SC rules out stay on RIL gas supply

Private parties cannot sign pact on gas says Govt; Next hearing fixed for Sept 1

A bench headed by Chief Justice K G Balakrishnan said, “We are not to pass any order on the supply of gas. The present status is to continue.”

While fixing September 1 for hearing the arguments, the court transferred the matter to a three-Judge bench to decide the issue.

Reliance Natural Resource Ltd owned by Anil Ambani opposed the petition filed by the government saying that it has no right to challenge Bombay High Court ruling as it was an intervener.

Senior Advocates Ram Jethmalani and Mukul Rohtagi also opposed the application filed by several power sector companies seeking to intervene in the case.

Jethmalani said that the conduct of the government was worse that the RIL. “The Petroleum Ministry is in the pocket of RIL.”

Immediately RIL Advocate Harish Salve retorted back: “I have not looked into the pocket of my client.’’ The court issued notice to the RIL and RNRL on the petition of the government that sought direction from the court to nullify the agreement between Mukesh Ambani and his estranged brother Anil to sell gas at a rate less that the fixed price.

Private party agreement

Additional Solicitor General Mohan Parasaran said government was an aggrieved party and it was a policy decision. “Private parties can not sign an agreement on gas, a public product,’’ he added.

RIL said that government has filed a petition before the court seeking to assist the court on law point. ‘’The price of gas has to be decided by the government,’’ said Salve.
In its reply on Friday, the Centre said the RIL and RNRL can not settle between themselves on pricing of gas which is a national asset.

RIL in its petition said it would not be possible to supply gas to RNRL without the government’s nod and requested the Supreme Court not to restrain it from selling gas to others.

It said that it can’t sell gas to anybody without official nod, the affidavit filed by RIL’s law firm Parekh & Company said that the government as such had rejected the price of $2.34 per mmBtu for gas. The current applicable price as per government formula is $4.20 per mmBtu.

RIL is a contractor under the production sharing contract entered into on April 12, 2000 with the government under the new exploration and licensing policy and has no unfettered rights on the quantity, said the petition.

Cross appeals

Both RIL and RNRL have filed cross-appeals challenging the Bombay high court decision on gas supply, in which the RIL has named the government as intervener.
RIL said in the affidavit that it would sell and supply the stipulated quantity of gas to users identified and nominated by the government.

“The instructions issued by the government... under the gas utilisation policy state that consumers belonging to any of the priority sectors should be in a position to actually consume gas as and when it becomes available and so the marketing priority does not entail any reservation,” RIL affidavit said.

DH News Service