Uncertainty over disputed Gurgaon CGD valuation

If the Supreme Court rules in favour of Indraprastha Gas (IGL) over the disputed valuation of the Haryana City Gas-operated CGD network in Gurgaon it risks accusations of supporting the takeover of a private business by a state-owned company.

On August 26, Justices Arun Mishra and Deepak Gupta postponed the case to September 26. In dispute is whether IGL should pay Rs1527cr ($218m) for the entire company or Rs200cr ($28m) for the CNG station and pipeline infrastructure based on a valuation carried out by court-appointed Deloitte.

"Whichever number the court chooses the other side will protest," says a gas sector source. "IGL may want to take over (HCG's) Gurgaon (assets) at just Rs200cr ($28m) but HCG cannot be compelled to sell at that price."

Some say the court might ask both sides to negotiate the price. "But there'll be no end to negotiations," we hear.

There's also a larger issue at stake if the court settles on one or the other figure. "Can or should a court take on this role?" asks a source.

"If it does it will send a wrong signal, indicating court support for (state-promoted) IGL nationalising a private company's business. Such things happen only in dictatorships!"