Mumbai: The Bombay high court will decide after two weeks whether to allow Reliance Industries Ltd (RIL) to amend its plea in a legal battle with NTPC Ltd, the country’s largest electricity producer, over their gas supply contract, the court said on Wednesday.
RIL wants to amend the plea to argue that following the government’s policy on pricing and allocation of gas from the KG basin, the RIL-NTPC contract stands “frustrated”.
RIL and NTPC had negotiated the contract for supply of gas from RIL’s KG basin reserves in 2003-04, but RIL later took the stand that the contract had not yet been concluded. State-run NTPC then moved the high court, saying that the contract had been sewn up and RIL should implement it. Under the contract, RIL is supposed to supply 12 million standard cu. m per day of gas to NTPC at $2.34 per million British thermal units (mBtu) for 17 years.
RIL now wants to amend its plea and adopt a fresh stand that even if it had a valid contract with NTPC, because of the government’s latest decisions on KG basin gas, the contract would be frustrated.
The Union government had filed an affidavit in the high court in RIL’s court battle with Reliance Natural Resources Ltd (RNRL) in January, stating the decisions of an empowered group of ministers (eGoM) on KG basin gas pricing and allocation. EGoM had said that KG basin gas won’t be sold for less than $4.20 per mBtu. RIL wants to rely on this affidavit in its case with NTPC.
A division bench comprising chief justice Swatanter Kumar and justice S.C. Dharmadhikari said on Wednesday that it would decide whether to allow RIL to take a new stand after two weeks.
On Monday, the court had asked Mukesh Ambani-led RIL to forge a “suitable arrangement” within a month to sell gas from the KG basin at a price 44% less than the government-mandated price of $4.20 per mBtu to RNRL, headed by his estranged younger brother Anil Ambani. RNRL is now set to intervene in the case between RIL and NTPC, a person familiar with the matter said.