Delhi High Court - Orders
Vedanta Limited & Anr vs Government Of India,Through Jt. ... on 28 May, 2020
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
EX.APPL.(OS)379/2020 in
+ O.M.P.(EFA)(COMM)5/2017
VEDANTA LIMITED & ANR . ....Petitioners
Through : Mr. Akhil Sibal, Sr. Adv. with
Mr.Arjun Pall, Adv.
versus
GOVERNMENT OF INDIA,THROUGH JT.
SECRETARY,MINISTRY OF PETROLEUM
ANDNATURAL GAS ....Respondent
Through : Ms. Maninder Acharya, ASG with
Mr.K.R. Sasiprabhu, Mr. Anurag
Ahluwalia and Mr. Tushar Bhardwaj,
Advs.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
ORDER
% 28.05.2020 [Court hearing convened via video-conferencing on account of COVID-19] EX.APPL.(OS)379/2020
1. The substantive prayer made in the captioned application is as follows:
"a. Pass a direction directing (directly and/or through the Respondent) the 4 oil marketing companies (viz. CPCL, MRPL, GAIL and BPCL) to directly and unconditionally make payments to the Petitioner No.1 of all amounts due to the Petitioner No.1 on and from 25 March 2020 (being Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 the date of imposition of the nationwide lockdown) until further orders of this Hon'ble Court;"
2. On 04.05.2020, I had passed the following order:
"Ex. Appl. (OS) No. 379/20201. I have heard learned counsel for the parties. I have also perused the pleadings filed by both sides.
2. Even according to the Government of India, the principal amount in issue in OMP (EFA) (COMM) No.15/2016 and OMP (EFA) (COMM) No.5/2017 is USD 144 million. This aspect of the matter is referred to in paragraph 21 of the reply filed by the Government of India which reads as under:
"21. In terms of this Hon'ble High Court order dated 29.10.2018, a principle amount of the USD 144 million was directed to secured through periodic deposits of the sale proceeds by the OMCs. A breakup of the said USD 144 million is provided below:
ONGC Carry Issue BDC
OMP (EFA) (Comm) OMP (EFA) (Comm)
No 5 of 2017 No 15 of 2016
Petitioner No. 1 64 29
Petitioner No. 2 35 16
Total 99 45 144"
3. Mr. Akhil Sibal, learned senior counsel, who appears on behalf of petitioner No. 1/Vedanta Limited says that the aforesaid table would show that insofar as the petitioner No. 1 is concerned, the total amount due in the aforementioned two proceedings is USD 93 million [USD 64 million + USD 29 million].
3.1 It is also Mr. Sibal's contention that dehors any other assertion that has been articulated on behalf of the petitioner No. 1 in the captioned application, the Government of India cannot seek security beyond USD 93 million.
4. I may only note that OMP (EFA) (COMM) No. 15/2016 was disposed of vide judgment dated 19.02.2020. The Government of India's objections filed under Section 48 of the Arbitration and Conciliation Act, 1996 (in short "1996 Act") were dismissed.
5. However, while OMP (EFA) (COMM) No. 15/2016 was pending adjudication, an interim order dated 29.10.2018 had been passed. This order was common to OMP (EFA) (COMM) No. 5/2017 as well. The said petition is pending adjudication even now.
Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:096. As would be evident, in view of the judgement dated 19.02.2020, passed in OMP (EFA) (COMM) No. 15/2016, petitioner No. 1's claim to USD 29 million, presently, stands sustained.
6.1 Qua this aspect, Ms. Acharya, learned Additional Solicitor General says that the Government of India intends to file a Special Leave Petition (in short "SLP") against the judgment dated 19.02.2020, passed in OMP (EFA) (COMM) No. 15/2016. It is stated by the learned Additional Solicitor General that on account of the lockdown due to the pandemic caused by Coronavirus disease - 2019 (COVID-19), the Government of India has not been able to approach the Supreme Court.
6.2 Ms. Acharya seeks three (3) weeks to have the SLP filed and listed for hearing.
7. On the other hand, Mr. Sibal emphasises the fact that even if this submission of Ms. Acharya is accepted, the security that the Government of India can seek cannot exceed USD 93 million which is the disputed amount in both the proceedings.
7.1 Prima facie, I find merit in this submission of Mr. Sibal.
8. However, given the fact that the Government of India seeks accommodation for filing the SLP, I am, at the moment, [having regard to the present situation obtaining in the city] inclined to stand over the matter by three (3) weeks.
