Madras Hc Posts Mar 9 For Hearing Spic Appeal

The Madras High Court yesterday posted for March 9 an appeal by Southern Petro-chemical Industries Corporation (Spic) for setting aside a single judge's order pertaining to the disinvestment of Tamil Nadu Industrial Develop-ment Corporation's stake in the former.

A division bench, comprising chief justice M S Liberhan and justice E Padmanabhan, ordered notice to the respondents and directed the appeal be clubbed along with those filed by former Tamil Nadu chief minister, Jayalalitha, during whose tenure Tidco renounced its rights in Spic, the company's chairman, M A Chidambaram and its vice chairman and president, A C Muthiah.

On December 15 last, justice Y Venkatachalam had directed Jayalalitha, Chidambaram and Muthiah to make good the loss of Rs 28.29 crore suffered by the state as a result of renouncing its rights far below the then prevalent price. He also ordered Tidco to reclaim its stake in Spic, reduced from 26 per cent to 11 per cent due to the renunciation, besides directing a CBI inquiry into the entire disinvestment issue.

 

Besides, Jayalalitha, Chidam-baram and Muthiah the other respondents include Janata Party president, Subramanian Swamy and the CBI. Contending that the single judge's order was contrary to provisions of the Companies Act and Articles of Association, the petitioner pointed out that the allotments had been made after the renouncement in favour of the renouncees, who were not parties before the court.

If the allotments were set aside, it would amount to reduction of capital and such a direction could not be issued by the court in writ proceedings. Besides, various actions and several business decisions had been taken since 1992 by the appellant as a corporate entity and these could not be 'set at naught' as it would lead to serious consequences, the petitioner contended.

If the order was implemented, it would cause great hardship, inconvenience and irreparable loss, Spic said.