# R. SAi BH1}~.A THI v. J. JAY ALALITHA AND ORS - **Citation:** [2003] Supp. 6 S.C.R. 85 - **Court:** Supreme Court of India - **Decided:** 2003-11-24 - **Case number:** Criminal Appeal Nos. 115-120 and 121-127 of 2002 - **Bench:** S. Rajendra Babu, P. Venka T Arama Reddi - **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/r-sai-bh1-a-thi-v-j-jay-alalitha-and-ors-19566 - **Pages:** 44 ## Headnote B Penal Code, 1860/Preventian of Corruption Act, 1288:::-Sections l 20B, 169 and 409/Sections l3(l)(c) and (d) and 13(2)-Prosecution under-Corporation-Owning Government Campanies-Ai;ticles of Association of Corporation provided sale of the property only after C approval fi·om Government-Property sold by Cmporation in publ(c interest by way of open tender-Purchased by the firm of the accused who was Chief Minister of the State and her associate-Code of conduct refraining the Ministers from buying such property-.Bid of the accused was highest and above the market value ascertained by the other two D accused-the Government Officials-Complaint against the accused alleging that ,the sale caused wrongful gain to the firms of accused and lvrongful loss to the Corporation-Conviction of accused u/ss.120-B and 409/PC and 13(l)(c) and (d) and 13(2) of the Act-Acquittal by High Court-On appeal, held: Property cannot be said to be under-sold causing loss to the E Corporation, the sale having been conducted by open tender, the bid being highest and above market value and the process of tender not having been vitiated-Offence u/s.120-B not established in the facts of the caseSection 3(J){d) not attracted because property was not purchased by accused by corrupt or illegal means for her pecuniary gain by discarding F public interest-Section 3(J){c) not attracted as the accused did not act dishonestly or fraudulently-Corpo~ation being a separate entity from the Government the property thereof ccmnot be said to be entrusted to the Government creating a trust a.~ the Government had no domination over it and dishonest disposal or conversion of property not having been G established Section 409 not attracted-Offence u/s 169 also not made out as purchase of the property in question was not prohibited by any statute but only by a Code of Conduct-Code of Conduct not having any statutory force, not enforceable in Court of Law and the same having· only e.(hical effect, cannot be construed to impose a legal prohibition-Accused H 85 86 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A directed to return the property unconditionally in keeping with good ethical behaviour. State of Tamil Nadu formed Tamil Nadu Small Industries Corporation Ltd. (T ANSI). The Memorandum of Association of the B Corporation provided that Board could not dispose of the land transferred to the Corporation by the Government other than to the . State or Central Government or their Departments or Undertakings without prior written approval of the Government. A Code of Conduct for Ministers was brought into force which provided that a Minister shall refrain from buying from, or selling to, the Government any C immovable property except where such property is compulsorily acquired by the Government in the usual course and refrain from starting, or joining, any business. After transfer of Government Industrial Units to the Corporation, some of the units started incurring losses. Government decided that the Corporation should close down D the units and explore the possibility of disposing the properties. Pursuant to advertisement in Newspaper calling for tenders, a firm, of which accused-I the Chief Minister of the State and A-2 were the partners, offered for the tender. The bid of the firm of the accused I • and 2 was the highest though much lower than the guideline value. It E was marginally higher than the value fixed by the Collector and Commissioner of Land Administration. Since the Corporation had already decided to sell land of the same unit to another Company at F the price lower than as bid by th.e firm of accused, the bid was considered reasonable and Board recommended for the sale to the firm of accused to the Government. Government approved the sale. A complaint was lodged. Charges were framed u/ss. 1208, 169 and 409 IPC and u/ss. 13(1)(c) and (d) and 13(2) of Prevention of Corruption Act on the ground that the property in question was deliberately sold for less value with a vi ## Text _Characters 0–39,790 of 109,772. This is a partial read: ask again with offset=39790 for what follows._ R. SAi BH1}~.A THI A v. J. JAY ALALITHA AND ORS. NOVEMBER 24, 2003 [S. RAJENDRA BABU AND P. VENKA T ARAMA REDDI, JJ.] B Penal Code, 