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Delhi High Court (HC) on Monday dismissed Adani Power's plea, seeking to restrain Lanco Infratech from selling its shares in its 1,200 Mw thermal power plant in Udupi district of Karnataka.
Judge S Muralidhar asked the parties to initiate arbitration proceedings, according to the agreement between them, to settle their dispute over Adani's Rs 6,000-crore proposed acquisition of Lanco’s power plant.
Adani had moved the HC to restrain Lanco and its representatives from selling its shares in Udupi Power Corporation Ltd or creating any third-party interest in the unit, saying it would be a violation of a share purchase agreement (SPA) between them.
It wanted to restrain Lanco from selling shares of its Udupi unit till the time the arbitration proceedings remained pending, saying that otherwise its interests would be harmed as it had paid Rs 125 crore as advance consideration.
According to Adani’s plea, the conditions of the SPA required Lanco to provide consent to the transaction from all of its secured lenders as well as a consent to release the shares of Udupi pledged with them.
It was Adani's contention that of the 18 secured lenders, Lanco provided "purported consents" from only seven, despite which Adani gave its "purchaser undertaking" agreeing to re-pledge the released shares back with the lenders promptly after closing the deal.
It had also obtained the requisite clearance from the Competition Commission of India, the petition had said.
Adani had also accused Lanco of trying to unilaterally terminate the SPA, even though Adani had agreed to extend the same till March 31, 2015. The SPA had expired on December 29 last year.
Lanco had refuted all the allegations made by Adani.
