JUDGMENT Jawahar Lal Gupta, J. - Are the petitioners entitled to purchase the 15 lac equity shares held by the Union of India on payment of the face value alongwith interest @ 18% per annum compounded six monthly minus the dividend already paid or are they liable to pay the price as given on the Stock Exchange and demanded by the respondent ? This is the short question that arises for consideration in this Writ Petition. A few facts as relevant for the decision of this case may be briefly noticed. 2. On January 15, 1992, a Financial Collaboration Agreement was executed between the Punjab Agro Industries Corporation Limited and Shri M.S. Bhinder and Associates. By this agreement, it was decided that a new company shall be got incorporated under the Companies Act, 1956. The company was to set up a plant for processing mushrooms. The authorised share capital of the new company was to be Rs. 11,50,00,000/- divided into 1,15,00,000/- equity shares of Rs. 10/- each. The corporation was to have 26% of the total shares. The collaborator viz. M/s M.S. Bhinder and Associates were to have 25% shares. The public including the Financial Institutions were to have 49% shares. Various other provisions including those relating to a restriction on sale of shares were also made. 3. In pursuance to the agreement, "M/s Agro Dutch Foods Limited" was incorporated as the new Company. It is the admitted position that 15 lacs shares were allotted to the Govt. of India. 4. On February 14, 1995 the Governments of India in the Ministry of Food Processing Industries sent a communication to M/s Agro Dutch Foods Limited (hereinafter referred to as the company) that it would like to disinvest its equity of Rs. 150 lacs provided for the integrated White Button Mushroom 100% Export Oriented Project through M/s Punjab Agro Industries Corporation Ltd., Chandigarh as per the terms and in the manner "as has been agreed between M/s Punjab Agro Industries Corporation Ltd., Chandigarh and M/s M.S. Bhinder & Associates, Patiala vide agreement signed and entered into between the two parties on 15.1.1992." A copy of this letter has been produced as Annexure P.2 with the writ petition. In response to this letter, the petitioners exercised their option "to buy 15,00,000 equity shares of Rs. In response to this letter, the petitioners exercised their option "to buy 15,00,000 equity shares of Rs. 10/- each held by the Ministry in the Agro Dutch Foods Limited on May 12, 1995 that is today. They asked the Government to convey the total amount to be paid by the collaborator, It was stated that "the payment shall be made in accordance with clause 26 of the agreement." A copy of this letter is attached as Annexure P.3 with the Writ Petition. On July 27, 1995, the Government of India informed the petitioners that they were "required to pay Rs. 2,02,82,192/- less dividends, if any, to be received by the Ministry, to the Ministry on or before 12th June, 1995". It was further stated that in case, the petitioners failed to pay "the above mentioned amount within the stipulated period", they will be required to pay" a further interest @ 18% per annum with half-yearly rests from the date 12.6.95 on which the price i.e. Rs. 2,02,82,192/- less dividends, if any, was to be received by the Ministry in respect of the said shares." A copy of this letter has been produced as Annexure P.4 with the writ petition. 5. The petitioners did not make the payment. Instead, they sent a communication after more than 3 years on March 8, 1999 with which they sent a demand draft for an amount of Rs. 5 lacs "against part payment of the amount payable" by them on account of disinvestment of shares held by the Ministry. The petitioners also asked the Ministry to deliver the scripts of the shares for an equivalent value of Rs. 5 lacs. A copy of this communication has been produced as Annexure P.5 with the writ petition. On April 21, 1999, the Government informed the petitioners that the offer made vide letter dated June 27, 1995 "has lapsed since the value of these shares was not made over the Ministry within the stipulated period of one month as prescribed in the Financial Agreement". It was further pointed out that "as per Clause 26 (b) of the Financial Collaboration Agreement, the company is required to pay for the shares held by the Ministry at the highest market value as published by the Indian Stock Exchanges on the date of exercise of option or the acquisition costs plus interest @ 20%, whichever is higher". The Govt. The Govt. pointed out that "based on the published value of the shares of this company by the National Stock Exchange as on 8th March, 1999 viz. Rs. 45.65 per share, the value of the 15 lacs shares held by the Ministry is Rs. 6,84,75,000/-." Thus, the petitioners were required to send an additional sum of Rs, 6,79,75,000/- within a period of one month of the letter failing which "interest @18% per annum with half-yearly rests would be chargeable........." A copy of this letter has been produced as Annexure P.6 with the writ petition. The demand was reiterated vide letter dated May 6, 1999, A copy of this letter has been produced as Annexure P.7 with the writ petition. Finally, on June 2, 1999, the Ministry informed the petitioners that it should be paid the amount of Rs, 6,79,75,000/- alongwith interest @ 18% per annum with half-yearly rests. A copy of this communication has been produced as Annexure P.8 with the writ petition. Thereafter, certain other letters followed. 