BALCO EMPLOYEES UNION (REGO.) v. UNION OF INDIA AND ORS.

A decision relating to the interests of the employees/ workers is taken by the Respondents, two weeks' prior notice ~{the same will be given to the Petitioners.

In view of the above, the petition is disposed of with liberty to the Petitioners to approach the Court in the event of any decision adverse B to the interest of the employees/workers being taken.

Petition dfaposed ~f accordingly".

According to the company, after the aforesaid order of 3rd· August, 1999 was passed, the entire rationale and process of disinvestment was explained to c the workers through BALCO Samachar News letter. A meeting was held in May, 2000 by the then Chairman and Managing Director with the Union leaders where the Joint Secretary of the Ministry of Mines, who was also Director of the company, was also present. In addition thereto, the workers' unions had been making various representations to the Government which were · - D considered by it before finalising of various documents. That there was a dialogue between the Government and representatives of the workers which is evident from the copy of minutes of the meetings held on February 14, 2001 between the union leaders and officers of the companies and the Government. The minutes of the meeting with leaders of six trade unions, who had taken part in the discussfon, disclose that, in principle, the Trade Unions were not against disinvestment but their interest should be sufficiently safeguarded.

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 G Voluntary Retirement Scheme offered by the company on the date of the arrangement. Apart from the conditions stipulated in the shareholders agree- ment, 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

BALCO EMPLOYEES UNION (REGO.) v. U.0.1. [KIRPAL, J.] 553 the company from their employment in accordance with the applicable staff regulations an<l 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 B 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 !MG in its meeting held on 25th January, C 2001 and the issues emanating therefrom were ·placed by the Department of Disinvestment before the Cabinet Committee on Disinvestment which held its meeting on !st February, 2001. A note containing the comments of the Ministry of Mines which was endorsed by the !MG of the Cabinet Committee on Disinvestment was forwarded by the Minister of Mines, Government of India D to Shri Tara Chand Vi yogi, President, M.P. Rashtriya Mazdoor Congress. The said note, apart from setting out reasons for disinvestment of BAI.CO, also refers how the interest of the employees of BALCO has been protected in the process of disinvestment. This note states:-

"Regarding employees, adequate provisions have been made in E Share Holders' Agreement (SHA) as follows :-

"Recital H Subject to Clause 7.2, the Parties envision that all employ- ees of the Company on the date hereof shall continue in the employment of the Company. F Clause 7.2 (e) It shall not retrench any part of the labour force of the Company for a period of one(!) year from the Closing Date other than any dismissa1 or tennination of employees of the Company from their employment in accordance with the applicable staff regulations and standing orders of the G Company or applicable Law; and

Clause 7.2 (() Subject to the sub-clause (e) any restructuring of the labour force of the company shall be implemented in the manner recommended by the Board and in accordance with H

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A all applicable laws. The SP in the event of any reduction of the strength of its employees shall, ensure that the Com- pany 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 B the date of this agreement;"

It may be mentioned that as per the provisions contained in the Industrial Disputes Act, BALCO will remain an industrial establish- ment even after the disinvestment and all the provisions of Industrial Disputes Act will automatically apply to BALCO. c In an organised sector, the issues of job security, wage structure, perks, welfare facilities, etc., of the workmen are governed by bipar- "tite/tripartite agreements. These agreements are in the nature of "set- tlement" underthe Industrial Disputes Act. Even after the disinvestment, the BALCO management will be required to enter into bipartite/ tripartite agreements with the workmen through unions, and, the terms and conditions in the agreement would be always governed by the practices and procedures applicable under collective bargaining. It is a fact that any agreement between two or more parties is based on the principles of mutual consent. Hence, the consent of the management to better service conditions, etc., would certainly depend on the achieve- ment of the productivity and production targets by the workers from time to time.

Regarding providing social security to the BALCO employees at par with government employees, it is to be noted that as a matter of principle, no industrial establishment has any right to be compared with a government establishment. Hence the issue of guaranteeing the

- social security of the BALCO employees at par with the employees of the Government establishments may not be possible any time before or after the disinvestment.

So far as employees' stock options and a lock-in period for the investor are concerned, there is a provision in the documents pertain- ing to the proposed strategic sale, for giving upto 5 per cent of the equity to employees, and for a lock-in period of three years. H

BALCO EMPLOYEES UNION (REGO.) v. U.0.1. [KIRPAL, J.] 555 Regarding guaranteeing that there will be no closure of any estab- A lishment of the company for a minimum period of 10 years, it is to be noted that the ''.Closure" of any undertaking of an Industrial Establisi1- ment of the kind of BALCO is governed by Section 25(0) of Chapter V-B of the Industrial Disputes Act, by virtue of which BALCO man- agement before or after disinvestment is not free to close down any part B of the BALCO at their sweet will. The closure is governed by the law of the land and under the existing provisions of Industrial Disputes Act, "genuineness and adequacy of the reasons stated by the em- ployer" and "the interests of the general public and all other relevant factors" has to be examined by the appropriate government, and, for doing so the government give a reasonable opportunity of hearing to c the employer and workmen and the persons interested in such closure. It means that unless and until the appropriate Government grants permission, the BALCO management will not be competent to close down any undertaking of the company even after disinvestment. So there are protections available under the Act against arbitrary closure of any undertaking of the BALCO after disinvestment.

