SC refuses to stay Jessop divestment

NEW DELHI: The Supreme Court on Monday issued notices to the Union government and disinvestment ministry on a petition challenging a decision to divest its stake in EMU coach manufacturing unit, Jessop & Co, in West Bengal, but refused to stay the ongoing process for its privatisation.
The notices were issued by a bench comprising Chief Justice VN Khare and Justice SB Sinha after hearing counsel, Deepankar Gupta for petitioner Jessop & Co staff and government counsel, Maninder Singh.
Saying that norms have been laid by the court in its judgement on disinvestment of Balco, the Chief Justice asked the petitioner which statutory provision had been violated by the government on its decision to disinvest in Jessop & Co. Mr Gupta said railway transport had been categorised by the government as a strategic sector and manufacturing of coaches also fell within that category.
However, the bench said manufacture of coaches could not be included in the category of railway transport, which would only include goods and passengers.
The government’s proposal to revive the sick Jessop & Co through disinvestment was approved by Board for Industrial and Financial Reconstruction (BIFR) and the Calcutta High Court dismissed a challenge to this. Ruia Cotex had bought the government shares and gained management control of the sick company.