SC questions Centre on courts' role in disinvestment

SC questions Centre on courts' role in disinvestment
PRESS TRUST OF INDIA

NEW DELHI, AUG 7: Amidst the disinvestment process of major Public Sector Undertakings, the Supreme Court on Monday asked the Centre as to what was the scope of intervention of courts in such processes and sought its response.

This direction came from a bench comprising Justice B N Kirpal and Justice D P Mohapatra during the hearing of an appeal challenging a Delhi High Court order upholding the transfer of Bailadila mines from National Mineral Development Corporation to a joint venture allegedly at a low price.

Justice Kirpal said "the case involved a very important question which has bearing on the present disinvestment policy of the Government".

"The limited role of the courts as far as privatisation of loss-making PSUs were concerned was understandable. But if the Government was handing over a healthy and profit making PSU on a platter to a private party, should the courts not intervene," the Judge asked Solicitor General Harish Salve.

The bench was hearing the appeal filed by B L Wadhera who alleged that the transfer of a mine at Bailadila in Madhya Pradesh to Nippon Denro Ispat for a meagre Rs 17 crore was against rules and the interest of the Corporation.

The Court on Monday impleaded Bailadila Mineral Development Corpoation, a joint venture of Nippon Denro, and asked it to file a reply to the appeal.

The HC, while dismissing Wadhera's PIL, had held "it has to be borne in mind that in the matter of policy particularly dealing with economic matters, the Government is within its right to try various experiments so long as such experiments are not arbitrary and malafide".

The petitioner said in 1991, NMDC had proposed a joint venture with 12.5 per cent equity participation each by Nippon Denro and Essar, 26 per cent by NMDC and 49 per cent public participation for the development of the mine.

The petitioner alleged that the proposal was scuttled by the Government which formulated transfer guidelines to help the Mittal Group to bag the contract for the development of the 11B iron ore deposit.

The mineral extract of the mine has high ferrous content of over 65 per cent and best suited for gas-based sponge iron plants, he said and added at present Mittal Group held 89 per cent of share while rest being with NMDC.

Wadhera said the global tender for the transfer would have earned the Government substantial revenue.

He stated in the petition that the Government in its affidavit before the High Court had said "it is not seriously disputed that the global tender could have brought in larger amount".