The unions desire that the prospective buyer should disclose its plans for investment/modernisation of BALCO after disinvestment. As a matter of fact, at the time of submitting financial bids the prospective buyers are expected to submit the business plan as well. But perhaps in such commercial ventures, given the changing market conditions, the business plan submitted by prospective buyers may not be enforce- able under law.

The trade unions desire that all listed demands should be accepted and put in the form of a written agreement between the government and the representatives of recognised unions before finalising any agreement with the prospective buyers. In fact, the Government and BALCO are two different legal entities. The Government is disinvesting its S 1% equity in the BALCO. Under law, no enforceable agreement may be entered between the Government and the workmen of BALCO as any such agreement will not have force of law. In order that an agreement has the force of law, it should be a written agreement between employer and workmen. The Government is not the employer of the workmen employed in BALCO. As such, any such agreement H

p. 556

A is neither desirable nor necessary and not enforceable".

From the aforesaid recital of facts, it is clear that safeguarding the interests of the workers was one. of the concerns of the Government. Repre- sentations had been received from the Trade Union leaders and effort was made to try and ensure that the process of disinvestment did not adversely. affect the B workers.

Even though the employees of the company may have an interest in seeing as to how the company is managed, it will not be possible to accept the contentions that in the process of disinvestment, the principles of natural justice c would be applicable and that the workers, or for that matter any other party having an interest therein, would have a right of being heard. As a matter of good governance and administration whenever such policy decisions are taken, it is desirable that there should be wide range of consultations including considering any representations which may have been filed, but there is no • provision in law which would require a hearing to be granted before taking a D policy decision. In exercise of executive powers, policy decisions have to be taken from time to time. It will be impossible and impracticable to give a formal hearing to those who may be affected whenever a policy decision is taken. One of the objects of giving a hearing in application of the principles of natural justice is to see that an illegal action or decision does not take place. Any wrong E order may adversely affect a person and it is essentially for d1is reason that a reasonable opportunity may have to be granted before passing of an adminis- trative order. In case of the policy decision, however, it is impracticable, and at times against the public interest, to do so, but this does not mean that a policy decision which is contrary to law cannot be challenged. Not giving the work- F 1nen an opportunity of being heard cannot per se be a ground of vitiating the decision. If the decision is otherwise illegal as being contrary to law or any constitutional provision, the persons affected like the workmen, can impugn the same, but not giving a pre-decisional hearing cannot be a ground for quashing the decision. G Our attention was invited to the decision in the National Textile Workers' Union and Ors. v. P.R. Ramakr'shnan (supra) where at page 245, Bhagwati, J. (as he then was) had observed that in deciding whether the Court should wind - up a company or change its rnanagement, the Court n1ust take into considera- tion not only the interests of the shareholders and creditors but also amongst other things, the interests of the workers: The workers must have an opportu-

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, J.] 557 nity of being heard for projecting and safeguarding their interests before winding up Order is passed by the Court: It was contended that similarly before a policy decision is taken, and also in the execution thereof, as the interests of the workers is going to be affected, the petitioning workers herein have a right to be heard. There can be no doubt that in judicial proceedings where rights are likely to be affected, principles of natural justice would require the Court B to give a hearing to the party against whom an adverse or unfavourable Order may be passed. It was in relation· 10 the winding up. proceedings which were pending before a Court that this Court in National Textiles Workers Union case held that they had a right to be heard. The position, in the present case,. is different. No judicial or quasi-judicial functions are exercised by the Govern- ment when it decides, as a matter of policy, to disinvest shares in a Public c Sector Undertaking. While it may be fair and sensible to consult the workers in a situation of change of management, there is, however, in law nO such obligation to consult in the process of sale of majority shares in a company. The decision in National Textiles Workers Union case can, therefore, be ofno assistance to the petitioner. D

In this connection, we approve the following observations of the Karnataka High Court in Pro.f Babu Mathew and Ors. v. Union ~{India and Ors.• [1997] 90 Company Cases 455 where the Court while dealing with disinvestment upto 49% of the government's holding in a public sector company observed at page E 478 as follows:

