{"id":298734,"date":"2023-08-07T10:00:54","date_gmt":"2023-08-07T04:30:54","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=298734"},"modified":"2023-08-10T17:28:43","modified_gmt":"2023-08-10T11:58:43","slug":"delhi-hc-dismisses-plea-against-conversion-of-ordnance-factory-board-into-corporations-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2023\/08\/07\/delhi-hc-dismisses-plea-against-conversion-of-ordnance-factory-board-into-corporations-legal-news\/","title":{"rendered":"\u2018Policy framed by the Government is in national interest\u2019; Delhi High Court dismisses plea against conversion of Ordnance Factory Board into Corporations"},"content":{"rendered":"
\n

Delhi High Court:<\/b> In a case wherein the petitioner, Bharatiya Pratiraksha Mazdoor Sangh (‘BPMS’) had filed a Public Interest Litigation stating that the notification issued on 01-10-2021 (‘impugned notification’), whereby seven Major Corporations had been established in place of Ordnance Factory Board (‘OFB’) regarding corporatization, was passed without considering the views of the workers who were one of the main stakeholders\/sufferers in the corporatization process, the Division Bench of Satish Chandra Sharma, C.J.*<\/b>, and Sanjeev Narula, J., opined that corporatization of the OFB, in no way, was violating or infringing the constitutional rights guaranteed to the citizens and the policy decision had been taken in larger public interest and in the interest of the nation to strengthen the defence production in the country ensuring quality products and a regular supply of arms and ammunitions to the Armed Forces. The Court did not find any reason to interfere with the policy decision of the Government, especially when the interests of the employees had already been protected.<\/p>\n

Background<\/b><\/p>\n

The petitioner was a federation of registered trade unions working in defence installations of Ministry of Defence, including OFB and was an industrial unit of Bharatiya Mazdoor Sangh (‘BMS’). It was stated that BPMS was the largest trade union in the country and the petitioner was duly recognised by the Ministry of Defence, Government of India. The petitioner was aggrieved by a Gazette notification no. dated 01-10-2021 by which a policy decision had been taken by the Government for conversion of OFB into seven Major Corporations. The petitioner had stated that the conversion of OFB into seven Major Corporations was recommended in 2000 by T.K.A. Nair Committee.<\/p>\n

The petitioners’ grievance was that in 2020, the Government constituted an Empowered Group of Ministers (‘EGoM’) under the chairmanship of Raksha Mantri to oversee and guide the entire process, whereby the OFB could be converted into one or more than one, 100% government owned corporate entities. It was stated that on 16-05-2020, during the Corona Virus Pandemic, the Government announced its plan to corporatize the Ordnance Factories and the Finance Minister under the “Aatma Nirbhar Bharat Abhiyan” made such an announcement. The petitioners’ contention was that finally, a notification was issued on 01-10-2021, whereby seven Major Corporations had been established in place of OFB regarding corporatization.<\/p>\n

The petitioner stated that the impugned notification had been passed without considering the views of the workers who were one of the main stakeholders\/sufferers in the corporatization process. Thus, it was submitted that the impugned notification was the result of abuse of power of Government and suffered from manifest “arbitrariness” and therefore was violative of Article 14<\/a> of the Constitution<\/a>. Moreover, the impugned notification had been issued by illegally silencing the legitimate voice\/concerns of the workers of OFB.<\/p>\n

Analysis, Law, and Decision<\/b><\/p>\n

The Court observed that the conversion of the Ordnance Factories from a Government department into a public sector company had been recommended by several committees that had been established by different governments in the past, including the T K A Nair Committee (2010), Kelkar Committee (2004), Raman Puri Committee (2015) and Shekatkar Committee (2016). The recommendation had been made as a measure to improve self-reliance in our defence preparedness. To enhance functional autonomy and innovation in Ordnance Factories, a proposal was submitted for approval of the Cabinet Committee on Security (‘CCS’) to convert OFB – a subordinate office of Ministry of Defence, into one or more than one 100% Government owned corporate entities, registered under the Companies Act, 2013<\/a>, which was approved by the CCS in its meeting dated 29-07-2020. The CCS approved to constitute an EGoM to oversee and guide the entire process including transition support and redeployment plan of employees while safeguarding their wages and retirement benefits.<\/p>\n

