The court saw a heated argument between both the parties on the final day of the hearing as the case revolved around the critical issue of whether the transfer of one share of $1 of CGP Investments (Holdings), Cayman Island to Vodafone by Hong-Kong based Hutchison Telecom International (HTIL) is equivalent to transfer of 67% shares in Hutchison Essar (HEL).
Responding to questions raised by the Division Bench of the HC comprising justices DY Chandrachud and JP Deodhar on capital assets on Tuesday, additional solicitor-general Mohan Parasaran said the interest in a joint venture was itself an asset.
HTIL, as a partner, had rights for the JV, which is a valuable right and thus, a capital asset. HTIL relinquished its rights in this asset to Vodafone and therefore, transfer of asset.
Thus the transaction has nexus in India, as one of the JV partner was an Indian entity. Parasaran also submitted various documents, including the sale and purchase agreement, to the court, to prove its stand.