6. The petitioners did not pay. Instead, they sought a reference to the Arbitrator. After hearing the parties, the arbitrator held that "the Financial Collaboration agreement which is a legal document is between Punjab Agro Industries Corporation and the claimant. The Ministry of Food Processing Industries is not a party to it as such, the agreement is not applicable to the Ministry of Food Processing Industries. The letter dated February 14, 1995 which has been referred by the Claimant does not give any legal right for arbitration. The Clause No. 36 vide which the dispute has come to the arbitrator cannot be made operative in this case as the arbitrator has no jurisdiction in respect of the Ministry of Food Processing Industries. Accordingly, the claim petition is dismissed being without jurisdiction", this order was passed by the Arbitrator - the Financial Commissioner, Development, Punjab on October 14, 1999. A copy of this order has been produced as Annexures P.12 with the Writ Petition. Hence, this petition. 7. The petitioners pray that the letters dated April 21, 1999 (Annexure P.6) June 2, 1999 (Annexure P.8) and July 7, 1999 (Annexure P.10) be quashed and that the respondent-Union of India be directed to transfer the shares on payment of "entire money as determined vide Annexure P.4 alongwith interest @ 18% per annum compounded six monthly minus dividend and the money received by the respondent". 8. A written statement has been filed on behalf of the respondent-Ministry by Mr. G. Venkataramani, Director. Certain preliminary objections have been raised. It has been submitted that there is no violation of any legal right of the petitioners or any statutory provision of law. Consequently, the writ petition is not maintainable. It has been pointed out that vide letter dated July 27, 1995, the petitioners were asked to pay a sum of Rs. 2,02,82,192/- which was worked out in accordance with the terms of the agreement. No payment was made. Nor any communication was received from the petitioners indicating the reasons for non-payment. As per the financial agreement, the "value of the shares was to be made over to the answering respondent within the stipulated period of one month". Since the petitioners have slept over the offer made on 27.7.95 for over four years, the offer had elapsed". The value of the shares on March 8, 1999 was Rs. 45.65 per share. Consequently, the respondent had demanded the additional amount of Rs. 6,79,75,000/-. It has been further pointed out that the petitioners have conveniently concealed from this Honble Court vital documents i.e. letter dated 29.4.1999 wherein they had stated that they would be exercising a fresh option in July 1999 i.e. after the expiry of 5 years from the date of commencement of the commercial production". A copy of the letter has been produced as Annexure R-1/1. Subsequently, the petitioners had vide letter dated May 11, 1999 stated that in case, the respondent had encashed the draft of Rs. 5 Lacs the same may be treated as advance payment against the fresh offer which would be exercised latter. A copy of the letter dated May 11, 1999 has been produced as Annexure R-1/2. On May, 1999, the petitioners had sent another communication by which they informed the Government that they were "ready to exercise their option of purchasing the equity as on May 12, 1999". A copy of this letter has been produced as Annexure R-1/3. On this basis, it has been submitted that the petitioners have" suppressed from this Honble Court material documents". Lastly, it has also been stated that the whole case involves a contractual matter and that the writ jurisdiction cannot be invoked. 9. On merits, the claim made by the petitioners has been controverted and the facts as mentioned above have been reiterated. Lastly, it has also been stated that the whole case involves a contractual matter and that the writ jurisdiction cannot be invoked. 9. On merits, the claim made by the petitioners has been controverted and the facts as mentioned above have been reiterated. The petitioners have filed a replication reiterating their earlier stand. However, the fact that the three letters had been written by the petitioners, has not been disputed. 10. Another fact which may be mentioned here is that the petitioners had filed a Civil Misc. application No. 30534 of 2000 for the hearing of the case. It was mentioned in this application that the Union of India was taking advantage of the non-disposal of the writ petition and was taking steps to sell 15 lac shares in the open market. According to the petitioners, the Government was obliged to sell the shares only to them at a price which had been fixed on May 12, 1995. A reply was filed on behalf of the respondent to this application. In this reply it was pointed out that the petitioners had managed to persuade the Punjab Agro Industries to sell the equity participation of about 30 lac shares @ Rs. 12/- per share as on May 12, 1995 alongwith interest viz. @ Rs. 31/- per share. The market price of the share in the National Stock Exchange was around Rs. 100/- per share on August 31, 1999. Thus, the petitioners had made a wrongful gain of Rs. 70/- per share. There was a loss to the public exchequer. The respondent alleged that "the transaction is nothing short of a scam". It was further stated that "the share acquired @ Rs. 31/- per share is being traded by the petitioners for Rs. 150/- per share". 