G D ZILANI Vs. UNION OF INDIA

JUDGEMENT

(1.) By this judgment we are deciding Writ Petitions Nos. 3181/94, 3160/94 and 3161 /94 since grounds of challenge are the same and so also the issues and the prayers. In this judgment we will refer to the facts of the case of G.D.Zilani (CWP No. 3181/94) and shall refer to other two petitions wherever necessary.

(2.) First petitioner is the shareholder of the second petitioner M/s. Torrent Gujarat Biotech Ltd. ("Torrent" for short), which is a company and is in the process of setting up its own penicillin plant. By this petition under Article 226 of the Constitution the petitioners seek a writ of mandamus or any other appropriate order or direction quashing and/ or recalling the decision of the first respondent-Union of India in the Ministry: of Chemicals & Fertilizers in allowing the second respondent- Hindustan Antibiotics Ltd. ("HAL" for short) to enter into a contract with the third respondent, Max-GB Ltd. (Max-GB), for leasing out the penicillin G (Pen-G) plant (Unit) of HAL to the third respondent. Petitioners have. also prayed that a direction be issued to the Union of India, i.e., the Central Government, and HAL to give equal opportunity to the petitioners to put forward their proposal regarding the leasing out the penicillin-G unit of HAL and to consider the same. We may note that there are four respondents and the fourth respondent is Mr. A.K. Basu, Managing Director (M.D.) of HAL.

(3.) Petitioners complain that actions of the Central Government and HAL are arbitrary as the contract which HAL proposes to enter into with Max-GB to lease out the penicillin-G unit of HAL to Max-GB an annual rental of approximately Rs. 17.00 crores when the fair rent estimated by an expert committee (Sub Committee) constituted by the Board of Directors of HAL was Rs.32.00 to Rs.35.00 crores. Petitioners also complain that HAL has not followed the normal procedure by inviting tenders and has instead discouraged and in fact prevented other interested parties from formulating any proper offer for giving more lease money as these interested parties were denied inspection of the facilities and material information necessary to make a meaningful offer. Petitioners then complain that HAL clandestinely and secretly entered into negotiations with Max-GB for leasing out its penicillin-G plant under the guise of upgrading the technology and that there was no notice inviting tenders nor any advertisement was given, nor any shortlisting of probable bidders was done nor any invitation to them to bid. The complaint about the fourth respondent, the Managing Director of HAL, is that he has been unduly favourable to Max-GB when he has given inspection to Max-GB of all the facilities including penicillin-G plant of HAL and also gave all material information which had been denied to the petitioners and other similarly situated persons, and, thus, the fourth respondent had sacrificed the commercial interest of HAL for pecuniary benefits to Max-GB.