Judgment : 1. The petitioners in this WP under art.226 of the Constitution of India dated July 25, 2003 are questioning a decision of the Central Government to accept the fifth respondent’s bid for purchasing 72% of the third respondent’s shares held by the third respondent in the second respondent. The five respondents in the WP are the following: - “1. Union of India through the Secretary, Ministry of Disinvestment having its office at Room No.407, Block No.14, CGO Complex, New Delhi 110 033; 2. Jessop & Company Ltd, an existing company within the meaning of the Companies Act, 1956, having its registered office at 21 & 22, Jessore Road, Kolkata 700 028; 3. Bharat Bhari Udjoy Nigam Limiited, a company incorporated under the provisions of the Companies Act, 1956 and having its Office at 26, Raja Santosh Road, Kolkata 700 027; 4. A. F. Ferguson & Co., a partnership firm and carrying on business at Appejay House, Block “B”, 15, Park Street, Kolkata 700 016 5. Ruia Cotex Ltd, a company incorporated under the provisions of the Companies Act, 1956 and having its registered office at Land Mark Building , A J C Bose Road, Kolkata.” Jessop & Co. Ltd. (in short JCL) was established in 1788. In 1995 it was declared sick under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985. The Board for Industrial and Financial Reconstruction (in short BIFR) specified State Bank of India (in short SBI) as the operating agency. Bharat Bhari Udyog Nigam Ltd. (in short BBUNL) is a wholly owned Government of India Undertaking. It was holding 98% of the shares of JCL. The Central Government accepted a proposal for disinvestment of 72% of the shares held by BBUNL in JCL. In July 2000 A.F. Ferguson & Co. (in short AFF) was appointed as the advisor to the disinvestment process. In February 2001 advertisement was published in newspapers inviting expression of interest. Five bidders including a consortium having Titagarh Wagons Limited (in short TWL) as a partner and a consortium having Ruia Cotex Limited (in short RCL) as a partner were short-listed. The short-listed bidders were provided with bid documents, namely, confidential information memorandum and draft transaction documents (share-holders agreement, share purchase agreement, guarantee agreement). The short-listed bidders were given opportunity of visiting the data room and the plant. The short-listed bidders were provided with bid documents, namely, confidential information memorandum and draft transaction documents (share-holders agreement, share purchase agreement, guarantee agreement). The short-listed bidders were given opportunity of visiting the data room and the plant. In the data room information on financial, organisational, technical, human resources, secretarial, marketing, properties, litigation, etc. was kept for scrutiny. In January 2002 the Central Government approved the share-holders agreement, share purchase agreement and guarantee agreement and also the financial restructuring of JCL. The bidders were asked to submit their financial bids on February 15, 2002. The Metro Railway Authorities, Metro Railway, Government of India needed around 5.5 acres of land owned by JCL. It was agreed that the Railway would pay Rs.14.99 crore for the land. JCL received Rs.10 crore as advance. It was parked with BBUNL. JCL’s offer for One Time Settlement (in short OTS) of bank loans was accepted by SBI leading the bankers’ consortium. SBI wrote a letter dated January 31, 2002 to BIFR saying, inter alia, that the proceeds of 5.5 acres JCL land should be made available for making payment under the OTS. It was mentioned that JCL had already applied to BIFR seeking permission to sell the land and utiliise the proceeds as working capital and for payment of employee related statutory dues. With a letter dated February 8, 2002 JCL sent to AFF a copy of SBI’s letter dated January 31, 2002. Under the circumstances, with a letter dated February 11, 2002 AFF sent to the bidders including TWL, inter alia, copies of JCL’s letter dated February 8, 2002 and SBI’s letter dated January 31, 2002. Then AFF wrote a letter dated February 12, 2002 to the bidders including TWL with a view to providing further information about the affairs of JCL. It was mentioned that Rs.29.65 crore needed for OTS would be funded through grant from the Government of India. On February 15, 2002 TWL and RCL submitted their financial bids at Rs.11 crore and Rs.18.18 crore respectively. The Secretary (Disinvestment) opened the bids in presence of the bidders, authenticated the bids on the reverse thereof, got them authenticated by the bidders, put them in another envelope and sealed the envelope. The Evaluation Committee (in short EC) held its requisite meeting on that same day at 3.30pm. The Secretary (Disinvestment) opened the bids in presence of the bidders, authenticated the bids on the reverse thereof, got them authenticated by the bidders, put them in another envelope and sealed the envelope. The Evaluation Committee (in short EC) held its requisite meeting on that same day at 3.30pm. Based on