JUDGMENT :

Dhananjaya Y Chandrachud, J.

A Introduction

1. An organization called the National Confederation of Officers Association¹[“Confederation”] has invoked the jurisdiction of this Court under Article 32 of the Constitution. The Confederation, which is a trade union registered under the Trade Unions Act 1926, is joined in these proceedings by three other petitioners, including a former employee of Hindustan Zinc Limited²[“HZL”]. The members of the Confederation are, or have been, employees of public sector undertakings. Their grievance in these proceedings arises from the Union Government’s disinvestment of its shareholding in HZL, the fourth respondent. According to the petitioners, HZL is not a loss incurring unit and the disinvestment does not sub-serve public interest. Parliament acquired the undertaking by the Metal Corporation (Nationalisation and Miscellaneous) Provisions Act 1976³[“Nationalisation Act 1976”]. In pursuance of its acquisition, the undertaking came to be vested in a government company. HZL is stated to be a ‘mini-navratna’ company with a cash liquidity resource of over Rs 20,000 crores. According to the petitioners, the Union Government’s divestment of its shareholding in HZL is in violation of the judgment of a two-judge Bench of this Court in Centre for Public Interest Litigation v. Union of India,⁴[“Centre for Public Interest Litigation”] (2003) 7 SCC 532] . In the proceedings as they stand, the challenge is to the proposed disinvestment of the residual shareholding of the Union Government in HZL, representing 29.54 per cent (approx.) of the equity capital.

2. Metal Corporation of India Limited was incorporated in 1944 as a public limited company under the Companies Act 1913. It was the sole producer of zinc and lead from its mines situated at Zawar in Rajasthan. The company had established a lead smelter plant at Tundoo, near Dhanbad, in the then State of Bihar for producing lead, silver and other by-products. Subsequently it installed a zinc smelter at Debari, near Udaipur. Given the strategic importance of zinc and lead, the Union Government took a decision to acquire the company by a legislation.

3. On 22 October 1965, the President promulgated the Metal Corporation of India (Acquisition of Undertaking) Ordinance for acquisition of the undertaking by the Union Government. Possession, control and administration was taken over by the Union Government on 23 October 1965. A petition under Article 226 of the Constitution was instituted in 1965⁵[WP 631-D of 1965] by the corporation and its managing director before the Circuit Bench in New Delhi of the then Punjab High Court, for challenging the constitutional validity of the Ordinance. During the pendency of the proceedings, the Ordinance was replaced by Act 44 of 1965 which led to the institution of another writ petition⁶[WP 832-D of 1965] challenging its validity. On 10 January 1966, HZL was incorporated as a public sector company to develop the mining and smelting capacities, so as to substantially fulfil the domestic demand for zinc and lead.

4. On 14 March 1966, the Punjab High Court held that the Ordinance and the enactment that replaced it, violated Article 31 of the Constitution and were void. The appeal by the Union of India was dismissed by this Court on 5 September 1966, in Union of India v. Metal Corporation of India Ltd, (1967) 1 SCR 255. On 13 September 1966 another Ordinance, Ordinance No 10 of 1966, was promulgated by the President for the acquisition of the undertaking of Metal Corporation of India Limited. The Ordinance was replaced by an Act of Parliament (Act 36 of 1966) which came into force on 3 December 1966. This led to ano