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SC notice to government on plea against Cairn-Vedanta deal

Delhi,Business/Economy,Immigration/Law/Rights, Mon, 23 Apr 2012 IANS

New Delhi, April 23 (IANS) The Supreme Court Monday issued notice on a plea urging that the acquisition of Cairn India, which holds the nation's biggest onshore oil block, by Anil Agarwal-promoted Vedanta Resources be declared invalid.


The notice was issued to the government, the Cairn and Vedanta companies and the Oil and Natural Gas Corporation (ONGC).


The public suit filed by Arun Kumar Agrawal, a financial expert, sought invalidation of government approval for the Cairn Energy-Vedanta deal under which Vedanta acquired 41 the percent stake of Cairn India in the Rajasthan oil block.


An apex court bench of Justice D.K. Jain and Justice Anil R. Dave issued notice after counsel Prashant Bhushan told the court that ONGC gave up its right over Rs.2.8 lakh crore worth of oil by not exercising its right of pre-emption over the sale of Cairn India's 41 percent shares which it was off-leading.


The court also issued notice on the interim prayer seeking stay on the Carin-Vedanta deal. The court has sought replies within eight weeks.


"Declare the Cairn Energy-Vedanta deal, wherein Vednata acquired shares of Cairn India, and the Government's approval of the said deal on Jan 24 as void ab initio," said the petition.


After ONGC stepped back from exercising its pre-emption right over the 41 percent Carin's stakes, the same were taken by Vedanta.


Counsel for the ptitioner alleged that ONGC gave up its right of pre-emption without even considering it. In return for giving up its right over the oil worth Rs.2.8 lakh crore, ONGC just got Rs.40 crore.


Seeking investigation into the entire issue involving ONGC not exercising its option of pre-emption rights over the sale of Cairn India's 41 percent stakes, Bhushan said that ONGC gave the no-objection certificate to the deal between Carin and Vedanta under political pressure.


The PIL has also sought direction to the CBI to investigate the considerations involved in the illegal extension of time given to Carin Energy by the central government for exploration of oil when it was fully aware that the area had billions of dollars of oil, as highlighted in the report of the government auditor.


"The government of India has allowed the transfer of the oil resources of the country worth lakhs of crores of rupees to a private company by giving up its own legal rights in complete violation of the public trust doctorine," the petition said.


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