LexBALCO EMPLOYEES UNION (REGD.) versus UNION OF INDIA AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
BALCO EMPLOYEES UNION (REGO.)
v.
UNION OF INDIA AND ORS.
DECEMBER 10, 2001
[B.N. KIRPAL, SHIVARAJ V. PATIL AND
P. VENKATARAMA REDD!, JJ.]
Disinvestnzent:
Disinvestment of 51% equity qf Balco, a Public Sector Undertaking, by
Central Govemnient to a Strategic Partner and transfer o,fnranagement thereof-
Amenability to Judicial Review-Held, it is cm ec~nomic policy decision qf the
Govenunent and hence not tunenable to judicial review-Constitution o,f India,
1950 -Articles 32 & 226.
A
B
c
Protection of workers' rights and interests-Availability of under the
D
Constitution-Held, not available-Hoivever, on .facts, st~{ficient sqfeguards
anl/ protection are built in various agree111ents entered into with the Strategic
Partner besides availability of protection under existing laws-Constitution of
India, 1950-Articles 12, 14 and 16.
Non-consultation with State Govemment by Union of India regan/ing
E
disenvestment-0.(fer by the State Government to purchase 51% equity at a
higher price-Held, on facts, State Government was not oblivious of the
disinvestment of BALC0-0.[fer not valid since the disinvestment is over.
Disinvestn1ent Co1nn1ission reconunendations to Union of India-Bind-
ing nature-Held, not binding.
Valuation o,f a:-;sets to arrive at a reserve price-Correctness thereof-
Held, valuation is a question of fact and hence, not an1enable to Judicial
review-On facts, proper procedure has been .followed in valuation.
Disinvestment decision of BALCO-Transparency of-Held, there is
complete transparency-On .fai:ts,fair and equitable procedure was followed in
carrying out disinvestn1ent-Clain1 by the State Government uncharitable and
baseless.
F
G
Trans.fer of land, which was originally a tribal land and given on lease
H ·
5ll
512
SUPREME COURT REPORTS
[2001] SUPP. 5 S.C.R.
A
to BALCO, to a non-tribal o;; disinvestment-Validity of-Held, change qf
management or shareholding does not involve tran~fer of land-Allegation
baseless since original tran~fer of land to BALCO WllS not questioned-M.P.
Land Revenue Code, 1959-Mining Concession Rules.
B
c
D
E
F
G
H
Ad111inistrtitive Unv:
Principles o,f Natural Justice-Right o.f hearing and consultation with
employees b~fore taking economic policy decisions-Availability of-Held, not
available.
Public Interest Litigation :
Petition Oil Disinevstment decisions-Admissibility of-Grant of Exp-
parte reli~f-Held, not admissible as it is not meant to challenge financial or
economic decisions of the Government-Ex-parte reli4should be granted after
taking undertaking from the Petitioner to indemnify any loss or damage if PIL
is dismissed since any delay will be contrary to public interest.
Mis. Bharat Aluminium Comapny Limited (BALCO) was incorpo-
rated in 1965 under the Companies Act, 1956 as a Public Sector Undertak-
ing (PSU). The State Government provided land partly by transfer of its
own land and partly through land acquisition to the undertaking for its
establishment. Since 1990-91, successive Central Governments had been
planning to disinvest some of the PS Us and in 1996, the Union of India
constituted a Disinvestment Commission as an independent non-statutory
advisory body and set out broad terms of reference. In 1997, the Commis-
sion recommended the Union of India to privatise BALCO and suggested
disinvestment of 40% of equity holding to a Strategic Partner and dilution
of remaining 60 % holding through public offer over a period of time.
Subsequently, on the basis of the revised recommendations of the Commis-
sion, Chairman suggested the Union of India to offer 51 % or more to the
Strategic Partner along with transfer of management. The Union of India
approved the sale of 51 % equity and appointed a Global Advisor through
competitive bidding process to carry out the process cf disinvestment.
This decision was challenged in 1999 by the BALCO Employees
Union by filing a Writ Petition in the High Court of Delhi. The High Court
disposed of the Writ Petition on the basis of a mutual consent that advance
intimation will be given to the employees before taking a final decision on
•
\
~
BALCO EMPLOYEES UNION (REGD.) v. U.O.l.
513
disinvestment.
In June 2000, the Global Advisor issued global advertisements in
leading journals and newspapers calling for 'Expression of Interest' for
acquiring 51 % equity in BALCO. Eight companies expressed their inter-
est. The Global Advisor, in consultation with the Union of IndiExcerpt shown. Read the full judgment & AI analysis in Lexace.