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| Govt asks SC to make it party in RIL-RNRL gas dispute |
| Press Trust of India / New Delhi Jul 17, 2009, 17:11 IST |
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In a new twist to the battle between Anil and Mukesh Ambani group firms, the government today asked the Supreme Court to make it a respondent in the ongoing gas supply dispute to safeguard its interests.
In its affidevit filed in the apex court in response to a petition filed by Mukesh Ambani-led RIL seeking to make government an intervener, the Petroleum Ministry said that it should be impleaded as a party in the dispute.
Younger Ambani sibling Anil's group firm RNRL had also filed a petition in the apex court seeking modification in the Bombay High Court ruling to make it incumbent on RIL to supply gas from KG Basin fields at a price of $2.34 per mmBtu, which is 44 per cent lower than that fixed by the government.
The Petroleum Ministry affidavit said: "Union of India's interests are vitally involved and affected by the High Court judgement and considering this fact, it would be more appropriate to make Union of India as a party."
It further added that the government's involvement in the proceedings was aimed at effectively resolving the controversy that has arisen in the matter.
Earlier in the day, RIL had said in its affidavit filed in connection with the cross-appeals filed by the two groups that it was only a contractor and did not have "any unfettered rights" in the quantity and price of gas and hence cannot give the same to RNRL without the consent of the government.
RNRL, on the other hand, has contended that RIL was trying to make the dispute as one between it and the government, which it argued had no role in the issue.
The government affidavit said the Bombay High Court judgement relating to the Ambani family settlement had held that "the price at which the respondent RNRL could get gas was subject to approval and that RNRL could not insist on gas being supplied to it on $2.3 per mmBtu."
The single judge had also held that the quantity and tenure would also be subject to approval by the government under the prevailing policies.
It added that the Bombay High Court division bench order, on which the cross-appeals have been filed, has the effect of completely "undermining the gas utilisation policy of the government of India and the principle of pricing natural gas declared as a policy by the government".
The matter involved sovereign ownership of natural resources and the government's rights in the capacity of a regulator, it said, adding that had the final judgement of the Bombay High Court affected the rights of only RIL-RNRL the role of government may have remained unchanged as an intervener.
Asserting that the gas has to be distributed as per the gas utilisation policy, the government said RIL and RNRL cannot settle between themselves as to how a national asset and natural resource is to be distributed.
"It is not the private property of RIL and RNRL and any understanding arrived at between them is not binding upon the government." it said, adding that the gas has to be distributed in terms of the policy approved by an empowered Group of Ministers.
Rejecting RNRL's contention that it was entitled to a particular quantity of gas, the affidavit said it was for the government to decide as who was entitled for the gas.
The entire amount of gas would have to be approved valued at the approved price for determining the entitlements of government and the contractor (which in this case is RIL), the affidavit said, adding that the government had rejected a proposal by RIL to supply gas to RNRL as it was not based on arms length transaction.
The Bombay High Court decision would lead to fixation of two prices — one for RNRL and the other for public sector undertakings — and "such an interpretation would be volatile of Article 14 of the Constitution of India," it said. Article 14 provides for equality before law and equal protection.
The sovereign rights of India could not be subjected to private negotiations by mutual understanding and this is what has precisely happened in the present case, necessitating the filing of the application, the government said.
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