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Gas row | Suitable arrangement must be approved by govt

Gas row | Suitable arrangement must be approved by govt
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First Published: Wed, Nov 18 2009. 06 58 PM IST
Updated: Wed, Nov 18 2009. 06 58 PM IST
New Delhi: The government on Wednesday asserted in the Supreme Court that any suitable arrangement between the Ambani brothers for the supply of gas from K G basin has to be approved by it keeping the national interest paramount.
It said the 2005 family MoU between the Ambani brothers cannot override the public policy on the gas supply and utilization.
Even the production sharing agreement (PSA) between Mukesh Ambani Group firm RIL and the government talks about public interest, additional solicitor general Vivek Tankha submitted before a bench headed by Chief Justice K G Balakrishnan.
“The RIL and Anil Ambani’s RNRL could arrive at suitable arrangement but it has to be a suitable arrangement for the country approved by the government,” he said.
“How could their (Ambanis) MoU override public document which is the PSA. The MoU is a family arrangement while PSA is an arrangement for the country.
“We are concerned with the protection of natural resources which is not limited to this case but for for all times to come. People’s right has to be protected,” he argued before the bench, also comprising Justices B Sudershan Reddy and P Sathasivam.
However, the government faced tough time as both the bench and RNRL questioned its submissions which were purportedly not part of the record in the Bombay high court.
“Our simple question is what are the material available with you on which you are arguing,” the bench asked the ASG, who said there was nothing on record from government’s side before the high court.
However, Tankha said this cannot be a ground to keep the government away from the dispute as “peoples’ right have to be protected”.
“How can the resource of the country be discussed and decided in the absence of the government,” the ASG said.
Tankha was frequently interrupted by RNRL’s counsel Ram Jethmalani and Mukul Rohatgi who accused the government of putting forth submissions which were never the part of the high court records.
Jethmalani said government submissions are designed to “help” RIL and its officials must be ready to face cross- examination.
Earlier, continuing the arguments additional solicitor general Mohan Parasaran said government is the sovereign owner of all natural resources and the constitution obligates upon it to distribute it in the best interest to subserve the common good.
He said the high court had, on the other hand, proceeded to conclude that an assured allocation of natural gas in favour of RNRL exists which results in compelling RIL to enter into contract with RNRL for the supply of 28 MMSCMD in addition to 12 MMSCMD of natural gas in case NTPC contract does not fructify.
The Ambani brothers are locked in a bitter battle over the supply and price of the gas from KG basin.
While RNRL is seeking gas at a committed price of $2.34 per unit, RIL says it cannot honour the commitment made in the family agreement due to government’s pricing and gas policies.
Parasaran said government policy was clear that gas was its property till it reached the delivery point. In this case, from the delivery point it would be under the control of RIL which is assuming the role of a contractor.
He said it was not permissible for the RIL to enter into contract with RNRL without the express approval of the government.
This prompted the bench to ask the government whether it ever objected to the RIL offer to RNRL.
The bench also wanted to know whether the empowered group of ministers had fixed the gas price after being in the know about the contract between RIL and RNRL.
Parasaran said the government had rejected the price of $2.34 mmBtu fixed between RIL and RNRL in 2006.
However, this submission was opposed by Jethmalani, who said the arguments were contrary to its stand in the high court.
“You don’t even have the right to approve the price,” he said opposing the government stand that any suitable arrangement between the Ambani brothers will have to be approved by it.
“There is only one gas utilization policy. I am bound by that,” he said and termed the submissions of government as “wild arguments”.
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First Published: Wed, Nov 18 2009. 06 58 PM IST
More Topics: SC | Supreme Court | Ambani | Reliance | RIL |