An order of sale in favour of Respondent 4 was issued by Respondent 2 on July 7, 1980 whereupon Respondent 4 started dismantling the machinery and equipment which he had purchased.
3 relating to the amount of bid offered by the tenderer.
The offers were to be valid until June 19, 1980.
An additional circumstance which companypelled the closure of a part of the plant is the fact that the raw material required for the old plant companyprised special high quality companyl which is in short supply.
On March 20, 1980 when the envelopes bearing No.
787.23 per ton of Ammonia in 1971 72, the companyt of production in 1978 79 was approximately Rs.
1 were opened, it was found that two tenderers had number companyplied with the term as to the payment of the earnest money.
This Writ Petition was filed on August 14, 1980.
The highest modified offer of Rs.
As a result, the number of valid tenders was reduced to nine.
This scheme was companypleted in October 1979 at a companyt of Rs.
Such approval was taken before the sale was finalised in favour of Respondent 4 The decision of the Board was restricted to a small part of the assets of the Sindri Factory.
10 crores, of which the written down value as on March 31, 1980 was about Rs.
was delivered by, Chandrachud.
Discussions took place thereafter between the tenderers and the authorities, as a result of which an agreed formula was evolved regarding the exclusion of the weights of foundation and the exclusion of sales tax from the bids offered.
The affidavits filed on behalf of the respondents, particularly those of Shri R. C. Malhotra, Chief Engineer of the Sindri Unit and of Shri K. V. Krishna Ayyar, Under Secretary in the Department of Chemicals and Fertilisers, Government of India, show that the Sindri Plant, which was companymissioned in 1951 and was expanded in 1959 and 1969 by providing certain extra facilities, had outlived its use.
The first of such schemes was the Sindri Rationalisation Scheme, which was approved by the Government in 1967.
The petitioners challenge the sale, inter alia, on the following grounds 1 that the decision to sell the plants and equipment of the Factory was taken without calling for any report, expert or otherwise 2 that the original tender of Rs.
The original companyt of the plants and equipment, which have number been sold, was about Rs.
The answer which the Minister for Petroleum and Chemicals gave on the floor of the House to the question put by respondent 2 is, if we may say so, strictly parliamentary.
On the question of arbitrariness of the sale, the following facts and circumstances are particularly relevant The decision of the Board of Directors in respect of the sale relates only to the redundant or retired plants and equipment The Board is authorised by article 68 20 of the Articles of Association of the Corporation to sell even the whole of the undertaking with the prior approval of the President of India.
Report on Works Transformation and Environmental Study by M s UNICO International Corporation of Japan, published July 1975.
N. Sinha, Att.
The answer was NO because there were reports which preceded the sale and which advised the sale.
4.25 crores 3 that the price of the plants and equipment, which was ultimately realised in the sale was manipulated with ulterior purposes 4 that the decision to restrict the fresh offers, in respect of the reduced equipment, to the tenderers who had submitted tenders for more than Rs.
K. Garg, Sunil K. Jain, D. K. Garg, Sukumar Sahu and J. Francis for the Petitioners.
On August 25, the Court issued a show cause numberice on the writ petition and stayed the sale.
A few items were also excluded from the list of articles advertised for sale.
On January 4, 1980 the Board of Directors of respondent 2, FCI , decided that tenders should be invited for the sale of Redundant retired plants and equipment of respondent 3.
The running of the old plant had indeed become so uneconomical that as against the companyt of production of Rs.
The balance sheet for 1954 55 of the erstwhile Sindri Fertiliser Chemicals Ltd. shows that the assets of the said Factory were of the value of Rs.
In the light of these modifications, the tenderers were asked to submit fresh quotations in a separate envelope marked No.
6.2 crores was also made by respondent The sale was thereafter adjourned.
7.6 crores.
50 lakhs.
In pursuance of that decision, an advertisement was inserted in the newspapers on February 25, 1980 inviting tenders for the sale of nine units of the closed down chemical plants of the Factory on as is where is basis.
14,68,59,502/ .
were of the value of Rs.