"Any economic reform, including disinvestment in PSEs is intended to shake the system for public good. The intention of disinvestment is to make PSEs more efficient and competitive and perform better. The concept of the public sector and what should be the role of the public F sector in the development of the country, are matters of policy closely linked to economic reforms. While it is true that any policy of the Government should be in public interest, it is not shown how prior consultation with employees of a PSE before disinvestment is a facet of such public interest." G 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. H

p. 558

A Apart from the fact that it will not be open to a Court to consider whether there has been a gross failure to evolve a comprebensive package towards implementation of the policy on disinvestment, as was contended by the Advocate-General of Chhattisgarh, it is not possible to accept the said conten- tion as being, in fact, correct. In the process of disinvestment, it is evident that B the Central Government was aware of the interests of the workers and employ- ees as a class. It was precisely for this reason that safeguards were inserted in. the Share Holders Agreement. These terms, which have been referred to were incorporated in the agreement after the demands of the BALCO employees were considered by the !MG in its meeting on 25th January, 2001 and thereafter the same were considered by the Cabinet Committee on Disinvestment on 1st c February, 2001.

As far as the grievance of alleged non-consultation of the State Govern- ment in the process of disinvestment of BALCO is concerned, that is a matter I between the State Government and the Union of India and any grievance on that score cannot be raised by the State against the Government of India in these proceedings initiated by the workmen. However, it is not possible to believe that during the entire process of disinvestment of BALCO, the Stale Govern- ment was oblivious of what was ~appening. The facts enumerated herein above clearly show that wide publicity was given at various stages in connection with disinvestment. Firstly, it was after due publicity that a global Adviser was appointed and thereafter advertisement was issued in an effort to select the strategic partner. The whole process of disinvestment of BALCO took place over a period of about two years. The issue was even debated by members in the Lok Sabha. There was nothing to prevent the State of Chattisgarh at any stage prior to the selection of the strategic partner, either to forward its· views or a representation or even lo make an offer of buying the 51 % of the shares which were being sold. Once Share Holders' Agreement has been signed, the offer of the State of Chattisgarh to buy 51 % equity shares in the company for a higher value of Rs. 551.41 crores would be of no consequence. This offer did not see the light of the day till the start of the present litigation. G It has been contended on behalf of the State of Chattisgarh as well as by Shri Ranjit Kumar that the process of disinvestment was a flagrant violation/ deviation of the recommendations of the expert body of the Disinvestment ,. Commission. It was submitted that the Disinvestment Commission had recom- H mended disinvestment of only 40% of the Government's equity to the strategic

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, J.] 559 partner through a transparent and competitive global bidding process but the A Counter Affidavit of the Union of India disclosed that it had taken a decision to off-load its equity holding of 51 % instead of 40% on the basis of the letter of the Chairman of the Commission dated 12th June, 1998. The contention of the learned Counsel was that the said letter of the Chairman could not be a substitute for the recommendations of the expert body of the Commission and B the Government of India should not have acted solely on the basis of the letter. It was submitted that there was, thus, gross departure from the recommenda- tions made by the Commission and the same was without any valid reason or consideration of overwhelming public interest which has resulted in vitiating the decision making process. c The Disinvestment Commission was established by the Government's Resolution on 23rd August, 1996. The Commission was to have a full-time Chairman and four part-time Members. The Commission was to make recom- mendations and be responsible for the implementation of the policies of the Government of India with respect to disinvestment. The terms of reference and the functions of the Commission were provided for in paras 3, 4 and 5 of the said Resolution. However, by another Resolution dated 12th January, 1998, paras 3 to 5 were deleted. It was now specifically stated that the Disinvestment Commission shall be the advisory body and will carry out such activities relating 10 disinvestment as may be assigned to it by the Government. It was clearly stipulated therein that the final decision on the recommendations of the Commission will vest with the Government. In April, 1997, the Commission advised the Government that BALCO needed to be privatised and a significant share of 40% of the equity should be sold to a strategic partner. This was to be followed by the reduction of Government's share holding to 26%. The Disinvestment Commission had categorised BALCO as a non-core group in- F dustry. After the issue of global advertisement, M/s Jardine Fleming Securities (I) Limited was appointed as global Adviser on 15th January, 1998. lt is on 12th June, 1998 that the Chairman, Disinvestment Commission advised that the Government may consider offering sale of 51 % or more equity of BALCO to the strategic partner along with transfer of management. This, according to the G Chairman, would fetch a better price of shares. In the light of these facts, it is not possible to accept the contention that the Union of India deviated from the advice which was given by the Disinvestment Commission. Firstly, the advice of this Disinvestment Commission was not binding on the Government of India. Further more, the terms of reference and the provisions contained in the H

p. 560

A Resolution dated 23rd August, 1996 which required the disinvestment under the supervision of the Commission and the Commission advising the Govern- ment on matters like consideration of the interests of the stake-holders, work- ers, consumers etc., were deleted by the subsequent Resolution of 12th January,

1998. The Commission became only an advisory or recommendatory body. It B is the full-time Chairman of the Commission who wrote on 12th June, 1998 that the Government may consider strategic sale of 50% or more of the equity instead of the recommendation which was contained in the earlier Report of the Commission for sale of only 40% of the equity. For the Government to accept this advise and to come to the conclusion that sale of 50% or more of the equity of BALCO along with transfer of management would secure for it c a better price than the sale of only 40% cannot, under any circumstances, be regarded as unwarranted, illegal or arbitrary.

