# SINDRI AND OTHERS v. UNION OF INDIA AND OTHERS

- **Citation:** [1981] 2 S.C.R. 52
- **Court:** Supreme Court of India
- **Decided:** 1980-11-13
- **Bench:** Y. V. Chandrachud, P. N. Bhagwati, V. R. Krishna Iyer, S. Murtaza Fazal Ali, A. D. Koshal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sindri-and-others-v-union-of-india-and-others-8129
- **Pages:** 27

## Headnote

Constitution of India-Article 19(1)(g)-Sale of redundant /retired pla_'lfS
& equipment--Occupation of an industrial l'.'Orker-Whet!ter affected by sucfl
-C
sale-Article
14-Whether violated-Article 43A-Wrongs con1mitted by
management in public sector whether can be remedied-Article 31-Access to
Justice-Public Property dissipated by sale-When and by who1n can the sale
be set aside.
The petitioners (v.lorkers) challenged the legality of the sale of certain
plants and equipment of the Sindri Fertilizer Factory, whereby
the
highest
•D
terider submitted by respondent No. 4 \Vas accepted by the Tender Committee
and approved by the Board of Directors. The petitioners, amongst others, ccu.~
tended that (i) that the decision to sell the plants and equipment of the Factcry
was taken without rolling for any report; ;(ii) the original tender of Rs. 7.~
crores was unaccountably reduced to Rs. 4.25 crores; (iii) the price of the
plants and equipment, which was ultimately realised in the sale was manipulated
V.'ith ulterior purposes; (iv) the decision to restrict fresh offers, in respect of
!E
the reduced equipment, to the tenderers who had submitted tenders for more
F
G
· than Rs. 4 crores was unfair and arbitrary; (v) the said decision resulted in
a huge loss to the public exchequer and (vi) the sale had jeopardised
the
employment of 11000 odd \Yorkers who faced retrenchment as a result of the
iale.
On behalf of petitioners 3 and 4 it was further contended that the sa1e will
deprive them of their fundamental right under Article 19(1) (g) to carry on
their occupation as industrial workers and that the sale is in violation of the
provisions of Article 14 of the Constitution being arbitrary and unfair. The
respondents raised a preliminary objection to the maintainability of the writ
petition on the ground that the petitioners have no locus standi and that the
impugned sale did not violate any Of the fundamental rights of the petition~!'$.
Dismissing the petition :
HELD (By the Court)
The petitioners' right under Art. 19(1) (g) to carry on their occupation as
industrial workers was not affected by the sale, nor was their fundamental right,
if any, under Article 14 of the Constitution violated. [60 Al
(Per Chandrochud, CJ., Faznl Ali & Kosbal, JJ.)
1. The violation of a fundamental right is the sine qua non cf the exerc!se
of the right conferred by Article 32.
. ...,.
...
•
FERTILIZER CORPN. V. UNION
53
The jurisdiction conferred on the Supreme Court by Article 32 is an important and integral part of the basic structure of the· Constitution because it is
meaningless to confer fundamental rights without providing an effective remedy
for their enforcement, if and when they are violated. A right without a remedy
is a legal conundrum of a most grotesque kind. [59 E·Fl
2. Whereas the right guaranteed by Article 32 can be exercised for !he
enforcement of fundamental rights only, the right conferred by Article 226 can
be exercised not only for the enforcement of fundamental rights but for any
ether purpose. [59 E]
3(i). There is no substance in the grievance that the petitioners' right under
Article 19(1)(g) is violated or is in the imminent danger of being violated
by the impugned sale, since not only did the sale not affect the employment
of the workers employed in the Factory, but those of them who were rendered
surplus from time to time on account of the closure of the plants were absorbed
in alternate employment in the same complex. [60 C, F·G]
(ii) The right of petirioners 3 and 4 and of the other workers is not, in
any manner, affected by the impugned sale.
The right to pursue
a
calling
or to carry on an occupation is not the same thing as the right to work in a
particular post under a contract of employment. If the workers are retrenched
consequent upon and on account of the sale, it will be open to them, to pursue
their rights and remedies under the Industrial Laws. The closure of an esta·
blishment in which a workman is for the time being em

## Text

_Characters 0–39,773 of 69,477. This is a partial read: ask again with offset=39773 for what follows._

52
A
FERTILIZER CORPORATION KAMGAR UNION (REGD.),
B
SINDRI AND OTHERS
v.
UNION OF INDIA AND OTHERS
November 13, 1980
[Y. V. CHANDRACHUD, C.J., P. N. BHAGWATI, V. R. KRISHNA IYER,
S. MURTAZA FAZAL ALI AND A. D. KOSHAL, JJ.]
Constitution of India-Article 19(1)(g)-Sale of redundant /retired pla_'lfS
& equipment--Occupation of an industrial l'.'Orker-Whet!ter affected by sucfl
-C
sale-Article
14-Whether violated-Article 43A-Wrongs con1mitted by
management in public sector whether can be remedied-Article 31-Access to
Justice-Public Property dissipated by sale-When and by who1n can the sale
be set aside.
