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Balaji C. Mouli

New Delhi , Oct 1

THE Ministry of Disinvestment (MoD) has mooted six options to counter the Supreme Court judgment that has sought Parliamentary approval for privatisation of Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL). The options will be taken up for discussion at a Cabinet meeting slated for October 3.

Stating that, "Failure to act swiftly and decisively to counter the fallout of the judgment would be viewed adversely," the Cabinet note states the following six options:

"To enact appropriate legislation specifically to empower the Government to disinvest HPCL and BPCL. Although this would enable the disinvestment of HPCL/BPCL, the judgment would still come in the way of divestment of similar other taken over companies and leave ample scope for litigation and hence slow down the divestment process." To pursue this option, the Government would require to issue an ordinance.

The second option states, "To enact appropriate legislation specifically to empower the Government to divest all such public sector undertakings (PSUs) which have been set up through nationalisation/acquisition of assets, wholly or partially, through Act of Parliament. This will cover all PSUs hit directly by the Supreme Court order." To go along this option, an ordinance can be issued.

The third option states that, "To enact legislation specifically to empower the Government to disinvest any PSU as long as the procedure is as per the rules to be framed under this legislation." To adopt this option would mean that an ordinance be issued. The legislation can be drawn up in the form of statutory rules, the Disinvestment Ministry has said. On the flip side, draft and finalisation of such general legislation is an extremely difficult task and would take years of debate and discussion in Parliament and outside, the MoD has argued. "It would also result in straight jacketing of a (disinvestment) programme which by nature is flexible."

Under the fourth option, the "Government can await any fresh case by a third party that may come up as a result of this judgment and then reopen the issue before a larger Bench and tries for a reversal of the ruling." On the down side of this option, the MoD has said, "This path is fraught with uncertainties and not proactive".

As per the fifth option, it said, "To reopen the issue by seeking a Presidential reference under Article 143 of the Constitution. The opinion of the courts on the questions raised but not answered - is there any need for a proactive legislation for the sale of shares in PSUs or for the privatisation of a corporation, particularly in the light of the observation of the court dealing with the `constitutional angle' of the matter. The presidential reference would be undoubtedly placed before a larger Bench."

"It would always be open to canvass that the decisions of the two learned judges is not correct," the MoD has observed.

"If the Bench hearing the presidential reference decides the matter in favour of the Government, then appropriate steps can be taken as to how the judgment in the HPCL can be set aside. This process can take three-to-four months," the MoD said. Under the sixth option, the Government can seek a review. "The review petition is heard by the same Bench and that too in Chambers. Moreover, the review is typically on the ground that there is `error apparent on the face of the record' or on the ground that the order would result in `miscarriage of justice'. There is uncertainty whether the courts would entertain either on these grounds. Such a review petition before the same Bench generally does not result in reversal of the order," the MoD has argued. In this case, the review is to be filed in 30 days. The Petroleum Ministry is likely to pitch for this option at the Cabinet meeting.

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