11. This case was posted before this Bench for the first time on January 10, 2001. Since the list was long, the case did not reach. It was kept for ready. 12. We have heard counsel for the parties. Mr. O.P. Goyal, Learned Counsel for the petitioners contends that the Government of India was bound to sell the shares at the face value alongwith interest as stipulated in the agreement. Since the list was long, the case did not reach. It was kept for ready. 12. We have heard counsel for the parties. Mr. O.P. Goyal, Learned Counsel for the petitioners contends that the Government of India was bound to sell the shares at the face value alongwith interest as stipulated in the agreement. He referred to the communications dated February 14, 1995 and July 27, 1995 to contend that the Government was bound by the terms of the agreement dated January 15, 1992 and that it has to sell the shares to the petitioners at their face value alongwith interest as stipulated in the Financial Collaboration agreement. By the letter dated February 14, 1995, the Union of India had made a definite offer. It had been accepted by the petitioners vide letter dated May 12, 1995. Thereafter, the Government could not have claimed the market value of the shares as notified in the National Stock Exchange. He also submitted that having written the letters dated February 14, 1995 and July 27, 1995, copies of which have been produced as Annexures P.2 and P.4, the Government of India was bound by the terms of the Financial Collaboration agreement and that it could not say that it was not binding on it as it was not a party thereto. The claim made on behalf of the petitioners was controverted by Mr. Gurpreet Singh, learned counsel who appeared for the respondents. 13. Admittedly, the Government of India is not a party to the agreement. It is also not disputed that the Government of India holds 15 lac shares. Since there is no written agreement between the petitioners and the Union of India, the rights of the Government of India cannot be less than those of any other shareholder. In the absence of an agreement to the contrary, the Government has the right to buy and sell the shares in open market. 14. Mr. Goyal contends that the Government of India having exercised its option vide letter dated February 14, 1995 and that the petitioners having accepted it on May 12, 1995, the Government cannot be allowed to sell the shares in open market or to claim the value as notified at the National Stock Exchange. Is it so ? 15. 14. Mr. Goyal contends that the Government of India having exercised its option vide letter dated February 14, 1995 and that the petitioners having accepted it on May 12, 1995, the Government cannot be allowed to sell the shares in open market or to claim the value as notified at the National Stock Exchange. Is it so ? 15. It is undoubtedly correct that vide letter dated February 14,1995, the Government of India had informed the petitioners that it would like to dis-invest its equity of Rs. 1,50,00000/- "as per the terms and in the manner as has been agreed between M/s Punjab Agro Industries Corporation Ltd. Chandigarh..." It is also true that vide letter dated May 12, 1995 the petitioners had informed the Government of India of their option to buy the equity shares. However, on receipt of this letter, the Government had informed the petitioners that according to clause 26(b) of the agreement, they were required to pay Rs. 2,02,82,192/- to the Ministry on or before 12th June, 1995", Still, vide letter dated July 27, 1995 they were asked to pay this amount alongwith interest @ 18% per annum with half yearly rests w.e.f. June 12, 1995 in accordance with Clause 26 (g) of the agreement. After the receipt of this letter, the petitioners remained quiet for a period of over four years. In fact, vide letter dated April 29,1999, they informed the Government of India that "on the expiry of the period of five years from the commencement of commercial production, we will probably exercise a fresh option in July, 1999 upon expiry of the said period". This was followed by a letter dated May 11, 1999 by which the petitioners informed the Government that in case "you have already encashed the draft as mentioned by you in your letter kindly either treat it as advance payment against the fresh offer which we shall be exercising shortly or Rs. 5 lacs may be refunded to us". They wrote yet another letter. On May 12, 1999, the petitioners informed the Ministry that they exercised the option "to buy 15,00,000 equity shares of Rs. 10/- each held by the ministry in the Agro Dutch Foods Limited on May 12,1999 that is today." Thus, they requested the Government to let them know" the total amount to be paid by collaborator to the Ministry". 16. On May 12, 1999, the petitioners informed the Ministry that they exercised the option "to buy 15,00,000 equity shares of Rs. 10/- each held by the ministry in the Agro Dutch Foods Limited on May 12,1999 that is today." Thus, they requested the Government to let them know" the total amount to be paid by collaborator to the Ministry". 