1860/Preventian of Corruption Act, 1288:::-Sections l 20B, 169 and 409/Sections l3(l)(c) and (d) and 13(2)-Prosecution under-Corporation-Owning Government Campanies-Ai;ticles of Association of Corporation provided sale of the property only after C approval fi·om Government-Property sold by Cmporation in publ(c interest by way of open tender-Purchased by the firm of the accused who was Chief Minister of the State and her associate-Code of conduct refraining the Ministers from buying such property-.Bid of the accused was highest and above the market value ascertained by the other two D accused-the Government Officials-Complaint against the accused alleging that ,the sale caused wrongful gain to the firms of accused and lvrongful loss to the Corporation-Conviction of accused u/ss.120-B and 409/PC and 13(l)(c) and (d) and 13(2) of the Act-Acquittal by High Court-On appeal, held: Property cannot be said to be under-sold causing loss to the E Corporation, the sale having been conducted by open tender, the bid being highest and above market value and the process of tender not having been vitiated-Offence u/s.120-B not established in the facts of the caseSection 3(J){d) not attracted because property was not purchased by accused by corrupt or illegal means for her pecuniary gain by discarding F public interest-Section 3(J){c) not attracted as the accused did not act dishonestly or fraudulently-Corpo~ation being a separate entity from the Government the property thereof ccmnot be said to be entrusted to the Government creating a trust a.~ the Government had no domination over it and dishonest disposal or conversion of property not having been G established Section 409 not attracted-Offence u/s 169 also not made out as purchase of the property in question was not prohibited by any statute but only by a Code of Conduct-Code of Conduct not having any statutory force, not enforceable in Court of Law and the same having· only e.(hical effect, cannot be construed to impose a legal prohibition-Accused H 85 86 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A directed to return the property unconditionally in keeping with good ethical behaviour. State of Tamil Nadu formed Tamil Nadu Small Industries Corporation Ltd. (T ANSI). The Memorandum of Association of the B Corporation provided that Board could not dispose of the land transferred to the Corporation by the Government other than to the . State or Central Government or their Departments or Undertakings without prior written approval of the Government. A Code of Conduct for Ministers was brought into force which provided that a Minister shall refrain from buying from, or selling to, the Government any C immovable property except where such property is compulsorily acquired by the Government in the usual course and refrain from starting, or joining, any business. After transfer of Government Industrial Units to the Corporation, some of the units started incurring losses. Government decided that the Corporation should close down D the units and explore the possibility of disposing the properties. Pursuant to advertisement in Newspaper calling for tenders, a firm, of which accused-I the Chief Minister of the State and A-2 were the partners, offered for the tender. The bid of the firm of the accused I • and 2 was the highest though much lower than the guideline value. It E was marginally higher than the value fixed by the Collector and Commissioner of Land Administration. Since the Corporation had already decided to sell land of the same unit to another Company at F the price lower than as bid by th.e firm of accused, the bid was considered reasonable and Board recommended for the sale to the firm of accused to the Government. Government approved the sale. A complaint was lodged. Charges were framed u/ss. 1208, 169 and 409 IPC and u/ss. 13(1)(c) and (d) and 13(2) of Prevention of Corruption Act on the ground that the property in question was deliberately sold for less value with a view to confer pecuniary G advantage to the firm of A-I and A-2 which resulted in wrongful loss to the Government and wrongful gain to A-1 and A-2. Trial Court convicted the accused u/ss. 120-B and 409 IPC and u/s.13(2) r/w. Section l3(1)(c) and (d) of Prevention of Corruption Act. H In appeal High Court acquitted all the accused. Hence the present R. S. BHARA THI v. J. JA YALALITHA 87 appeals and Special Leave Petition. A Dismissing the appeals and Special Leave Petition, the Court HELD : 1.t. In view of the failure of the prosecution to show the guideline value and in view of the positive evidence as .brought out through valuation given by the Collector and