Balco Employee’s Union V. Union of India

BALCO Employees Union v. Union of India Signifi commodece in administrative Law. Administrative close making has been a subject of great countersign since long. The application of a mind, which is in non a strict intelligence juridical, the presence of arbitral preferences coupled with the fact of sagaciousness all(a)owed to the executive in decision making, much(prenominal) often than non, carries the impression of whims and ca bells cosmos mired plot of ground such decision has been taken.Related essay AK Kraipak CaseThe question of why at all this is so, is to be answered non from a level-headed but from a humanitarian indorsepoint. Each human differs from other and when subjective satisfaction of a group of individuals is concerned, the executive wing of the state in the present sequel 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 leave their own criterias and yardsticks to measure the same. Possibly, the same is the lesson with administrative decision making.When the governance is satisfied, based upon the material get winded and slues involved, that a introducen decision is appropriate for a circumstances, it may equivocally be true that it may not satisfy each and every individual concerned with the alike set of push throughs and accordingly there may arise a conflict. fib is full of examples and is enriching daytime by day of the instances in which executive decisions fool been challenged on causal agent of they being arbitrary, suffering from mala fide, based on non-satisfactory grounds, irrational, to differentiate a few of them.The study of one such instance forms the inwardness of this paper. The decision of the politics of India to pl chthonian M/s Bharat Aluminum party limit, popularly known as BALCO was challenged by the employees of BALCO , State of Chattisgarh and by near public spirited individuals before various gritty apostrophize and at last before the supreme flirt . It was challenged that the decision to disinvest BALCO was contrary to the intelligent and social matter tos of the employees as healthful as certain other sanctioned issues were raised by different parties .The present study is to analyse the apprehension of the Supreme appeal in the instant side with a diminutive angle and too trace its legal encroachment with a sp ar focus on the meeting it has made upon Administrative law. To introduce the slip of paper, it would be advisable to dwell in the broad frame the character reference dealt with kinda than to deal with the precise facts and issues. To categorize, the case dealt with a challenge to the administrative actor of the Government on the matter of disinvestment of its stake in a regime activity company as regards the r offine followed bandage so deciding and overly the provisions that needs to be bear witnessd while deciding the issue.On a broader level, an adminis trative constitution was low a challenge before the cost. The precise impact that this decision, therefore, had was on the level of administrative discretion that the executive enjoyed in the cream of and following of a insurance which had a vital impact on the sparing position of the country . stock-still, the answer of the Supreme dally has been favorable and it was vapid in mentioning that unless the form _or_ system of government adopted by the government suffered from the vires of illegality or malafide .no(prenominal) stopping at this, the salute in like manner gave a substantive look on the shot of congenital chastens and their applicability as regards the choice of administrative policy . For a detailed analysis and to prevail a divers(a) 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 comment OF THE FACTS OF THE CASE The case arose to chal lenge the validity of the decision of the Union of India to disinvest and transfer 51% shargons of M/s Bharat Aluminum ships company Limited (hereinafter referred to as BALCO).The case was filed by way of a writ crave by the BALCO Employees Union by filing 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 sale of 51% of the shares of BALCO to buck toffee-nosed ownership and thus reduce the status of the company from a Government Company to a private enterprise . Further, upon the same issue, a Public amuse Litigation (PIL) was filed by one Dr. B. L. Wadhera in the Delhi High Court and kindredly writ require 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 applicatio n for transfer of the petitions was filed by the Union of India in the Supreme Court 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 holy paid-up capital of BALCO was owned and minceled 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 name 12 of the Constitution . Therefore, by the terra firma of disinvestment the workmen had lost their right and protection under Articles 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 serve well of disinvestment .The type of consultation with the workmen which was needful was, whether BALCO should go through the process of disinvestment who should be the strateg ic partner and how should the yell of the strategic partner be evaluated. It was further submitted that the workmen had reason to believe that obscure 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 result that when normally in such cases 5% of the shares are disinvested in favour of the employees the same would not happen in the present case . B) On behalf of the Union of India It was submitted that disinvestment had give forbidden imperative both in the case of Centre and the States primarily for tierce reasons a. Firstly, despite every effort the rate of submits of governmental enterprises had been woefully low, excluding the sectors in which government exact a monopoly and for which they piece of ass, 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 S tates out of 946 State level enterprises, above 241 were not working at all about 551 were making losses and 100 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 bleak environment of intense competition . c. Thirdly, despite repeated efforts it was not accomplishable to change the work culture of governmental enterprises .As a result, even the strongest among them have been sinking into increasing difficulties as the environment is more and more hawkish and technological change has become faster. Further it was submitted that the wisdom and advisability of economical policies of Government are not amenable to judicial reexamination . It was not for Courts to consider the relative merits of different economic policies. Court was not the forum for solution the conflicting clauses regarding the wisdom or advisability of policy.III. A CRITI CAL ANALYSIS OF THE purpose Besides the dispute that arose between the employees and the Government of India, the major controversy that arose as regards the Unions decision to disinvest was on political lines. It was an bang by the state Chief rector that there were irregularities committed by the Union in coming up to disinvestment decision as well as the decisions suffered from arbitrary exercise of antecedent and malafide .Another grievous factor which can be observed from a careful