The Hindu : Supreme Court to review order on oil PSUs

Online edition of India's National Newspaper
Tuesday, Nov 18, 2003

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Supreme Court to review order on oil PSUs

By J. Venkatesan

New Delhi Nov. 17. The Supreme Court today agreed to have a fresh look at its recent judgment on the Hindustan Petroleum Corporation Limited and the Bharat Petroleum Corporation Limited holding that prior approval of Parliament is required for disinvestment in these public sector undertakings.

A Bench of the Chief Justice V.N. Khare and Justice S.B. Sinha observed during the hearing of a petition challenging the disinvestment of the rail coach manufacturing company, Jessop and Co., that "we are primarily concerned whether disinvestment requires parliamentary approval and whether it is legally permitted."

Earlier, the Attorney-General, Soli J. Sorabjee, contended that though many decisions for privatising PSUs had been taken prior to the September 16 judgment halting privatisation of the oil PSUs for want of prior Parliamentary approval, these had now been challenged in many High Courts relying on the HPCL judgment.

He said: "The decision of the apex court was not to be applied to all the cases where a disinvestment decision was taken prior to the judgment." Certain observations in the HPCL judgment required to be examined afresh as they had far-reaching consequences.

In its counter-affidavit, the Centre said the judgment in the HPCL/BPCL case needed reconsideration as it had misinterpreted the powers conferred on the executive under Article 298 of the Constitution. Submitting that the reliance of the Centre on its powers under Article 298 of the Constitution had not been dealt with in the said judgment, despite being raised by the Government, it said, "insofar as the judgment holds that Union of India, in exercise of its executive power, is not entitled to dispose of shares acquired by it pursuant to the Nationalisation Acts, it is submitted that the said judgment restricts the scope and ambit of Article 298."

It said the observations in the judgment put in "jeopardy" various disinvestments of companies and PSUs, but the judgment proceeded on misunderstanding and misconception of Article 113 of the Constitution as it appeared to hold that the executive could not dispose of any property purchased from funds out of the Consolidated Fund of India (pursuant to Parliamentary approval), except with Parliament's sanction.

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