Consequently, advertisements were issued and a detailed process followed, resulting into the selection of M/S Sterling Co. as the Strategic Partner to whom the 51% stake of the Government would be transferred for Rs. 551 crores. Discussions on the same also took place in the Rajya Sabha and the Lok Sabha wherein motion to disapprove the proposed disinvestment failed. Thereupon the said transfer of stake was challenged before the Supreme Court and other High Courts. Clubbing the claims, the Court framed the following issues;
Whether Executive Policies are reviewable by the Judiciary? Whether the decision to disinvest BALCO is constitutionally valid?
ARGUMENTS:- Those challenging the disinvestment argued that (a) by reason of disinvestment the workmen had lost their right and protection under Articles 14 and 16 of the Constitution and as this was an adverse civil consequence, they had a right to be heard before and during the process of disinvestment and (b) normally in cases of this nature 5% of the shares were disinvested in favour of the employees which was not so done in the present case. Thus the disinvestment was unsustainable. To this the counter argument was, (a) public sector companies were constantly sinking into an increasing difficulties and it was in public interest to disinvest them, and (b) the wisdom and advisability of economic policies of Government are not amenable to judicial review.
JUDGMENT:- The Apex Court held that (a) it could not look into the executive wisdom which enacts a policy, specially matters regarding economic management and (b) the legal challenges made to the disinvestment of BALCO were not valid and consequently, the decision to disinvest BALCO is constitutionally valid. The reason for the said decision, the Apex Court gave as follows;
Non-government employees working in a company cannot claim a superior right than a government servant and impugn its change of status in terms of social security measures and protection of their employment and rights. In taking of a policy decision in economic matters at length, the principles of natural justice have no role to play which would require a hearing of the workers prior to decision making. When the government chooses to run an industry by forming a company and it becomes its shareholder then under the provisions of the Companies Act as a shareholder, it would have a right to transfer its shares.
FOR COMMON MAN:- In the course of delivering this judgment, the Court came down heavily on frivolous Public Interest Litigations (PILs). In fact this case has set the trend for in lemine dismissal of PILs if the petitioners are not able to establish that a substantial public interest is involved in the petitions. The Court also declared that public interest is the paramount consideration in national governance and therefore if in the public interest the Government thought it fit to take over a sick company to preserve the productive unit and the jobs of those employed therein, the government can do so reducing the continuing drain on its limited resources. This decision is in tune with the growing recognition of the efficiencies of market mechanism .
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