16. The three letters noticed above clearly belie the claim of the petitioners that the Government of India was bound to sell the shares at their face value alongwith interest. In fact, the letters written by the Government were in the nature of offers. The petitioners had not made the payment in pursuance to those offers. They had by their three letters in the year 1999 categorically reserved the right to exercise their option. They had actually exercised the option on May, 12, 1999. They had gone to the length of saying that the amount of Rs. 5 lacs paid by them in the year 1995 may be treated as an advance. The three communications clearly show that the petitioners were not clear about their own position and had exercised their option on May 12, 1999. The petitioners have for obvious reasons intentionally withheld vital information from the court so as to rest their claim on the two letters which had lost all significance with the lapse of time. 17. Despite these communications, Mr. Goyal contended that the petitioners were entitled to buy the shares on payment of the face value alongwith interest as stipulated in Clause 26 (b) of the agreement. 18. The two Clauses viz. Clauses 25 and 26 may be noticed. These are as under :- 25. "For a period of five years from the date of commencement of commercial production by the company neither the corporation nor the collaborator shall sell or otherwise transfer or assign the whole or any part of their respective equity share holdings in the company without the prior consent in writing of the other party. This restriction, however, shall not apply to sales and transfers inter se the parties or a party and its nominees or interest the nominees. 26. a) The collaborators shall have option to buy at any time the equity share holding of the corporation of commercial production. This restriction, however, shall not apply to sales and transfers inter se the parties or a party and its nominees or interest the nominees. 26. a) The collaborators shall have option to buy at any time the equity share holding of the corporation of commercial production. However, if the company has made a public issue of its shares, the collaborators can buy shares of the corporation only after quotations for shares in question are available at Stock Exchange(s). However, upon the expiry of the period of five years from the date of commencement of commercial production by the company as referred to in clause 25 hereinabove, the collaborator shall be bound to purchase the said equity share-holdings of the corporation in the company. b) The price to be paid shall be either the amount paid by the corporation for the acquisition of the said shares plus simple interest at the rate equal to the lending rate of the IDBI, prevailing at the time of original purchase of shares by the corporation for a given area, calculated from the date of payment by the corporation for the shares in question to the date of payment of the said price by the collaborator less dividend, if any, received by the corporation in respect of the said shares in the intervening period or the highest market value of the shares as published by the Indian Stock Exchange(s) where the companys shares are listed, on the date of the exercise of its option to purchase by the collaborator or on the date on which the collaborator ought to purchase the shares held by the corporation as provided in clause (a) above, whichever is highest. c) The corporation shall be bound to sell the equity share holdings in the company to the collaborator as aforesaid. d) The sale and purchase of the shares, as aforesaid, payment of price, therefore, and delivery of share holdings and transfer deeds relative thereto, shall be completed within one month of the exercise by the corporation of its right to sell its shares in the company to the collaborator and/or by the collaborator of its right to buy the said shares from the corporation. e) In the event the collaborator fails to purchase the equity shares of the corporation in the company. e) In the event the collaborator fails to purchase the equity shares of the corporation in the company. As provided in clause 26 (a) above the Corporation shall have the option of recommending one of its nominee to be appointed as Managing Director of the Board of Directors and the said nominees of the corporation after being appointed shall continue as Managing Director so long as the default on the part of the collaborator continues. Immediately upon the completion of the payment by the collaborator of the full amount payable in respect of purchase of shares mentioned in clause 26 hereinabove, this clause will cease to be operative and the management of the company will be carried on as before by a Managing Director who will be appointed by the Board of Directors in terms of Clause 20. f) Without prejudice to the provisions of clause 26 (a) above, the corporation shall also, in the event of the collaborator failing to purchase the company as provided in clause 26 (a) to (d) above, be entitled to sell its shares in the company at the risk and cost of the collaborator either by public auction or through recognised shareholders of the Stock Exchanges where the shares are listed by private negotiations. g) In the event the sale and purchase of share is not completed in time as provided in clause 26 (a) to (d) above, the total price to be paid by the collaborator for the purchase of shares determined in terms thereof shall carry further interest @ 18% per annum with half yearly rests from the date on which the price was payable by the collaborator until the actual date of payment." 