Balco Employee’s Union V. Union of India

BALCO Employees sodality v. Union of India Signifi basece in Administrative Law. Administrative decision making has been a overt of great discussion since long. The application of a mind, which is in not a strict sense judicial, the posture of arbitral preferences coupled with the feature of judgment allowed to the executive in decision making, more often than not, carries the moving picture of whims and caprices existence involved composition such(prenominal) decision has been taken.Related essay AK Kraipak CaseThe question of why at all this is so, is to be answered not from a legal but from a charitableitarian standpoint. Each human differs from other and when subjective satisfaction of a group of individuals is concerned, the executive wing of the state in the consecrate theme it is bound to happen that one there will be a number of groups who do not agree with the decision so taken for they fork out their own criterias and yardsticks to measure the equivalent. Po ssibly, the comparable is the case with administrative decision making.When the brass instrument is satisfied, based upon the material considered and issues involved, that a given decision is take into account for a circumstances, it may equivocally be true that it may not satisfy each and either individual concerned with the similar set of issues and therefore there may arise a conflict. accounting is full of examples and is enriching day by day of the deterrent examples in which executive decisions wipe out been challenged on grounds of they being arbitrary, suffering from mala fide, based on non-satis cyphery grounds, irrational, to name a few of them.The study of one such instance forms the essence of this paper. The decision of the Government of India to disinvest M/s Bharat Aluminum Company contain, popularly know as BALCO was challenged by the employees of BALCO , proboscis politic of Chattisgarh and by some public spirited individuals before various racy address and finally before the Supreme appeal . It was challenged that the decision to disinvest BALCO was contrary to the legal and social inte alleviations of the employees as well as certain other legal issues were raised by different parties .The stick study is to analyse the judgment of the Supreme royal court in the instant case with a diminutive angle and too trace its legal electric shock with a special focus on the impact it has do upon Administrative law. To introduce the case, it would be advisable to dwell in the broad frame the case dealt with rather than to deal with the precise facts and issues. To categorize, the case dealt with a challenge to the administrative power of the Government on the intimacy of disinvestment of its stake in a authorities company as regards the procedure followed while so deciding and also the provisions that needs to be examined while deciding the issue.On a broader level, an administrative polity was low a challenge before the hail. T he precise impact that this decision, therefore, had was on the level of administrative discretion that the executive enjoyed in the selection of and following of a insurance insurance which had a vital impact on the economic position of the country . Nevertheless, the answer of the Supreme tap has been affirmative and it was categorical in mentioning that unless the constitution adopted by the government suffered from the vires of illegality or malafide .Not stopping at this, the Court also gave a real reflection on the aspect of pictorial rights and their applicability as regards the choice of administrative polity . For a detailed analysis and to have a diverse perspective, the study has been divided into different chapters which deal with a host of issues involved in the case and for having a varied dimension. II. A BRIEF DESCRIPTION OF THE FACTS OF THE shield The case arose to challenge the validity of the decision of the Union of India to disinvest and transfer 51% sh a rs of M/s Bharat Aluminum Company Limited (hereinafter referred to as BALCO).The case was filed by modality of a writ entreat by the BALCO Employees Union by register Writ Petition No. 2249 of 1999 in the High Court of Delhi when upon the recommendation of the Disinvestment Commission, the Cabinet Committee on Disinvestment approved the sales agreement of 51% of the sh ares of BALCO to private ownership and thence reducing the status of the company from a Government Company to a private enterprise . Further, upon the same issue, a Public Interest Litigation (PIL) was filed by one Dr. B. L. Wadhera in the Delhi High Court and similarly writ petition filed by Mr.Samund Singh Kanwar in the High Court of Chattisgarh wherein different steps of the disinvestment procedure were challenged. With the filing of the writ petitions in the High Court of Delhi and in the High Court of Chattisgarh, an application for transfer of the petitions was filed by the Union of India in the Supreme Co urt and by Order dated 9thApril, 2001, the writ petitions which were pending in the High Court of Delhi and Chattisgarh were transferred to the Supreme Court . CONTENTION OF THE PARTIES (A) On behalf of the BALCO Employees Union.Before disinvestment, the entire paid-up capital of BALCO was owned and ensureled by the Government of India and its administrative control co-vested in the Ministry of Mines. BALCO was, therefore, a State within the meaning of denomination 12 of the Constitution . Therefore, by the reason of disinvestment the workmen had lost their right and defendion under names 14 and 16 of the Constitution. This was an adverse civil consequence and, therefore, they had a right to be heard before and during the motion of disinvestment .The geek of consultation with the workmen which was necessary was, whether BALCO should go through the process of disinvestment who should be the strategical partner and how should the bid of the strategic partner be evaluated. It w as further submitted that the workmen had reason to believe that apart from the sale of 51% of the shares in favour of Sterlite Industries the Agreement postulated that balance 49% will also be sold to them with the issuing that when normally in such cases 5% of the shares are disinvested in favour of the employees the same would not happen in the position case . B) On behalf of the Union of India It was submitted that disinvestment had become imperative both in the case of Centre and the States mainly for three reasons a. Firstly, despite every effort the rate of returns of governmental enterprises had been woefully low, excluding the sectors in which government have a monopoly and for which they spate, therefore, charge any price. The rate of return on central enterprises came to minus 4% while the cost at which the government borrows money is at the rate of 10 to 