The petitioners (v.lorkers) challenged the legality of the sale of certain
plants and equipment of the Sindri Fertilizer Factory, whereby
the
highest
•D
terider submitted by respondent No. 4 \Vas accepted by the Tender Committee
and approved by the Board of Directors. The petitioners, amongst others, ccu.~
tended that (i) that the decision to sell the plants and equipment of the Factcry
was taken without rolling for any report; ;(ii) the original tender of Rs. 7.~
crores was unaccountably reduced to Rs. 4.25 crores; (iii) the price of the
plants and equipment, which was ultimately realised in the sale was manipulated
V.'ith ulterior purposes; (iv) the decision to restrict fresh offers, in respect of
!E
the reduced equipment, to the tenderers who had submitted tenders for more
F
G
· than Rs. 4 crores was unfair and arbitrary; (v) the said decision resulted in
a huge loss to the public exchequer and (vi) the sale had jeopardised
the
employment of 11000 odd \Yorkers who faced retrenchment as a result of the
iale.
On behalf of petitioners 3 and 4 it was further contended that the sa1e will
deprive them of their fundamental right under Article 19(1) (g) to carry on
their occupation as industrial workers and that the sale is in violation of the
provisions of Article 14 of the Constitution being arbitrary and unfair. The
respondents raised a preliminary objection to the maintainability of the writ
petition on the ground that the petitioners have no locus standi and that the
impugned sale did not violate any Of the fundamental rights of the petition~!'$.
Dismissing the petition :
HELD (By the Court)
The petitioners' right under Art. 19(1) (g) to carry on their occupation as
industrial workers was not affected by the sale, nor was their fundamental right,
if any, under Article 14 of the Constitution violated. [60 Al
(Per Chandrochud, CJ., Faznl Ali & Kosbal, JJ.)
1. The violation of a fundamental right is the sine qua non cf the exerc!se
of the right conferred by Article 32.
. ...,.
...
•
FERTILIZER CORPN. V. UNION
53
The jurisdiction conferred on the Supreme Court by Article 32 is an important and integral part of the basic structure of the· Constitution because it is
meaningless to confer fundamental rights without providing an effective remedy
for their enforcement, if and when they are violated. A right without a remedy
is a legal conundrum of a most grotesque kind. [59 E·Fl
2. Whereas the right guaranteed by Article 32 can be exercised for !he
enforcement of fundamental rights only, the right conferred by Article 226 can
be exercised not only for the enforcement of fundamental rights but for any
ether purpose. [59 E]
3(i). There is no substance in the grievance that the petitioners' right under
Article 19(1)(g) is violated or is in the imminent danger of being violated
by the impugned sale, since not only did the sale not affect the employment
of the workers employed in the Factory, but those of them who were rendered
surplus from time to time on account of the closure of the plants were absorbed
in alternate employment in the same complex. [60 C, F·G]
(ii) The right of petirioners 3 and 4 and of the other workers is not, in
any manner, affected by the impugned sale.
The right to pursue
a
calling
or to carry on an occupation is not the same thing as the right to work in a
particular post under a contract of employment. If the workers are retrenched
consequent upon and on account of the sale, it will be open to them, to pursue
their rights and remedies under the Industrial Laws. The closure of an esta·
blishment in which a workman is for the time being employed does not by itself infringe his fundamental right to carry on an occupation which is guaran·
teed by Article 19(1)(g) of the Constitution. [60 G-H, 61 A]
4. Article 19(1)(g) confers a broad and general right which is available
A
B
c
D
to all persons to do work of any particular kind and of their choice. It does
E
not confer the right to hold a particular job or to occupy a particular post of
one's choice. Even under Article 311 of the Constitution, the right to continue
in ~ervice falls with the abolition of the. post in which the person is working.
The workers in the instant case can no more complain of the infringement of
their fundamental right under Article 19{l){g) than can a Government servant
complain of the termination of his employment on the abolition of his post.
The_ choice end freedom of the workers to work as industrial workers is not
F
affected by the sale.
The sale may at the highest affect their locum, but it
does not affect their locus, to work as industrial workers. [61 B-D]
5. In the instant case, it is quite difficult to hold that the decision to sell
the plants and equipment of the Factory was arbitrary, unreasonable or nUJla
fide. The real drive of the petition is against the decision of the Board to sell
the plants and equipment.
It is that decision which is stated to furnish the
G
cause to complain of the violation of the right conferred by Article 14, fairness,
justness and reasonableness being its implicit assumptions. [64 D-F]
6. As far as possible, sales of public property, when the intention is to get
the best price, ought to take place publicly.
The vendors are not necessarily
bound to accept the highest or any other offer, but the· public at least gets the
satisfaction that the Government has put all its cards on the table.
One canH
not exclude the possibility here that a better price might have been realised in
a fresh public auction but such possibilities cannot vitiate the sale or justify
the allegation of mala fides.
