BREAKING | 'Not Illegal Or Arbitrary': Calcutta High Court Refuses CBI Probe In WB Govt's Metro Dairy Disinvestment

The Calcutta High Court on Monday refused to initiate a probe by the Central Bureau of Investigation (CBI) into the alleged Metro Dairy scam, by opining that no case has been made out for interference as the State has not adopted any non-transparent or opaque sale of shares.

The Court was adjudicating upon a Public Interest Litigation (PIL) petition moved by West Bengal Congress President Adhir Chowdhury alleging a lack of transparency in West Bengal government's sale of its 47 percent stake in Metro Dairy to private dairy organisation Keventer Agro Ltd in 2017. In the same year, one Singapore-based company had reportedly bought Metro Dairy's 15 per cent share at a much higher price.

The petitioner had alleged that the West Bengal government had sold its stake in Metro Dairy to Keventer Agro Ltd at a very low price without following any transparent process and without any justifiable reason. 

The CBI had earlier informed the High Court that it is ready to take over the probe of the alleged Metro Diary scam pursuant to the permission of the High Court. 

A Bench comprising Chief Justice Prakash Shrivastava and Justice Rajarshi Bharadwaj observed that the policy decision of the West Bengal government to sell its 47 per cent stake in Mother Dairy (respondent no. 5) to Keventer Agro Ltd in an auction for Rs 85 crore was neither illegal nor arbitrary. 

"Having regard to the above, we find that policy decision of the State to sell 47 % shares of respondent no. 5 MDL was neither illegal nor arbitrary and State had also not adopted non-transparent or opaque procedure for sale of shares, hence no case for interference in the present writ petition is made out which is accordingly, dismissed", the Court ruled. 

The Court further opined that in the instant case nothing has been pointed out to show that the decision of the State to sell 47 per cent shares of Metro Dairy runs counter to any statutory provision or is illegal in any manner.

 "This Court need not go beyond the policy decision and find out the reason for such a policy decision if the decision is otherwise unquestionable", the Court opined further. 

The Court further underscored that the record clearly reveals that the process of sale of 47 % shares of Metro Dairy adopted by the State cannot be termed as opaque or non- transparent process.

Metro Dairy was established in 1991 as a public-private venture. The state-run West Bengal Milk Producers Federation had 47 percent stake, the Centre-run National Dairy Development Board (NDDB) had 10 percent and the remaining 43 percent was owned by Keventer Agro Ltd. NDDB had later sold its entire stake to Keventer.

In 2017, the West Bengal government had reportedly approved the sale of its 47 percent stake to Keventer in an auction for Rs 85 crore. However, in the same year, a Singapore-based company had reportedly bought Metro Dairy's 15 percent share for a much higher price i.e. Rs 135 crore.

Consequently, the Enforcement Directorate (ED) had reportedly started an investigation in 2019 and had summoned officials of Keventer Agro Ltd, the project's sole private partner at the time of the sale and other government officials for questioning.

Chowdhury had alleged in his petition that the government, which set up the company with public money had suffered a loss of at least Rs 500 crore by selling its stake in Metro Dairy to Keventer at a very low price. Accordingly, he had contended that a CBI probe must be initiated into the alleged scam.

Case Title: Shri Adhir Ranjan Chowdhury v. State of West Bengal 

Case Citation: 2022 LiveLaw (Cal) 235

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