It is clear from the facts enumerated above that at each stage of disinvestment, public notices were issued in appointing the Global Adviser and D then in selecting the strategic partner. The Global Adviser, after inviting quo- tations, selected a valuer, Shri P.V. Rao. Simultaneously, with the process of valuation, steps were taken for selecting the strategic partner by calling for expression of interest after advertisements in leading Journals and newspapers. Nevertheless. contention is sought to be raised that the method of valuation was E . faulty, some assets were not taken into consideration and that Rs. 551.5 crores offered by Mis Sterlite did not represent the correct value of 51 % shares of the company along with its controlling interest. It is not for this Court to consider whether the price which was fixed by the Evaluation Committee at Rs. 551.5 crores was correct or not. What has to be seen in exercise of judicial review of administrative action is to examine whether proper procedure has been F followed and whether the reserve price which was fixed is arbitrarily low and on the face of it, unacceptable.

Assets including shares can be sold in a number of ways, i.e., they can be sold by public auction, tenders or sealed offers or by negotiations. The G exercise which was undertaken to appoint valuers and to get a value of this controlling interest of 51 % of the shares was presumably to arrive at the reserve price. What the assets will fetch, is ultimately reflected in the offer which is received. Despite global advertisement, initially only eight companies submit- ted their expression of interest. The !MG, consisting of high officials rejected the bids of two of the eight parties and ultimately only three viz., Alcoa/USA, H

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, J.] 561 HINDALCO, Sterlite conducted due diligence on BALCO between September A and October, 2000. After carrying out the necessary inspection (due diligence), it is only two out of three applicants who gave their bid. Alcoa having dropped out, the bid of Sterlite industry was more and double of the bid of HINDALCO. The bidders at the time of furnishing their bids did not know what will be the reserve price which had to be fixed. It is only after the receipt of the bids that B the reserve price was made known. The perception in the mark~t. therefore, clearly was that 51 % shares of BALCO along with its management was not worth more than Rs. 550.5 crores. The only other bidder who had expressed interest was HINDALCO whose bid was only Rs. 275 crores. Under the circumstances, when the Government had decided to disinvest in BALCO by accepting a bid far in excess of the reserve price which was fixed by the c Evaluation Committee, the said decision cannot, under any circumstances, be faulted. Whether the reserve price should have been 514.4 crores or more appears to be immaterial when the best price which has been offered for the sale of 51 % stake in BALCO after global advertisement was only Rs. 551.5 crores. There is no suggestion that there was any other company or institution D which had or could offer more than the said sum. When proper procedure has been followed, as in this case, and an offer is made of a price more than the reserve price then there is no basis for this Court to conclude that the decision of the Government lo accept the offer of Sterlite is in any way vitiated. E It was contended by the learned Advocate General that the whole process lacked transparency. We are not able to appreciate this contention. The disinvestment of BALCO commenced with the recommendation by the Disinvestment Committee in its second Report suggesting that the Government may disinvest BALCO. It is by global advertisement that the global Adviser and the strategic partner was chosen. At every stage, the matter was looked into by the !MG and ultimately by the Cabinet Committee on Disinvestment. The system which was evolved was completely iransparent. It was made known. Transparency does not mean the conducting of the Government business while sitting on the cross roads in public. Transparency would require that the manner in which decision is taken is made known. Persons who are to decide are not arbitrarily >elected or appointed. Here we have the selection of the global adviser and the strategic partner through the process of issuance of global advertisement. It is the global Adviser who selected the valuer who was already on the list of valuers maintained by the Government. Whatever material was received was examined by high Power Committee known as the !MG and the H

p. 562

A ultimate· decision was taken by the Cabinet Committee on Disinvestment. To say that there has been lack of transparency, under these circumstances, is uncharitable and without any basis.

It was contended on behalf of the State of Chattisgarh that the land on which industry has been set up was originally tribal land. The said land could have been acquired and used by public sector undertaking but the tribal land could not be transferred to a non-tribal. Once majority shares in BALCO were transferred to a non-tribal company, the prohibition contained against the ,, transfer of tribal land came into operation. Relying on the majority decision of this Court in Samatha v. State ~f A.P. and Ors.. (1997] 8 SCC 191, it was contended that the transfer of land even by lease in favour of BALCO must be regarded as being invalid.

