The Calcutta High Court dismissed a petition alleging the sale of State’s Metro Dairy Limited (MDL) shares to Keventer Agro Ltd (KAL) in 2017 was non-transparent or opaque.
A division bench of the court said the state has not adopted a non-transparent method to sell 47 per cent of its stake to KAL and there is no need for a CBI probe into the sale.
The share holding of MDL since inception was as follows:
a. State of West Bengal: 47%
b. National Dairy Development Board (NDDB): 10%
c. Keventer Agro Limited (KAL): 43%
Later NDDB sold its share to KAL after which the latter became a majority shareholder. Later, the State sold its shares to KAL.
The court was hearing a public-interest litigation filed by Congress’s Adhir Ranjan Chowdhury, alleging that the West Bengal government sold its 47 per cent stake to KAL at a lower price, whereas Keventer had sold 15 per cent of MDL shares to another company for a much higher consideration.
The Counsel appearing for KAL said that the 15 per cent shares sold by them had no connection with the shares of MDL. He also said that due process was followed during the sale.
Noting the contentions, the court said, “The decision in respect of disinvestment and transfer of 47 per cent of shares in MDL by the State is essentially a policy decision based upon 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. Courts may also interfere if any illegality is committed in the execution of such a policy decision.”
The court held that in the present case, nothing has been pointed out to show that the decision of the State to sell 47 per cent shares of MDL ran counter to any statutory provision or is illegal in any manner. “It has been pointed out from the record that MDL is a company dealing in dairy business alone and sometime around 2004-05, Amul milk, owned by Gujarat Co-operative Milk Marketing Federation, had entered the West Bengal Milk Market as competitor to the MDL as a result of which, the annual procurement of milk as also annual sale of MDL were continuously declining,” the court observed.
“We find that the policy decision of the State to sell 47 % shares was neither illegal nor arbitrary and the State had also not adopted a non-transparent or opaque procedure for sale of shares,” the court said and dismissed the petition.
Source : Business Standard June 13th 2022