Commissioner of Land B Administration the land of TANSI Foundry unit could be relied upon particularly when the sale was by way of open tender, it cannot be said beyond reasonable doubt that the property in question had been under-sold and thus there was loss to TANSI. (104-G-HI c t.2. The scheme of the Stamp Act (as amended by T.N. Act 24 of 1967) and Tamil Nadu Stamp (Prevention of Undervaluation of Instruments) Rules, 1968 is not sacrosanct, but only a factor to be taken note of if at all available in respect of an area in which the property transferred lies. In any event, therefore, if for the purpose of D Stamp Act guideline value alone is not a factor to determine the value of property, its worth will not be any higher in the coniext of assessing the true market value of properties in question to ascertain whether the transaction has resulted in any offence so as to give a pecuniary advantage to one party or the other. (109-A-C] E 1.3. The approach of the High Court in ascertaining the true value of the land on the basis of the offer of the firm of A-1 and A-2 in the tender process and the value fixed in respect of the land sold to another Company cannot be said to be irrelevant or perverse. The tender process by the T ANSI not being shown to be or demonstrated to be p vitiated is a transparent and good piece of evidence to indicate the real price of the properties in question. The adoption of the value as Guideline Value will have to be in terms of Tamil Nadu Stamp Act &nd not de hors the same. (109-C-E] .~ 2. As regards the offence under Section 120-B IPC the manner '-' of conspiracy is not established. How there have been meeting of the minds of different accused at different stages and what the common design has been, is not clear. Even if it is assumed that some of the officers of the Government were circumspect in their attitude having come to the conclusion that A-I was interested in purchase of the H 88 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R. A properties and have put their seal to such act either tacitly or over zealously by being too expressive of the same, it cannot be held that there was a concpiracy amongst various persons. There is no link to show that the conspirators agreed to have the property sold or the property purchased at a lesser price so as to cause wrongful loss or .. B wrongful gain_ or to enable A-1 and A-2 to obtain the property at a price less than its value. [110-E-F) 3.1. The circumstances under which the properties were purchased by the firms of A-1 and A-2 cannot be treated as one obtained in the circumstances arising in Section 13{1)(d) of the Prevention of C Corruption Act. The facts established in the case point out that the properties are not purchased by C!}rrupt or illegal means or by abusing th~ official_ position as public servant to obtain pecuniary advantage discarding public interest. The purchase was effected through open sales held by T ANSI. The right to sell the properties in question was D available with the. Corporation which chose to do so in favour of the firms A-1 and A-2. If the properties in question were sold by TANSI in public interest, the obtaining of the same through purchase in such a transaction for valuable consideration which does not fall below market value does not come within the scope of Section 13(l)(d). Thus, E the charge under Section 13(1)(d) is not established. [113-D-H; 114-AJ 3.2. Offence under Section 13(l)(c) of the Prevention of Corruption Act would arise if any public servant dishonestly or fraudulently misappropriated or otherwise converted for his own use any property entrusted to him or under his control as a public servant or allowed F any other person to do so. In the present case, it cannot be said that the accused acted dishonestly because there was no wrongful gain or wrongful loss and hence it cannot be said that they acted fraudulently. It cannot also be said that the accused has converted the property of T ANSI inasmuch as property was sold pursuant to a transparent G tender process which is not shown to be vitiated in any manner. The property in question to T ANSI a Government Company and it was neither trust property nor was it entrusted to or under the control of the Chief Minister or any Minister. Hence, Section 13(l)(c) of the Prevention of Corruption Act is not attracted to the facts of the case. H (114-B-DJ .