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Balco tangle threatens to involve Essar, Daewoo units in Chhatisgarh

BS Law Correspondent

The legal tangle over the Balco divestment threatened to involve more companies as the Supreme Court on Tuesday impleaded Daewoo Power Ltd and Essar Power Ltd which are also operating in the tribal land of Chattisgarh state.

Another border-line case was Hindalco.

The court issued notices after the Chhatisgarh government submitted that it had issued show cause notice to Balco because it has ceased to be a public sector company after the transfer of shares to Sterlite.

Tribal land can be given only to PSUs under the special provisions of the Constitution (Schedule V) and not to private companies. When the Advocate General said that the principle would apply uniformly to all companies, the judges asked him to clarify its stand on Daewoo and Essar.

When contacted Essar officials said the company is yet to receive a copy of the order apparently issued by the Supreme Court. The company will take appropriate measures after the receipt of the order.

The state government will provide to the court details of other companies which have got tribal land for different uses like mining etc. The court noted that the points raised in the Balco case might have an effect on the allotments of land made to other companies also.

The next hearing has been fixed for July 17.

The bench consisting of Justice B N Kirpal, Justice Ruma Pal and Justice Brijesh Kumar regretted that the employees of Balco had not joined work.

The management reiterated its offer that it would pay two months salary subject to adjustment in case they join duty. Intervention on behalf of the tribals was rejected. Another intervention application jointly moved by national labour unions like INTUC, HMS and AITUC was kept in abeyance.

Balco union said that they were open to negotiations. Their counsel G L Sanghi said the matter was not as simple as the management put it. "It is not a question of taking advance, the moot question is that what is the future of the workers under the new management," he said.

Attorney General Soli Sorabjee and Balco counsel Ashok Desai said that the workers, instead of returning to work after accepting the offer of two months' salary had made a charter of 25 demands. They demanded the scrapping of the divestment process itself, including the transfer of shares.

They also wanted the establishment of a judicial enquiry. Desai said the workers wanted the company to deposit Rs 50 billion and the central government to provide counter-guarantee.

He said that the workers should not suffer and they should first return to work.

ALSO READ: br>The Balco Saga

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