On this principle (SCs September 16 judgement) disinvestment of all companies should be subject to clearance of Parliament. It cannot apply only to companies when you sell shares (to bring down government equity) from 51 per cent to 49 per cent because every single share has been paid out of the consolidated fund of India. So how even minority shares have been sold since 1991, Mr Shourie told PTI after studying the judgement in detail.
Referring to the courts observation that because all expenditure from the consolidated fund is approved by Parliament and therefore disinvestment could not take place without its approval, Mr Shourie said that this logic would not only apply to the two oil PSUs but also to companies set up under Acts of Parliament or nationalised in a similar manner. This, he said, was because shares were bought out from the consolidated fund of India and dividend was paid into that fund.
Referring to the courts observation that the judgement did not apply to disinvestment in Maruti Udyog (which was set up under an Act of Parliament) because there was no challenge, Mr Shourie said, it is a new logic from an institution which has been in the forefront of judicial activism of taking into hand matters which were not brought before it.
According to Mr Shourie it was a new logic because even if it was not challenged it was up to the court to take notice of it in case government had done something illegal relating to Maruti.
The minister felt that the judgement could also have implications on the governments decision to privatise Delhi and Mumbai airports because Airports Authority of India was set up by an Act of Parliament to control, manage and own the airports. How can you handover 74 per cent equity in a new company to a private partner for controlling, managing and owning the airports without the sanction of Parliament, Mr Shourie wondered.
Emphasising that the judgement deserved close examination by the government both because of its logic and its far reaching implications, Mr Shourie said all these things have to be carefully studied and put up for discussion before Cabinet committee on disinvestment on October 3. He said that other points raised into the judgement also merited close study by government and by legal experts. Stating that the judgement begins by discussion with what it calls Constitutional angles and views about Parliamentary approval for government expenditure, he said, on this principle disinvestment of all companies should be subject to clearance of Parliament.
Citing the example of governments handling of sick mills of the National Textile Corporation, Mr Shourie said that the mills set up or nationalised under Acts of Parliament were being restructured or closed. Probably 50 mills of this corporation have been closed. By the logic of this judgement all these decisions have been put into question, he said. Besides, Mr Shourie said, the same logic would apply to a large number of enterprises which are under state government on account of consolidated fund of state government or their creation under acts of state legislature. He wondered as to how a state government could divest its stake in an enterprise like road transport corporation which had been paid out of consolidated fund of state government without the approval of legislature.