Tobacco PIL: ITC, Sebi made party

NEW RESPONDENTS GIVEN SIX WEEKS

The Bombay High Court on Thursday impleaded cigarette major ITC and the market regulator Securities and Exchange Board of India in the public interest litigation (PIL) against investment in tobacco companies by the government and state-owned insurance companies. The court also granted requests by farmers’ associations to be part of the PIL. The court directed the new respondents to file their respective affidavits within six weeks.

The Bombay High Court (HC) on Thursday impleaded cigarette major ITC and market regulator Securities and Exchange Board of India (Sebi) in a public interest suit against investment in tobacco companies by the government and state-owned insurance companies.

The court also granted requests by farmers’ associations to be part of the suit. The court directed the new respondents to file their respective affidavits in reply to the petition within six weeks. The next hearing in the matter is likely within eight weeks.

The additional solicitor-general here will represent the Union government in the matter.

The suit has been filed by Sumitra Hooda Mahajan, widow of Satish Pednekar, former minister of Maharashtra who died of oral cancer, and six other citizens, including Tata Memorial Hospital's Pankaj Chaturvedi and Tata Trusts managing trustee R Venkataramanan, in his personal capacity.

The petition seeks divestment of state-owned insurance companies’ holdings in tobacco companies and prevention of such investments in the future.

Life Insurance Corporation (LIC), New India Assurance, General Insurance Company, Oriental Insurance Company and National Insurance Company are named as respondents. The Insurance Regulatory and Development Authority of India (Irdai) has also been named as a respondent.

The insurance companies, along with the Specified Undertaking of Unit Trust of India (Suuti), hold a 32 per cent stake in lTC, which derives most of its revenue from the sale of cigarettes. The stake is valued at about ~1 lakh crore.

Lawyers representing the petitioners argued that while the government was consciously trying to address the menace of tobacco use, institutions and companies owned by it were investing in tobacco companies.

Counsels representing the respondents argued against the suit, stating that the investments made in companies were in the secondary market and not in any direct investment in the operations of the firms.

Counsels representing the farmers’ associations said in various states, farmers were dependent on tobacco for their livelihood.

The Bombay High Court was of the view that all parties affected by the petition would have to be heard.