• R. S. BHAR)\THI v. J. JAYALALITHA 89 3.3. There was no- evidence to show that A-3 Chairman-cum- A Managing Direct<>r of T ANSI acted against the decision to favour the firm of A-1 and A-2. The sale of land to the firm is a collective decision of the Board and not of any individual, the price on which the land was to be sold and the price on which the buildings were to be sold were decided by the Board of Directo~s to which the Government gave B approval and thus there was no independent assignment to A-3 in deciding the matter nor did he suppress any document by not placing them before the Board of Directors. 3.4. A-5, Special Deputy Collector (Stamps), only performed statutory duty in fixing the value of the property in question after C notice to the concerned parties. The matter was statutorily referred to A-5 for fixing the market value of the property and thereafter A-5 fixed the market value of the property after taking into consideration the relevant factors. Therefore, A-5 cannot be attributed with any misconduct. (115-B-C; 116-HJ D 4.1. The properties in question belongs to TANSI, a corporation which is a separate and distinct entity from the Government and the properties are held by it as owner and has complete control over the same except when the said properties are to be alienated, approval of E the Government has to be obtained as provided under the Articles of Association of the said Corporation. In a case of this nature, where there is no dominion over the properties by a Chief Minister or a Minister it cannot be treated as entrustment of the properties creating a trust which is an obligation annexed to the ownership of the properties and arises out of the confidence reposed and accepted by F the owner. Indeed there is no material in the whole case to come to the conclusion that any such trust has been or deemed to have been created in respect of the said properties and that the relationship between A-1 and TANSI is one of trustee and beneficiary. (125-A-DJ 4.2. The ingredients of Section 409 IPC are not attracted to the present case at al!. There is absolutely no entrustment of the properties in any manner, which allows a dominion over it except approving or disapproving, an act on the part of the Corporation either to sell or G to alienate the properties. It cannot be said that a public servant who H 90 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A holds a particular portfolio and has an element of supervisory control in certain matters, has a dominion over the property so as to exercise any legal incidents ~!tached to the right of ownership. Therefore, there. was no entrustm~nf of the said properties and it cannot be said that A-1 had dominion over the said properties either as the Chief Minister B or as the Minister of Industries a.nd in ariy case, the evidence does not establish the ingredient of dishonest disposal or conversion of property for personal use. [125-D-F] 5.1. On a plain reading of Section 169 IPC and seeking the assurance from the marginal heading as well, it is fairly clear that C prohibition should flow from a law. Such law in the context of Section 169 IPC should mean that the law as ordinarily understood, that is to say, an enacted law or a rule or regulation framed under such law but not an executive order which confers no rights on anybody nor sets down legally enforceable obligations. The rules and administrative D instructions governing the public servants holding the civil post have undisputedly no application in this case. The law, which is pointed out, is tfle Code of Conduct for Ministers by the Government ofTamilnadu. A perusal of the Code would indicate that they lay down guidelines or norms of conduct which the Minister must observe ... The rules also E prescribe the authority who should ensure compliance with the Code and to whom various statements have to be furnished. The procedure to be followed is left to the discretion of that authority in case of breach of the Code. That authority is the Chief Minister. (121-H; 122-A-D) 5.2. The Code of Conduct not having a statutory force and not F enforceable in a Court of law, nor having any sanction or procedure for dealing with a contravention thereof by the Chief Minister, cannot be construed to impose a legal prohibition against the purchase of property of the Government so as to· give rise to a criminal offence under Section 169 IPC. In law, there must be a specific provision G prohibiting an act to make it illegal. A Code of Conduct prescribed by the Government under certain 11otification by itself cannot be elevated to the level of law. [122-E-F] 5.3. Even if the Government order is traced to have been H issued under executive power of the State under Article 162 of the ;.. .. ., ' R. S. BHARA THI v. J. JAY ALALITHA 91 Constitution of India, such a Code will not be enforceable when the A language used is not in