8.1 In the meanwhile, the learned Additional Solicitor General will obtain instructions as to whether the Government of India is secured by way of cash deposits and bank guarantees to the extent of USD 93 million. 8.2 I may also indicate that it has been Ms. Acharya's submission that the Government of India is also entitled to interest on USD 93 million and that an application in this behalf has been moved before the court. 8.3 On the other hand, Mr. Sibal says that petitioner No.1 has also moved an application for vacating the order dated 29.10.2018. 8.4 At the moment, I do not wish to make observations, one way or the other, qua the aforesaid submissions made by learned counsel for the parties.
9. Furthermore, at request of learned counsel for the parties [which includes the learned Additional Solicitor General], the concerned four oil companies1 are directed, in the meanwhile, to deposit the amounts due with 1 I. Chennai Petroleum Corporation Limited [CPCL] II. Mangalore Refinery and Petrochemicals Limited [MRPL] Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 the Registry of this court.
10. Learned counsel are also agreed that in view of the lockdown, the aforementioned oil companies be permitted to deposit the sale proceeds with the Registry of this Court via wire transfer/Net Banking. 10.1 It is ordered accordingly.
11. The Registry will assist in having the money transmitted to its account via the means indicated above.
12. Accordingly, renotify the matter on 28.05.2020."
3. A perusal of the aforementioned order i.e. the order dated 04.05.2020would show that it had two parts to it. 3.1 First part involved granting time to the Government of India [in short "GOI"] to file an appeal in the Supreme Court against the judgment dated 19.02.2020, passed in O.M.P. (EFA) (COMM) 15/2016. 3.2 Ms. Maninder Acharya, learned Additional Solicitor General (ASG), had sought three weeks' time for this purpose and, accordingly, time was granted for the said purpose to GOI.
3.3 I am, however, informed by the learned ASG that the SLP was filed only on 23.05.2020 which was nearly 18 days after the order dated 04.05.2020 had been passed. To be noted, the order was uploaded on the website of this Court on that day itself i.e. 04.05.2020. 3.4 I am further informed by learned ASG, based on instructions of Mr.K.R. Sasiprabhu, that the SLP is likely to be listed for hearing shortly.
4. The second part of the order dated 04.05.2020 pertained to the prayer made in the application for release of money to the petitioner No. 1. In this behalf, reference was made to the disputed amount i.e. the amount that GOI claims from the petitioners in the two petitions i.e. O.M.P. (EFA) (COMM) III. Gas Authority of India Limited [GAIL] IV. Bharat Petroleum Corporation Limited [BPCL] Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 No.15/2016 and O.M.P. (EFA) (COMM) No. 5/2017.
4.1 The principal amount in dispute was noted in the order dated 04.05.2020. The sum crystallized is USD 144 million.
5. A perusal of the order dated 04.05.2020, which has been extracted hereinabove by me, would show that the breakup of this figure, petitioner wise, is set out in that very order.
6. As noted in the order dated 04.05.2020, insofar as petitioner No.1 is concerned, in the aforementioned petitions, the total principal amount which is in dispute, even according to GOI, is only USD 93 million. There is, admittedly, no dispute qua this aspect of the matter.
7. It is in this context that I had asked the learned ASG, on 04.05.2020, to obtain instructions as to whether or not the GOI was secured for an amount equivalent to USD 93 million.
7.1 Reference to this aspect of the matter is made in paragraph 8.1 of the order dated 04.05.2020.
7.2 I had also noted Ms. Acharya's submission that the GOI had moved an application for grant of interest on USD 93 million.
8. However, unfortunately, despite three weeks being granted, the GOI has not been able to confirm whether the statement made before me by Mr. Akhil Sibal, learned senior counsel, who appears on behalf of petitioner No.1, that the GOI is secured for an amount more than USD 93 million, is correct.
9. The learned ASG, once again on instructions of Mr. Sasiprabhu, says that the respondent could not access the information from the office of the Registrar General of this court.
10. Mr. Sibal, on the other hand, to my mind, correctly points out that this Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 information is available in the court's record which is shared by both parties. 10.1 It is Mr. Sibal's contention that out of USD 93 million, USD 84,320,024 [INR 595,40,39,516] is secured by way of bank guarantees furnished solely and exclusively by petitioner No.1. 10.2 According to Mr. Sibal, pursuant to the order dated 22.04.2020, passed by my predecessor, the Registrar General confirmed that the Oil Marketing Companies [in short "OMCs"] have deposited USD 6,374,491 or Rs.46,58,66,693/- [Rs.16,40,05,368/- in OMP (EFA) (COMM.) No.15/2016 andRs.30,18,61,325/- in OMP (EFA) (COMM.) No.5/2017] with the Registry of this court towards the share of petitioner No.1. 10.3 Mr. Sibal says that this apart, one of the OMCs i.e. CPCL, vide an e-mail dated 06.05.2020, has informed petitioner No.1 that it has deposited USD 2,881,482 [INR 21,85,08,298] with the Registry of this Court towards the share of petitioner No. 1.
