The Supreme Court on Friday upheld the West Bengal government’s 2017 decision to sell its 47% stake in Metro Dairy Ltd (MDL) to Keventer Agro Ltd (KAL).

A Bench, led by Justice MR Shah, dismissed West Bengal Congress MLA Adhir Ranjan Chowdhury’s appeal seeking the CBI probe into the stake sale of MDL for lack of transparency. Even the Calcutta High Court had dismissed the PIL filed by Chowdhury, saying the state’s policy decision to sell its 47% stake in MDL to Keventer Agro in an auction for Rs 85 crore was “neither illegal nor arbitrary” and did not call for any interference.

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Chowdhury, through his counsel Maninder Singh, alleged that state government, which set up the company in 1991, had suffered a loss of at least Rs 500 crore by selling its stake at such a low price. Singh urged the SC that the scruitiny had to be higher for a public corporation being divested in this manner. Keventer sold 15% of its shares to a Singapore-based company for around Rs 135 crore with few weeks after becoming the sole owner of MDL, he added.

While refusing to interfere with the Mamta Banerjee government’s decision, the HC, in its 18-page judgment, had held: “We find that the policy decision of the state to sell 47% shares was neither illegal nor arbitrary and the state had also not adopted a non-transparent or opaque procedure for sale of shares… the decision in respect of disinvestment and transfer of 47% of shares in MDL by the state is essentially a policy decision based upon economic and other considerations. Such a policy decision is not open to interference unless the same is unconstitutional, violative of statutory provision, totally arbitrary or suffers from the vice of malice. Courts may also interfere if any illegality is committed in the execution of such a policy decision.”

According to HC, “it has been pointed out from the record that MDL is a company dealing in dairy business alone and sometime around 2004-05, Amul, owned by Gujarat Co-operative Milk Marketing Federation, had entered the West Bengal milk market as competitor to the MDL, as a result of which, the annual procurement of milk as also annual sale of MDL were continuously declining,” the court observed.

The state-run West Bengal Milk Producers Federation had 47% stake in MDL when it was established in 1991, the Centre-run National Dairy Development Board had 10% and the remaining 43% was held by KAL.