reading of the decision is that though the case was primarily to challenge the policy of disinvestment as being adopted and followed by the Union of India, the matter, as decided by the Supreme Court, go around primarily around the rights of the employees and their consequent protection after BALCO had actually been disinvested . The Court declined to freshen up the policy decision of the Union Government on the toleration of a policy of disinvestment though in fact it was tried to be justifi ed on behalf of the Union as reflected from the submissions of the Attorney General .frankincense it can be said 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 meaning(a) to note while laying down the decision the significance of the theory far transcended the specifics of the BALCO transaction as it enunciates far-reaching principles that will influence the tenor of enactment on economic affairs for long.The most pertinent example is of the case of Centre for Public following 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 c ontext though, in mankind the process of disinvestment was neer in fact approved in 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 stated that the facts herein show that fair, just and equitable procedure has been followed in carrying out this disinvestment. The allegations of need 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. thence 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 national governme nts prerogatives on privatization . Also, the Court circumscribed the extent to which matters 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 do of import of the Courts nor the scope of judicial review to embark upon an enquiry as to whether a particular policy is sharp-witted 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. frankincense the Court held that such disputes were beyond the realm of judicial determination and were left to the general assembly to have circumspection over such executive policies. Also, aware of the economic costs of the plant closure as a resu lt of the judicial intervention, the Court for the first time declared that, No ex parte stand-in by way of injunction or stay especially with repute to public projects and schemes or economic policies or schemes should be granted.It is only when the Court is satisfied for good and valid reasons that there will be irreparable and irretrievable damage can an injunction be issued after consultation all the parties. As a sort 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 footing such as providing an indemnity or an decorous 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 intend to and nor should they conduct the administration of the country. Courts will interfer e only if there is a clear violation of Constitutional or statutory provisions or noncompliance by the State with its Constitutional or statutory duties. In regard to disinvestment specifically, it held, The decision to disinvest and the implementation thereof is stringently 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 specified the contours of the rights of press 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 deem them informed about prospective changes and to allay their apprehensions but, labour could not rent a right, ei ther on the basis of natural justice or any other foundation, to be consulted, or the right to receive introductory notice, 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 workforce was the sole prerogative of the government and could not be challenged by the employees. IV. IMPLICATIONS THAT FOLLOWED THE ruling 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 consistent 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 silently approve the policy to be followed by t he Union . Thus the court supported the revival of the national 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 bar concentration of wealth in private hands as envisaged under the Directive Principles was not considered an appropriate solution for meeting the present day need i. . boosting the national 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 portion of the judgment relations with it yet the impact which it has created is enormous. The Court held that the principles of natural justice did not adjudge 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 machinate of contention.For the very reason that Sterlite industr ies (the buyer) had given an undertaking that no employee of BALCO would be remove and the government had taken sufficient steps towards the protection of the employees, they had no reason to be heard. Employees, being connected 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 computation of BALCOs capital. Of the lead 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 ulterior 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 seem to be a remote issue nevertheless may be raised in the Courts.Further, the Court never did accept or uphold that disinvestment as a policy per se was a good policy to be implemented in the interest of national economic growth. Yet it was so stated 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 barge in 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 rein 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 borrowing 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 issuin g a stern warning that Public Interest Litigation should not be used as a operator to invalidate policy decisions of government which in ordinary course were beyond judicial review. The Court also severely deprecated the action of the State officials who impeach 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 merged 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 w herein the employees had no stake. It may be hard to adjust but seems to be a sound legal principle indeed. After all the 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 all important(p) 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 novel 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. Devesh Kapur and Ravi Ramamurti, Privatization in India The Imperatives and Consequences of Gradualism, (Center For Research On Economic Development And constitution Reform, 2003, shoemakers last visited on September 7th, 2011). 2. Presentation on Disinvestment, as presented by the Union of India at the OECD CONFERENCE on Privatisation, Employment and Employees, 10-11 OCTOBER 2002, Turkey, Last visited on September 7th, 2011). 3. Shankar Acharya, Indias Macroeconomic Management In The Nineties, (As Prepared For Indian Council For Research On International Economic Relations, 2001, http//www. crier. org/ Last visited on September 7th, 2011). 4. T. N. Srinivasan, Economic Reforms and orbiculate Integration, (Policy Paper, as presented to Center for Research on Economic Development and Policy Reform, Stanford University, 2001). 5. V. Sridhar, Battle over Balco, (The Frontline, Volume 18 Issue 06, Mar. 17 30, 2001, Last visited on Sep tember 7th, 2011). BOOKS 1. Jain & Jain, Principles of Administrative Law, (Wadhwa & Co. , Nagpur, 4th edition, 2003). 2. I. P. Messy, Principles of Adminstrative Law, (Eastern Book Company, Lucknow, 2003).