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Andhra Pradesh High Court
Judges : V.V.S.RAO
Goldstone Exports Limted, Secunderabad - Appellant
Versus
Government Of A.P. - Respondent
Decided On : 08-23-02
Companies Act, 1956 – Section 173 (2) - Tender - Bids evaluation – Process – Notification - Finalisation of transaction - Policy to implement economic reforms, the Goap decided in 1996-97 or thereabout to disinvest/privatize various industrial units of NSL - Initially, acceptable bids were received for two sugar mills and one distillery - While finalisation of transaction in relation to these three units was in the process, the petitioners herein (except Ganapathi Sugars limited, seventh petitioner herein) led by the first petitioner and entered into discussions and negotiations with the goap. This appears to have culminated in the petitioners (except seventh petitioner) submitting unsolicited proposal on 12-10-2001 in respect of four units of NSL including the distillery unit, namely, shakarnagar Sugar Mill, Shakarnagar distillery, Mombojipalli Sugar Mill and metpally Sugar Mill in Andhra Pradesh. The proposal envisages that the Government/ nsl will incorporate a new company (NEWCO) under the companies Act, 1956 in name and style of nsf LIMITED at an appropriate time and transfer four unsold undertakings along with identified assets to newco – Initially Government/nsl will hold 100% share-holding of the company, which will have paid-up equity capital of Rs. 20 Crores - The value of transferred assets to NEWCO would be taken as Rs. 45 crores for the purpose of issuing equity/preference shares and optionally Convertible Debentures - The unsolicited proposal submitted by GELCON also gave a brief history of the GEL and its associates who formed consortium as well as their financial position - Implementation Secretariat; structure and process of bids evaluation – Held, Court is not inclined to consider the submission for two reasons; first, in the counter affidavit the reasons for disqualifying GELCON Best and Final proposal are mentioned which have been considered in detail and this is not one of the reasons, and secondly, the learned additional Advocate General did not specifically press this submission presumably because it did not weigh significantly with the CSC when it considered the reports of CTBE - Court has examined the decision- making process at every stage in the light of ifp relating to privatisation of four units of nsl and keeping in view the fact that the court of judicial review is not a Court of appeal - Court is satisfied that respondents 1 and 2 have procured the best market price and have chosen a superior proposal to the unsolicited proposal as well as Best and Final Proposal of GELCON. Indeed, having regard to the importance of the matter and principles of fairness, though this Court refused to pass an interim order, requested the learned Additional Advocate general not to take any hasty step, which would tend to result in a fait accompli. In obedience to such observations, it is reported that the decision has been kept in abeyance - Writ petition dismissed.
( 80 ) DPML in their Best and Final proposal also gave details of additional land required (Page 12, Paper Book Vol. III ). The ctbec came to the conclusion that gelcon proposal fails to satisfy additional assets at Shakarnagar, as required by IFP and that the proposal states vaguely that any additional assets required will be taken on five years lease at market rates. Insofar as proposal of DPML is concerned, CTBEC concluded that DPML Best and Final proposal was examined for responsiveness and compliance and that the proposal was found to be specific, responsive, compliant and eligible for evaluation. The learned counsel for the petitioners attacks the conclusion of respondents 1 and 2 as discriminatory. He submits that the proposal of DPML does not contain the offer in terms of money, whereas the petitioner's offer was clear and that they would take the assets, if necessary. He would also further submit that unequals are treated equally. Reliance is placed on Tata Cellular v. Union of india (supra) in support of the submission that an opportunity ought to have been given to the petitioners to clarify the so called vagueness. The petitioners were discriminated, it is urged, while examining the final proposal for its responsiveness and compliance and two sets of standards were applied.
( 81 ) THE learned Additional Advocate general invited the attention of the Court to the proposal statement and proposal form submitted by the petitioners as well as the best and Final proposal submitted by DPML and submitted that it is only DPML which has submitted specific proposal and the petitioners failed to do so.
( 82 ) AS already pointed out, in GELCON proposal, it was mentioned that any extra assets required will be taken on five years lease. This is certainly vague. There is no specific indication whether or not additional assets are required. In Clause 1. 6, it is specifically mentioned in the IFP statement proposal relating to four NSL units, the extent of land is limited to Ac. 20. 00 only. It was also mentioned that an extent of about ac. 40. 00 is required for loading and unloading yards to operate the factory, and ac. 20. 00 for effluent treatment plants and lagoons and that the participants should specify which assets are needed for the shakarnagar Mill and Distillery. The participants are also required to state clearly the price of each additional unit. In that view of the matter, the proposal statement submitted by GELCON insofar as additional land is concerned, cannot be considered as responsive or compliant. In the proposal submitted by DPML
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