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SC to reconsider disinvestment issue
New Delhi, Nov 17: For the first time, the Supreme Court today agreed to have a fresh look at its recent judgement on HPCL and BPCL sell-off cases holding that privatisation of PSUs created by legislation required prior approval of Parliament.
New Delhi, Nov 17: For the first time, the Supreme Court today agreed to have a fresh look at its recent judgement on HPCL and BPCL sell-off cases holding that privatisation of PSUs created by legislation required prior approval of Parliament.
Hearing a petition challenging the disinvestment of rail coach manufacturing company Jessop and Co, a bench comprising Chief Justice V N Khare and Justice S B Sinha observed that "we are primarily concerned whether disinvestment requires parliamentary approval and whether it is legally permitted."
This observation came after Attorney General Soli J Sorabjee contended that though many decisions for privatising PSUs had been taken prior to the September 16 judgement, halting privatisation of oil PSUs for want of prior parliamentary approval, these have now been challenged in many high courts relying on the HPCL judgement.
"The decision of the apex court was not to be applied to all the cases where disinvestment decision was taken prior to the judgement," he said adding certain observations in the HPCL judgement required to be examined afresh as they have far reaching consequences.
Meanwhile, the apex court stayed the proceedings before various high courts on petitions challenging the disinvestment of Shipping Corporation of India (SCI), Hindustan Copper Ltd (HCL) and Burns Standard Corporation Ltd (BSCL) as the Union Government today sought transfer of these petitions to the Supreme Court for a authoritative pronouncement.
Appearing for the Jessop and Co officers association, senior advocate Deepankar Gupta contended that the Centre has raised several new points, and sought four weeks to reply to the counter affidavit of the government.
Defending the disinvestment of sick PSU Jessop & Co, which was pending before Board for Industrial and Financial Reconstruction (BIFR), the government in its counter affidavit said that the apex court`s judgement on HPCL was being relied upon by the petitioners to say that the sell-off of the rail coach factory to Ruias was null and void.
The Centre said that the judgement needed reconsideration as it had misinterpreted the powers conferred on the executive under Article 298 of the Constitution.
"By virtue of Article 298, the executive power of the Union has been expressly extended to the carrying on of any trade or business and to the acquisition holding and disposal of property and the making of contracts for any purpose," it said.
Submitting that the reliance of Centre upto its powers under Article 298 of the Constitution had not been dealt with in the said judgement, despite being raised by the government, it said, "in so far as the judgement holds that Union of India, in exercise of its executive power, is not entitled to dispose of shares acquired by it pursuant to nationalisation acts, it is submitted that the said judgement restricts the scope and ambit of Article 298."
It said that the observations in the judgement put in "jeopardy" various disinvestments of companies and PSUs, which were formed with government funds but not acquired under of pursuant to a statutory enactment.
Bureau Report
This observation came after Attorney General Soli J Sorabjee contended that though many decisions for privatising PSUs had been taken prior to the September 16 judgement, halting privatisation of oil PSUs for want of prior parliamentary approval, these have now been challenged in many high courts relying on the HPCL judgement.
"The decision of the apex court was not to be applied to all the cases where disinvestment decision was taken prior to the judgement," he said adding certain observations in the HPCL judgement required to be examined afresh as they have far reaching consequences.
Meanwhile, the apex court stayed the proceedings before various high courts on petitions challenging the disinvestment of Shipping Corporation of India (SCI), Hindustan Copper Ltd (HCL) and Burns Standard Corporation Ltd (BSCL) as the Union Government today sought transfer of these petitions to the Supreme Court for a authoritative pronouncement.
Appearing for the Jessop and Co officers association, senior advocate Deepankar Gupta contended that the Centre has raised several new points, and sought four weeks to reply to the counter affidavit of the government.
Defending the disinvestment of sick PSU Jessop & Co, which was pending before Board for Industrial and Financial Reconstruction (BIFR), the government in its counter affidavit said that the apex court`s judgement on HPCL was being relied upon by the petitioners to say that the sell-off of the rail coach factory to Ruias was null and void.
The Centre said that the judgement needed reconsideration as it had misinterpreted the powers conferred on the executive under Article 298 of the Constitution.
"By virtue of Article 298, the executive power of the Union has been expressly extended to the carrying on of any trade or business and to the acquisition holding and disposal of property and the making of contracts for any purpose," it said.
Submitting that the reliance of Centre upto its powers under Article 298 of the Constitution had not been dealt with in the said judgement, despite being raised by the government, it said, "in so far as the judgement holds that Union of India, in exercise of its executive power, is not entitled to dispose of shares acquired by it pursuant to nationalisation acts, it is submitted that the said judgement restricts the scope and ambit of Article 298."
It said that the observations in the judgement put in "jeopardy" various disinvestments of companies and PSUs, which were formed with government funds but not acquired under of pursuant to a statutory enactment.
Bureau Report