[64 G-H, 65 A-BJ
54
SUPREME COURT REPORTS
(1981] 2 S.C.R.
A
7. It cannot be held that the petitioners' rights, if any, under Article 14 are
violated, in view of the fact that neither the decision to sell nor the .sale proceedings were unreasonable, unjust or unfair. But if and when a sale of public
property is found to be vitiated by arbitrariness of n1ala fides,
it would
be
n~cessary to consider the larger question as to \Vho has the right to complain
of it. [65 C, D-EJ
B
8. (i) The maintainability of a writ petition which is correlated to the
existence and violation of a fundamental right is not always to be confused
with the locus to bring a proceeding under Article 32. These two matters often
mingle and coalesce with the result that it becomes difficult to consider them
in water-tight compartments. The question whether a person has the locus to
~
file a proceedings depends mostly and often on whether he possesses a legal
right and that right is violated. · But, in an appropriate case, it may become
C
necessary in the changing awareness of legal rights and social obligations to
take a broader view of the question of locus to initiate a proceeding, be it
under Article 226 or under Article 32 of the Constitution. [65 E-G]
(ii) The Court might not have refused relief to the workers if it had found
that the sale was unjust, unfair or mala fide. If a public property is dissipated,
it would require a strong argument to convince the Court that representative
D
segments of the public or at least a section of the public which is directly
interested and affected would have no right to complain of the infraction of
public duties and obligations.
Public enterprises are owned by the people and
those who run them are accountable to the people. The accountability of the
public sector ro the Parliament is ineffective because the parliamentary control
of public enterprises is "diffuse and haphazard". [65 G-H, 66 A]
E
(Per Bhagwati and Krishna. Iyer, JJ. concurring)
F
1. Public law, as part of the panorama of the developmental process, mu5t
possess the specific techniques of public sector control within \\'ell-defined para·
meters which \Yill anathematise administration by court writ
and
interdict
public officials handling public resources in disregard of normatice essentials
and constitutional fundan1entals.
In a society in which the State had thru<>t
upon it the imperative of effectuating massive transformation of economy and
social structure the demands upon the legal order to inhibit administrative eviis
and engineer developmental progress are enormous, though novel.
[68 E & 69 A-BJ
2. It is important to underscore the vital departure from rhe
pattern of
judicial review in the Anglo-American legal environment because the demands
nf development obligated by Part IV compel creative extensions
to control
G
jurisprudence in many fields, including business administrative lav:. contract law,
penal law, fiscal low and the like. [69 C-Dl
H
3. Judicial interference with the Admini5tration cannot be meticulous. The
court cannot usurp or abdicate, and the parameters of judicial review must be
clearly defined and never exceeded. If the Directorate of a Governmeht company has acted fair1y, e\·en if it has faltered in its wisdom, the court cannot,
a<; a super-auditor. take th.:! Board of Directors to task. This function is limited
to testing ¥.'hether the ad1ninistrative action has been fair and free from the
taint of unreasonableness and has substantially complied with the norms
of
procedure set for it by rules of public administration. [71 A-CJ
•
•
r
FERTILIZER CORPN. V. UNION
55
4. Locus Standi must be liberalised to meet the challenges of the time. Ubi
A
jus ibi rc111cdium must be enlarged to embrace all interests of public-n1inded
~ 1tizens or organisations with serious concern for conservation of public re-
\!IOUrccs and the direction and correction of public power so as
to promote
justice in its triune facets. [71 D-E]
5. An officious busybody picking up a stray dispute or idle peddlar of
·blackmail-litigation through abuse of the· process of the court cannot be permitted
B
lo pollute the court instrumentality, for private objectives.
Public justice is
al\vays <ind only at the· service of public good, never the servant or janitor of
.private interest or personal motive. [72 B-C]
6. Public interest litigation is part of the process of participate justice and
'standing' in civil litigation of that pattern must have liberal reception at the
judicial door-stej!S. [74 E-F]
7. Certainly, it is not part of the judicial process to examine entrepreneurial
activirics to ferret out :flaws.
The court is least equipped for such oversighls,
Nor, indeed, is it a function of the judges under the constitutional scheme. The
mternal 1nanagement, business activity or institutional
operation
of
public
bodies cannot be subjected to inspection by the Court.
To do so, is incomc
petent and in1proper and, therefore, out of bounds.
Nevertheless, the broad
D
parameters of fairness in administration, bona fides in action, and the fundamental rules of reasonable management of public business, if breached
will
become justiciable. [77 A-CJ
8. Article 43A of the Constitution confers, in principle, partnership status
to workers in industry and therefore technical considerations of corporate personality cannot keep out those '\Vho seek to remedy wrongs committed in the
ntanagement of the public sector. (76 GJ
Municipal Council, Ratlani v. Shri Vnrdliicliand and Ors. [1981] 1 S.C.R. 97
Wisconsin Lo\V Revie\V, \'ol. 1966 : 999 at P. 1064 and M. Cappelletti, Rabels
I. (1976) 669 at 672 referred to.
0RIG!NAL JurusoICTION : Writ Petition No. 3804 of 1980.
