Apex court to review decision on HPCL, BPCL privatisation

Tuesday, 18 November 2003, 20:30 IST
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NEW DELHI: The Supreme Court Monday agreed to take a fresh look at its judgement halting the privatisation of state-run Hindustan Petroleum Corporation Ltd. (HPCL) and Bharat Petroleum Corporation Ltd. (BPCL). The court had on September 16 restrained the government from selling its stake in the two state-run oil refining and marketing majors without Parliament's approval. The judgement had come to be seen as a major setback to the privatisation programme. A two-judge bench comprising justices V.N. Khare and S.B. Sinha observed Monday that the apex court was "primarily concerned whether disinvestment requires parliamentary approval and whether it is legally permitted". The bench made this observation while hearing a petition challenging the privatisation of rail coach-manufacturing company Jessop and Company. Earlier, Attorney General Soli J. Sorabjee said though many decisions for privatising state-run companies had been taken prior to the September 16 ruling, these had now been challenged in many high courts based on the HPCL, BPCL verdict. "The decision of the apex court was not to be applied to all the cases where disinvestment decision was taken prior to the judgment," he said. Sorabjee said certain observations in the HPCL judgement required to be examined afresh as they had far reaching consequences. Meanwhile, the Supreme Court stayed the proceedings on petitions filed before various high courts challenging the privatisation of the Shipping Corporation of India (SCI), Hindustan Copper (HCL), and Burns Standard Corporation (BSCL). The government had sought transfer of these petitions to the apex court. In its counter affidavit to the special leave petition in the Jessop's case, the government said the judgment regarding HPCL and BPCL needed review 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. It said the observations made in case of HPCL and BPCL could put in "jeopardy" privatisation of various state-run firms. The Centre for Public Interest Litigation and the Oil Sector Officers' Association had filed petitions in the Supreme Court challenging the government's decision to privatise HPCL and BPCL without Parliament's approval. Counsel for the petitioner had argued the government could not resort to disinvestment of the two profit-making companies without Parliament's approval because it had taken them over by acts of Parliament. The government had planned to sell 35.2 percent equity in BPCL through public offer in domestic and international markets and 34.01 percent equity shares of HPCL to a strategic buyer. It postponed the sell-off process for three months in September last year in the face of intense political squabbling. HPCL and BPCL control 40 percent of India's two million barrel-a-day oil market.
Source: IANS
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