NTPC moves SC against RIL in gas row

Says the company was aware of ministers panel decision on pricing of gas

A Division Bench of the the Bombay High Court had allowed amendment in the petition wherein RIL had prayed that the government’s policy on pricing of gas would frustrate its contract with NTPC.
The Special Leave Petition (SLP) by NTPC comes within days of the government moving the apex court stating that its pricing policy was without prejudice to the power PSU case against RIL.NTPC had earlier taken opinion from top two law officers, wherein both the Attorney General and Solicitor General had advised the power PSU to move the Supreme Court saying the amendment by RIL seems to portray the government as the chief architect of the inability of RIL in being able to perform the contract. The power PSU had earlier moved the Bombay High Court seeking 12 mmscmd gas from RIL which had emerged winner in an international competitive bid quoting a price of USD 2.34 per mmBtu.

“The High Court failed to appreciate that the amendment substantially cited the Central government and its decision to be the chief cause of inability to perform the General Sales & Purchase Agreement,” NTPC said, pointing that this (amendment) was a new case and ought not to have been permitted.It said that (RIL’s) amendment was based on an affidavit filed by the government in Bombay High Court in February, but without regard to the empowered Group of Ministers’ contention that “... the decision taken in the eGoM meeting will be without prejudice to the NTPC Vs RIL and RNRL Vs RIL case which are separately subjudice...”

Law ministry clarification
It may be recalled that RNRL is also fighting a case against RIL to get gas at US$2.34 per mmBtu, a price substantially lower than the US$4.2 per mmBtu approved by the eGoM and both the parties have moved Supreme Court challenging two separate decisions of the Bombay High Court. Even the government has moved a petition on the RIL-RNRL issue and the apex court has decided to commence hearing on the matter on October 20. The government, which filed its petition on July 18, had subsequently sought amendment saying its price approval was without prejudice to the NTPC-RIL case.

The government’s interlocutory application earlier this week had also mentioned that the Ministry of Law had clarified during the eGoM meeting in August 2007 that “the two cases between RIL Vs NTPC and RIL Vs RNRL were separate contracts between the supplier and different companies.
“We have to keep these cases beyond the scope of our deliberations and take a decision in general on NELP pricing issue.”

NTPC said RIL’s application for amendment of its original written statement after the commencement of trial was liable to be rejected. RIL, prior to filing its statement, was aware of the eGoM’s decisions of September 12, 2007, on the pricing of gas.As per the SLP, Mukesh Ambani firm knew the EGoM’s decisions on the pricing of gas on October 10, 2007, which was prior to filing of the written statement on October 31, 2007.
It said Order 6 Rule 17 of the Civil Procedure Code was subject to the provision that makes it mandatory that after the commencement of trial, no application for amendment could be allowed unless RIL was able to satisfy the trail court that inspite of due diligence it could not raise the issue before the commencement of the trial. “The proposed amendments were merely an afterthought and with a view to delay the trial of the suit and, therefore constituted a gross abuse of the process of this court,” the petition stated.The PSU said RIL had sought amendment not only after a lapse of almost a year-and-a-half, but even after filing its written statement and hearing in the matter was expedited and trial had already commenced.

“...the High Court has clearly misdirected himself (itself) in fact and in law, thus arriving at conclusions, which are entirely unwarranted and unjustified and on the undisputed record before the court, the findings in the impugned judgement and order constitutes an error apparent on the face of the order,” the petition stated.