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SC
upholds Balco selloff
Our
Economic Bureau
New Delhi, Dec
10: The Centre has got a shot in the arm on its divestment
policy as Supreme Court has upheld the government’s decision
to sell off 51 per cent equity of Bharat Aluminium Company
(Balco) to Sterlite Industries.
In its ruling on
Monday the three-judge bench of the apex court, which included
Justice BN Kirpal, Justice SV Patil and Justice PV Reddy said
that Balco privatisation was “not invalid.”
The court made two
important observations. First, “it is not for the courts to
consider relative merits of different economic policies and
consider whether a wiser or better one can be evolved. For
testing the correctness of a policy, the appropriate forum
is Parliament and not courts.” The policy was tested and the
motion was defeated in the Lok Sabha.”
Second, the apex
court refused to enter into the arcane world of valuing a
company. “Valuation is a question of fact and the court will
not interfere in matters of valuation unless the methodology
adopted is arbitrary,” it said. The petitioners Balco Employees
Union, among others, had raised questions regarding the procedure
and quantum of valuation of Balco.
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Shourie happy
over ruling
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New Delhi, Dec 10: The Supreme Court judgement
was sheer music for disinvestment minister Arun Shourie’s
ears. Talking to The Financial Express on phone
from Japan, where he is with Prime Minister Atal Bihari
Vajpayee, he said, “I am sure that the judgement will
help facilitate privatisation.”
The apex court ruling has “completely vindicated our
position. It would be an eye-opener to those who indulge
in irresponsible allegation-mongering, he said.
The court’s remark that no ex-parte relief can be
given by way of injunction or stay will have an immediate
effect, the minister said. Backed by the apex court
judgement, the central government will now move courts
that have granted stay on privatisation of ITDC properties
at Madurai and Mamallapuram, he added.
“When I told the Prime Minister about the judgement,
he was very happy and said, ‘Yeh to bahut hi achha hai’
(This is very good indeed),” Mr Shourie said.
— Ravi Kapoor
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Giving a clean chit
to the Centre, the court said, “The offer of the highest bidder
has been accepted. This was more than the reserve price which
was arrived at by a method which is well recognised and, therefore,
we have not examined the details in the matter of arriving
at the valuation figure.”
Criticising the
Chattisgarh government, the court said, “It is a matter of
regret that on behalf of State of Chattisgarh such allegations
against the Union of India have been made without any basis.
We strongly deprecate such unfounded averments which have
been made by an officer of the said State.”
The court also dismissed
the Chattisgarh government’s contention that Balco was situated
on tribal land and, therefore, could not be transferred to
a private company. “The land was validly given to Balco a
number of years ago and today it is not open to the state
of Chattisgarh to take a somersault and challenge the correctness
of its own action.”
The judgement also
made a significant remark on public interest litigation (PIL).
It said, “Every matter of public interest or curiosity cannot
be the subject matter of PIL. Courts are not intended to and
nor should they conduct the administration of the country.
Courts will interfere only if there is a clear violation of
Constitutional or statutory provisions.”
Further, the apex
court said, “no ex-parte relief by way of injunction or stay,”
especially with respect to public projects and schemes or
economic policies, “should be granted.”
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