DCF method and value on account of asset backing, EC recommended the reserve price of the share-holding in question at Rs.12 crore. On February 16, 2002 the Inter Ministerial Group (in short IMG) accepted EC recommendation on reserve price and opened the envelopes containing the financial bids submitted by TWL and RCL. On February 22, 2002 the Core Group on Disinvestment (in short CGD) recommended for approval to the Cabinet Committee on Disinvestment (in short CCD) the following proposals submitted by the Ministry of Disinvestment (in short MODI):- “i. Acceptance of the highest bid and sale of 72% of the equity shares of the Company to M/s Ruia Cotex Limited (Consortium) for Rs.18.18 crores by Bharat Bhari Udyog Nigam Limited (BBUNL). ii. Ratification of the action taken by MODI in restricting the financial restructuring already approved by CCD. iii. Ratification of the action taken by MODI in making the modifications/changes in transaction documents. iv. To approach BIFR with the proposal of induction of a strategic partner for their approval; and v. To execute the transaction documents with the winning bidder after the approval of the selection of the Strategic partner by BIFR.” In its meeting held on February 27, 2002 CCD approved the proposal for acceptance of the financial bid submitted by RCL. Under the circumstances, the Joint Secretary to the Government of India, Ministry of Heavy Industries and Public Enterprises, the Department of Heavy Industry wrote a letter dated March 7, 2002 to BIFR. It was written with a view to conveying the approval of the competent authority of the Government of India for induction of RCL, the successful bidder, as a strategic partner in JCL. Paragraph 6 of the letter of the Joint Secretary dated March 7, 2002 being relevant is quoted below:- “6.Further Jessop & Co. has sold (and measuring 5.5 acres to Metro Railways, Kolkata for Rs.9.9 crore and pending decision on the modalities of transfer of land, the amount is shown under both assets and liabilities by Jessop & Co. in the audited accounts for the year ended 30th September, 2001. has sold (and measuring 5.5 acres to Metro Railways, Kolkata for Rs.9.9 crore and pending decision on the modalities of transfer of land, the amount is shown under both assets and liabilities by Jessop & Co. in the audited accounts for the year ended 30th September, 2001. If the estimated profit on sale of the above land of Rs.8.80 crore(net of assumed capital gain tax) is taken into account by the company, the revised net worth as on 30.09.2001 would become Rs.0.42 crore.” Stating in detail the procedure followed in the selection of the strategic partner, facts concerning transparency, etc. the Joint Secretary requested BIFR to approve the proposal of the Government to induct RCL as a strategic partner in JCL. It was mentioned that if the proposal was not acceptable, then BIFR might consider the question of winding up of JCL, because the rehabilitation package would not be available to JCL without formation of a joint venture. BIFR approved the proposal in September 2002. Questioning the disinvestment decision of the Government one Jessop & Company Ltd. Staff Association filed a WP No.4209 (W) of 2002 in this Court under art.226 of the Constitution of India. By a decision dated March 25, 2003 a single Judge of this Court set aside the disinvestment decision of the Government. Four appeals were filed against the decision of the single Judge, and by a decision dated July 8, 2003 a Division Bench of this Court set aside the decision of the single Judge and allowed all the four appeals. The principal question involved in that WP No.4209 (W) of 2002 was whether more than 49% shares of JCL could be disinvested. While deciding the question the Division Bench extensively examined the disinvestment process and held that there was no “lack of transparency.” This WP was filed on July 25, 2003, i.e. a few days after the Division Bench decision dated July 8, 2003. The case stated in this WP will appear from paras.13-22 thereof, and it is this. On July 23, 2003 the petitioners’ representative, while browsing through internet, came across a report published in an article that the shareholding in question was sold to RCL as a part of a deal that the Rs.14 crore proceeds of land would be “refunded” to RCL. All the time RCL was aware that the proceeds would not be appropriated by the bankers’ consortium. All the time RCL was aware that the proceeds would not be appropriated by the bankers’ consortium. RCL was given this information by Union of India (in short UOI), JCL, BBUNL and AFF. Since TWL’s consortium was not given the information, the real value of its bid ought to have been considered Rs.25 crore. UOI, BBUNL, AFF and RCL filed their respective affidavits-in-opposition. Dealing with all the oppositions the petitioners filed an affidavit-in-reply dated September 10, 2003 and in this reply they stated a new case concerning fixation of reserve price. The case was stated in sub-paras.