The government has asked Supreme Court not to stay the privatisation of public sector oil majors -- Hindustan Petroleun Corporation and Bharat Petroleum Corporation -- as it would lead to irreparable loss and injury to economic sentiments in the country besides impacting the stock markets.
Replying to Supreme Court notices on a petition challenging privatisation of HPCL and BPCL without Parliamentary approval, the divestment ministry has sought to make out a case for the court not to intervene in the matter citing its earlier ruling in the Bharat Alluminium case.
The case is likely to come up for hearing on September 1.
Pointing to the Supreme Court ruling in the Balco case that "the decision to divest and the implementation thereof is purely an administrative decision relating to the economic policy of the state and that it is open to the elected government to follow its own policy," the ministry said the government's divestment policy "cannot be made the subject matter of judicial review."
It said prior approval of Parliament for divesting government's holding in HPCL and BPCL was not necessary as "in the Acquisition Acts (under which ESSO was nationalised as HPCL and Burmah Shell as BPCL in 1970s) as also in the Companies Act, there are no restrictions on the divestment."
Shares in BPCL/HPCL were sold during 1991-92 to 1993-94 through executive decisions.
"Another PSU -- Maruti Udyog Ltd -- where acquisition was through an Act of Parliament, was divested through executive decisions."
Pleading for dismissal of the petition, the government said, "The grant of stay would lead to irreparable loss and injury to the economic sentiments in the country, since divestment is a sensitive economic process that will seriously be affected by any litigation."
Government's reply stated that the decision to divest has had a significant impact on the stocks and the capital markets and "any delay could lead to sudden fall in prices of shares of these companies and significant loss could be caused to the shareholders including the government."
The government is selling 35.2 per cent equity in BPCL through public offer in domestic and international markets and 34.01 per cent equity shares of HPCL to a strategic buyer.
The divestment ministry said Parliament's approval was necessary only in case the nationalised banks were to be privatised and there was no such stipulation in the case of oil PSUs.
The government made it clear to the Supreme Court that a policy can be prerogative of Parliament but "no part of the decision making process can be reviewed judicially as there is no statutory requirement to seek a prior approval of any such policy."