(Under Article 32 of \he Constitution).
R. K. Garg, Sunil K. Jain, D. K. Garg, Sukumar Sahu and V. J.
Francis for the Petitioners.
L. N. Sinha, Att. General of India, M. M. Abdul Khader, T.V.S.
Narasimhachari and M. N. Shroff for Respondent No. 1.
M. K. Banerjee, Addl. Sol. Genl., J. B. Dadachanji, C. M. Oberoi
and K. J. John for Respondent No. 2.
E
F
G
A. K. Sen, S. S. Ray, R. S. Nanda, Anindya Mitra, Parijat Sinha
B
N. P. A garwala, C. K. Jain, Bardar Ah'mad, Mrs. R. Dhariwal and
M. C. Dhin~ra for Respondent No. 4.
- Jt&lltJ!M M
A
8
c
56
SUPREME COURT REPORTS
[1981] 2 S.C.R.
The Judgment of Y. V. Chandrachud, C.J., S. Murtaza Fazal Ali
and A. D. Kosh.al, JJ. was delivered by, Chandrachud. C.J. V. R.
Krishna Iyer J. gave a concurring Opinion of his own and on behalf
of P.N. Bhagwati, J.
CHANDRACHUD, C.J. By this petition under Article 32 of the
Constitution, the petitioners challenge the legality of the sale of certain
plants and equipment of the Sindri Fertilizer Factory, whereby the
highest tender submitted by Respondent 4 in the sum of Rs. 4.25 crores.
was accepted on May 30, 1980. The relief sought by the petitioners
is that the respondents should be directed not to sell away the plant
and equipment, that they should be asked to withdraw their decision to
sell the same and that the said decision should be quashed as being
illegal and unconstitutional.
Petitioner 1 is a Union of the Workers of the Factory, Petitioner
2, Shri A. K. Roy, a Member of Parliament from Dhanbad, is the
President of that Union, while Petitioners 3 and 4
are
workers
employed in the Factory. Respondent 1 to the Writ Petition is the
D
Union of India, Respondent 2 is the Fertilizer Corporation of India,
('FCI'), Respondent 3 is the Sindri Fertilizer Factory, while
the
added Respondent 4, Ganpatrai Agarwal, is the highest tenderer.
Respondent 2, a Government of India Undertaking, is
a Company
incorporated under the Companies Act 1956 and is a 'Government
E
F
G
Company' within the meaning of Section 617 of that Act. It established
the Respondent 3 Factory, which was commissioned in 1951. By
article 66 ( 1) of the Articles of Association of respondent 2, its
directors are appointed by the President of India.
On January 4, 1980 the Board of Directors of respondent
2,
(FCI), decided that tenders should be invited for the sale of
'Redundant/retired plants and equipment of respondent 3. In pursuance
of that decision, an advertisement was inserted in the newspapers on
February 25, 1980 inviting tenders for the sale of nine units of the
"closed down chemical plants" of the Factory on "as is
where is"
basis. The advertisement gave to the intending purchasers the option
to quote for four alternatives, one of which was the quotation for
individual equipmenV such as pumping sets and compressors. Each
tenderer was required to submit three separate envelopes : Envelope
No. 1 relating to the payment of earnest money; envelope No. 2
relating to the terms and conditions of the sale; and envelope No. 3
relating to the amount of bid offered by the tenderer. The offers were
H
to be valid until June 19, 1980.
On March 20, 1980 when the envelopes bearing No. 1 were
opened, it was found that two tenderers had not complied with the
,
•
,
HRT!LIZER CORPN. v. UNION (Chandrachud, C.J.)
57
term as to the payment of the earnest money. As a result, the number
A
of valid tenders was reduced to nine. Discussions took place thereafter between the tenderers and the authorities, as a result of which
an agreed formula was evolved regan:ling the exclusion of the weights
of foundation and the exclusion of sales-tax from the bids offered. A
few items were also excluded from the list of articles advertised for
sale. In the light of these modifications, the tenderers were asked to
B
submit fresh quotations in a separate envelop~ marked 'No. 4'.
On March 21, 1980 envelopes bearing No. 3 which contained the
original offers and those bearing No. 4 which contained the modified
offers, were opened in the presence of the tenderers. The highest c
original offer was that of r,:spondent 4 in the sum of Rs. 7.6 crores.
The highest modified offer of Rs. 6.2 crores was also made by
respondent 4. The sale was thereafter adjourned.
On March 31, 1980 a letter was received by Respondent 2 that a
part of the plants and equipment which were advertised for sale were
needed by thei Fertilizer (Planning and Development) India Ltd. for
the purposes of experiment and research. On April 10, 1980 a similar
request was received from the Ramagundam Division of Respondent 2.