(d) and (e) of para.7 of the reply. Sub-paragraphs (d) and (e) of para.7 of the petitioners’ affidavit-in-reply dated September 10, 2003 are quoted below:- “d) Further, the deadline for submitting bids by prospective bidders for purchase of 72% share in JCL was 11 AM on 15 February, 2002. The writ petitioners and the respondent no.5 abovenamed submitted their respective bids within the aforesaid deadline and the bids were opened at about 11 AM on 15 February, 2002. e) After opening the said two bids on 15 February, 2002 itself, a meeting was held at 3.30 PM by the Evaluation Committee, wherein the Reserve Price for the 72% equity shares of JCL was fixed at Rs.12 crores, i.e. Rs.1 crore more than the bid put in by the writ petitioners. In this connection, hereto annexed and marked “B” is a copy of the minutes of the meeting of the Evaluation Committee held on 15 February 2002 at 3.30 PM.” The respondents in the WP were give an opportunity of dealing with the new case stated by the petitioners in their affidavit-in-reply dated September 10, 2003. Accordingly, UOI filed a counter affidavit dated February 24, 2011 stating the circumstances under which the financial bids were opened for authentication. The case was stated in sub-paras. (i) and (ii) of para.11 of the counter affidavit. The case stated in sub-paras.(i) and (ii) of para.11 of the counter affidavit of UOI is this. Following the existing practice of the Department of Disinvstment, the Secretary (Disinvestment) opened the bids of TWL and RCL and authenticated them on their reverse in the presence of the bidders on February 15, 2002. No one saw the content of the bids, nor could anyone see the bids, because the entire procedure was performed in front of the bidders. Following the existing practice of the Department of Disinvstment, the Secretary (Disinvestment) opened the bids of TWL and RCL and authenticated them on their reverse in the presence of the bidders on February 15, 2002. No one saw the content of the bids, nor could anyone see the bids, because the entire procedure was performed in front of the bidders. The authenticated bids were immediately put in another envelope that was sealed. The petitioners not raising any objection, are estopped from saying that the contents of the bids were seen. The petitioners filed a rejoinder dated April 2, 2011 to the counter affidavit of UOI dated February 24, 2011. The new case concerning fixation of reserve price was further elaborated in paras.12 and 13 of the rejoinder. The case stated in para.12 of the petitioners’ rejoinder dated April 2, 2011 is this. At the time the bids were opened for obtaining signatures of the bidders on the reverse thereof “the Secretary (Disinvestment) and some other officials came to know of the exact amount of price bid.” Referring to the pleadings, Mr Chatterjee appearing for the petitioners has argued as follows. No reasonable man could conclude from the disclosed documents that the Rs.14 crore proceeds of 5.5 acres JCL land would come to the till of JCL after the disinvestment. But, admittedly, it was known to RCL that the amount would be available to JCL for utilisation by JCL after disinvestment. The reserve price was fixed after seeing the bids. It was calculatedly fixed at Rs.12 crore for ousting TWL’s consortium from the race. Mr. Chatterjee has relied on the meaning of the word “notice” in Aiyar’s the Law Lexican and the decisions in Ram and Shyam Company v. State of Haryana & Ors., (1985) 3 SCC 267 , Allahabad Bank v. Bengal Paper Mills Co. Ltd. & Ors., AIR 1999 SC 1715 , Commissioner of Sales Tax & Ors. v. Subhash and Company, AIR 2003 SC 1628 , Aggarwal & Modi Enterprises (P) Ltd. & Anr. v. New Delhi Municipal Council, (2007) 8 SCC 75 and Virender Chaudhary v. Bharat Petroleum Corpn. & Ors., (2009) 1 SCC 297 . Mr Bose has appeared for UOI. Mr Rezzak, the Additional Solicitor General of India, has appeared for BBUNL. Mr. Talukdar has appeared for AFF. Mr Mitra has appeared for JCL and RCL. Mr. v. New Delhi Municipal Council, (2007) 8 SCC 75 and Virender Chaudhary v. Bharat Petroleum Corpn. & Ors., (2009) 1 SCC 297 . Mr Bose has appeared for UOI. Mr Rezzak, the Additional Solicitor General of India, has appeared for BBUNL. Mr. Talukdar has appeared for AFF. Mr Mitra has appeared for JCL and RCL. Mr. Rezzak leading the case of the respondents has submitted as follows. There is nothing to show that any information about the Rs.14 crore proceeds of 5.5 acres JCL land was given to RCL, but not to TWL. From the disclosed documents it was evident that OTS amount was to be paid from the Government grant. The case concerning fixation of reserve price at Rs.12 crore, not in the WP, is an afterthought. No objection was made that during authentication the bids were seen. The previous decision is a bar to a fresh examination of the process. While adopting Mr Rezzak’s argument, Mr Mitra has added that the share purchase agreement given to all the bidders contained the end use information on the proceeds of the land. Although very lengthy submissions were made over the days taking the Court extensively through the