mandatory terms and they are intended to be mere guidelines or instructions to the concerned persons in authority. Therefore, as long as such a Code of Conduct is not enforceable in any court of law and does not even provide what action could possibly be · taken in case of breach by the Chief Minister, the prohibition contained B therein is only having ethical or moral effect and any breach thereof . cannot be treated to be unlawful or even illegal within the meaning of _Section 43 IPC. To constitute a ground for civil action under Section 43, there must be a right in a party which can be enforced. It may be a breach of contract or a claim for damages or some such similar right C accruing under any law. There is no law which debars the Chief Minister from participating in a sale conducted by any Department of the Government or any of the Corporations or any public sector undertaking affording a cause for civil action especially when no fraud or illegal gain is involved. Therefore, the offence under the aforesaid provision has not been established. In fact, there is nothing in the D charge to indicate nor did the prosecution take a specific stand at any stage of the trial that the purchase of T ANSI foundry property by A-1 from the Government would furnish a ground for a particular civil action. The nature of civil action that could be initiated cannot be left to the guess work and the accused cannot be expected to meet such case E at this stage. [123-G-H; 124-A-DJ 5.4. That A-1 was a public servant and the properties were purchased by the firm in which she was a partner, would be insufficient to establish a charge under Section 169 against her as the main ingredifnt of the aforesaid provision is not established. [124-G) F 5.5. In the present case, in view of the fact that Government headed by A-1 has to give permission in respect of the sale of property of these two companies, it certainly exercises powers over the same and thus there is conflict of interest. Where there is conflict of interest law G has always avoided such sales being effected in favour of those who can jeopardise the fair outcome of the transaction. Persons in public life, who are gentlemen, follow such Code instead of taking escape routes by resorting to technical pleas as arise in criminal cases. Persons in public life are expected to maintain very high standards of probity and, H 92 SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R. A particularly, when ·there is likely to be even least bit of conflict of interest between the office one holds and the acts to be done by such person, ought to desist himself from indulging in the same. Good ethical behaviour on the part of those who are in po\ver is the hallmark of a good administration and people in public life must perform their duties B in a spirit of public service rather than by assuming power to indulge in callous cupidity regardless of self-imposed discipline. A-1 must atone for the same by answering her conscience not only by returning the property to T ANSI unconditionally but also ponder over whether she had done .the right thing in breaching the spirit of the Code of Conduct C and giving rise to suspicion that rules and procedures were bent to acquire the public property for personal benefit, though trite to say that suspicion however strong cannot take place of legal proof in a criminal case and take steps to expiate herself. 1127-F-H; 128-A-D] D CRIMINAL APPELLATE JURISDICTION : Criminal Appeal Nos. 115-120 and 121-127 of 2002. E F From the Judgment and Order dated 4.12.2001 of the Madras High Court in Crl. A. Nos. 969, 970, 971, 978, 988, 1169 and 972, 973, 974, 977, 981, 987 and 1168 of 2000. WITH S.L.P. (Crl.) No. 477 of 2002. T.R. Andhyarujina, N. Nnatarajan, R. Mohan, V.G. Pragasam, Elango, Sunder Mohan, Dr. Subramanian Swamy-in-person and Ms. Roxna Swamy for the Appellant. Altaf Ahmed, Additional Solicitor General, K.K. Venugopal, V.A. Bode, Ranjit Kumar, K.V. Viswanathan, K.V. Venkataraman, N. Jothi, B. G Raghunath, Ajit Mohan Singh, A.K. Sinha, Ms. Seema Bengani, K.V. Vijaykumar, A.T.M. Sampath, V. Balaji, C. Manishankar, P. Venugopal, P.S. Sudheer, C.S. Kiran, P.N. Ramalingam, Ms. N. Annapoorani, Raj Sekhar, Pillai, C.S.S. Pillai and Rajnish Pathiyil for the Respondents. H The Judgment of the Court was delivered by R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 93 RAJENDRA BABU, J. These two sets of criminal appeals arise out A of two criminal cases filed against Respondents Nos. I to 6 an'd the fall out thereof unfolding against currents and cross currents of political vicissitudes. Facts leading to these appeals are as