On May 14, 1980 the Board of Directors decided that only those
items should be offered for sale which remained after meeting the
requirements of the Fertilizer (Planning and Development) and the
Ramagundam Division and that fresh offers should be invited for the
reduced stock, restricted to the tenderers who had submitted modified
tenders in sums exceeding Rs. 4 crores. There were six such tenders
amongst the nine valid tenders. A week later, the six tenderers who
had submitted those tenders were called to Sindri and a fresh list of
reduced items was furnished to them. They submitted their revised
tenders in sealed covers on May 23, 1980. On May 24, the Tender
Committee considered the offer made by Respondent 4 in the sum of
Rs. 4.25 crores as the best, that being the highest amongst the fresh
reduced offers. The Tender Committee referred the matter to the
Board on the same date and on May 29, the Board gave its approval
to the acceptance of respondent 4's offer. On May 30, a letter of
Intent was issued by R~spondent 2 in the name of Respondent 4 who
paid the security deposit of Rs. 50 lakhs on June 13, 1980. An order
of sale in favour of Respondent 4 was issued by Respondent 2 on July
7, 1980 whereupon Respondent 4 started dismantling the machinery
and equipment which he had purchased. This Writ Petition was filed
on August 14, 1980. On August 25, the Court issued a show cause
notice on the writ petition and stayed the sale.
D,
p,
G.
--
58
SUPREME COURT REPORTS
[1981) 2 S.C.R.
A
The petitioners challenge the sale, inter alia, on the following
B
c
D
E
F
grounds:
(1) that the decision to sell the plants and eqnipment of
the Factory was taken without calling for any report,
expert or otherwise;
(2) that the original tender of
Rs.
7.6 crores
was
unaccountably reduced to Rs. 4.25 crores;
(3) that the price of the plants and equipment, which
was ultimately realised in the sale was manipulated
with ulterior purposes;
( 4) that the decision to restrict the fresh offers, in
respect of the reduced equipment, to the tenderers
who had submitted tenders for more than
Rs.
4
crores was unfair and arbitrary;
(5) that the said decision resulted iu a huge loss to the
public exchequer since, if the sale was readvertised,
an appreciably
higher price would
have been
realised; and
( 6) the sale bas jeopardised the employment of
11000
odd workers who face retrenchment as: a result of the
sale.
Petitioners 3 and 4 support this petition undet Article 32 of the
Constitution by contending that the sale will deprive them of their
fundamental right under Article 19(1)(g) to carry on their occupation as industrial workers. They contend further that the sale is in
violation of the provisions of Article 14, since it is arbitrary and
unfair.
The learned Attorney General, who appears on behalf of
the
Union of India, has raised a preliminary objection to the maintainability of the writ Petition on the ground that in the first place, the
petitioners hav0 no locus standi to file the petition and secondly, that
the impugned sale does not violate any of the fundamental rights of
G
the petitioners. We must decide this objection before considering the
contentions raised by Shri R. K. Garg on behalf of the petitioners.
Article 32 of the Constitution which guarantees by clause ( 1) the
right to move the Supreme Court by appropriate proceedings for the
enforcement of the rights conferred by Part III, provides by clause
H
(2) that:
"The Supreme Court shall have power to issue directions
or orders or writs, including writs in the nature o'f habeas
I
•
•
...
,
.,
~·.
FERTILIZER CORPN. v. UNION (Chandrachuil, C.J.)
59
corpus, mandamus, prohibition, qno warranto and certiorari,
A
whichever may be appropriate, for the enforcement of any of
the rights conferred by this Part".
I
It is malrifest that the jurisdiction conferred on this Court by Article
32 can be exercised for the enforcement of the rights conferred by
Part III and for po other purpose. Clanse (1) as well as clause (2)
of Article 32 bring ont this point in sharp focus. As contrasted with
Article 32, Article 226 (1) of the Constitution provides that :
"Notwithstanding
anything
in
article
32
every
High
Court shall have power, throughout the territories in relation
to which it exercises jurisdiction, to issue to any person or
authority, including in appropriate· cases, any Government,
withltn those territories directions, orders or writs, including
writs in the nature of habeas corpus, mandamus, prohibition,
qno warranto and certiorari, or any of them, for the enforcement of any of the rights conferred by Part ID and for any
other purpose". (emphasis snpplied).
'
The difference in the phraseology of the two Articles brings out the
marked difference in the nature and purpose of the right conferred by
these Articles. Whereas the right guaranteed by Article 32 can be
exercised for the enforcement of fundamental rights only, the right
conferred by Article 226 can be exercised not only for the enforce-
. ment of fundamental rights but for any other purpose.
The jurisdiction conferred on the Supreme Court by Article
B
c
D
E
32 is an important and integral part of the basic 'structure of the
Constitution because it is meaningless to confer fundamental
rights
F
without providing an effective remedy for their enforcement, if and
when they are violated. A right without a remedy is a legal conundrnm
of a most grotesque kind.