pleadings, it seems to me that the two principal issues involved in the WP are these: (i) whether any information was given to RCL, but not to TWL, that after disinvestment the Rs.14 crore proceeds of 5.5 acres JCL land would be available to JCL for utilisation by JCL; (ii) whether anyone saw the price bids of TWL and RCL when the envelopes were opened and the bid authentication process was carried out on the reverse of the bids. Admittedly, the above-noted two issues were not involved in the previous WP that was filed in this Court by Jessop & Company Ltd. Staff Association questioning the disinvestment decision of the Central Government. The petitioners were not party to the WP. In my opinion, it will not be appropriate to say that because of the Division Bench decision dated July 8, 2003 dismissing that WP, the two issues in this WP can no longer be examined on merits. I am also of the opinion that nothing in the relied on decisions is relevant for deciding the two principal issues. Hence if I do not deal with them, I hope I will not be considered either disrespectful to them or unappreciative of the argument. I am also of the opinion that nothing in the relied on decisions is relevant for deciding the two principal issues. Hence if I do not deal with them, I hope I will not be considered either disrespectful to them or unappreciative of the argument. The petitioners have failed to prove that anyone gave RCL any information that after the disinvestment the Rs.14 crore proceeds of 5.5 acres JCL land would be available to JCL for utilisation by JCL. I am unable to accept the case that the disclosed documents did not contain all the material information on the Rs.14 crore proceeds of 5.5 acres JCL land. The documents revealed that a part-payment was received, that the amount was parked with BBUNL, that in JCL’s audited accounts it was shown under both the assets and liabilities, that both JCL and SBI requested BIFR to permit appropriation of the proceeds, that SBI requested BIFR to permit appropriation of the proceeds for OTS payment, and that financial restructuring approved by the Government provided, inter alia, that the OTS amount would be paid from the Government grant. I am, therefore, unable to accept the case that since information about utilisation of the Rs.14 crore proceeds of 5.5 acres JCL land was made available to RCL, but not to TWL, RCL got an undue advantage. The allegation that non-disclosure of all material information on the Rs.14 crore proceeds of 5.5 acres JCL land vitiated the disinvestment process is baseless. There is no material from which it can be concluded that it was not the practice of the Government’s Disinvestment Department to open the bids in presence of the bidders, authenticate them on the reverse thereof without seeing the bids and keep them once again in a sealed envelope. This was the practice and in this case also following the practice the bids of TWL and RCL were opened on February 15, 2002. There is no reason to disbelieve the case of the respondents that the bids were not seen by anyone. I am minded to accept the case of the respondents that the case of the petitioners’ that the bids were seen during the authentication process is an afterthought. The allegations were made for the first time in the reply dated September 10, 2003. Nothing was said about the bid authentication in the WP dated July 25, 2003. I am minded to accept the case of the respondents that the case of the petitioners’ that the bids were seen during the authentication process is an afterthought. The allegations were made for the first time in the reply dated September 10, 2003. Nothing was said about the bid authentication in the WP dated July 25, 2003. No objection was raised at any time. It is unbelievable that if the bids were actually seen before fixation of the reserve price, TWL would have remained silent. The fact that it never raised any objection is sufficient to reach the conclusion that during the authentication process no one saw the bids. There is no merit in the argument that even if the bids were not seen by anyone, the mere opening thereof before fixation of the reserve price vitiated the selection. The bids were opened according to the practice that was in force. The petitioners have failed to demonstrate how the opening of the bids and authentication thereof without seeing the bids prejudiced them. Since the bid opening did not cause them any real prejudice, I am unable to accept that the opening of the bids vitiated the selection. In view of the above-noted situation, I am unable to accept that the disinvestment process was vitiated. Simply because the reserve price was fixed following DCF method and asset backing, or because during the process AFF participated, or because a high official participating in the disinvestment process joined JCL after the disinvestment – it cannot be concluded that there was a calculated move to ensure RCL’s success in the bidding process. Allegations made by the petitioners are baseless. For these reasons, I dismiss the WP. No costs.