under: The Government of Tamil Nadu formed a Tamil Nadu Small B Industries Corporation Limited (for short 'TANSI'). It was registered under the Companies Act, 1956 as a Government Company. The entire shares, namely, 100% of the shares of the said Corporation, were held by the government. In the Memorandum of As~ociation it is stated that the said company is formed 'to take over .ft-om the Government of Tamil Nadu any of their production and/or servicing units with the rights and liabilities C of the Government of Tamil Nadu so far as they relate to such units'. Article 72 of Articles of Association empowers the Government to appoint all the Directors with the power to remove any Director from time to time. Article 79 empowers the Government to appoint and remove the Managing Director. Similarly Government can also appoint a Chairman and Vice- D Chairman of the Board. The Chairman can reserve for the approval of the Government any proposals or decisions of the Board in respect of any of the matters r~garding (a) increase or reduction of the capital of the Company; (b) loan granted by the Company or giving of a guarantee or any other financial assistance to any person or concern; (c) winding up E of the Company; and (d) any other matter which in the opinion of the Chairman be of such importance as to be reserved for the approval of the Government. In respect of any proposal or decision of the Board reserved for the approval of the Government no action shall be taken by the Company until approval to the same has been obtained. The Government also exercises the power to issue directives or instructions as it may deem fit in regard to finances and the conduct of the business and affairs of the Company and the Directors shall duly comply with and give effect to such directives or instructions. T ANSI has I 0 Directors and all of them were the nominees of the Government of Tamil Nadu; including the ChairmanF cum-Managi11g Director who was an IAS officer. G Article 77-a(4) provides that the Board shall not dispose of the land transferred to the Company by the Government other than to Tamil Nadu Government Departments/Undertakings/Boards or Government of India Depa1tments/Unde1takings/Board without the previous written approval of H 94 SUPREME COURT REPORT$ [2003] SUPP. 6 S.C.R. A the Government. A Code of Conduct for Ministers was brought into force by G.O.Ms, Nos. 1350 on June 16, 1968 which was revised from time to time and clause 2(b) thereto provides that 'a Minister shall refrain fiwn buying from, or_sel!i11g to, the Government any immovable property except where such property is compulsorily acquired by the GoverlJment in the B usuq/ co~~se and refrain fi·om starting, or joining, any business'. After the form.ation ~(TANSI Corporation and transfer of Government Industrial lJn,its to it, sonie of the. units sta1ted incurring losses. Therefore a report was sent by ,! ;\NSI to the Government to the effect that some of the industri.a(units are consistently incurring losses. On 30th September, 1985 the Oo~ernme~t 0 decided that eight units mentioned in the G.O.Ms. 832 can C ne~~r be ~~de vi~ble whatever measures to be adopted to achieve the objects for which they were set up in the· public sector and therefore their continuance will cause a drain on the finance ofT ANSI. T ANSI Enamelled Wires, Guindy and TANSI Foundry, Gufody, situate in Thiru.vi.ka.lndustrial Estate were two of the units among .~he eight identi.fied as the units D incurring losses mentioned in the said G.O. Therefqre, the Government decided that T ANSI should close down the 8 units and explore the possibility of disposing the properties by inviting offers through advertisements in newspapers. E In pursuance of the G.O., Ex.P-21, TANS I Foundry unit was officially close as per Ex.P.-33. Out of the total extent of 5.535 acres of land ~nd 3267 sq.rots. of buildings in TANSI Foundry, an extent of0.545 acres.of land and 569 sq.rots. ofbuilding wete transferred to Tamil Nadu.Corporatio~ for Development of Women on 15.5.1987 by TANSI after collecting Rs. 12.21 lakhs. Advertisements were issued on 31.8.1988 for disposal of th~ F remaining extent of land and building and four offers were received. Th~ offers of Ashwini Plastic and ENCOFED were recommended to tl;te Government after the approval of the Board, but the Government did not give approval on the ground that it will be more advantageous to T ANSI to call for fresh tenders after parcelling out the land into industrial plo}s G in accordance with the Madras Metropolitan Development Authority rules and regulations. On 30.4.1990 Jaya Publications, an unregistered partnership firm in which J.Jayalalitha, Accused No. l, and Sasikala, Accused No. 2, were partners, purchased land adjacent to the T ANSI property in dispute ·· · · from Hitex Equipment company vide sale deed, Ex.P.