While the draft Article 25, which
corresponds to Article 32, was being discussed in the Constituent
Assembly, Dr. Ambedkar made a meaningful observation by saying :
"If I was asked to name any particular article in this
Constitution as the most important-an article without which
this Constitntion would be a nullity-I could not refer to any
other article except this one. It is the very soul
of
the
Constitiition and the very heart of it and I am glad that the
House has reali$ed its importance". (Constituent Assembly
Debates, December 9, 1948, Vol. VII, p. 953).
5-1281 SCJ/80
G
H
60
SUPREME COURT REPORTS
[1981] 2 S.C.R.
A
But though the right guaranteed by Article 32 is one of the highly
cherished rights conferred by the Constitution, the purpose for which
that right can be enforced is stated in the very article which confers
that right. The violation of a fundamental right is the sine qua non of
the exercise of the right conferred by Article 32.
B
:D
E
F
G
That makes it necessary to consider whether any of the fundam~ntal rights of the petitioners is violated or is in the imminent
danger of being violated by the sale of the plants and equipment of
the Factory. The grievance of the petitioners is that two of their
fundamental rights are violated by the sale,
one
under
Article
19(1) (g) and the other under Article 14 of the Constitution.
We find no substance in. the grievance that the petitioners' right
under Article 19 ( 1) (g) is violated or is in the imminent danger of
being violated by the sale. That Article confers on all citizens the
right to practise any profession or to carry on any occupation trade
or business. The right of the petitioners to carry on an occupation is
not infringed by the sale mediately or immediately,
actually or
pote11tially, for two reasons. In the first place, Shri R. C. Malhotra,
who is the Chief Engineer of the Sindri Unit, says in paragraph 5 of
the counter-affidavit filed by him on behalf of the FCI, that althoogh
the old plants anj equipment had to be shut down from 1976 to 1979
because they had become redundant, unsafe or unworkable, no
employee was deprived of his employment on
that account., Shri
Malhotra says further in the same paragraph and in paragraph 6 of.
the counter-affidavit, that the management of the FCI had decided to
deploy the workmen working in the plants that had to be shut down
in various other plants set up under the scheme of modernisation and
rationalisation and in the various facilities that had been renovated in
the Sindri complex itself. Thus, not only did the sale· not affect the
~mployment of the workers employed in the Factory, but those of
them who were rendered surplus from tinle to time on account of the
closure of the plants were absorbed in alternate employment in the
same complex.
Secondly, the right of Petitioners 3 and 4 and of. the other workers
to carry on the occupation of industrial workers is not, in any manner
affected by the impugned sale. The right to pursue a calling or . to
karry on an occupation is not the same thing as the' right to work in a
"articular post under a contract of employment. If the workers are
fl retrenched consequent upon and on account of the sale, it ~ill be open
to them to purSue their rights and remedies under the Industrial Laws.
But the point to be noted is that the closure of an establishment in
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l'ERTILIZER CORPN. v. UNION (Chandrachud, C.J.)
61
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.. which a workman is for the time being employed does not by itself
infringe his fundamental right to carry on an occupation which is
guaranteed by Article 19 ( 1) (g) of the Constitution. Supposing a law
were passed preventing a certain category of workers from accepting
employment in a fertiliser factory, it would be pol;sible to contend then
that the workers have been deprived of their right to carry on
ai1
occupation.
Even assuming that some of the workers may eventually
have to be retrenched in the instant case, it will not be possible to say
that their right to carry on an occupation has been violated. It would
be open to them, though undoubtedly it will not be easy, to find out
other avenues of employment as industrial workers. Article 19 (1) (g) \
confers a broad and general right which is available to all persons to
do work of any particular kind and of their choice. It does not comer
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the right to hold a particular job or to occupy a particular · post of
one's choice. Even under Article 311 of the Constitution, the right to I
continue in service falls with the abolition of the post in which the l
person is working. The workers in the instant case . can no more
complain of the infringement of their fundamental right under Article
D
19 ( 1) (g) than can a Government servant complain of the termination of his employmenu on the abolition of his post. The choice and I
freedom of the workers to work as industrial workers is not affected
by the sale. The sale may at the highest affect their locum, but it does
not affect their locus, to work as industrial workers. This is enough
unto the day o;Ait.19(l)(g).
:i;n regard to the infringement of the right under Article 14, the
contention of the petitioners is that the plants and equipment of the
factory were sold Without the benefit of any expert report,
that the
decision to effect the sale was taken arbitrarily, that it was actuated
by an ulterior motive, and that the sale is vitiated by the violation of
the principles of natural justice since the ultinlate bid was restricted
to a select group of persons. The petitioners contend that the arbitrac
riness and unfairness of the sale is reflected in the circumstance that
the original bid of Rs. 7.6 crores came down to Rs. 4.25 crores. If
the sale was readvertised after there was a material variation in its
terms, the plants and equipment, according to the petitioners, would
have fetched a much higher price.
A clear and satisfactory answer to this contention is provided by
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the learned Additional Solicitor General, who appears on behalf of
Respondent 2, FCI. He has. pointed out to us numerous circumstance~ H
from which it would appear that the grievance of the petitioners that
the sale was unfair and arbitrary is not justified.
