Chief Justice of India VN Khare on Monday clarified that the government could go ahead with the divestment of public sector undertakings that were not created by Acts of Parliament.

The Supreme Court was looking into the issue of whether PSUs set up through relevant legislation could be divested or not.

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The court found no impediment in the divestment of state-owned companies registered under the Companies Act.

The Bench, headed by Chief Justice Khare, was commenting on a number of petitions, which besides the original appeal relating to Jessop & Co, also included those of Hindustan Zinc, Hindustan Copper, Shipping Corporation of India, Burn Standard and Company Ltd, Engineers India Ltd and National Fertiliser Corporation of India.

When the case was called, Attorney-General Soli Sorbajee submitted that there were petitions pending in six high courts and they should also be transferred to the Supreme Court.

The court appeared to agree with this request and issued notices to the parties in those cases. Some of them are the officers' associations of the respective companies.

When the counsel for the National Fertiliser Corporation, Salman Kursheed, submitted that his client also wanted to intervene in the case, the Chief Justice asked him whether the company was created by an Act of Parliament.

He replied in the negative, but said he still wanted to argue certain issues that were common to all PSUs. The Chief Justice then clarified that the court was dealing with those units that were created through statutes.

The number of petitions had gone up as the Jessop divestment case, which came on appeal from the Calcutta high court, was turned into a petition for reopening the divestment judgment.

Last year, the Supreme Court in a ruling on the divestment of Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd had said a company created by an Act of Parliament could be disinvested only with the consent of the House.

As this had stalled the divestment policy, the government approached the court through the Jessop case to reopen the issue. The Chief Justice has agreed to re-examine the issue.