11%.In the States out of 946 State level enterprises, above 241 were not working at all more or less 551 were ma king losses and cytosine were reported not to be submitting their accounts at all . b. Secondly, neither the Centre nor the States have resources to sustain enterprises that are not able to stand on their own in the new environment of intense disputation . c. Thirdly, despite repeated efforts it was not possible to convince the work culture of governmental enterprises .As a result, nonetheless out the strongest among them have been sinking into increasing difficulties as the environment is more and more competitive and technological change has become faster. Further it was submitted that the wisdom and advisability of economic policies of Government are not amenable to judicial analyze . It was not for Courts to consider the relative merits of different economic policies. Court was not the forum for resolving the remote clauses regarding the wisdom or advisability of policy.III. A CRITICAL ANALYSIS OF THE DECISION Besides the dispute that arose between the employees and the G overnment of India, the study controversy that arose as regards the Unions decision to disinvest was on political lines. It was an accusal by the state Chief curate that there were irregularities committed by the Union in culmination up to disinvestment decision as well as the decisions suffered from arbitrary exercise of power and malafide .Another authorized factor which can be observed from a careful reading of the decision is that though the case was generally to challenge the policy of disinvestment as being adopted and followed by the Union of India, the matter, as make upd by the Supreme Court, revolved primarily around the rights of the employees and their consequent protection after BALCO had actually been disinvested . The Court declined to recapitulation article the policy decision of the Union Government on the adoption of a policy of disinvestment though in fact it was tried to be justified on behalf of the Union as reflected from the submissions of the Attorne y General .Thus it can be tell that the Court actually did not, at any stage, examine the correctness of the disinvestment policy for India. The Court tried to evade deciding upon this issue and thus giving it a name of administrative policy, it was approved. It is also important to note while laying down the decision the significance of the judgment far transcended the specifics of the BALCO action as it enunciates far-reaching principles that will influence the tenor of jurisprudence on economic affairs for long.The most relevant example is of the case of Centre for Public Interest Litigation v. Union of India wherein the disinvestment of Hindustan Petroleum Company Limited (HPCL) and Bharat Petroleum Company Limited (BPCL) was approved on the grounds that since the disinvestment of BALCO was already allowed therefore there is no case made out whereby it could be proved unsuited to the Indian context though, in veracity the process of disinvestment was never in fact approved i n the BALCO case based upon the merits of the case .It is important to note that in the specific case of the alleged malfeasance in the case of BALCO, the Court categorically express that 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 that there has been an arbitrary exercise of power are without any basis. It is a matter of regret that on behalf of the State of Chattisgarh such allegations against the Union of India have been made without any basis.We strongly deprecate such unfounded averments which have been made by an officer of the said State. Thus the judgment was not simply a strong rebuke to the credibility of the Chief Minister Mr. Ajit Jogi, it also served to forestall further challenges by state governments on the federal governments prerogatives on privatization . Also, the Court circumscribed the extent to which mat ters of economic policy and disinvestment in particular, and consequently matters of policy, shall be scrutinized by courts .The Court was categorical in stating that it is neither within the domain of the Courts nor the scope of judicial review to embark upon an motion as to whether a particular policy is wise or whether a better public policy can be evolved. Nor are our Courts inclined to strike down a particular policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Parliament is the proper forum for questioning such policy. Thus the Court held that such disputes were beyond the realm of judicial determination and were left to the legislature to have circumspection over such executive policies. Also, aware of the economic costs of the plant closure as a result of the judicial intervention, the Court for the first time declared that, No ex parte relief by way of injunction o r stay especially with respect to public projects and schemes or economic policies or schemes should be granted.It is barely when the Court is satisfied for candid and valid reasons that there will be irreparable and irretrievable constipation can an injunction be issued after hearing all the parties. As a clear up of warning, the Court sought to deprecate the excessive use of PILs as a medium to thrash government policies which were prima facie genuine and correct. It thus added, the Petitioner should be put on appropriate terms such as providing an indemnity or an adequate undertaking to make good the loss or damage in the event the PIL is dismissed. It categorically held that every matter of public interest 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 assault of Constitutional or statutory provisions or noncompliance by the State wi th its Constitutional or statutory duties. In regard to disinvestment specifically, it held, The decision to disinvest and the carrying into action thereof is purely an administrative decision relating to the economic policy of the State and challenge to the same at the instance of a busybody cannot fall within the parameters of Public Interest Litigation. The Court also condition the contours of the rights of labour when policy changes were affected, for instance when the Government disinvests its equity in an enterprise.While holding that in the BALCO disinvestment case, the Government had exerted itself to protect the interests of employees of the company, more generally it was open for the Government, like any other employer, to take workers along, to keep them informed about prospective changes and to allay their apprehensions but, labour could not claim a right, either on the basis of natural judge or any other foundation, to be consulted, or the right to receive prior no tice, or to be consulted at every stage of the process .The Court also specially held that even a government servant, having the protection of not only Articles 14 and 16 of