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[1981] 2 S.C.R.
The affidavits filed on behalf of the respondents, particularly thoso
of Shri R. C. Malhotr~, Chief Engineer of the Sindri Unit and of Shri
K. V. Krishna Ayyar, Under Secretary in the Department of Chemicals and Fertilisers, Government of India, show that the Sindri Plant,
which was commissioned in 1951 and was expanded in 1959 and 1969
by providing certain extra facilities, had outlived its use.
Various
schemes were considered from time to time for improving the economics of the Sindri Unit in order to ensure continued employment to
the workers. The first of such schemes was the Sindri Rationalisation
Scheme, which was approved by the Government in 1967.
This ·
. scheme was completed in October 1979 at a cost of Rs. 60.77 crores.
While the Ra~ionalisation Scheme was under implementation, it transpired that the Ammonia manufacturing facilities. based on coke were
fast deteriorating and unless the equipment was renovated substantially
or was replaced with modem equipment, it was impossible to expect
stability in the production of Nitrogenous fertilisers from the plant.
Different alternatives were before the Government in this behalf, and,.
finally, the Sindri Modernisation Scheme was
approved by it in
November 1973. This Scheme envisaged the shutting down of the
old Ammonia plant based on coke and the setting up of a modem
Ammonia plant producing 900 tonnes a day of Ammonia with low
sulphur heavy stock as foodstock.
This scheme was complete,d in
October 1979 at a cost of Rs. 183.19 crores.
Thus, the long term
plan of the Government was to reta,in the Ammonium Sulphate plant
after renovating it and to shut down the old coke-based Ammonia
plant.
The plant operations with the old plant showed considerable
deterioration in 1975-76. A team of engineers of the Sindri Unit as
well as of th(l Plannin!l and Development Division of the Fertiliser Corporation, in association with the engineers of the Central Mechanical
Engineering Research Institute, Durgapur, undertook Survey, examination and inspection of the plants with a view to determining their status
and condition. A committee of Directors was also appointed for the
same purpose. One of the main. critetia which thti Directors kept before
themselves in view of the reported unsafe working condition of the
plant was the safety of the personnel and the workmen. The matter
was thereafter kept under constant review and parts of l:he plant were
retired or closed down from time to time as and when their operatio~
became unsafe and uneconomical. The running of the old plant had
indeed become so uneconomical that as against the cost of production
of Rs. 787.23 per ton of Ammonia in 1971-7~, the cost of production
in 1.978-79 was approximately Rs. 6296/- per ton. An additional
circumstance which compelled the closure of a part of the plant is the
fact that the raw material required for the old plant comprised a
special high quality coal which is in short supply.
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FERTILIZER CORPN. v. UNION (Chandrachud, C.1.)
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On the question of arbitrariness of the sale, the following facts and
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.circumstances are particularlY relevant :
( 1) The decision of the Board of Directors in respect of
the sale relates only to the .redundant or retired plants
and equipment;
(2) The Board is authorised by article 68(20)
of the
'Articles of Association of the <Corporation to sell even
the whole of the undertaking with the prior approval
of the President of India. Such approval was taken
before the sale was finalised in favour of Respondent
4;
(3) The decision of the Board was restricted to a small
part of the assets of the Sindri Factory. The balancesheet for 1954-55 of the erstwhile Sindri Fertiliser &
Chemicals Ltd. shows that the assets of the said
Factory were of the value of Rs. 22,82,99,086/- as
on April 1, 1954, out of which
plants,
equipment,
machinery,
etc. , were of the value
of
Rs. 14,68,59,502/-. The original cost of the plants
and equipment, which have now been sold, was about
Rs. 10 crores, of which the written-down value as
on March 31, 1980 \Vas about Rs. 50 lakhs. The
present outlay on the Sindri Unit is in the region of
Rs. 220 crores;
( 4) The decision to sell the redundant or retired. plants
became necessary for the reason that they had outlived their life, having run for a period ranging from
18 to 28 years. It had also become unsafe, hazardous
and uneconomic to run such plants and equipment;
and
(5) Although the old plants had to be shut down on
account of the sale, no employee at all was retrenched
or is likely to be retrenched on account of the sale.
The answer which the Minister for Petroleum and Chemicals gave
on the floor of the House to the question put by respondent 2 is, if we
may say so, strictly 'parliamentary'. The question was whether there
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was any report justifying the sale. The• answer was 'NO' because there
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were reports which prece<!ed the sale and which advised the sale. But
they did, not 'justify' the sale, which is an ex post facto matter. In .fact
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SUPREME COURT REPORTS
[1981] 2 S.C.R.
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many a report had suggested the disbanding of worn out, uneconomical and hazardous plants of Fertilizer undertakings like :
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1. Report of the Fertilizer Mission to India of the International Bank for the Reconstrnction and Development
published July, 1969.
·
2. Techno economic study of Alternative schemes
for
Sindri Modernisation Project prepared
by Planning
and Development Division of Fertilizer
Corporation
of India and published May 1971.
