The Telegraph
Since 1st March, 1999
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Supreme Court notice to govt on petro selloff

New Delhi, April 14: The Supreme Court today issued a notice to the Centre on a public interest litigation (PIL) challenging disinvestment in Bharat Petroleum and Hindustan Petroleum Corporation.

A division bench of Justice S. Rajendrababu and G. P. Mathur said the Union government must respond to the contention that the oil majors can be privatised only by enacting a law in Parliament, not by virtue of a Cabinet fiat.

The government has pressed forward the plan to sell 34.01 per cent and 38.2 per cent in HPCL and BPCL respectively, emboldened by the advice of the attorney general that Parliament’s approval was not required for the deal.

The petition argues that since HPCL and BPCL were nationalised in the 1970’s through an Act of Parliament, their privatisation will have to follow the same course.

To back up its case, the suit cites a report presented by the standing committee of the petroleum ministry, which says no disinvestment in oil firms can be pushed through without a Bill passed by the House to the effect.

Attorney general Soli Sorabjee had told the government on January 20 that it need not seek the parliamentary sanction to go ahead with the planned stake sale.

Sorabjee said he was not required to give his opinion on the legal merits of the decision, or the course of action that the government may choose to sell its holdings. That, he argued, would depend on shareholders’ agreement between the government and the strategic partner. The terms and conditions that may be imposed to ensure government control and voice in the management of both companies will also play a role.

The Cabinet Committee on Disinvestment had approved disinvestment in the two firms with a 40 per cent of the petro-products market on January 26 this year.

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