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Rabindra Nath Sinha

KOLKATA, Dec. 12

A PRECEDENCE of sorts is worth citing in the context of the Opposition's stand in Parliament that divestment of the shares of Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) cannot be carried out only through an executive order and that before the Centre moves in the matter, it must secure legislative clearance.

The precedence stems from the case of The Indian Iron & Steel Co Ltd, whose management was taken over by the Centre on July 14, 1972. Prior to the takeover, IISCO was controlled by the late Sir Biren Mukherjee. The process of acquisition of IISCO's shares was completed by New Delhi four years later in July 1976. (Subsequently, the Centre transferred the shares to Steel Authority of India Ltd and IISCO became SAIL's wholly-owned subsidiary with effect from March 30, 1979).

After Mukand was selected in end-1993in a long drawn-out process to be IISCO's majority partner and spearhead the steel company's overdue modernisation, Mr Santosh Mohan Dev, then Union Minister of State in-charge of steel in the Congress (I)-led Ministry headed by Mr P.V. Narasimha Rao, came forward with a Bill in Lok Sabha in early 1994 for divestment of IISCO. (It is another matter that in the face of stiff opposition to the privatisation move, particularly from the Left MPs, Mr Dev could not press ahead with the Bill and that taking note of these developments, Mukand withdrew from the race.)

The conclusion to be drawn is that the powers that be found it necessary to seek legislative support for the proposal to privatise IISCO, whose nationalisation had been approved by Parliament. Stretching a point, it may be suggested that the Centre's top law officers at that time must have taken the view that parliamentary okay had to be sought. In any case before a Bill is introduced in the legislature, it is vetted by the Law Ministry/Department.

According to the published reports on the parliamentary proceedings on the HPCL-BPCL issue, the stand taken by two former Congress (I) finance ministers, Dr Manmohan Singh and Mr Pranab Mukherjee, in the Rajya Sabha on Monday was that the divestment proposals had no validity in the absence of legislative measures to repeal the nationalisation of the two oil outfits.

Meanwhile, the two Acts that had formalised the nationalisation of the two oil companies were The Esso (Acquisition of Undertakings in India) Act 1974 and The Burmah Shell (Acquisition of Undertakings in India) Act 1976. Subsequently, Esso came to be known as Hindustan Petroleum Corporation Ltd while the new name for Burmah Shell was Bharat Petroleum Corporation Ltd.

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