The Bombay high court on Wednesday dismissed the petition of the Maharashtra state government that said it had no objection to handing over the probe in the multicrore stamp paper scam to the Central Bureau of Investigation.

The petition had been filed by the government amid reports that the Special Investigation Team, probing the racket, was on the verge of calling Deputy Chief Minister Chhagan Bhujbal for questioning.

Chief Justice C K Thakkar and Justice Abhya Oka said they were dismissing the petition without going into the merits of the case since a similar plea was pending before the Supreme Court. 

They added it would not be proper for a lower court to decide on a matter when it was pending before the apex court. The Supreme Court will take up the other petition for hearing on January 5.

The government had moved the court urging for transfer of investigations to the CBI saying most of the legislators had expressed such a desire and more so because state Governor Mohammed Fazal and Deputy Prime Minister Lal Kishenchand Advani had written letters to Chief Minister Sushilkumar Shinde favouring a CBI probe.

Before delivering the order, the court heard CBI and the petitioners who had filed PILs alleging lopsided probe into the fake stamp paper scam.

Advocate General Goolam Vahanvati justified the state's request for a CBI probe, saying both the houses of the state legislature had expressed the need to transfer investigations to a central agency during a debate in the ongoing Nagpur session of the Maharashtra Assembly.

The CBI counsel said the agency was prepared to coordinate with state investigative agencies as the scam was spread across many states but he had not received any instructions in this regard.

He, however, felt that it would be prudent to wait as the Supreme court was to hear an SLP urging for a CBI probe on January 5 next.

Contending that the court verdict was not a 'setback' to the government, Minister of State for Home Kripa Shankar Singh said the state government will wait for the Supreme court's decision in this regard.

The government was always in favour of investigation through SIT but due to opposition demand it was handed over to CBI, Singh told reporters.

Leader of opposition in state legislative council Nitin Gadkari (BJP) said the fake stamp paper scam was a fit case for the CBI as it was spread over several states. He said help from the Interpol too would be required and only CBI was competent enough to conduct the investigation.

He said state government had earlier rejected the demand of transfer of probe to CBI even when Advani had advised to do so.

He alleged that Deputy Chief Minister Chhagan Bhujbal did not seek legal opinion before going to high court, seeking transfer of case to CBI. The government has thus committed a contempt of court by going to high court even when the matter was subjudice, he said.

The SIT has so far arrested former Mumbai police commissioner R S Sharma in connection with the racket. Sharma was appointed to the top post despite adverse reports about his role in the racket. Bhujbal gave the go-ahead for the appointment after the then Director General of Police Subhash Malhotra cleared Sharma of any wrong-doing.

The SIT recently questioned Malhotra in this regard.