The Hindu : Karnataka / Bangalore News : NGEF: court stays single judge order

Online edition of India's National Newspaper
Saturday, Mar 25, 2006

Karnataka

Karnataka - Bangalore

NGEF: court stays single judge order

Staff Reporter

The single judge had terminated the auction proceedings of the firm's assets

BANGALORE: The Karnataka High Court on Friday stayed an order of a single judge directing the State Government to produce the Cabinet records pertaining to the closure of the New Government Electric Factory (NGEF), a State Government undertaking here.

A single judge had on December 2005 terminated the auction proceedings of NGEF assets and given time to the State Government till March 16, 2006 to submit a comprehensive revival package of the unit.

He had also directed the State Government to place before the court the Cabinet note and proceedings, the names and addresses of Ministers and officials of the previous Government who were a party to the decision to wind up NGEF.

The names and addresses of those in the current Government who had sought to revive the unit were also asked to be tabled.

The court, while terminating the auction had put the State Government on terms and said it would have to make good the loss occasioned to NGEF on account of terminating the entire sale proceedings. In case the State was unable to place before the court sufficient and adequate material on the revival package and payment of debt, it would be liable to pay Rs. 1,599.66 crores which is the highest offer received by the official liquidator during the auction. Alternatively, the State would have to make good any loss occasioned if the property is put on sale.

When the State submitted that it wanted to revive NGEF and sought time to place a revival package, the single judge had remarked that while the previous Government wanted to liquidate NGEF, another Government wanted to save it. He wanted to know why a conscious decision taken by one Government was sought to be changed.

He had remarked that some of the bureaucrats had steered the company towards doom. "They must not be allowed to make hay and continue to make hay while the sun shines," he had said. When there was a small light for the revival, the bureaucrats chose to walk away, he said and asked the State to probe the lapses.

State appeal

The State had appealed against this order of a single judge, saying that a company court, which was seized of liquidation matters, could not go beyond its scope and summon for records.

A Division Bench comprising Justice P. Vishwanath Shetty and Justice N. Kumar stayed the operation of a single judge order and adjourned further hearing on the matter.

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