SC upholds divestment of ITDC-run hotel | india | Hindustan Times
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SC upholds divestment of ITDC-run hotel

The judgment will have a bearing on other ITDC hotels which were being disinvested at the time, reports Satya Prakash.

india Updated: Nov 01, 2006 02:34 IST

The Supreme Court on Tuesday upheld the divestment of ITDC-run Hotel Agra Ashok in the city of Taj as it did not find any fault with the previous NDA government’s decision to privatise it.

"In our view, the decision of the Government of India to divest the property was a policy decision, which was not in any manner contrary to the law of the land," a Bench of Justices AR Lakshmanan and AK Mathur said upholding disinvestment of the five star hotel.

The decision came on a petition filed by All India ITDC Workers Union and employees of Hotel Agra Ashok who had challenged the decision to sell the hotel to M/s Mohan Singh and Yamuna View Pvt Ltd on the ground that it was arbitrary and illegal.

Dismissing the petition, the Bench observed that the deal was transacted in a fair and transparent manner. It also rejected employees’ demand for Voluntary Retirement Scheme (VRS) terming it as as untenable. After the disinvestment, it is for the buyer to float the scheme of VRS in terms of the transferred documents, the Bench said.

The judgment will have a bearing on certain other ITDC hotels which were in the process of disinvestment.

Citing the government circular on VRS, the Bench said, "it is clearly stated that the schemes do not confer any right whatsoever on any employee to have his request for voluntary retirement accepted.”

Referring to the BALCO case, in which the court had earlier upheld the divestment of the PSU, the court said the government ensured that the interests of the workmen are fully protected in that case as well as in the present one.

Terming it as a the policy decision taken by the government to transfer Hotel Agra Ashok to the private player, the Bench said it could not be assailed at the stance of the employees.

“The government has ensured that it has got the best price for its shares. It is also pertinent to notice that the government has not received any other higher offer," it said.

The Bench said that the government followed all procedures required for the divestment and also accepted the recommendations of the Disinvestment Commission. The Commission had said that disinvestment in ITDC, which fell in the non-core category, could go up to 74 per cent or more.

"The government constituted the Disinvestment Commission and accepted the recommendations of the Commission. A decision was taken by Inter-Ministerial Group and at the level of the Cabinet Committee on Disinvestment to divest each property individually rather than altogether or in groups,” it added.

Email: satya.prakash@hindustantimes.com