In Samatha s case, .this Court had to consider the validity of the grant of ' land in a scheduled area to the 'Non-Tribals'. The mining lease of Government Court had to consider the effect and applicability of Section 3(1) of the A.P. D Scheduled Areas Land Transfer Regulation, 1959 which reads as follows:-

"3. Tran.~fer of immovable property by a member o.f a Scheduled Tribe-( l)(a) Notwithstanding anything in any enactment, rule or law in .force in the Agency tracts any trans.fer of immovable property E situated in the Agency tracts by a person, whether or not such person is a member ~fa Scheduled Tribe, shall be absolutely null and void, unless such trans.fer is rnade in .favour of a person, who is a nzen1ber ~fa Scheduled Tribe or a society registered or deemed to be registered under the Andhra Pradesh Cooperative Societies Act, 1964 (Act 7 ~f 1964) which is composed solely ~{members ~fthe Scheduled Tribes". F While interpreting the said Regulation framed by the Governor in exer- cise of powers under Article 244 read with para 5(2) of the Fifth Schedule of the Constitution, this Court held that the words "transfer of immovable prop- erty ....... by a person" in.that clause included the transfer by way of grant of mining lease by the State Government. Section 3( 1) was interpreted as prohib- iting any such transfer in favour of a non-scheduled tribe and it was further declared that such transfer shall be absolutely null and void.

While we have strong reservations with regard to the correctness of the majority decision in Samatha s case, which has not only interpreted the pro-

BALCO EMPLOYEES Ul'<ION (REGD.) v. U.O.l. [KIRPAL, J.] 563 visions of aforesaid Section 3(1) of the A.P. Scheduled Areas Land Transfer A Regulation, 1959 but has also interpreted the provisions of the Fifth Schedule of the Constitution, the said decision is not applicable in the present case because the law applicable in Madhya Pradesh is not similar or identical to the aforesaid Regulation of Andhra Pradesh. Article 145 (3) of the Constitution provides that any substantial question of law as to the interpretation of the B provisions of the Constitution can only be decided by a Bench of five judges. In Samatha's case, it is a Bench of three Hon'ble judges who by majority of 2: 1, interpreted the Fifth Schedule of the Constitution. However, what is im- portant to note here is, as already observed herein above, that the provisions of the Madhya Pradesh Land Revenue Code, 1959 and Section 165, in particu- lar, are not in pari materia with the aforesaid Section 3 of the Andhra Pradesh c Regulation.

Section 165 of the M.P. Revenue Code, 1959 deals with transfer of rights of Bhumiswami. Prior to its amendment on 29th November, 1976, Sub-section 6 of Section 165 reads as follows :- D

"Notwithstanding anything contained in sub-section ( 1), the right of a Bhumiswami belonging to a tribe which has been declared to be an aboriginal tribe by the State Government by a notification in that behalf for the whole or a part of the area to which this Code applies shall not be transferred to a person not belonging to such tribe without the permission of a Revenue Officer not below the rank of a Collector, given for reasons to be recorded in writing".

By Section 2 of the M.P. Act No. 61 of 1976 published in the Gazette on 29th November, 1976, the aforesaid sub-section (6) of Section 165 was repealed and was substituted by the following provision:-

"Notwithstanding anything contained in sub-section (I) the right of Bhumiswami belonging to a tribe which has been declared to be an aboriginal tribe by the State Government by a notification in that behalf for the whole or part of the area to which the Code applies shall-

(i) in such areas as are predominately inhabited by aboriginal tribes and from such date as the State Government may, by notification specify, not be transferred nor it shall be transferable either by H

p. 564

A way of sale or otherwise or as a consequence of transaction of loan to a person not belonging to such tribe in the area specified in the notification;

(ii) in areas other than those specified in the notification under clause (i), not be transferred or be transferable either by way of sale or B otherwise or as a consequence of transaction of loan to a person not belonging to such tribe without the permission of a Revenue Officer not below the rank of Collector, given for reasons to be recorded in writing".

c Explanation - For the purposes of this sub-section the expression "otherwise" shall not include lease.

Sub-section (6) of Section 165, before and after its amendment, does not contain any provision prohibiting the giving of tribal land by way of lease to non-tribals. Prior to its amendment, a land could be transferred to a non-tribal D after getting permission of Revenue Officer not below the rank of Collector who is required to give his reasons for granting the permission. After amend- ment on 29th November, 1976 by virtue of provision of sub-section (6), lease of land is taken out of the purview of sub-section 6(1).

