The Supreme Court today indicated it would reconsider its ruling two months ago in the HPCL/BPCL case that PSUs cannot be privatised without parliamentary approval.While dealing with a petition challenging disinvestment in Kolkata-based Jessop and Co, a two-judge bench headed by Chief Justice V N Khare observed that ‘‘we are primarily concerned with the question whether disinvestment requires parliamentary approval.’’This clearly indicates that Khare’s bench does not propose to decide the case on the basis of the HPCL/BPCL verdict even though Jessop too had been, like the two oil majors, taken over by the Centre through a nationalisation Act.Since the BPCL/HPCL judgment was delivered by a two-judge bench headed by Justice S Rajendra Babu, it may soon be referred to a larger bench to take a fresh look at the whole controversy.As a prelude to such reconsideration, the court today stayed the rash of litigation in high courts challenging disinvestment in other PSUs in the wake of the HPCL/BPCL judgment laying down parliamentary approval as a pre-condition.On a transfer petition filed by the Centre, the apex court issued notices on five writ petitions pending in various high courts against the privatisation of three PSUs, Shipping Corporation of India, Hindustan Copper and Burns Standard Corporation.The Centre has asked for all of them to be clubbed with the Jessop case in the Supreme Court so that there can be one authoritative pronouncement on the subject.The Centre has also filed a counter affidavit in the Jessop case in which it pointed out that the petitioners were relying on the HPCL/BPCL verdict to contend that the sale of the engineering company to Ruias was null and void.In the BPCL/HPCL verdict, Justice Rajendra Babu mandated parliamentary approval for the reason that a PSU is set up with the money drawn with Parliament’s sanction from the Consolidated Fund of India.The Centre said this observation in the judgement put in “jeopardy” disinvestment in all PSUs because every one of them is formed with government funds. The judgement, it said, proceeded on a ‘‘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 except with parliament’s sanction.‘‘The judgement has far-reaching implications if the above interpretation is to be applied. For example, the executive may be held not to be entitled to disinvest even in a company, which has been established from the very beginning as a company under companies act,’’ the counter affidavit said.It said this could further be interpreted to even inhibit the executive from disposing of any asset after its normal use and life, if the asset was purchased out of funds sanctioned by parliament to be used from the consolidated fund of India.The Centre also contended that Babu’s bench 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.Submitting that the Centre’s reliance upto its powers under Article 298 of the Constitution had not been addressed, it said, ‘‘In so far as the judgement holds that Union of India, in exercise of its executive power, is not entitled to dispose of shares acquired by it pursuant to nationalisation Acts, it is submitted that the said judgement restricts the scope and ambit of Article 298.’’
