ARVIND GUPTA Vs. STATE OF GUJARAT

JUDGEMENT

(1.) DECISION taken by the Government of Gujarat on 16. 7. 1997 to disinvest its equity shares of Ahmedabad Electricity Company Limited (for brevity "aec") in favour of Torrent Group as part of its dis-investment policy, is the subject matter of challenge in this writ petition filed in the public interest.

(2.) PETITIONER claiming to be a share-holder of AEC and a social activist, has approached this Court by this public interest litigation, seeking a writ of certiorari to quash the Government Resolution dated 16. 7. 1997, deciding to disinvest the shares of Government of Gujarat in favour of Torrent Group, contending the same is arbitrary, illegal, violative of Article 14 of the Constitution of India and also in violation of breach of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

(3.) PETITIONER, who appeared in person, submitted that State Government favoured Torrent Group by parting its equity shares, that too without following the procedure laid down in disposing of the equity shares and in gross violation of the Rules and Regulations. Petitioner submitted that Government Resolution published through public announcement did not disclose any rationale in State Government dis-investing its equity shares without inviting any competitive bidding or offer for sale through public auction. Petitioner pointed out that Government of Gujarat, after selling its entire substantial equity stake of 28. 89% in AEC, as stipulated under Clause 6 of the impugned Regulation Torrent Group should acquire additional 20% of AEC shares by public offer, which will amount to malafide exercise of power by the State Government. Petitioner also submitted that he had submitted a representation to SEBI to conduct an investigation with regard to clandestine take-over of AEC with Torrent Group, which amounts to violation and breach of norms laid down under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Petitioner further submitted that SEBI (Substantial Acquisition of Shares and Takeovers) Regulation casts an obligation on the acquiring company to comply with the Takeover Regulation, but the Government of Gujarat went beyond its scope of contracting agreement to sell the share-holding of AEC to Torrent Group.