-57, at the assessed H market value of Rs. 6 lakhs per ground which is at par with the guideline R. S. SHARA THI v. J. JAY ALALITHA [RAJENDRA BABU, J.] 95 value of Registration Department. In the general elections held on 13.5.1991 A for the Tamil Nadu Legislative Assembly AIADMK party came to power and J.Jayalalitha, accused No'. I, became the Chief Minister. On 29.9. I 991 Jaya Publications again purchased another adjacent land from Idhayam Publications vide sale deed (Ex.P-8) at the assessed market value of Rs. 7 .32 lakhs per ground [270 sq. yards]. On I 0. 10.199 I an advertisement was B published for disposal of TANS! Enamelled Wire Units adjacent to the T ANSI Foundry in the Thiru.vi.ka.Industrial Estate. Pursuant to this advertisement R.R. Industries and two other companies submitted tenders for purchase. Ex.P-22 is the quotation given by R.R. Industries. The price of one square meter of land had been mentioned in that qu~tation as Rs. C 1850, which works out to Rs. 4.12 lakh per ground. \On I 4. I 0.1991 a meeting was held under the chairmanship of the Chief Minister J. Jayalalitha for the review of the performance of the T ANSI and A-4 Minister for Rural Industries, A-3 Chairman-cum-Managing Director ofTANSI, P.W. l I Chief Secretary, P.W. 14 Secretary Industries D Department and P.W. 16 Secretary, Finance Department attended the said meeting and several decisions were taken for the revival of T ANSI. One of the decisions taken at the meeting is that TANSI may sell the properties of its unit which are defunct and T ANSI Foundry unit was identified as a defunct unit and the estimated sale price was fixed at Rs. I .5 crore, but E without any land valuation report on record. It was also decided· that T ANSI must identify more such properties for sale and can send a proposal to the Government. along with all details and topography sketches recommending the sale and that the vacant sites available for the running units can be plotted out into industrial lots for selling them at market value with a view to raise some resources. On 6.11.1991 Government directed F al 1 public sector undertakings to obtain prior approval of the Government in respect of all tenders for works, equipment, etc. and all purchases whether by open tender or by limited tender enquiries etc. where the value of the contract exceeds Rs. 1 crore. It also directed that the proposals should be sent with the recommendation of the Board to the Administrative G Department concerned and that Administrative Department may follow circuit procedures to circulate the file to concerned Minister, Minister for Finance and Chief Minister. The Board of Directors of TANSI resolved to constitute a H 96 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R. A Sub-Committee consisting of the Directors for evaluating the offers received in respect ofT ANSI Enamelled Wires pursuant to the advertisement ... issued on I 0.10.1991 and to make recommendations for the disposal of the assets of the closed units of TANS!. The members of the Sub-Committee appointed by the Board were Chairman-cum-Managing Director ofT ANSI, B who is also the Director of T ANSI, Abdul Hasan, the Director of T ANSI and Joint Secretary, Industries Department, and C. Madakkannu, Chief Engineer (Buildings), PWD, who is also the Director of TANSI. Advertisements were caused to be published in leading newspapers on 21.11.1991 calling for offers through tenders for the purchase of the property of TANSI Foundry. A letter was addressed by the Managing C Director (A-3) to the Sub-Registrar, Adayar (P.W. 1) intimating that they want to dispose of land in Thiru. Vi.Ka.Industrial Estate and requesting to furnish the guidelines price of the lands situate in Block No. 5 at Alandur. Sub-Registrar, Adayar replied (Ex.D-39) that there was no guideline value for survey numbers 86, 87, 88, 90, 91 Part, 92 Part and 93 Part, in Block D No. 5 of Adayar Viilage which are the properties in dispute. He further stated that in the adjoining property in Block No. 6 ofThiru.vi.ka.Industrial Estate, the value of one sq.feet was Rs. 305, which worked out to Rs. 7.32 lakhs per ground. It is important to note that Block Nos. 1 to 6 of Adayar village are situated in Thiru.vi.ka.Industrial Estate. The Sub-Committee of E T ANSI met on 25.11.1991 to consider the offers for the disposal of T ANSI Enamelled Wires Unit for which an advertisement was published on 10.10.1991.The tender