10.4 Therefore, according to Mr. Sibal, the aforementioned amounts, when added up, would show that the GOI is secured for an amount equivalent to USD 93,575,997 [INR 663,84,14,507].
10.5 Besides this, Mr. Sibal says that a sum equivalent to USD 4,307,554 [INR 32,43,03,031/-] has already fallen due and, therefore, ought to have been deposited by GAIL and MRPL [i.e. two of the four OMC's which are concerned with this matter] with the Registry of this Court. 10.6 In addition to the above, Mr. Sibal goes on to say that as on 30.05.2020, GAIL is required to deposit a further amount equivalent to USD 1,297,930 [INR 9,86,42,682/-] with the Registry of this court. 10.7 Thus, according to Mr. Sibal, insofar as the principal amount is concerned, the Government of India is secured for an amount more than the Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 amount in dispute qua petitioner No.1 which is USD 93 million. 10.8 Insofar as the aspect of interest is concerned, it is Mr. Sibal's contention that it does not form part of the prayer made in the SLP. 10.9 According to Mr. Sibal, the application for grant of interest was moved both, in the disposed of petition i.e. O.M.P. (EFA) (COMM) No.15/2016,and in the captioned petition i.e. O.M.P. (EFA) (COMM) No.5/2017.
11. It is, thus, Mr. Sibal's submission that the application which was filed in O.M.P. (EFA) (COMM) No.15/2016could not be considered by this court as the matter stands disposed of vide judgment dated 19.02.2020. 11.1 However, with regard to the application bearing E.A.No.7674/2020 which is filed in O.M.P. (EFA) (COMM) No.5/2017, it is stated that, assuming without admitting, even if the Government of India were to succeed in convincing this Court that interest should be granted to it in petitioner No.1's execution petition, there is more than enough security available for that contingency as well.
11.2 Mr. Sibal says that the Government of India has extended the Production Sharing Contract [in short "PSC"]in favour of petitioner No.1 for a further period of 10 years and, therefore, revenues that are generated can always be adjusted against the interest.
11.3 This apart, Mr. Sibal says that a corporate guarantee has been furnished by the parent company i.e. Vedanta Resources PLC which can be invoked in case there is a default by petitioner No. 1. 11.4 Mr. Sibal has drawn my attention to Clause 3 of the guarantee dated 13.04.2017 which is appended on page 182 of the captioned application i.e. Ex.App.(OS)No.379/2020.
Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:0911.5 For the sake of convenience, the said clause is extracted hereafter:
12. Given this position, according to me, the Government of India has failed to carry out the exercise[which, in any event, it was required to carry out only as a measure of abundant caution] with regard to the security available to it insofar as the principal amount i.e. USD 93 million was concerned.
13. As indicated above, out of the USD 93 million, USD 84 million is secured by way of bank guarantees which had been furnished from time to time by petitioner No.1 pursuant to the orders of this court, the details of which, have been furnished by petitioner No. 1 and are set out hereafter:
"Bank guarantees accepted by Hon'ble Court in OMP (EFA) (Comm.) No. 15 of 2016 S. No. BG Number INR Amount USD Amount Order Reference
1. 0544BGR0236819 398,673,955 5,599,723 2 April 2019 17 February 2020
2. 0544BGR0029920 53,627,183 759,699 1 July 2019 15 May 2020
3. 0544BGR0029820 454,909,170 6,575,732 1 July 2019 15 May 2020
4. 0544BGR0030020 43,707,620 629,793 1 July 2019 15 May 2020
5. 0544BGR0029720 388,869,719 5,637,901 1 July 2019 Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 15 May 2020
6. 0544BGR0105020 40,330,958 581,976 23 September 2019
7. 0544BGR0105420 439,441,381 6,377,746 23 September 2019
8. 0544BGR0105620 409,185,090 5,872,919 23 September 2019
9. 0544BGR0105820 49,316,724 717,543 23 September 2019
10. 0544BGR0105520 50,082,483 730,278 23 September 2019
11. 0544BGR0122120 58,140,722 851,879 23 September 2019
12. 0544BGR0164220 55,939,152 793,576 3 December 2019
13. 0544BGR0164120 47,244,678 673,577 3 December 2019
14. 0544BGR0164020 53,474,615 750,626 3 December 2019
15. 0544BGR0172519 54,155,176 776,975 11 February 2019 Extended BG filed on 9 December 2019 vide Ex. Appl. (OS) No. 978 of 2019 (Diary No. 1548978/2019);
order yet to be passed.
