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New Delhi, Nov. 17: The Supreme Court today hinted at a “fresh look” on divestment in the first-ever sign that it could review its verdict forbidding sale of Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) without Parliament’s approval.
A three-judge bench of Chief Justice V. . Khare, Justices S. B. Sinha and A. R. Lakshmanan heard Attorney-General Soli Sorabjee’s arguments and stayed all proceedings related to divestment in high courts across the country so that conflicting verdicts were avoided before its own comprehensive ruling is passed.
Analysts saw this as a major judicial decision, a breather for a government finding ways to get around the judgment that made House sanction mandatory for sale of its stake in the two petroleum PSUs.
Today’s observations came on a challenge to sale of shares in Jessop and Co of Calcutta, a PSU manufacturing railway coaches to Ruia Cotex. Jessop officers’ association has contested the divestment in the company.
The judges agreed with the suggestion of the attorney-general that the case “has presented an opportunity to have a re-look at the entire process of divestment, especially the judgment on HPCL and BPCL.
Sorabjee contended that apex court’s verdict making Parliamentary legislation necessary to sell the shares of the two oil companies needed “clarification”, given that it has “raised serious doubts about the entire process of divestment among potential investors”.
The apex court asked the counsel for Jessop to reply after Sorabjee filed a written submission along these lines. The matter will be heard again after two weeks.
In arguing its case on Jessop and Company, the government has succeeded, albeit indirectly, in its attempt to seek a review of the judgment barring divestment in the oil sector without a Parliamentary legislation
Although the government has not filed a review petition, it has, through the attorney-general, told the apex court that its verdict in the BPCL-HPCL case must be “interpreted” since the process of divestment was being challenged in several other quarters.
The whiff of a review reached bourses, where the HPCL share rose Rs 7.80 to Rs 344.75 from Rs 336.95 on Friday; BPCL jumped Rs 2.35 to Rs 355.85.
Earlier, Sorabjee had advised to the government that Parliament’s prior approval or enactment was not necessary to sell a PSU. However, opponents argued that the firms were created out of a law passed by Parliament and, hence, could be sold off only if that was repealed. An executive order, they insisted, is not enough to divest. The apex court agreed a new statute is required.