation Committee the State Government issued directions to the Corporation on July 27, 1994 which were considered by the Board of Directors of the Corporation on July 28, 1994 and the said decision of the Board of Directors was approved at the annual general meeting of the Corporation held on July 28, 1994. On August 24/25, 1994 the Writ Petition giving rise to the present appeal was filed in the High Court by respondents Nos. 1,2 and 3 (hereinafter referred to as the petitioners). In the sai
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