19. It deserves notice at the outset that the Government of India was not a party to the agreement. It was not bound by these clauses. As already stated, the Government of India was like an ordinary shareholder. It was entitled to sell its shares regardless of the agreement. The petitioners had no right against the Govt. on the basis of the agreement. In any event, even it is assumed that the Govt. of India was also bound by the terms of the agreement, its offer according to clause (d) had to be accepted and the whole transfer had to be "completed within one month of the exercise" of option. The offer made by the Govt. on the basis of the agreement. In any event, even it is assumed that the Govt. of India was also bound by the terms of the agreement, its offer according to clause (d) had to be accepted and the whole transfer had to be "completed within one month of the exercise" of option. The offer made by the Govt. of India vide its letter dated February 14, 1995 was not accepted by the petitioners within one month. There was no payment by the petitioners. Thereafter, the Govt. was entitled to claim the market value of the shares. Thus, vide its letter dated July 27,1995, the Govt. of India had made a demand for Rs. 2,02,82,192/- and the interest thereon. The petitioners had kept quiet for over 4 years. It was only on April 29, 1999 that the petitioners had informed the Government of India that they were proposing to exercise an option. That option was actually exercised on May 12, 1999. That having happened the petitioners have no right to claim that the Government was bound by its offer of February 14, 1995. Still further, even according to the terms of the agreement, the Govt. is entitled to claim the total price of the shares alongwith interest @ 18% per annum with half yearly rests from the date on which the price was payable by the petitioners until the date of actual payment. It may be mentioned that Clause (b) clearly provides for the sale of shares at the highest market value as published by the Indian Stock Exchanges where the company shares are listed. The demand made by the Govt. of India is in strict conformity with the terms of the agreement. Thus, the contention raised on behalf of the petitioners cannot be accepted. 20. Mr. Gurpreet Singh, learned counsel for the respondent contended that the petitioners are guilty of withholding relevant documents from this court. 21. The contention appears to be well-founded. In paras 5, 9 and even in the grounds raised in the petition, the petitioners have clearly placed reliance on the communications dated February 14, 1995 and July 27, 1995. They have not disclosed that the communications dated April 29, 1990 May, 11, 1999 and May 12, 1999 had been sent by them. These three communications, copies of which have been produced as Annexures R-1/1, R-1/2 and R-1/3 are relevant to the case. They have not disclosed that the communications dated April 29, 1990 May, 11, 1999 and May 12, 1999 had been sent by them. These three communications, copies of which have been produced as Annexures R-1/1, R-1/2 and R-1/3 are relevant to the case. These show that the petitioners had not accepted the offer contained in the letters written by the Union of India in the year 1995 and had reserved the right to exercise their option till the year 1999. It is clear that if these letters had been disclosed in the petition, the whole exercise which has been gone into for a period of one year may have been unnecessary. Be that as it may, the fact remains that the petitioners kept back the relevant information from the court. We cannot compliment the petitioners on their conduct. 22. Before parting with the case, we may also notice the conduct of the petitioners in regard to the purchase of the shares from M/s Punjab Agro Industries Corporation Limited, Chandigarh. They purchased the shares @ Rs. 31/- each while the market value was in the region of Rs. 100/- per share. How did this happen ? There is no explanation on the record. The Corporation is not a party. The matter is not free from doubt. We are clearly of the view that the transaction needs to be investigated. The State of Punjab may consider the desirability of holding an enquiry into the matter so as to ensure that the public exchequer does not suffer an avoidable loss. The amount involved is clearly substantial. We hope that the authorities shall take suitable remedial steps without any loss to time. 23. No other point has been raised. 24. In view of the above, we find no merit in this petition. It is, consequently, dismissed. Since the petitioners have unnecessarily delayed the payment of the amount to the Govt. of India and have withheld the relevant information from this court, we are of the view that they need to compensate the respondent by payment of penal costs. These costs are assessed and fixed at Rs. 50,000/-. 25. The order was announced by us today after hearing the arguments of the counsel. We have recorded these reasons at the end of the day. Petition dismissed