Financial Daily from THE HINDU group of publications
Wednesday, Jul 09, 2003

Port Info

Group Sites

Corporate - Courts/Legal Issues
Industry & Economy - Disinvestment

Court allows divestment in Jessop

Our Legal Correspondent


A DIVISION Bench of the Calcutta High Court comprising the Chief Justice, Mr A.K. Mathur, and Mr Justice Ashim Kumar Banerjee, by a composite judgement today, allowed the appeal of Union of India, whereby the issue of disinvestment with regard to stake of Union of India in Jessop & Co Ltd (JCL) does not have any embargo at the moment.

Challenging the order of the Trial Court passed on April 10, 2003, Bharat Bhari Udyog Nigam Ltd (BBUNL) filed an appeal against Jessop & Co Ltd Staff Association (Association).

Ruia Cotex Ltd (RCL), the purchaser of shares of Union of India in JCL, for Rs 18.18 crore, filed appeal against the association; the Government filed appeal against the association, which in turn filed an appeal against Board for Industrial and Financial Reconstruction (BIFR). All the appeals have been heard analogously and a single judgement was passed.

The association filed a writ petition challenging the Government move to disinvest its share in JCL to RCL, but the Trial Court passed an order of stay against it.

RCL went up to the Supreme Court, challenging the order of Division Bench of Calcutta High Court, but the apex court directed the Trial Court to dispose of the pending application. The association disputed the sale of stake as the matter was pending with BIFR. The court, however, directed BIFR to hear the matter without passing any final decision.

The association claimed JCL was an industry coming under strategic sector but the Government rejected this, and BBUNL supported the contention of Union Government. Mere manufacturing of Railway ancillaries cannot recognise any establishment as being in the strategic sector.

The court, while dismissing the appeal of the association, observed that the association has nothing to do with the modus of BIFR and hence, cannot challenge the functioning of BIFR. The court held that the association had no locus to challenge the decision-making process of the Union Government.

The court admitted the contentions of Government, holding that during disinvestment process the interests of the employees shall be safeguarded.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Arisaig offloads Apollo Hospitals equity shares

Grasim resumes Nagda operations
Bayer to consider scheme of arrangement for CropScience
Poor demand for VCRs forces Kalyani Sharp to switch off EOU
Punjab Tractors to pay Rs 3 interim
Raymond to pay 45%
ICAI move against `surrogates' hailed
`Companies Act to plug accounting loopholes'
Jisco board okays pref allotment
`UK keen on pharma research outsourcing'
Court allows divestment in Jessop
HC directs Sarguna Textiles to wind up
Saregama revamps music business
Wockhardt buys CP Pharma for Rs 82 cr
GMR Tech stakeholders okay Varalakshmi merger
Govt denies sops to Arvind Mills venture with Mauritius co
First Leasing plan for wind power
RailTel, BSNL to sign `barter' deal
Bridgestone to invest in Philips Carbon facility
Ocimum Bio ties up with US hospital
`Quality, competitiveness, low cost our strategy for growth' — Mr V. Pichai, V-P (Finance) & Secretary, Seshasayee Paper
Capital revamp at Timex to offset net loss
Fiat India targets Rs 53-cr auto parts exports
ITC Foods divn rolls out ReadyMeals — Eyes Rs 500-cr revenue in 3 years
PF defaulters face blacklisting

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |

Copyright 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line