given by R.R. Industries and other two tenders given by other companies were placed before the Sub-Committee and it passed a resolution calling for a report regarding the guideline price ·of the F land and a report from the Public Works Department regarding the value of the buildings. After consideration of all the offers the Sub-Committee decided that T ANSI may ti)'"again-for better offer by giving advertisements. Again advertisements were published on 21.11.1991 and 22.11.1991 calling for tenders for purchase of the property of T ANSI Foundry, four tenders were received at the T ANSI office and they were opened in the G presence of all the tenders on the same day. Ex.P-29 is the offer of Jaya Publications in which J. Jayalalitha, A-1 and Sasikala, A-2 are partners. Ex. P-13 is the offer of Aban Constructions and Ex. D-15 is the offer of ENCOFED. Tamil Nadu Small Industries Development Corporation (SIDCO) also submitted a tender. Jaya Publications offered to purchase H the entire land at the rate of Rs. 3.0 I lakhs per ground. Aban Constructions J.-; R. S. BHARA THI v. J. JAY ALALITHA [RAJENDRA BABU, J.] 97 offered to purchase the landed prope11y at the rate of Rs. I, 77,325 per A ground, but it offered to purchase only 1.72 acres and not the entire property. ENCOFED offered to purchase 2000 sq.mts of land at rate of Rs. 1,33,333 per ground while SIDCO offered to purchase the land at Rs. 502 per sq.mt. All the offers were placed before the Sub-Committee for consideration B and it decided that A-3 who is the Chairman-cum-Managing Director, T ANSI, should negotiate with Jaya Publications since the offer of Jaya Publications was Rs. l,82,13,l50 which is the highest of all the four bids and they should take up the matter with the Board by a note in circulation for a decision regarding the disposal of the property. Ex. P-30 are the C Minutes of the meeting of the Sub-Committee and the same were initiated by P.W. 8 and A-3. The Board considered the matter and it was noticed that the value offered for the land by the highest bidder was Rs. 1,62,93, 150 which worked out to Rs. 3.01 lakhs and that though it was much lower than Rs. 7.30 lakhs which was the guideline value for Block No. 6 of D Thiru.vi.ka.Industrial Estate, it was marginally higher than the value fixed by the Collector under Ex.D-20 as the Collector had fixed the price per ground for the property at Rs. 3 lakhs. The note further indicated that T ANSI had already decided to sell 2.52 acres of land of the same unit to Tamil Nadu Sugar Federation at Rs. 3 lakhs per ground and, therefore, the E price of Rs. 3.01 lakhs offered by Jaya Publications could be considered reasonable. It was also taken into consideration that Rs. 19.20 lakhs was offered by the highest bidder for the building and that heavy structures available at T ANSI Foundry may be useful for a heavy engineering workshop and for a buyer who does not intend to put up a heavy engineering workshop, the value is only notional and at best is only a scrap F value. Therefore, members of the Board recommended to the Government selling a portion of the land of about 2.98 acres at the rate of Rs. 1,350 per sq.mt., that is, Rs. 3.01 lakhs per ground, and that the exact extent of the land to be sold could be measured at the time of handing over and the exact amount could be collected and the building measuring 2698 sq. mts. G could be sold at a cost of Rs. 19,20,200. The resolution was unanimously adopted and signed by the Managing Director and other seven Directors. A proposal was sent to the Government on 30.12.1991 and the proposal of T ANSI was examined by the Government. There were certain notings made therein that the rate of 3 lakhs per ground was much lower than the H 98 SUPREME COURT REPORT~· [2003] SUPP. 6 S.C.R. A guideline value of Rs. 7.30 lakhs per ground ;is mentioned by Registration Depatiment. Further, the file was marked to 'Minister (Rural Industries)', 'Minister for Finance' and 'ChiefMinister'. It is stated that the markings to other Ministers were cancelled by the Minister (Rt11•al ·Industries). The Minister for Finance approved the proposal on 14:1.1992. · By G.O: Ms. B No. 18 issued on 20.1.1992 the·Governrrient approved the sale of TANS! Foundry property to Jaya- Publications,,i~ faya Publications,- in turn, :was informed of the decision ofthe Government by Ex. ·P!36 with whichia draft sale agreement for getting N.O.<'.:! !from the Income Tax Depa1tment/Was enclosed. An agreement- for sale •was entered'into between .. TANSf and c Jaya Publications, on "4.3: 1992. and' ·the r~aid -doclill'ient"WilS ·registered conditionally because·thevalue·ofthe