The Calcutta High Court on Friday set aside the sale of Jessop & Co Ltd to Ruia Cotex Ltd, and directed the BIFR to file a new revival scheme within three months. Justice Kalyan Jyoti Sengupta also directed BIFR to give fresh directions to the SBI, the operating agency for the scheme, and also consider SBI’s role afresh.In his reaction, the Disinvestment Minister Arun Shourie said the government will appeal in Supreme Court. Centre had sold a 72 per cent stake in Jessop —which it owns via holding company Bharat Bhari Udyog Nigam Ltd —to Ruia Cotex Ltd on February 27, 2002. The sale, at a price of Rs 18.18 crore, had been challenged by the Jessop Staff Association, which had questioned the entire sale process, Jessop’s valuation, and its sale to a defaulter of bank loans.The staff association and unions had claimed that Jessop enjoyed a “strategic” status since it supplies equipment to Railways and mining sector.However, although Justice Sengupta termed the process of the sale to Ruia Cotex as “not in accordance with law”, and criticised the valuation process, he declined to term Jessop a strategic company.The Jessop sale had become a closely watched case since Ruia Cotex itself owes the banks a huge sum. The uproar over the sale had led Shourie to admit in Parliament in December last year that the government had no rules preventing a defaulter from bidding for or buying a public sector undertaking put up for sale.Official sources expressed surprise. In the case of Jessop privatisation, they said, the government had followed the same process as in Balco sale. When contacted, chairman of Ruia Cotex, P.K. Ruia, pointed out that the court has quashed the main contention of union—that Jessop comes under the strategic sector.
