The Supreme Court today began hearing the writ petitions challenging the disinvestment of Balco with the trade unions alleging that there was no need to sell the profit-making unit to a blacklisted private company for a song. The Chhattisgarh government emphasised that the tribal land was given to the public sector unit in the Sixties to develop the region and give employment to the tribal people. That social purpose was lost when it was handed over to a private company.
A three-judge bench headed by Justice BN Kirpal heard seven unions, the state government and a person arguing a public interest petition against the disinvestment. Justice Kirpal observed that public interest petitions were now being misused by many people. It is even used for blackmailing entrepreneurs. Such petitions not only discouraged new projects but also hiked up their cost.
Senior counsel Dipankar Gupta, arguing for the main trade union, submitted that the workers had not been consulted about the disinvestment. There was no transparency in the deal as they were not told how and to whom the PSU was being sold. There was no compulsion to pick this company out of 72 recommended for privatisation when there were several sick ones. The workers have lost some of their fundamental rights because Balco is no longer a government company, counsel said.
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He added that the recommendations of the disinvestment commission have not been followed in the sale.
Morever, the 51 per cent of the shares ( also the rest, according to the agreement) have been given to a company which was undergoing investigation by Sebi and later blacklisted for entering the capital market.
Senior counsel Ranjit Kumar, representing six unions, submitted that the disinvestment commission guidelines allowed sale of only non-viable units. Secondly, the employees cannot be transferred without a legislation or without their consent. Further he pointed out that selling the company for Rs 551 crore when the company had a cash surplus of Rs 430 crore was an "eyewash".
Advocate general of the state, Ravindra Srivastava, emphasised the violation of the regulations regarding transfer of tribal lands to private parties for non-forest activities. The fifth schedule to the Constitution protected tribal interests.
Further, there was a land revenue code in the state (originally Madhya Pradesh ) which has been violated. Though the tribal land belonging to the governemnt was acquired in the sixties on permanent lease for industrial development, the social objective has been lost now by the handing over of the land and units to private hands. The transfer of assets also violated the principles laid down in the 1997 Supreme Court judgment in an appeal involving tribal land in Andhra Pradesh. The arguments of the Advocate General will continue on Thursday also. The Attorney General and Balco have to reply after that.