E In the instant case, either the land was acquired and then given on lease by the State Government to BALCO or permission was given by the District Collector for transfer of private land in favour of BALCO. This was clearly permissible under the provisions of Section 165(6) as it then stood and it is too late in the day, 25 years after the last permission was granted, to hold that because of this disinvestment;_ it must be presumed that there is a transfer of land to the non-tribal in the year 2001 even though the land continues to remain with BALCO to whom it was originally transferred. The giving of land to BALCO on lease was in compliance with the provisions of Section 165(6) of the Revenue Code. Moreover, change of management or in the shareholding docs not imply that there has now been any transfer of land from one company to another. If the original grant of lease of land and permission to transfer in favour of BALCO between the years 1968 and 1972 was valid, then, it cannot now be contended that there has been another transfer of land with the Gov- ernment having been reduced it's stake to 49%. Even if BALCO had been a non-public sector undertaking the transfer of land to it was not in violation of the M.P. Land Revenue Code. The decision of this Court in Samatha's case

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, !.] 565 (Supra) is inapplicable in the present case as the statutory provision here does not contain any absolute prohibition of the type contained in Section 3( I) of the Andhra Pradesh Regulation, which was the basis of the decision in Samatha>· case.

Transferred Case No. 9 of 2001. B Shri B.L. Wadhera has, in recent years, become a persistent Public Interest Litigant who has to his credit fairly large number of Writ Petitions filed in the Delhi High Court. Not to miss an opportunity, soon after the bid of Sterlite was accepted on 21st February, 2001, promptly Wadhera filed Writ Petition in the Delhi High Court within two days i.e. on 23rd February, 2001 which is Transferred Case No. 9 of2001 challenging the said decision. Wadhera c is not an employee of the company, nor was he a prospective bidder. He contended that he had been closely connected with public sector undertakings and therefore, had the locus standi to file the Writ Petition challenging the said disinvestment by filing what he terms as a Public Interest Litigation. D Public Interest Litigation, or PIL as it is more commonly known, entered the Indian judicial process in 1970. It will not be incorrect to say that it is primarily the judges who have innovated this type of litigation as there was a dire need for it. At that stage, it was intended to vindicate public interest where fundamental and other rights of the people who were poor, ignorant or in E socially or economically disadvantageous position and were unable to seek legal redress were required to be espoused. PIL was not meant to be adversarial in nature and was to be a cooperative and collaborative effort of the parties and the Court so as to secure justice for the poor and the weaker sections of the community who were not in a position to protect their own interests. Public Interest Litigation was intended to mean nothing more than what words them- F selves said viz., 'litigation in the interest of the public'.

While PIL initially was invoked mostly in cases connected with the relief to the people and the weaker sections of the society and in areas where there was violation of human rights under Article 21, but with the passage of time, G petitions have been entertained in other spheres. Prof. S.B. Sathe has summa- rised the extent of the jurisdiction which has now been exercised in following words :-

"PIL may, therefore, be described as satisfying one or more of the following parameters. These are not exclusive but merely descriptive: H

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A • Where the concerns underlying a petition are not individualist but are shared widely by a large number of people (bonded Jabour, undertrial prisoners, prison inmates).

• Where the affected persons belong to the disadvantaged sections of society( women, children, bonded Jabour, unorganised labour B etc.).

• Where judicial Jaw making is necessary to avoid exploitation(inter- country adoption, the education of the children of the prosti- tutes). c • Where judicial intervention is necessary for the protection of the sanctity of democratic institutions(independence of the judiciary, existence of grievances redressal forums).

D • Where administrative decisions related to development are harmful to the environment and jeopardize people's to natural resources such as air or water".

There is, in recent years, a feeling which is not without any foundation that Public Interest Litigation is now tending to become publicity interest litigation or private interest litigation and has a tendency to be counter-produc- tive.

PIL is not a pill or a panacea for all wrongs. It was essentially meant to protect basic human rights of the weak and the disadvantaged and was a procedure which was innovated where a public spirited person files a petition in effect on behalf of such persons who on account of poverty, helplessness or economic and social disabilities could not approach the Court for relief. There have been, in recent times, increasingly instances of abuse of PIL. Therefore, there is a need to re-emphasize the parameters within which PIL can be resorted to by a Petitioner and entertained by the Court. This aspect has come up for consideration before this Court and all we need to do is to recapitulate and re- emphasize the same.

