The Hindu : Opposition, unions hail SC ruling on oil majors

Online edition of India's National Newspaper
Wednesday, Sep 17, 2003

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Opposition, unions hail SC ruling on oil majors

By Our New Delhi Bureau

NEW DELHI. SEPT 16. In one voice, Opposition parties and trade unions today welcomed the Supreme Court's decision to direct the Government to seek Parliamentary approval before disinvesting in oil majors, Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL), and viewed it as a vindication of their stand.

The Bharatiya Janata Party was naturally upset, and even surprised, since the Government view that Parliamentary approval was not needed was based on legal opinion obtained from the Law Ministry and the Attorney-General.

Indirectly, the ruling party admitted that it may not be possible to push this disinvestment through Parliament, and in any case, the whole process had been certainly delayed. Jagdish Shettigar, former convenor of the BJP economic cell, hoped this would not affect the economic liberalisation process. He also insisted that disinvestment of PSUs not created through acts of Parliament would not be affected by today's judgement, and "this process will continue.''

The Opposition parties, including the Congress, the Left and other smaller parties, made it crystal clear that they would oppose disinvestment of these oil companies if the Government decides to seek the necessary Parliamentary approval. Some Congress leaders pointed out that even some allies of the BJP in the National Democratic Alliance Government were opposed to this policy.

The Congress spokesperson, S. Jaipal Reddy, said its opposition was both on legalistic merits and substantive grounds. The party held the view that since an Act of Parliament created both these oil companies, the same route was required to privatise them and as a policy it was opposed to disinvestment in PSUs in strategic sectors such as oil. He alleged that the Law Ministry and the Attorney General had given "erroneous and perverse advice based on false logic and not with good intent''. That was the basis on which the Vajpayee Government had begun the process of disinvestment of these two oil companies.

The CPI(M) Politburo member, Prakash Karat, said today's judgement vindicated the stand taken by the party in Parliament that the move required amendment to the Act of Parliament while the CPI(M-L) demanded the resignation of the Disinvestment Minister, Arun Shourie, for "misleading the country and persisting on this patently illegal move''.

The former Prime Minister, Chandra Shekhar, too hoped that the Vajpayee government would now retrace its steps, which "were taken under the pressure from the World Bank and the International Monetary Fund''.

The Samajwadi Party (SP) noted that the verdict "had virtually endorsed '' the report of the Standing Committee on Petroleum headed by its president, Mulayam Singh Yadav. The committee in its report to the Lok Sabha in December 2002 had categorically stated that the disinvestment of HPCL and BPCL should have formal sanction of Parliament.

The trade unions too welcomed the judgement and described it as a vindication of their stand. In separate statements, the All India Trade Union Congress and the Centre of Indian Trade Unions said since the HPCL/BPCL were created through an Act of Parliament by nationalising the then foreign oil companies because of the geo-political and strategic importance of the oil sector, the Centre should immediate restore status quo ante in regard to all those PSU that were created through an Act of Parliament and then disinvested without its approval.

Welcoming the decision, the Samajwadi Party claimed that the verdict "had virtually endorsed'' the report of the Standing Committee on Petroleum headed by the party president, Mulayam Singh Yadav.

Surendra Mohan, Janata Dal (S) leader, said it was a landmark judgment, while the Chairman of the Lok Janshakti Party Parliamentary Board, Arif Mohammed Khan, said that it was in the fitness of things that Parliament must have the final word in the sales of PSUs.

Since money for the PSUs was sanctioned by Parliament, the correct Constitutional position would be that Parliament should also apply its mind where the money that accrued from the sale should be invested. "The PSUs are not merely commercial enterprises, they also have a social responsibility towards the weaker section of our people," Mr. Khan said.

The Court's decision was also welcomed by the Lok Dal president, Ajit Singh. "The apex court has taken the correct Constitutional position. In cases where large amounts of public money are involved, Parliament must have the final say."

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