The Supreme Court also sought CBI probe in the case.
ONGC sought opinion from the second highest law officer of the country after its partner Cairn Energy Plc stated that the UK firm's sale of majority stake in Cairn India to Vedanta Resources will not trigger pre-emption rights of the state- owned firm, a top oil ministry official said.
In a setback to the Cairn-Vedanta deal, Solicitor General Gopal Subramanium has reaffirmed that the government can impose preconditions like equitable sharing of royalty in the all-important Rajasthan block for clearing Vedanta Resources' takeover of Cairn India.
ONGC, which is 30 per cent partner in Cairn India- operated Rajasthan oilfields, is obliged to pay royalty on entire crude oil produce from the blocks, even though its share is just 30 per cent.
After months of dithering, UK's Cairn Energy on November 25 applied for government nod to transfer control in its three producing assets, including the prolific Rajasthan fields to Vedanta Resources.
The Supreme Court on Monday issued notices on a public interest suit challenging the role of the central government and state-owned Oil and Natural Gas Corporation in the deal between Cairn India and Vedanta Resources.
More than three months after announcing the sale of its up to 51 per cent stake in the Indian unit to Vedanta, Cairn Energy Plc on November 23 last year had made a conditional application to seek government's nod but refused to accept partner ONGC's rights.
The Home Ministry, while giving the security no-objection certificate (NOC), highlighted eight areas of concern, including 64 legal proceedings against Vedanta and its subsidiaries in various courts, sources privy to the development said.
A CCEA meeting is scheduled for tomorrow but the approval for the Cairn-Vedanta deal is not listed on its agenda so far.
Oil ministry will move Cabinet Committee on Economic Affairs once comments from ministries of finance, law, home, environment and corporate affairs are received.
The government will reserve the right to decide on the cost recoverability of royalty from Cairn India's block in Barmer while clearing Cairn Energy's sale of its Indian subsidiary to Vedanta Resources.
The Petroleum Ministry may have watered down its preconditions for approving mining group Vedanta Resources' acquisition of Cairn India, but the $9.6 billion deal will still hinges on no-objection from partner ONGC.
The government has written to market regulator SEBI saying Cairn Energy Plc's deal to sell majority stake in its Indian arm to Vedanta Resources does not yet have its approval, a condition contingent for the $8.48 billion deal to consummate.
With Cairn Energy Plc voluntarily offering to meet government conditions, the Oil Ministry may find it difficult to nix its deal to sell majority stake in Cairn India to Vedanta Resources.
A Group of Ministers headed by Finance Minister Pranab Mukhejree is likely to meet on Monday to vet London-listed mining group Vedanta Resources' $ 9.6 billion acquisition of Cairn India.
The Centre and Oil and Natural Gas Corporation's decision on the $-8.5 billion deal was taken after due deliberation, the apex court said.
Delay in approvals and bureaucratic stonewalling create hurdles; experts fear return of licence raj.
The announcement came just ahead of the meeting of a ministerial panel, headed by Finance Minister Pranab Mukherjee, to look into the Cairn-Vedanta deal which was struck in August.
The way the government treated miner Vedanta Resources' proposal to buy majority of UK's Cairn Energy in Cairn India and RIL selling 30 per cent of its stake in 23 properties, including the prolific KG-D6 gas block to BP, goes to the heart of the mistrust between India Inc and United Progressive Alliance-2 in 2011.
New regime less harsh than the draft guidelines, has a host of exemptions.
The Securities and Exchange Board of India (Sebi) is unlikely to clear Vedanta Resources and Sesa Goa's open offer to the shareholders of Cairn India till the government approves the Cairn-Vedanta deal, according to officials familiar with the matter.
The $9.6-billion deal is contingent upon government nod as the deal involves change of ownership of strategic assets like the giant Rajasthan oilfields.
There will be capital gains tax of 20 per cent with indexation.
The ICICI board is looking to the retired petroleum secretary to provide 'maturity and sagacity'.
The government was planning to come up with a new fiscal model giving 'special incentives' for fields that were given out on nomination to ONGC and Oil India, reports Shine Jacob.
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Cairn India said the company board has accepted Elango's resignation.
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