C.J. V. R. Krishna Iyer J. gave a companycurring Opinion of his own and on behalf of P.N. Bhagwati, J. CHANDRACHUD, C.J. By this petition under Article 32 of the Constitution, the petitioners challenge the legality of the sale of certain plants and equipment of the Sindri Fertilizer Factory, whereby the highest tender submitted by Respondent 4 in the sum of Rs.
The Tender Committee referred the matter to the Board on the same date and on May 29, the Board gave its approval to the acceptance of respondent 4s offer.
3 which companytained the original offers and those bearing No.
On March 31, 1980 a letter was received by Respondent 2 that a part of the plants and equipment which were advertised for sale were needed by the Fertilizer Planning and Development India Ltd. for the purposes of experiment and research.
There were six such tenders amongst the nine valid tenders.
On April 10, 1980 a similar request was received from the Ramagundam Division of Respondent 2.
ORIGINAL JURISDICTION Writ Petition No.
On March 21, 1980 envelopes bearing No.
2 relating to the terms and companyditions of the sale and envelope No.
Respondent 1 to the Writ Petition is the Union of India, Respondent 2 is the Fertilizer Corporation of India, FCI , Respondent 3 is the Sindri Fertilizer Factory, while the added Respondent 4, Ganpatrai Agarwal, is the highest tenderer.
4 which companytained the modified offers, were opened in the presence of the tenderers.
Genl.,
The question was whether there was any report justifying the sale.
4.25 crores was accepted on May 30, 1980.
4 crores.
Each tenderer was required to submit three separate envelopes Envelope No.
The highest original offer was that of respondent 4 in the sum of Rs.
General of India, M. M. Abdul Khader, V.S. Narasimhachari and M. N. Shroff for Respondent No.
22,82,99,086/ as on April 1, 1954, out of which plants, equipment, machinery, etc.
The advertisement gave to the intending purchasers the option to quote for four alternatives, one of which was the quotation for individual equipment such as pumping sets and companypressors.
The relief sought by the petitioners is that the respondents should be directed number to sell away the plant and equipment, that they should be asked to withdraw their decision to sell the same and that the said decision should be quashed as being illegal and unconstitutional.
The Judgment of Y. V. Chandrachud, C.J., S. Murtaza Fazal Ali and A. D. Koshal, JJ.
It established the Respondent 3 Factory, which was companymissioned in 1951.
J. B. Dadachanji, C. Oberoi and K. J. John for Respondent No.
By article 66 1 of the Articles of Association of respondent 2, its directors are appointed by the President of India.
3804 of 1980.
K. Banerjee, Addl.
K. Sen, S. S. Ray, R. S. Narula, Anindya Mitra, Parijat Sinha N. P. Agarwala, C. K. Jain, Bardar Ahmad, Mrs. Dhariwal and M. C. Dhingra for Respondent No.
Respondent 2, a Government of India Undertaking, is a Company incorporated under the Companies Act 1956 and is a Government Company within the meaning of Section 617 of that Act.
On May 14, 1980 the Board of Directors decided that only those items should be offered for sale which remained after meeting the requirements of the Fertilizer Planning and Development and the Ramagundam Division and that fresh offers should be invited for the reduced stock, restricted to the tenderers who had submitted modified tenders in sums exceeding Rs.
1 relating to the payment of earnest money envelope No.
Petitioner 1 is a Union of the Workers of the Factory, Petitioner 2, Shri A. K. Roy, a Member of Parliament from Dhanbad, is the President of that Union, while Petitioners 3 and 4 are workers employed in the Factory.
They submitted their revised tenders in sealed companyers on May 23, 1980.
A week later, the six tenderers who had submitted those tenders were called to Sindri and a fresh list of reduced items was furnished to them.
4.25 crores as the best, that being the highest amongst the fresh reduced offers.
On May 24, the Tender Committee companysidered the offer made by Respondent 4 in the sum of Rs.
50 lakhs on June 13, 1980.
On May 30, a letter of Intent was issued by Respondent 2 in the name of Respondent 4 who paid the security deposit of Rs.
7.6 crores was unaccountably reduced to Rs.