16. 0544BGR0226419 48,629,687 685,988 2 April 2019 17 February 2020
17. 0544BGR0226619 52,961,499 763,134 2 April 2019 17 February 2020
18. 0544BGR0234820 29,666,282 416,719 1 May 2020
19. 0544BGR0233820 35,075,472 492,702 1 May 2020
20. 0544BGR0235020 11,175,933 157,585 1 May 2020 Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09
21. 0544BGR0234720 50,262,900 708,726 1 May 2020 TOTAL 2,824,870,399 40,554,798 Bank guarantees accepted by Hon'ble Court in OMP (EFA) (Comm.) No. 5 of 2017 S. BG Number INR Amount USD Amount Order Reference No.
1. 0544BGR0105320 359,369,122 5,227,195 23 September 2019
2. 0544BGR0175520 341,869,381 4,767,328 20 December 2019
3. 0544BGR0172619 816,561,512 11,197,567 11 February 2019 20 December 2019
4. 0544BGR0184919 373,435,624 5,210,269 11 February 2019 20 December 2019
5. 0544BGR0226319 147,590,108 2,093,076 2 April 2019 17 February 2020
6. 0544BGR0226519 398,110,509 5,570,410 2 April 2019 17 February 2020
7. 0544BGR0233720 375,618,174 5,270,059 1 May 2020
8. 0544BGR0234920 20,398,382 284,517 1 May 2020
9. 0544BGR0279320 296,216,305 4,144,804 1 May 2020 TOTAL 3,129,169,117 43,765,226
1. Therefore, total bank guarantees submitted and accepted by the Hon'ble Court:
USD 84,320,024 or INR 595,40,39,516"
14. Thus, I am unable to understand as to why this exercise needed examination of the record of the office of Registrar General of this Court.
15. It is not in dispute that the amounts were released to petitioner No.1 Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 only against bank guarantees in terms of the order dated 29.10.2018 and subsequent orders passed by this Court. If there was any doubt with regard to the bank guarantees, I am sure, the GOI would have raised an objection with regard to the same at the relevant point of time. 15.1 Admittedly, no objection was raised by the GOI with regard to the aspect concerning bank guarantees furnished by the petitioner No. 1 for release of amounts.
16. Thus, in my view, the captioned application i.e. Ex. App. (OS) No.379/2020can be disposed of with the following directions:
(i) The four oil companies i.e. CPCL, MRPL, GAIL and BPCL will release to petitioner No. 1the amounts payable as per the terms of the subject PSC dated 28.10.1994 as extended by Addendum No. 2 dated 24.10.2019directly and conditionally. In other words, all amounts beyond the amount equivalent to USD 93,575,997 [INR 663,84,14,507] shall be released to petitioner No. 1.
(ii) In case, the GOI were to succeed in the application bearing E.A.No.7674/2019, petitioner No.1 will deposit the requisite amounts in Court or have the amounts, as quantified by the Court,adjusted against the monies to be released in their favour.
(ii) (a)The director of petitioner No.1 will file an undertaking in the form of an affidavit with the Registry of this Court within a period of seven days from today to that effect. A copy of the same will be transmitted to Mr.Sasiprabhu, who, as noted above, is the advocate-on-record on behalf of Government of India,albeit, electronically.
(iii) The aforesaid directions will be subject to any order(s) that the Supreme Court may pass in the SLP which, I am told, has been filed against Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09 the judgment dated 19.02.2020, passed in O.M.P. (EFA) (COMM) No.15/2016.
(iv) The aforesaid directions will be without prejudice to the rights and contentions that petitioner No.1 i.e. Mr. Sibal's client may raise in connection with E.A.No.297/2020 filed in O.M.P. (EFA) (COMM) No.15/2016 and E.A.No.278/2020 filed in O.M.P. (EFA) (COMM) No.5/2017.
(iv) (a) As would be evident, the captioned application i.e. Ex. App. (OS) No.379/2020is filed only by petitioner No. 1 and, therefore, will not concern petitioner No.2.
17. Having regard to the fact that GOI has communicated that the SLP has been lodged and, therefore, further indulgence should be given, I am inclined to stay the operation of the aforementioned directions for a period of another one week, even though time sought, in this behalf, was only till 01.06.2020.
RAJIV SHAKDHER, J MAY28, 2020 Aj/KK Click here to check corrigendum, if any Signature Not Verified digitally signed byVIPIN KUMAR RAI signing date29.05.2020 10:09