A fortnight before the CBI reopened in August the disinvestment of Hindustan Zinc Ltd by the NDA government more than a decade ago, the UPA government’s top lawyer had said that there was no case for challenging that executive decision now merely because it lacked parliamentary approval.
Attorney General G E Vahanvati, it has emerged, had advised the mines ministry that the sale of HZL to Anil Agarwal’s Sterlite Opportunities & Ventures Ltd could not be legally challenged now as it was neither contested at the time of the sale in 2002 nor after the first call option in November 2003.
Vahanvati’s opinion came in response to a query from the mines ministry on the HZL disinvestment.
“Therefore, not only was there no challenge at the relevant point of time to the sale of shares in 2002 or the further offloading in 2003, these actions have been fully implemented. Thus, these transactions had been completed and cannot be reopened much less in 2013, 10 years after the event,” Vahanvati said.
“It need hardly be said that courts do not lightly interfere with longstanding decisions, especially those in which over time, people have settled their business in accordance therewith. Too much water has flown under the bridge and it is not possible to put the clock back,” the AG had written on August 5.
On August 20, the CBI decided to take a fresh look at the strategic sale and sought records from the mines ministry on how HZL was privatised without the approval of Parliament when it was created by acquiring the Metal Corporation of India Ltd (MCIL) through a parliamentary statute.
The CBI demanded the “entire record pertaining to HZL related to nationalisation of MCIL, disinvestment of HZL in favour of Sterlite Opportunities and the opinion of the attorney general on Sterlite’s call option”. It also sought details of officers who were associated with the process of disinvestment.
The AG’s latest opinion was in response to the mines ministry asking him if the HZL sale to Sterlite could be reversed as no parliamentary approval was taken to privatise the nationalised company.
The query stemmed from the Supreme Court’s 2003 order that stopped the disinvestment of Bharat Petroleum and Hindustan Petroleum saying that it could be done only after amending the acts that nationalised them.
Vahanvati’s argument is that the apex court had passed “a limited order” on September 16, 2003 stopping the government from selling shares of