rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Supreme Court dismisses plea challenging Vedanta-Cairn deal

Supreme Court dismisses plea challenging Vedanta-Cairn deal

Last updated on: May 09, 2013 13:56 IST

VedantaThe Supreme Court on Thursday refused to interfere in $8.5 billion Cairn-Vedanta deal and dismissed a PIL challenging its validity.

A bench of justices K S Radhakrishnan and Dipak Misra said that the decision by the Centre and ONGC pertaining to the deal was taken after due deliberation and the court cannot sit in judgement on the decision taken by parties in a business dealing.

The bench also said there was no extraneous considerations involved in the deal.

The court delivered the judgement on the PIL filed by Bengaluru resident Arun Kumar Agarwal who had alleged that there was a clause in the agreement between Cairn group and ONGC that in case Cairn Group wanted to sell its shares in Cairn India, it would first offer the same to ONGC and this right was "not asserted" by the PSU and the Centre.

He had also alleged that the decision on the deal had been made on "extraneous considerations" and without taking into account the relevant aspects.

As per the clause, Cairn could sell its shares to other parties only after ONGC refused to buy the stake and ONGC, thus, had the right of first refusal, he had said.

The petitioner had alleged that Cairn Energy had violated the clause and signed a deal with Vedanta group to sell its shares in Cairns India, without making an offer to ONGC and that the exchequer would have benefited by over Rs 1 lakh crore (Rs 1 trillion) if ONGC had insisted on enforcing the clause.

Cairn India Ltd, a subsidiary of UK-based Cairns Energy, is the operator of the Rajasthan oil block.

It had entered into an agreement with UK-based Vedanta Group on June 16, 2010, to sell its majority stake in Cairn India for a consideration of around $8.5 billion, without offering the shares to its partner ONGC in the joint venture as per the agreement of right of first refusal, the PIL had said.

Image: A bird flies by the Vedanta office building in Mumbai | Photograph: Danish Siddiqui/Reuters

© Copyright 2013 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.