NATIONAL CONFEDERATION OF OFFICERS ASSOCIATION OF CENTRAL PUBLIC SECTOR ENTERPRISES AND ORS. versus UNION OF INDIA AND ORS.

Citation: [2021] 10 S.C.R. 899 · Decided: 18-11-2021 · Supreme Court of India · Bench: D.Y. CHANDRACHUD · Disposal: Case Partly allowed

cites 8 · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
899
   [2021] 10 S.C.R. 899
899
NATIONAL CONFEDERATION OF OFFICERS ASSOCIATION
OF CENTRAL PUBLIC SECTOR ENTERPRISES AND ORS.
v.
UNION OF INDIA AND ORS.
(Writ Petition (C) No. 229 of 2014)
NOVEMBER 18, 2021
[DR. DHANANJAYA Y CHANDRACHUD
AND B. V. NAGARATHNA, JJ.]
Disinvestment: Policy of disinvestment – Union Government’s
divestment of its residual shareholding of 29.54 % in HZL company
– Public interest litigation u/Art. 32, seeking mandamus directing
the Union Government to refrain from disinvestment without
amending the Nationalisation Act, 1976 – Held: Decision in Centre
for Public Interest Litigation’s case, does not apply to the present
facts because HZL had ceased to be a government company, at the
stage of the disinvestment – Thus, the Union Government’s decision
to disinvest 29.54 per cent of its residual shareholding in HZL is
not interdicted by the principles laid down by this Court in Centre
for Public Interest Litigation’s case that when the acquisition takes
place under an Act of Parliament, any disinvestment by the Union
Government can be undertaken only with the approval of Parliament
or through its intervention –There is no challenge to the
disinvestment which took place in 1991-92 or in 2002, the latter
having resulted in HZL ceasing to retain its status as a government
company within the meaning of s. 617 of the Companies Act 1956 –
It would be inconsistent to read an implied limitation on the transfer
by the Union Government of its residual shareholding in HZL
representing 29.54 per cent of the equity capital – Thus, when a
decision is taken by the government as shareholder of a company
to sell its shares, it acts as any other shareholder in a company who
makes the decision on the basis of the financial and economic
exigencies – Furthermore, SOVL company does not seek to exercise
the second call option, in terms of the Share Purchase Agreement,
as such the Union Government took decision to sell its residuary
shareholding in the open market – Union Government being
amenable to Part III of the Constitution, would not impose a restraint
on its capacity to decide, as a shareholder, to disinvest its
A
B
C
D
E
F
G
H
900
SUPREME COURT REPORTS
[2021] 10 S.C.R.
shareholding, the process of disinvestment being transparent
and which comports with law and results in the best price
being a shareholding – Metal Corporation (Nationalisation
and Miscellaneous) Provisions Act 1976 – Constitution of India –
Art. 32.
Constitution of India: Art. 32 – Writ petition under –
Disinvestment of the residual 29.54 per cent shareholding of the
Union Government challenged on the ground that the residual
disinvestment can occur only after the amendment of the
Nationalisation Act 1976 – Said prayer substantially similar to the
reliefs sought in Maton Mines Mazdoor Sangh’s case, wherein they
challenged the disinvestment of 2002 and 2014, on the basis of the
decision in Centre for Public Interest Litigation – Petition, if barred
by the principles of res judicata, following the dismissal of the earlier
writ petition on the same issue – Held: The summary dismissal of an
earlier petition u/Art. 32 does not bar the instant writ petition on
grounds of res judicata as there has been no substantive decision
on the merits of the issues, thus, the instant writ petition not barred
by res judicata – Metal Corporation (Nationalisation and
Miscellaneous) Provisions Act 1976.
Code of Civil Procedure 1908: s. 11 – Principle of res
judicata – Determination of its applicability - Held: While determining
the applicability of the principle of res judicata u/s. 11, the grave
issues of public interest are not to be ignored merely because a
petition was initially filed and dismissed, without a substantial
adjudication on merits – There is a trend of poorly pleaded public
interest litigations being filed instantly following a disclosure in the
media, with a conscious intention to obtain a dismissal from the
Court and preclude genuine litigants from approaching the Court
in public interest – Court to be aware of the contemporary reality
and interpret the principles of res judicata or constructive res
judicata in a manner which does not debar access to justice –
Jurisdiction u/Art. 32 is a fundamental right in and of itself.
Investigation: CBI Crime Manual – Process of conducting
CBI’s preliminary enquiries – Preliminary enquiry by CBI into the
suspected irregularities in the course of disinvestment of 26% equity
holding of the Union Gover

Excerpt shown. Read the full judgment & AI analysis in Lexace.