The undertaking has been given in response to a writ petition filed before the court, challenging the validity of the preferential allotment made to Castrol Plc in 1993.

The petitioner has also sought an ad-interim injunction restraining Castrol India Ltd from remitting any dividend to Castrol Plc on the preferential shares allotted and the rights/bonus shares arising therefrom.

The writ petition has questioned the validity of the preferential allotment made to Castrol Plc way back in 1993 when 35,37,862 preferential shares were allotted to it. Subsequently, 77,83,296 shares were allotted on the said preferential shares by way of bonus issues in 1994 and 1995.

According to a Castrol India spokesperson, the parent company has agreed to give an undertaking before the court ata hearing held recently that, the shares arising out of the preferential allotment and the bonus shares arising from them would not be sold or disposed of without seeking the permission of the court.

"Further, all bonus/rights shares that may be allotted in future on the said preferential/bonus shares would not be sold or disposed of without the permission of the court," said the spokesperson.

It has further agreed to give an undertaking to the effect that all dividends declared and paid in the future on the said preferential shares and bonus/rights shares would be repatriated to India in the event of the matter being ultimately decided against Castrol Ltd and the allotment of the preferential shares being struck down by the court.

"Upon the above undertakings being given, the application for interim injunction would become infructous. Further, we may mention that the company is legally advised that in making the preferential allotment it has acted within the parameters of law", the spokespersonadded.

Meanwhile, rumours on the case have been doing the rounds in the market and this has been reflected on the scrip's performance. On April 23, the stock breached the crucial mark of Rs 700 to touch a low of Rs 693 before closing at Rs 695.50, registering an intra-day decline of 1.41 per cent. In the absence of the official version of the entire episode the stock traded at a low of Rs 688 on April 24.