the Constitution but also of Article 311, had no absolute right to remain in service and therefore the decision to change the control of the company from government to private hands was the sole prerogative of the government and could not be challenged by the employees. IV. IMPLICATIONS THAT FOLLOWED THE JUDGMENT It is true that the decision given by the Court in the BALCO case was based upon a sound appreciation of arguments, yet there are many implications which may follow pursuant to the decision.The major emphasis is on the policy of disinvestment. Though the Court did not go into the merits of the disinvestment policy per se yet, it did taciturnly approve the policy to be followed by the Union . Thus the court supported the revival of the issue economic with the support of private lines. The earlier policy of socialist economy, as upon which the Constitution was based and is as well enshrined in the Preamble, read with the States duty to avoid concentration of wealth in private hands as envisaged under the Directive Principles was not considered an appropriate solution for meeting the manifest day need i. . boosting the depicted object economic growth . The observations of the Court on the aspect of natural justice may have been insignificant in terms of words spoken on it or pile of the judgment dealing with it yet the impact which it has created is enormous. The Court held that the principles of natural justice did not apply even in case the rights of the employees were affected as regards the change of their employer . They were not even given an opportunity to be heard and this was the sole bone of contention.For the very reason that Sterlite industries (the buyer) had given an undertaking that no employee of BALCO would be withdraw and the government had taken sufficient ste ps towards the protection of the employees, they had no reason to be heard. Employees, being machine-accessible with the manufacturing and other process in a much closer manner than any other body had, at least, the minimum right to put their views before the Court. Thus the participation of employees in the betterment of their organisation at the Board level was also discouraged.An important fact that may have evaded the critics was the method of reckoning of BALCOs capital. Of the three different methods, the accounting method adopted for arriving at the reserve price for the sale of BALCO was the one with the lowest result . It was never questioned by the Court. Thus it can be used in later cases before the Court that the method adopted by the Government is beyond judicial review too as it falls within the ambit of administrative discretion too . It may come out to be a remote issue nevertheless may be raised in the Courts.Further, the Court never did accept or uphold that dis investment as a policy per se was a good policy to be implemented in the pursuance of national economic growth. Yet it was so express in the later case wherein the disinvestment of HPCL and BPCL was challenged and it was contended by the Union of India that the policy of disinvestment was upheld by the Supreme Court in the BALCO case . These are some of the implications that may arise pursuant to the decision of the Supreme Court in the matter of the BALCO disinvestment process, as being conceived by the researcher.V. CONCLUSION The Supreme Court, in the celebrated case of wad Jawaya Kapoor v. State of Punjab, observed thus, the executive function comprises both the determination of policy as well as carrying into execution. The evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fact the carrying on or supervision of the general administration of the State . Thus we find that the determination of policy has always been within the domain of the Executive.Therefore there remains no doubt that the government had the power to decide as to the adoption of a policy of disinvestment. It is this very precise reason that the same could not have been challenged successfully before the Court. Thus, it was challenged indirectly by taking the stand that such a policy would under the legal and constitutional rights of the employees of BALCO . Thus we find that the litigation, the reason for challenge and the motive behind such a challenge were flawed from its very beginning. The success of the petition was, therefore, never guaranteed.The main reason seems more of so political rather than legal, which initiated the present litigation. Nevertheless the Court was categorical in dealing with the issues. It laid to rest its critics while also issuing a stern warning that Public Interest Litigation should not be used as a means to invalidate policy decisions of government which in run-of-the-mine course were beyond judicial review. The Court also severely deprecated the action of the State officials who accused the Union Government of malafide and abuse without stating firm grounds for the same.On the aspect of the impact that the decision has created on administrative law, it can be said that it was not much except for the fact that it reiterated certain fundamental principles which had already been embodied in the Indian legal stream. The fact of the administrative discretion and power to adopt and implement policy decisions being beyond the scope of judicial review unless it suffered from illegalities or malafide was upheld .Further the Court upheld that there was no violation of principles of natural justice by non-hearing of the employees in the entire disinvestment process as it was purely a matter of administrative choice wherein the employees had no stake. It may be hard to adjust but seems to be a sound legal principle indeed. After all t he rights of the employees were protected under different labour and industrial legislations no matter who the employer was. Thus accepting the fact that they had an interest in the management of the company yet, it was not incumbent or essential to take their views before deciding the entire process.The silent approval of the disinvestment process by the Apex Court also symbolizes the fact that the Court also feels it in the interest of national interests and the economy on the whole. This the Court expounded in a later case when it approved the sale of HPCL and BPCL on similar lines as BALCO. Thus, on a whole, though the case may failed to give any falsehood concept, yet it is landmark of its own kind. It was an attempt on the part of the Court to define its own limits on judicial review. It also stretched the scope for the exercise of administrative powers in making policy decision. REFERENCESARTICLES 1. 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Jain & Jain, Principles of Administrative Law, (Wadhwa & Co. , Nagpur, 4th edition, 2003). 2. I. P. Messy, Princ iples of Adminstrative Law, (Eastern Book Company, Lucknow, 2003).