The Supreme Court on Thursday upheld the Centre’s decision to sell its residual 29.54 per cent stake in Hindustan Zinc Limited (HZL) even as it ordered a CBI probe on the terms in which the Centre sold its majority stake in HZL to Sterlite.

The apex court said after it sold off its majority stake to Sterlite and held the residual 29.54 per cent stake, the Centre was just a shareholder and not the owner anymore.

“While considering the ambit of the present controversy, it is necessary to note that the challenge in the petition under Article 32 (violation of fundamental rights) is to the proposal of the Union government to sell its residual stake in HZL, by the sale of the remaining 29.54 per cent equity.

“Neither is the validity of the initial divestment of 24.08 per cent equity which took place in 1991-92, nor is the subsequent divestment of 26 per cent in terms of the Share Purchase Agreement, challenged in these proceedings,” the Supreme Court said.

“As a consequence of the divestment on 27 March 2002, HZL ceased to be a government company within the meaning of Section 617 of the Companies Act 1956 since its shareholding fell below 51 per cent,” Justice D.Y. Chandrachud, who authored the judgment, said.

The bench, also comprising Justice V.Nagarathna, was dealing with a PIL filed by the National Confederation of Officers Association of Central Public Sector Enterprises and certain other employees of HZL. The petitioners said the Centre cannot sell its residual stake as it was a government company and the sale of the stake involves precious natural resources.

Justice Chandrachud said the HZL issue cannot be compared with the judgments of the apex court in 2003 when it ruled divestments in HPCL and BPCL cannot be done without amending the provisions of the Nationalisation Act 1976.