The Court noted that while taking the decision to convert OFB into seven corporate entities, the Government had ensured that the service conditions of the existing employees of OFB were protected as Central Government employees and a statement on affidavit had been made that the Government was committed to safeguard the interest of employees of OFB. The Government had decided that all employees of OFB (Group A, B & C) belonging to production units would be transferred to the corporate entities on deemed deputation initially for a period of two years without altering their service conditions as Central Government employees. It had also been stated on the affidavit that the pension liabilities of the retirees and the existing employees would continue to be borne by the Government, that is, the service condition of the employees would not be changed and they would be entitled to the same benefit which they were drawing prior to conversion of OFB into corporate entities registered under the Companies Act, 2013<\/a> and 100% owned by the Government.<\/p>\n

The Court opined that the policy decision of the Government was certainly aimed to enhance functional autonomy, efficiency and unleash new growth potential and innovation in Ordnance Factories. The re-structuring was also aimed at transforming the Ordnance Factories into productive and profitable assets, deepen specialization in product range, enhance competitiveness, improving quality and cost efficiency. It was a policy decision of the Government in national interest. It was a well-settled proposition of law that the Courts could not bind the Government to its policy decisions taken in public interest and in national interest.<\/p>\n

The Court relied on Bajaj Hindustan Ltd.<\/i> v. Sir Shadi Lal Enterprises Ltd.<\/i>, (2011) 1 SCC 640<\/a> and Distribution of Essential Supplies and Services During Pandemic, In re<\/i>, (2021) 7 SCC 772<\/a> and opined that policy making power continued to be in the sole domain of the executive. The Court further opined that the policy framed by Government was in national interest keeping in view the defence requirements, and therefore, the question of interference by this Court did not arise. The policy decision in the present case, by no stretch of imagination, was violative of Article 21 nor any other constitutional provision.<\/p>\n

The Court also opined that in the present case, corporatization of the OFB, in no way, was violating or infringing the constitutional rights guaranteed to the citizens and the policy decision had been taken in larger public interest and in the interest of the nation to strengthen the defence production in the country ensuring quality products and a regular supply of arms and ammunitions to the Armed Forces. The Court did not find any reason to interfere with the policy decision of the Government, especially when the interests of the employees had already been protected. Therefore, no case for interference was made out in the present case and the petition was, accordingly, dismissed.<\/p>\n

[Bharatiya Pratiraksha Mazdoor Sangh v. Union of India, 2023 SCC OnLine Del 4694<\/a>, decided on 03-08-2023<\/span>]<\/p>\n

*Judgment authored by: Justice Satish Chandra Sharma<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For the Petitioner: Adarsh Kumar Tiwari, Vinit Pathak, Advocates;<\/p>\n

For the Respondents: Ajay Digpaul, CGSC; Kamal R. Digpaul, Swati Kwatra, Pushpesh Digpaul, Advocates.<\/p>\n

Buy Constitution of India  HERE<\/a><\/h3>\n

\"Constitution<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“The policy decision of the Government is aimed to enhance functional autonomy, efficiency and unleash new growth potential and innovation in Ordnance Factories. The re-structuring is aimed at transforming the Ordnance Factories into productive and profitable assets, deepen specialization in product range, enhance competitiveness, improving quality and cost efficiency.”<\/i><\/p>\n","protected":false},"author":1,"featured_media":293503,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[60083,30015,2543,32067,31626,60082,3487,3391],"class_list":["post-298734","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-bharatiya-pratiraksha-mazdoor-sangh","tag-corporations","tag-Delhi_High_Court","tag-government-of-india","tag-national-interest","tag-ordnance-factory-board","tag-policy","tag-public_interest"],"yoast_head":"\n'Policy framed by Government is in national interest'; Delhi HC dismisses plea against conversion of 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