New Delhi: The Supreme Court on Tuesday restrained the government from going ahead with any further disinvestments of its stake in Hindustan Zinc Ltd, the management of which is under the control of a Vedanta subsidiary.
The apex court also questioned the government for selling of 29 per cent of valuable shares in the company, which deals with the strategic minerals.
"There will be status quo as of today pertaining to disinvestment of Hindustan Zinc Ltd to be maintained by parties," a bench comprising Chief Justice T S Thakur, Justices A K Sikri and R Banumathi said.
The bench clarified that it was not stopping Sterlite Vedanta, which has taken over the company, from carrying out investment and only stopping the government from selling its residuary shares in the company.
The bench also said that it will not allow any further disinvestment till the matter is heard and admitted the petition. Senior advocate C A Sundaram, appearing for Vedanta, submitted that the private company had taken over the majority stakes 14-years back when HZL was a loss-making company and now it has emerged as a profit-making unit.
The court, however, asked Attorney General Mukul Rohatagi, "What is the requirement to hand over the valuable assets to Vedanta? Don't do this and don't go for the disinvestment. We will hear the matter. We will not allow them to sell."
The bench also wanted to know why the government wanted to part with the residuary stakes in HZL. Advocate Prashant Bhushan, appearing for National Confederation of Officers' Associations of Central Public Sector Undertakings which has filed the petition, submitted that when the first disinvestment was carried in the company, there was transgression of the law which had become clear when a two-judge bench of the apex court had dealt with disinvestment in another PSU.
Taking note of the contention, the bench said, "Already you have committed a wrong and we would not allow the second transgression."
Referring to the earlier judgments, it said further disinvestment could not be carried out without amending the relevant legal provisions and asked the Attorney General, "What is the compulsion for the disinvestments?"
The Attorney General maintained that it is a policy decision, saying what will the government do with the remaining shares of the company. “It is a peculiar situation," Rohatgi said.
The bench then said that there is no other way left but for the government to go before Parliament and seek amendment of the relevant law, otherwise it has to retain the remaining stakes in the company.
The petitioner has challenged the proposed disinvestment, saying the decision is "irrational, illogical, illegal, unreasonable, mala fide and arbitrary".
During a hearing in the case on October 9, 2014, the apex court was informed that CBI had registered a preliminary investigation with regard to the sale of stakes in HZL to Vedanta-promoted Sterlite Opportunities and Ventures Ltd in 2002-03.
