HBL LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The Electronic Corporation of India Ltd. (ECIL in short) has filed application for being impleaded as a party to this writ petition. Petitioners, are sister limited companies filed this writ petition for quashing the circular dated 7.8.1999 issued by the Department of Atomic Energy respondent no.2 impleading UOI and two other officers as respondents no. 1, 3 & 4.

(2.) The facts as disclosed in the petition are as follows. The petitioners are engaged in the manufacturing of batteries for aircraft, torpedoes, and missiles etc. These supplies are made to the Indian Air-Force, Indian Navy, Indian Railways, Steel Authority of India Ltd. and Oil Corporation etc. Under Government policy certain defence items which were hitherto manufactured by Electronic Corporation of India Ltd. of Department of Atomic Energy were permitted to be manufactured by private companies. The petitioners also obtained an industrial licence on 17.5.1999 for manufacture of projectiles and part thereof including various fuses (empty). Petitioner no.2 stated making arrangements for the conditions set out in the licence. Petitioner no. 1 used to supply specialised batteries manufactured by it to the Ministry of Defence. Ministry of Defence of the respondent no.1 issued a circular dated 7.8.1999 against the petitioners in pursuance to a letter received from respondent no.3. Joint Secretary (R&D) as a result the petitioner has not been able to make supplies to the Ministry of Defence and its subordinate organizations. In the circular it is mentioned that an investigation is being conducted at Police Station at Kushaiguda, Hyderabad against two former employees of the ECIL on the allegation that they had taken away with them some fuses belonging to the ECIL stealthily and had joined to private companies. It was further alleged that the empty fuses were recovered from a sub-contractor of the petitioner no.1 which indicated the involvement of the petitioner companies in the said theft. The circular was issued without any verification of the true facts. The petitioners are not involved in criminal case in any way. The circular is causing a great hardship for both the petitioners for doing business and to participate in the tenders in respect of the products manufactured by them for which Ministry of Defence are the major buyers.

(3.) This petition is resisted by the respondents, UOI by raising diverse pleas by affidavit. In the counter affidavit it is alleged that this court had no territorial jurisdiction. The petitioners have no right to file the petition or be granted relief prayed for. Petition is also mis-conceived because it was reported to the Government that the petitioners were one of the suppliers of Sindered Nickel Plates for Nickel Cadmium Batteries for the Ministry of Defence and were supplying non-standard items. The Government was also informed regarding the poaching of the technology of defence products by the petitioners and others. The inter-departmental note was sent to Government and thus the petitioners cannot have any right to say that the said note prepared by the Government had affected the business right of the petitioners for tender. The petitioners cannot procure confidential documents and use it in the writ petition. It is an official communication pertaining to the affairs of the State and as such, the documents cannot be given nor can be procured. Entire public interest would be jeopardised and no administration can run if such disclosures are made and no reliance can be made upon such documents. The writ petitioners have stolen these documents. The petition should be dismissed in public interest as the petitioners have not come with clean hands. Mr. G. Siva, Sr. Manager, IOG, ECIL and Mr. Manikyelrao, Technical Manager, SDP, ECIL are still the employees of ECIL. They have been placed under suspension. They were arrested by the police but have been released on bail. They violated the service code by not marking their attendance with the security at ECIL. A criminal case was registered and investigations had taken place with regard to the alleged theft of 20 nos. of VT BA fuses from ECIL by these two employees. The inquiry is being conducted. Mr. A.L. Prasad is the competitor of ECIL in the supply of batteries to the Ministry of Defence. He was in close contact with the employees of the ECIL. The HBL in collaboration with some of the employees of ECIL has been trying to poach the technology of defence products. The goods were recovered from the premises of one of the sub-contractors of HBL, the writ petitioner, which shows the nexus between the employees of ECIL and Dr. Prasad and the writ petitioner company HBL. It has also been found that those employees of ECIL were apparently working with M/s Sabnite Power System Ltd. which is also a company promoted by the Chairman of the writ petitioners company. Intelligence Bureau has also registered a case against Dr. Prasad for his international leakage of information and that Dr. Prasad, Chairman of the writ petitioner company, acting against the interest of PSE and against the interest of the country. ECIL has filed a writ petition in the High Court of Hyderabad against the writ petitioner and an injunction has been granted restraining respondents no.1 & 2, the employees, and joining services of the writ petitioners