Bombay HC asks Centre to reply on tobacco PIL

Court to decide on the admission of the plea on April 27

Bombay High Court (HC) on Monday asked government to reply to a petition against its investments in tobacco companies.

Seven people, including Tata Trusts' managing trustee R Venkataramanan, last week filed a public interest litigation (PIL) in Bombay HC against government and six state-owned insurers including Life Insurance Corporation (LIC) seeking divestment of their holding in tobacco companies and also seeking to prevent them from making such investments in the future.

The government, along with the six state-owned insurers, has investments worth more than Rs 1 lakh crore in cigarette maker ITC.

The court will decide on admission of plea on April 27. 

Waseem Pangarkar, representing the petitioners, pleaded for an early hearing for admission of PIL.

Pangarkar said notices have already been served to respondents and the issue needs to be looked at urgently as the number of deaths caused by tobacco is rising.

"While the government is consciously trying to address the menace of tobacco usage on one hand, institutions and companies owned by it are invested in tobacco companies and are increasing their stakes in the same," he said.

The insurance companies, along with Specified Undertaking of Unit Trust of India (Suuti), hold 32 per cent stake in ITC, which gets most of its revenues from the sales of cigarettes.

LIC, The New India Assurance, General Insurance Company of India, The Oriental Insurance Company, and National Insurance Company are state-owned companies named as respondents in the PIL. Insurance Regulatory and Development Authority (Irda) has also been named as a respondent. 

The petitioners have said investment in tobacco companies goes against the government's drive of tobacco control.

"The government of India has long had an outlook leaning towards tobacco control. To this effect, India is a signatory to WHO's most comprehensive anti-tobacco convention- the Framework Convention on Tobacco Control, 2003 (FCTC). As per Article 5.3 of the convention, the parties must create, implement and protect policies for tobacco control. Further, and more importantly in this context, Article 7.2 of the convention restrains parties from investing in the tobacco industry in order not to promote the cultivation and production of tobacco," the petitioners have said.

"While on one hand, the government is committed to tackling the problem of tobacco and the ill-effects caused by it, the insurance companies, in complete disregard to the government's policy, continue to invest in ITC, de-horse the spirit and intent of the FCTC," they add.

Investment in tobacco stocks is also a contentious issue globally. Typically, rules don't bar them from investing, but most pension funds don't invest in tobacco companies due to their ill-effects on health.