Battery of lawyers to defend Gujarat’s Sardar Sarovar Bonds Act [Read Petition]

In a major surprise today, a battery of law officers and Senior Advocates appeared before the Supreme Court to defend the Sardar Sarovar Narmada Nigam (Conferment of Power to Redeem Bonds) Act..Attorney General Mukul Rohatgi and Additional Solicitor General Tushar Mehta along with Senior Advocates Arvind Datar and L Nageswara Rao appeared for the Gujarat government and Sardar Sarovar Narmada Nigam Limited (SSNNL)..A Division Bench of Justices PC Ghose and Amitava Roy said that the matter needs to be heard out and granted leave. The stay on the High Court judgment will continue..By way of background, the Gujarat government had raised funds for the Sardar Sarovar Dam Project in 1993 by way of bonds. In an issue guaranteed by the Gujarat state government, Sardar Sarovar Narmada Nigam Limited issued non-convertible bonds and Deep Discount Bonds. Every DDB of Rs. 1,11,000 each was issued at the discounted price of Rs. 3,600, and the said amount of Rs. 1,11,000 was to be paid in January 2014..However, in 2008, the Gujarat state assembly enacted the Sardar Sarovar Narmada Nigam Limited (Conferment of Power of Redeem Bonds) Act, 2008, whereby SSNNL was granted powers to redeem the bonds earlier. The Act empowered the government to terminate the bonds by making a payment of Rs. 50,000 for each bond, which would result in a loss of Rs. 61,000 per bond for each of the 4.1 lakh investors..With this premature termination, the Gujarat government aimed at saving around Rs 4,500 crore, and the final figure would have been Rs 7,000 crore at the end of maturity in 2014..Subsequently, petitions were filed in the High Courts of Gujarat, Maharashtra and Karnataka challenging the vires of the Act. The matter even reached the Supreme Court through a transfer petition. In 2013, the apex court directed that all the matters would be decided expeditiously by Gujarat High Court..Before the High Court, the petitioners had challenged the Act on grounds of legislative competence, Article 14 and 19 of the Constitution, and extra-territorial operation. It was also argued that the framing of such Acts is the prerogative of the Parliament, and not of state assembly, as it falls within the ambit of Company Laws and Acts related to the Security and Exchange Board of India..A Bench of Justices Jayant Patel and Nilay Anjaria had declared the Act to be ultra vires..The Court today heard Attorney General and other lawyers for a few minutes before granting leave. It has now posted the matter for hearing in July..Read the petition against individuals below.