The Supreme Court on Friday junked a plea by Congress leader Adhir Ranjan Chowdhury seeking an investigation into the sale of 47 per cent stake in Metro Dairy Ltd by the West Bengal government, holding it was a prudent decision. A bench comprising Justices M R Shah and Krishna Murari did not agree to the submissions of senior advocate Maninder Singh, appearing for the Congress leader, that the regulations relating to sale of assets were not followed by the state government.
They took a right decision… in the share market, it happens as the prices go up on a day and come down on another day. Auctioning is the prudent decision. We are of the opinion that the procedure adopted was the correct and transparent one, the top court said while dismissing Chowdhury’s petition. Having heard the counsel …, the findings recorded by the Calcutta High Court in paragraphs numbers … call for no interference of this court. The SLP (special leave petition) stands dismissed, it ordered.
At the outset, Singh faulted the decision of the state government and the subsequent verdict of the high court, insisting there was a laid down procedure which required setting up a committee that would recommend disinvestment and the ways for going for it. The top court said this ground was not taken before the high court and rather it has been noted in the verdict that nothing was shown on the record to establish that the auction was against any regulatory or statutory norms.
The Calcutta High Court had on June 13 dismissed the plea by Chowdhury, the leader of the Congress in the Lok Sabha, asking for probing the stake sale. The high court had dismissed the public interest litigation (PIL), holding the stake sale was neither illegal nor arbitrary.
It held the state had not adopted non-transparent or opaque measures for the sale of shares to Keventer Agro, and as such, no case was made out for interference. In his PIL, Chowdhury had alleged the state government sold its stake in Metro Dairy at a very low price, without following a transparent process and sans any justifiable reason.
He had appealed for appointment of a high-powered committee, headed by a sitting judge of the high court, to investigate the sale. The state government had offered to sell its equity in Metro Dairy in May 2017 for a base price of Rs 85.43 crore and Keventer Agro offered Rs 85.5 crore for buying it.
The West Bengal government held 47 per cent stake in Metro Dairy, Keventer Agro 43 per cent, while the rest 10 per cent was with the National Dairy Development Board (NDDB). NDDB sold its stake to ICICI Bank, which was then acquired by Keventer Agro, the court was informed.
state government’s share, Keventer owned 100 per cent stake in Metro Dairy. Chowdhury had submitted 47 per cent shares of Metro Dairy were sold to Keventer Agro for Rs 85.5 crore, following which the company sold 15 per cent shares to Mandala Swede SPV for a whopping Rs 170 crore.
The counsel for Keventer Agro had submitted Mandala Swede had bought shares in Keventer Agro, which has various business activities, including the dairy business, and not in Metro Dairy Ltd. The two deals have no connection, he had clarified. The counsel appearing for Mandala Swede SPV submitted it is not a necessary party in the matter and the allegation is misconceived.
The high court had held the state’s decision of disinvestment in Metro Dairy was essentially a policy decision based on economic and other considerations. “Such a policy decision is not open to interference unless the same is unconstitutional, violative of statutory provision, totally arbitrary or suffers from the vice of malice,” the high court had said.
Observing that it does not lie within the domain of the courts to consider the relative merits of different economic policies, the bench said, in the present case, nothing has been pointed out to show that the decision of the state to sell 47 per cent shares of Metro Dairy runs counter to any statutory provision or is illegal in any manner.
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