IN THE HIGH COURT OF SIKKiM OF3DEF} SHEET .......Writ..Pst.it.ion ............................. „.No.16 of 2oo7 I.CJ ALCEEMIar ljiTD. a AiR. Versus srarE BANK OF slKKIM 6E ORs. Petifener / Appellant Fle§pondent Order with Signature Office Note as.to action (if any) taken on Order 01. 13.08.07 Present: Mr. N.G. Sherpa, Advocate for the Petitioners. Mr. S.P. Wangdi, Advocate General with Mr. J.B. Pradhan and Mr. Karma Thinlay, Government Advocates for the State-Respondents. This is a Single Bench matter. By consent, adjourned to 17.09.2007. frfty (3ji¥£Ng¥8tRfacy! 11-- Serial Date Order with Signature Office Note as to No. ofOrder ofOrder action (if any)takenonOrder 02. 17.9.07 Present: Mr. P.C. Sen and Mr. Ranjan Deb, I Senior Advocates with Mr. Arijit Baneljee, Mr. Rohitendra Ch. Deb, Bar-at-Law, Mr. B.P. Subba and Mr. Kirit Zaveri, Advocates for the Petitioners.Mr.S.P.Wangdi, Advocate General with Mr. J.B. Pradhan and MI.. Karma Thinlay, Government Advocates for the State-RespondentsThisisawritpetitionat the initial stage and toda.y is the first day when the case has been presented.However, the matter has been argued at length since the very admission of a ihrit petition of the present na.ture is fran8ht wi consequences, and those consequences woul visit, in this case, no less an organization than th State Bank of Sikhim itself.Thewritpetitioner Alchemist is desirou ultimately of becoming a strategic partner of th State Bank of Sikkim. .Itappearstobe an extremely start]in proposition, unhaown anywhere else in India fo1,----J`11+I+.1. su lulls, ]|.I |[sal.u L.u c...Lj, vL u-Le oLLLef I+a:E±eF^a±H-e_ banks which ha.ve now existed as such for a long /pr, serial Date Order with Signature Office Note as to No. of of action (if any) Order Order taken on Order tine. Not only has no private party o I organization become a strategic or an importan partner of any such other nationalized bank, ther has not been any writ or suit for specifi performance in that regard yet, to the best of thi Court's lmowledge or tliat of learned counse appearing today, as on date.Thebasicfactsarethese. Before the takoveroftheStateofSikkimbytheUrrionofIndia. 1975, sometine in or about the year 1968 ther was a Proclamation by the then Ruler nanely "The Chogyal", which is entitled the State Bank o Sikkim Proclamation, 1968. The Proclamation i just like a State Act and runs into 47 sections. I has now become a State Act by operation of law.Sometineonoraboutthe21stofJanuary2004,theStateBankofSikkjmissuedanotic inviting offers for a joint venture. No doubt, th whole thing was started by the State Bank itse on its own initiative at that time. Th.advertisementstatedthattheBankwaslookinforasuitablestratericbusinessT]artnerwhowa. willing to enter into a joint venture through thuge p+, I" I serial Da,te Order with Signature OfficeNoteasto I( No. of of! action (if any) Prder Order taken on Order IIiIIIIIII rQ`^lldEL investments', bringing in competent management, Ii)!1 introducing major refoms etc. The last sentence of that notice read as follows: -"Theoffersmadeby the parties shall be subject to scrutiny by the Board of Directors and it reserves the richt to accept or reject offers without assigning any reason." Sometine in the month of February 2004, offers came from the vrit petitioners and they Ii have been willing to infuse large sums of money of iI the order of Rs.400-500 crore in the joint venture. iiI Some Fixed Deposit Receipts of that tine and of that amount were also produced then, but those I - ii nelnr have/been encashed by the wit petitioner and iI)IIi no money of theirs is blocked up in any mannernow.InthemonthofFebruary2004itself,the i II State Bank of Sikldm wrote to the ihrit petitioner iiiiI accepting in principle their offer of being in joint venture with the bank.Themannerin which the wit petitioner I wanted to come into the bank was as follows. The '.`L i '`-is.i-Il- State Government holds/the majority sharesj.e.. I /'' appreciablyabove50°/o. Some36%sharesofthe '! SerialNo.ofOrder DateofOrder Order with Signature Office Note as toaction(ifany)takenonOrder prdrprfu bank, of the face value of Rs.100 per share are still unsubscribed. This 36 °/o block the Alchemist would purchase defor#:vi# :#Rsi3#an approximately. This purchase of the share block and the investment of the aforesaid cash amountinthemannerdelineatedbytheAlchemist,these were the basics of the proposed I.oint venture ± 4flts±!ev.qu `Partieswerenot sinply whting letters, but there was certainly a good degree of seriousness about the transaction and a possibility of the whole thing ripening ultimately into a full fledged executed transaction. But a lot of steps were still to be taken, like finalizing the agreemerty in all its details, signing it, and, above all, obtaining the State Government's full approval in the matter, with the Legislature bringing in the changes, if any needed, in the Bank's Charter, which is the said Proclamation of 1968.InMarch2005, a team from the Bank of Sikkim paid about a four-day visit to the vrit petitioners' main place of business at Chandigarh and an inspection was made about the possible E / 5 i} / serialNo.ofOrder DateofOrder Order with Signature Office Note as toaction(ifany) ItakenonOrder 1 IIII future partner of the bank and its business and I standings.After the team returned to Sikkim, nothing further happened. The next inportant document, which is the most inportant document chaJJ.enged by the wit petitioner in this wit petition, was thereafter. written about a year later, on the 23rd day of F`ebruary 2006. It is a chort letter of about 7-8 lines stating simply that the bank was withdrawing from the earlier plan of strategic partnership as the State Government of