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Govt. may seek review of ruling on disinvestment

By Our Special Correspondent

NEW DELHI SEPT. 25. With the public sector disinvestment exercise practically on hold after the Supreme Court judgment in the case relating to the Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL), the Government is veering round to the view that a judicial review or a clarification is in order.

The Disinvestment Minister, Arun Shourie, and the Union Law Minister, Arun Jaitley, had a half-hour meeting today on the issue, the first since the judgment given last week because both the Ministers were abroad. Coming out of the meeting, Mr. Shourie said, "We have considered some options. The Disinvestment Department will prepare a paper on the issue and present it to Mr. Jaitley tomorrow.'' Once the Law Ministry vets the paper, the matter will finally be decided at the meeting of the Cabinet Committee on Disinvestment, scheduled, as of now, for October 3.

The options that Mr. Shourie mentioned are basically to go in for a judicial review or clarification or follow the judgment and approach Parliament for permission to disinvest in the two oil companies. However, Government sources indicate that the preference would be for a judicial review because larger issues than just HPCL and BPCL are involved and that the Government wanted the position to be clear about whether it could undertake public sector disinvestment or not.

Mr. Shourie had gone on record soon after the judgment that it was not just the two oil companies which were affected, but disinvestment in all public sector units which had been nationalised at the Centre or in the States.

Secondly, the judgment has also raised the issue of funds being utilised from the Consolidated Fund of India while nationalising the oil companies and whether Parliament's permission is necessary before any sale since the Consolidated Fund is approved by Parliament. Mr. Shourie's view is that since the Consolidated Fund is involved in all public sector undertakings, the sale of even minority shareholding could attract legal objections.

In this background, the sources said that unless a clarification was available from the Supreme Court, further disinvestment in any public sector unit could lead to litigation and the Government could land in a host of court cases all over the country.

Mr. Shourie and Mr. Jaitley have added another dimension to the controversy. With both having recently interacted with potential foreign investors, they feel that without a clear policy picture, investors will be hesitant to come to India. Hence, a clear judicial position on the disinvestment policy would be very much in order to attract foreign investment.

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