What Public Interest Litigation is meant to be has been explained at length in S.P. Gupta v. Union of India and Anr., [1981] Supp. SCC 87. Public H Interest Litigation in that case was filed relating to the appointment and transfer

BALCO EMPLOYEES UNION (REGO.) v. U.0.1. [KIRPAL, J.] 567 of judges and it is in this connection that the question arose with regard to the locus standi of the Petitioner to file the Writ Petition. While deciding this aspect, this Court examined as to what is the nature of the Public Interest Litigation and who can initiate the same. At page 215, Bhagwati J. observed as follows :-

" .. .It is for this reason that in public interest litigation - litigation undertaken for the purpose of redressing public injury, enforcing public duty, protecting social, collective, 'diffused' rights and interests or vindicating public interest, any citizen who is acting bona fide and who has sufficient interest has to be accorded standing ... "

The limitation within which the Court must act, and the caution c against the abuse of the same is referred to by Bhagwati J. at page 219 as follows :-

"24. But we must be careful to see that the member of the public, who approaches the court in cases of this kind, is acting bona fide and not for personal gain or private profit or political motivation or other oblique consideration. The Court must not allow its process to be abused by politicians and others to delay legitimate administrative action or to gain a political o~iective. Andre Rabie has warned that "political pressure groups who could not achieve their aims through the administrative process" and we might add, through the political process, "may try to use the courts to further their aims". These are some of the dangers in public interest litigation which the court has to be careful to avoid. It is also necessary for the court to bear in mind ;hat there is a vital distinction between locus standi and justiciability

.. and it is not eve1y d~fault on the part of the State or a public authority that is justiciable. The court must take care to see that it does not overstep the limits ~fits judicial.function and trespass into areas which F

are reserved to the Executive and the Legislature by the Constitution. It is a fascinating exercise for the court to deal with public interest litigation because it is a new jurisprudence which the court is evolving G ajurisprudence which demands judicial statesmanship and high crea- tive ability. The frontiers of public law are expanding far and wide and new concepts and doctrines which will change the complexion of the law and which were so far as embedded in the womb of the future, are beginning to be born. H

p. 568

A 25. Before we part with this general discussion in regard to locus standi, there is one point we would like to emphasise and it is, that cases may arise where there is undoubtedly public injury by the act or omission of the State or a public authority but such act or omission also- causes a specific legal injury to an individual or to a specific class or B group of individuals. In such cases, a member of the public having sufficient interest can certainly maintain an action challenging the legality of such act or omission, but if the person or specific class or group of persons who are primarily injured as a result of such act or omission, do not wish to claim any relief and accept such act or omission willingly and without protest, the member of the public who c complains of a secondary public injury cannot maintain the action, for the effect of entertaining the action at the instance of such member of the public would be to foist a relief on the person or specific class or group of persons primarily injured, which they do not want."

D Emphasis added

In Sachidanand Pandey and Am: v. State of West Bengal and Ors., [1987] 2 SCC 295, V. Khalid, J. observed as follows :-

"61. It is only when courts are apprised of gross violation of funda- E mental rights by a group or a class action or when basic human rights are invaded or when there are complaints of such acts as shock the judicial conscience that the courts, especially this Court, should leave aside procedural shackles and hear such petitions and extend its juris- diction under all available provisions for remedying the hardships and F miseries of the needy, the underdog and the neglected. I will be second to none in extending help when such help is required. But this does not mean.that the doors of this Court are always open for anyone to walk in. It is necessary to have some self-imposed restraint on public interest .. litigants''. G After referring to the decision in Subhash Kumar v. State ~f Bihar and Ors., [ 1991] 1 SCC 598 and other cases on the point, in Janata Dal v. H.S. Chowdhm)• and Ors., [1992] 4 SCC 305, it was observed at page 348 as follows :-

H "109. It is thus clear that only a person acting bona.fide and having

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, l.] . 569 sufficient interest in the proceeding of PIL will alone have a locus A standi and can approach the court to wipe out the tears of the poor and needy, suffering from violation of their fundamental rights, but not a person for personal gain or private profit or political motive or any oblique consideration. Similarly, a vexatious petition under the colour of PIL brought before the court for vindicating any personal griev- B ances, deserves rejection at the threshold".

Referring to the litigants standing in queues waiting for the cases to be listed in Courts at page 349, Pandian, J. had observed as follows:-

" ... the busybodies, meddlesome interlopers, wayfarers or officious c interveners having absolutely no public interest except for personal gain or private profit either for themselves or as proxy of others or for any other extraneous motivation or for glare of publicity break the queue muffling their faces by wearing the mask of public interest litigation, and get into the courts by filing vexatious and frivolous D petitions and thus criminally waste the valuable time of the courts and as a result of which the queue standing outside the doors of the Court never moves which piquant situation creates a frustration in the minds of the genuine litigants and resultantly they lose faith in the adminis- tration of our judicial system." E While dealing with a case where PIL had been filed in relation to an award of contract, the factors which the Courts have to consider have been dealt with in the following observations in Raunaq International Ltd. v. /. V.R. Construction Lid. and Ors., (1999] 1 SCC 492 at page 502.

