Privatisation will result in threat to security of nation: Challenge to BEML disinvestment in Karnataka High Court

The Karnataka High Court on Wednesday issued notice on a plea challenging the in-principle approval given by the Central government for the strategic disinvestment of 26 percent equity in Bharat Earth Movers Limited (BEML) [BEML Staff Association & Ors v. BEML Limited]..A Division Bench of Chief Justice Ritu Raj Awasthi and Justice Suraj Govindaraj sought responses from the Centre as well as BEML in the petition filed by trade unions of the public sector undertaking (PSU)..Senior Advocate Ravivarma Kumar, appearing on behalf of the petitioner trade unions, contended that BEML is a vital defence establishment and India’s leading defence equipment manufacturer. The company is involved in the Integrated Guided Missile Development Project, for which it supplied ground support vehicles. No reasons have been furnished by the State on the decision to privatise the PSU, he said.On these grounds, among others, he prayed for interim relief and sought a direction to the Central government to produce a copy of its decision to privatize, since it was "shrouded in mystery." He also asked that the expression of interest be stayed, lest third party rights be created in the meantime. However, the Court refused to grant interim relief before giving the respondents an opportunity to file their statement of objections..Initially, when the move was made towards privatisation, the employee unions had approached the Defence Ministry, which had assured them that the identity of BEML as a Defence PSU would be maintained. However, the Department of Investment and Public Asset Management later put the disinvestment process on fast track to privatise the company by inviting expressions of interest..The petition argued that the decision to disinvest is arbitrary, with no reasons having been provided for privatisation. The approval to sell 26% of the equity shares out of the Government of India's shareholding of 54.03% in BEML is an effort to allow back-door entry to corporations in the Defence sector. This, the petition claimed, "will mark the first time in Indian history that the Ministry of Defence will lose control over one of its own companies and the entire production will go out of control of Respondent No.1 thereby resulting in threat to the Security of the Nation.".Privatisation will compromise India’s sovereignty and economic freedom and be a threat to the security of the nation, besides disturbing the nation’s independence and exposing people to more economic exploitation, the petitioners went on to contend..Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.