SC rejects Centre's plea against CBI probe into disinvestment of Hindustan Zinc

In a setback to the Union government, the Supreme Court on Monday rejected a plea by the Centre for recall of its earlier direction, which asked the CBI to register a regular case in relation to 26% divestment in Hindustan Zinc (HZL) in 2002.

The Finance Ministry had sought modification of the SC's directions on the grounds that the investigative agency had submitted incomplete information that was contrary to the record and the satisfaction was reached and recorded by the apex court based on the file notings and one "self-contained note" filed by the CBI in a sealed cover.

A bench presided over by Justice D Y Chandrachud rejected the stand of Department of Investment and Public Asset Management (erstwhile Department of Disinvestment) that the SC "unfortunately" did not have correct information at its disposal while giving the directions for filing a regular case.

The court clarified that that the CBI had submitted the whole files with notings and not just affidavits to it.

The court also told Solicitor General Tushar Mehta that its judgement of November 18, 2021 was based primarily on the CBI’s submissions not what the petitioners, i.e., the National Confederation of Officer's Association had alleged.

The apex court while permitting the government to withdraw its application allowed it to pursue legal remedy, including filing of a review petition.

Mehta claimed that errors had crept into "foundational facts" that the CBI had submitted before the top court.

The Supreme Court had then allowed the Centre to disinvest its residual 29.5% stake in HZL in the open market as HZL ceased to remain a government company since sale of its majority stake in 2002. Anil Agarwal-led Vedanta Resources firm, Sterlite Opportunities and Ventures, held 64.92% stakes in the company.

However, it had taken objection to the closure of preliminary inquiry (PE) by the CBI in the HZL disinvestment during 1997-2003 and directed registration of a regular case by CBI and to fully investigate the Atal Bihari Vajpayee-led NDA government’s 2002 decision to disinvest its majority shareholding in HZL. The divestment was done during the Arun Shourie's tenure.

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