"17. Normally before such a project is undertaken, a detailed consid- F

- eration of the need, viability, financing and cost-effectiveness of the proposed project and offers received takes place at various levels in the Government. If there is a good reason why the project should not be undertaken, then the time to object is at the time when the same is under consideration and before a final decision is taken to undertake G the project. If breach of law in the execution of the project is appre- hended, then it is at the stage when the viability of the project is being consiciered that the objection before the appropriate authorities includ- ing the court must be raised. We would expect that if such objection or material is placed before the Government, the same would be H

p. 570

A considered before a final decision is taken. It is common experience that considerable time is spent by the authorities concerned before a final decision is taken regarding the execution of a public project. This is the appropriate time when all aspects and all objections should be considered. It is only when valid objections are not taken into account B or ignored that the court may intervene. Even so, the court should be moved at the earliest possible opportunity. Belated petitions should not be entertained.

18. The same considerations must weigh with the court when interim orders are passed in such petitions. The party at whose instance interim c orders are obtained has to be made accountable for the consequences of the interim order. The interim order could delay the project, jettison finely worked financial arrangements and escalate costs. Hence the petitioner asking for interim orders in appropriate cases should be asked to provide security for any increase in cost as a result of such D delay or any damages suffered by the opposite party in consequence of an interim order. Otherwise public detriment may outweigh public benefit in granti,1g such interim orders. Stay order or injunction order, if issued, must be moulded to provide for restitution."

Lastly, we need only to refer to the following observations in the major- E ity decision in Narmada Bachao Ando/an case (supra) at page 763.

"232. While protecting the rights of the people from being violated in any manner utmost care has to be taken that the court does not transgress its jurisdiction. There is, in our constitutional framework a fairly clear demarcation of powers. The court has come down heavily whenever the executive has sought to impinge upon the court's juris- diction.

233Copy pinpoint233. At the same time, in exercise of its enormous power the court should not be called upon to or undertake governmental duties or functions. The courts cannot run the Government nor can the admin- istration indulge in abuse or non~use of power and get away with it. The essence of judicial review is a constitutional fundamental. The role of the higher judiciary under the Constitution casts on it a great obligation as the sentinel to defend the values of the Constitution and the rights of Indians. The courts must, therefore, act within their

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, l.] 571 judicially permissible limitations to uphold the rule of law and harness their power in public interest. It is precisely for this reason that it has been consistently held by this Court that in matters of policy the court will not interfere. When there is a valid law requiring the Government to act in a particular manner the court ought not to, without striking down the law, give any direction which is not in accordance with law. B In other words, the court itself is not above the law.

234Copy pinpoint234. In respect of public projects and policies which are initiated by the Government the courts should not become an approval authority. Normally such decisions are taken by the Government after due care and consideration. In a democracy welfare of the people at large, and c not merely of a small section of the society, has to be the concern of a responsible Government. If a considered policy decision has been taken, which is not in conflict with any law or is not ma/a.fide, it will not be in public interest to require the court to go into and investigate those areas which are the function of the executive. For any project which is approved after due deliberation the court should refrain from being asked to review the decision just because a petitioner in filing a PIL alleges that such a decision should not have been taken because an opposite view against the undertaking of the project, which view may have been considered by the Government, is possible. When two or more options or views are possible and after considering them the Government takes a policy decision it is then not the function of the court to go into the matter afresh and, in a way, sit in appeal over such a policy decision".

It will be seen that whenever the Court has interfered and given direc- F tions 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 G 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 H

p. 572

A 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 chal- B lenge to the same at the instance of a busy-body cannot fall within the param- eters of Public Interest Litigation.

On this ground alone, we decline to entertain the writ petition filed by Shri B.L. Wadhera. c Writ Petition (Civil) No. 194 ~f 2001

This writ petition has been filed under Article 32 of the Constitution by BALCO challenging various show cause notices issued to them by authorities in the State of Chhattisgarh. In our opinion, it will not be appropriate for this D 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.

E Conclusion:

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 amena- ble 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 !st March, H 2001.

BALCO EMPLOYEES UNION (REGD.) v. U.0.1. [KIRPAL, J.] 573 Thus, apart from the fact that the policy of disinvestment cannot be A 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 B 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 c 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. v. State of U.P. and Ors.. [2000] I SCC 633]. D The ratio of the decision in Samatha's case (supra) 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. Further- more even with the change in management the la~d remains with BALCO to whom it had been validly given on lease. E

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 F 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 contingenci~s arise in this present case. G 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 ~ H

p. 574

A 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 B 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. c 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 200 I are dismissed. The parties will, however, bear their own costs.

D B.S. T.C. and Petition dismissed.