On November 18 last year, a bench headed by Justice D Y Chandrachud had ordered registration of a regular case for a full-fledged CBI inquiry into the alleged irregularities in the sale of 26% of government stake in HZL to Sterlite, a subsidiary of Vedanta group, for Rs 749 crore when its value was allegedly around Rs 39,000 crore, an order that had the potential to dent the ‘clean’ image of the Vajpayee government and the then disinvestment minister Arun Shourie.
Arguing the Centre’s application for recall/modification of the November 18 order, solicitor general Tushar Mehta, who had earlier appeared for CBI in the case, said, “The fundamental facts presented by the CBI before the Supreme Court were either false or palpably wrong… Every line that the CBI informed the Supreme Court about the decision making process for disinvestment (of 26% government stake in HZL) was false or wrong.”
“The decision was not made by a single individual as projected by the CBI. (It was factually wrong). It was a collective three-tier decision. The empowered group of secretaries, comprising 10-12 secretaries of various departments, examined the proposal. Their views were scrutinised by the Core Group of Disinvestment. Ultimately the Union Cabinet took into account all the views and arrived at the decision after careful consideration of the whole gamut of facts and views,” the SG said and pleaded that when the erroneous facts presented by the CBI led to an erroneous conclusion by the SC, then it was open for the court to correct that mistake by recalling or modifying the order directing registration of a regular case by the CBI.
But, a bench of Justices Chandrachud and Surya Kant said the SC had carefully considered the documents and investigation reports submitted by the CBI as well as the closure report and came to the conclusion that the issue required a thorough investigation. Advocate Prashant Bhushan interjected to say that it was the SG who was appearing for the CBI during the hearing and had vehemently opposed sharing of the CBI’s closure report with the petitioners who had challenged the HZL disinvestment and sought a fresh probe into the alleged irregularities.
Finding the bench unconvinced, the SG said he would withdraw the recall/modification application and file a petition seeking review of the November 18 judgment’s direction for registration of FIR by CBI. The bench permitted withdrawal of the application.
Writing the November 18 judgment, Justice Chandrachud had faulted the CBI for closing the preliminary enquiry (PE) despite having listed numerous irregularities in the sale of government shares in HZL allegedly for a song to Sterlite and brushing aside of CAG’s caustic report. The bench had ordered the CBI to register a regular case (RC) and conduct full-fledged investigations into 18 suspicious grounds surrounding the deal and file periodic status reports into the nearly two decade-old deal.
“There is sufficient material for registration of a regular case in relation to the 26% disinvestment of HZL by the Union Government in 2002. The CBI is directed to register a regular case and proceed in accordance with law. The CBI is directed to register a regular case and periodically submit status reports of its investigation to this court. The aforesaid reports shall be submitted every quarter, or as otherwise directed by this court,” the bench had said, while it green signalled the selling of the government’s residuary 29.5% stake in HZL, a decision which was taken in 2012 by the UPA government.