Y.-Techno economic Feasibility Report of Sindri Modernisation Project published by Planning and Development
Division 1973 .of Fertilizer Corporation of India.
4. Appraisal of Sindri Fertilizer Project India-Report of
the International Bank for Reconstruction & Development, International Development
Associatioo,
published November, 1974.
5. Report on Works Transformation and Environmental
Study by M/s UNICO International Corporation of
Japan, published July 1975.
In view of these facts and circumstances, it is quite difficult to
hold that the decision to sell the plants and equipment of the Factory
was arbitrary, unreasonable or ma/a fide. It has to be emphasized
that the real drive of the· petition is against the decision of the Board
to sell the plants and equipment. It is that decision which is stated
to furnish the cause to complain of the violation of the right conferred
by article 14, fairness, justness and reasonableness being its implicit
assumptions.
There is only one other aspect of the matter and that we are unable
to view with any. great equanimity. It is clear from the proceedings
that the plants which were initially advertised for sale went through
variation on two occasions. The first variation which was made on
March 20, 1980 may not be regarded as si;bstantial. But after the sale
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was adjourned to March 31, 1980, the requests received by the FCI
from the other public sector tmdertakings stating, that they were in
need of a part of the equipment which was advertised for sale, led to
a substantial reduction in the goods advertised for sale. The authorities then sent for the nine tenderers and negotiated with them across
the table. We want to make it clear that we do not doubt the booa.fides
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of the .authorities, but as far as possible, sales of public property, when
the intention is to get the best price, ought to take place publicly. The
vendors arn not necessarily bound to accept the highest or any other
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FERTILIZER CORPN. v. UNION (Chandrachud, C.J.)
65
offer, but the public at least gets the satisfaction that the Government
has put all its cards on the table.
In the instant case, the ofticers who
were concerned with the sale have inevitably, though
unjustifiably,
attracted the criticism that during the course
of negotiations
the
original bid was reduced without a justifying cause. We
had willynilly to spend quite some valuable time in satisfying ourselves that the
reduction in the price was a necessary and fair consequence of the
reduction in the quantity of the goods later offered for sale on March
31, 1980. One cannot exclude the possibility that a better price might
have been realised in a fresh public auction but snch possibilitie3
cannot vitiate the sale or justify the allegalion of mala fides.
In view of the fact that neither the decision to sell nor the sale
proceeilings were unreasonable, unjust or unfair, it cannot be held that
the petitioner's rights, if any, under Article 14 are violated.
The
learned Attorney General contended
that
arbitrariness would be
actionable under Article 32, only if it causes injury to the fundamental
rights of the petitioner, and that the petitioners in the instant case
have no fundamental right in the exercise of which they can challenge
the sale. We consider it unnecessary to examine this contention because
the sale is not vitiated by any unfairness or arbitrariness. If and when
a sale of public property is found to be vitiated by arbitrariness or
ma/a [ides, it would be necessary to consider the larger question as to
who has the right to complain of it.
That disposes of the question as regards the maintainability of the
writ petition. But, we feel concerned to point out that the maintainability of a writ petition which is correlated to the
existence
and
violation of a fundamental right is not always to be• confused with the
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locus to bring a proceeding under Article 3 2. These two matters often
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mingle· and coalesce with the result that it becomes difficult to consider
them in water-tight compartments. The question whether a person has
the locus to file a proceeding depends mostly and often on whether he
possesses a legal right and that right is violated. But, in an appropriate
case, it may become necessary in the changing awareness of . legai
rights and social obligations to take a broader view of the question of
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locus to initiate a proceeding, be it under Article 226 or under Article
32 of the Constitution. If public property is
dissipated,
it
would
requlre a strong argument to convince the Court that representative
segments of the public or at least a section of the public which is
directly interested and affected would have no right to complain of the
infraction of public duties and obligations.
Public enterprises
are
0
owned by the people and those who run them are accountable to the
people. The accountability of the public sector to the Parliament is
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SUPREME COURT REPORTS
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ineffective because the parliamentary control of public enterprises is
"diffuse and haphazard". We are not too sure if we would have refused
relief to the workers if we had found that the· sale was unjust, unfair
or mala fide.
Several decisions were cited before ns by the learned Attorney
General, the learned Additional Solicitor General, Shri A. K. Sen and
Shri R. · K. Garg on the questiou of the maintainability of ' the writ
petition. We consider it unnecessary to discuss them in view of the
fact that we have come to the conclusion that the petitioner's fundamental right undet Article 19 (1) (g) to carry on the occupation of an
industrial worker is not affected by the sale, and similarly, that his
fundamental right, if any, under Article 14 of the Constitution has not
been violated.
· The question as regards 'access to justice',
particularly under
Article 226 of the Constitution, has been dealt with by Brother Krishna
Iyer. at some icngth, fOT which reason I do not consider it necessary to
dwell upon that topic.
In the result, we dismiss the petition and discharge the rule. There
will be no orde.