The apex court said it cannot sit on judgement on the decision taken by parties in a business dealing
The Supreme Court on Thursday refused to interfere in the $8.5-billion Cairn-Vedanta deal and dismissed a public interest litigation (PIL) that had challenged validity of the deal.
A Bench of Justices KS 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 judgment on the decision taken by parties in a business dealing.
The PIL was filed by Bengaluru-based 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 Cairn India, without making an offer to ONGC and that the exchequer would have benefited by over Rs one lakh crore if ONGC had insisted on enforcing the clause.
The Bench, however said there were no extraneous considerations involved in the deal.
Cairn India Ltd, a subsidiary of UK-based Cairn Energy, is the operator of the Rajasthan oil block. It had entered into an agreement with the UK-based Vedanta Group on 16 June 2010, to sell its majority stake in Cairn India for 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.
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