Sikhim had not approved the bank's recommendation.Thewritpetitionerhadfiledawritin the Hich Court of the Punjab & Haryana. That writ petition was dismissed for lack of jurisdiction. An SLP was preferred to the Supreme Court of India and that Court was pleased to pass on the 4th day of December 2006 an order allowing filing of counter affidavit and restraining till the ne2ct day of hearing creation of any 3rd party interest in respect of the shares. A i__-_ IT` /, / aSerialNo.ofOrdel. DateotOrder Order with Signature Office Note as toaction(ifany)takenonOrder dr The SLP was disposed of thereafter on 16.03.2007 and the Supreme Court was pleased to hold that the Punjab & Haryana High Court was right on the point of jurisdiction and thus, the SLP was dismissed on that issue.Thepartyhasthereafter travelled to the High Court of Sikkin, which certainly has jurisdiction in this wit matter, providedjf'it is appropriately the subject matter of a \hrit petition at all. These matters relating to writs are usually heard here by a Division Bench, but since an assembly of inch a Bench might take some more tine, and the matter is quite urgent and important, this order is being passed by me sitting singly.The principal point urged by Mr. Sen in support of the wit petition was that a State or other authority or a public body like the State Bank of Sikkim cannot deal with citizens or thecompaniesofcitizensinulireasonedorundalr ltprt- e Office Note as toaction(ifany) Serial Date Order with Signature No. ofOrder ofOrder taken on Order ways, which ways can perhaps be adopted wi I,` I impunity by private businessmen.AccordingtoMr.Sen,thecryptic withdraw of 23.2.2006 was not informed by reason. Th writ petitioner was not taken into confidence b the bank. No hearing was given. Nothing i known by the writ petitioner as to why, or if at all, the State Government refiised to grant sanction. No oppchurity was given to the Tndt petitioner to try and to persuade these authorities to go ahead with the agreement or to review its decision of dropping the partnership proposal altogether.AccordingtoMr.Sen,theseare,in the present state of the law, all sound and good points \ for entertainment of the ihndt petition and calling for an answer both from the State of Sikkim andtheStateBankofSikkim.Onbehalfofthesetwoauthorities,the leaned Advocate General has argued the case and he has submitted that the case should bedismissedinlimine. pr :¥nlS:i SerialNo.ofOrder DateofOrder Order with Signature Office Note as toaction(ifany)takenonOrder He has said that it is not an area wherenaturaljustice,hearingofparties,ortakingthem into confidence or giving a reasoned decision can operate at all. According to liim, the proposed I.oint venture agreement would wholly alter the character of the State Bank of Sikkim as nowentrenchedbyanenactment.NoWritCourtcan direct a State Government to alter any Legislation by passing an order of mandamus to that effect. If the proposed agreement of the writ petitioner is enforced by this Court, a huge percentage of share holding would go over to the writ petitioner maldng the passing of any special resolution impossible in future without their consent and approval.The agreement seeks to provide for managerial control by the ihrit petitioner and it would be a takeover of the management, for all practical purposes, from the State by the private individuals. Three Directors would be of theprivatebodyandtwooftheState.TheManaging Director would be nominated by the wit JJn-titiullc|. J prft- a / cal.e is needed on subsequent days than on the /,r`f` o0 Serial Date Order with Signature Office Note as to No. of of action (if any) Order Order taken on Order pr first day. As soon as there is an admission the Court. pronounces either expressly or by necessary implication a case to go to trial, or, a case for a hearing, which might be a better word in regard to writ petitions. Affidavits are an automatic consequence. Disclosure of numerous matters would have to be made on affidavits, because o the ingrained principle that all litigants must come before the Court with full and complete disclosure of all material matters in their special knowledge.Thedoctrineoflispendensandthoseof a sinilar nature would immediately operate. Whether there is an order of injunction or not, if litigation is pending in the hichest Court of the State, everything is put under a brake. This is the reason why, before a notice is issued in this Jfro. Oy f a. SjcJIL matter to this/State/Bank of Sikkim at the instance of a rich and powerful business house, it is essential for the Court to see that there aresubstantialandgoodreasonsforissuanceofrule, and at least a likelihood that ultimately the grievance of the vrit petitioner might ultimately be I.ciiit;sst=u uy il.ic wrii. Loul-[. 11 6 giv seriar Date Order with Signature Office Note as to No. of of action (if any) Order Order taken on Order a specific performance cannot be had, of merely an agreement "in principle" of entering into a partnership. It lacks certainty, and it also lacks the subject matter or the content, which a Court can ever specifically enforce upon a party, whether that other party is willing or not.Forthesereasons,Iamof the clear opinion that the writ petition is not entertainable. There is no claim for damages made in the writ petition, but if the wit petitioner is desirous of filing any suit for damages or any suit in the private spher for enforcing any agreement or relationship in th natul.e of aD agreement, the wit petitioner will b wholly free in that regard and nothing said here. will prejudice his richts or contentions thel.e. Th writ petition is dismissed in limine as no entertained. There will be no order as to costs.(A.N.Ray, CJ