Supreme Court reserves decision on HPCL, BPCL privatisation

Friday, 05 September 2003, 19:30 IST
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NEW DELIH: The Supreme Court on Friday reserved its verdict on a petition challenging the central government's move to privatise public sector Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL). A two-judge bench comprising justices S. Rajendra Babu and G.P. Mathur reserved order after the conclusion of arguments by senior counsel F.S. Nariman and Shanti Bhushan for the petitioners and Harish Salve for the government. Counsel for the petitioners argued that the government could not resort to disinvestments of the two profit making state-run companies without obtaining Parliament approval. They pointed out that oil giants HPCL and BPCL were originally taken over by acts of Parliament and therefore they could not be disinvested without parliamentary sanction. Salve, on the other hand, argued that parliamentary approval was not necessary because the character of HPCL and BPCL had changed after their nationalisation. He said the government proposed to appoint a regulator to monitor the process of privatisation and that the process would not hamper public interest. The Oil Sector Officers' Association has challenged the decision to divest state's equity in HPCL in the Supreme Court, saying a company nationalised by Parliament can only be privatised with the approval of Parliament. Attorney General Soli Sorabjee had earlier said that no parliamentary approval was needed for the sale of HPCL. Petroleum Minister Ram Naik had sought deferment of HPCL divestment till the court heard the workers union's petition. On July 25, the court had asked the government to respond to a notice challenging the privatisation of HPCL, which has a countrywide network of petrol stations. The government is selling 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. The government had postponed the sell-off process of HPCL and BPCL 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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