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HC spikes Centre's Jessop plea

BS Law Correspondent

The Calcutta High Court on Friday turned down the plea of the Central government to vacate the ad-interim order passed in the Jessop & Company divestment case.

Earlier, on March 7, 2002, following a writ petition filed by the JCL Staff Association, the court directed the Board for Industrial & Financial Reconstruction not to pass any order relating to company's investment without the permission of the court.

Rejecting the prayer of the Central government, Justice Kalyan Jyoti Sengupta fixed the case for hearing on June 24 and extended the interim order till July 2, 2002.

Additional solicitor-general of India, Harish Salve, appearing with Pradeep Ghosh and Jayanta Bannerjee, counsel for department of divestment of the Central government, argued that the contention of the writ petition was a wild attempt to derail the divestment process of the government. The writ petition alleged that the company was within the strategic sector as defined in the central government policy and it could not be divested.

Disputing the contention of the writ petition, it was stated: "Railway transport is within the strategic sector of the central government - railway transport means management or running of the railway and not manufacture of rolling stock relating to railways which JCL manufacture. So the company does not fall under the strategic sector".

Coach and wagon manufacturing does not tantamount to running of rails, so it can not construed as falling under the strategic area, the counsel argued. The central government counsel further stated that the government procedure of divestment was absolutely transparent and in case of JCL the procedure have been meticulously followed by the department of divestment.

It was also argued that the central government had complied with all the directions of BIFR by filing affidavits and the action of the government were not only legal but also good in law.

The central government counsel said that any stay of government's decision to privatise JCL with the BIFR permission would have serious repercussions on the continuity of JCL.

The government will not be able to divert scarce resources and delay would lead to winding up of Jessop. If this happened, jobs of about 1500 employees would be in jeopardy. The petition should therefore be dismissed, the counsel prayed.

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