NTPC case different, govt tells apex court

NTPC case different, govt tells apex court

New Delhi: The government filed its much awaited affidavit in the Supreme Court in the fight between the estranged Ambani brothers, that essentially reiterates its right to regulate sales of gas found on blocks bid out by it while seeking to protect the interests of state-owned utility NTPC Ltd, which is involved in a similar dispute.

Interestingly, the government’s affidavit didn’t guarantee that NTPC would get gas at $2.34 (Rs108.34) per million British thermal unit (mmBtu) as indicated by solicitor general Gopal Subramanium in the court on 19 November, but it hinted as much.

The government’s affidavit in the case between Mukesh Ambani’s Reliance Industries Ltd (RIL) and his younger brother Anil Ambani’s Reliance Natural Resources Ltd (RNRL) over supply of gas from the former’s D6 block in the Krishna-Godavari basin tries to make a distinction between this and the case being fought between RIL and NTPC in the Bombay high court. However, it mentions that the $2.34 per mmBtu “price offered by the contractor (RIL) to NTPC will require scrutiny and approval of the government under the production-sharing contract".

While RNRL’s lawyer Ram Jethmalani claimed the affidavit has hurt NTPC, a senior executive at the utility, who did not want to be identified, said his firm had been consulted on the affidavit and that “there is a provision made in the affidavit that enables government to take care of our interest".

The executive’s reference is to the portion of the affidavit that said the government would take a decision on approving the gas price when either NTPC’s rights are established in the pending case in the high court or when “factors of overriding public interest warrant any governmental decision". Subramanium said the affidavit “adequately protected NTPC’s interests".

The lawsuit between NTPC and RIL in the Bombay high court dates back to December 2005, with the point of contention being the existence and terms of a valid contract between the two. NTPC claims there is one in which RIL promised to supply 12 million standard cu. m a day of gas for the expansion of the state-owned power generator’s Kawas and Gandhar power plants, both in Gujarat, for 17 years at a price of $2.34 per mmBtu. RIL claims otherwise.

Spokespersons for the Reliance-Anil Dhirubhai Ambani Group of which RNRL is a part, and RIL declined comment.

RIL and RNRL had approached the Supreme Court against the verdict of the high court on 15 June, which had asked them to sign a “suitable arrangement" for gas supply. RIL appealed the judgement while RNRL wanted it expedited. The apex court has refused to stay the lower court’s ruling.