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Rediff.com  » Business » HC clears Jessop sale to Ruia Cotex

HC clears Jessop sale to Ruia Cotex

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July 09, 2003 11:40 IST

The Calcutta high court has upheld the central government's decision to divest its shares in Jessop and Company Ltdto Ruia Cotex Ltd.

A division bench of chief justice A K Mathur and justice Ashim Banerjee set aside the order of a single judge which had nullified the sale.

The bench allowed three appeals filed by the Union government, Ruia Cotex Ltd and Bharat Bhari Udyog Nigam Ltd against the order of the single judge.

The central government had transferred its 72 per cent stake in JCL to Ruia Cotex for Rs 18 crore (Rs 180 million).

In May, 2002, the Jessop Staff Association had filed a writ challenging the divestment and obtained a stay order.

While allowing the appeals, the bench held that the staff association had no right to question the governmental policy of divestment.

The counsel for staff association sought stay of operation of the order, which was refused by the court.

After receiving the order, P K Ruia, chairman of the company, in a press release expressed his happinessĀ  and said they would immediately start implementing the scheme for revival of JCL in right earnest.

He also sought cooperation of all concerned. The court in its 41-page judgement further held that the employees has no locus to challenge the decision making process of the government.

The court observed that there was nothing wrong in the Board for Industrial & Financial Reconstruction order as held by the single judge.

The bench held that there was no invalidity in the BIFR's order and the order of the single judge was absolutely erroneous.

The bench stated there was no lack of transparency or illegality in the process as alleged by the staff association.

Proper advertisement was issued and all facts and datas were given to the prospective promoters and after verifying the relevant documents and papers the court did not find any unfairness or invalidity in the process of divestment.

The court upheld the argument of S K Kapur, additional solicitor general of India, appearing for the government that JCL did not come within the purview of strategic sector of industry.

BS Law Correspondent in Kolkata
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