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| Parasaran begins arguments in gas row |
| BS Reporter / New Delhi Nov 18, 2009, 01:13 IST |
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Says HC allocation order wrong, for govt is custodian of all gas in India
Additional Solicitor General Mohan Parasaran asserted today that all natural resources, including gas, were the property of the central government, according to Article 297 of the Constitution. They cannot be shared among private parties, ignoring the interest of the government, custodian of the public interest.
He began the Union government’s arguments today in the RIL-RNRL dispute over K-G basin gas. Earlier, RIL concluded its arguments before the bench, headed by Chief Justice K G Balakrishnan.
RNRL counsel Ram Jethmalani had earlier argued the government had no legal standing to intervene in the five appeals being argued in the Supreme Court. The government, he said, was not a party before the Bombay High Court, which had given a decision largely in favour of RNRL. He also argued that sovereign claim over gas is an outmoded concept. Sovereignty was only between this country and others, not vis-à-vis the people.
Disputing the contention of Jethmalani, Parasaran said the government was an intervener in the high court. It had filed affidavits in the high court explaining its gas utilisation policy. Therefore, it should be heard by the Supreme Court.
Further, he said, even if the government was not a main party in the high court, where the warring Ambani brothers fought over the price of the gas and the production sharing contract, the government should be heard, as it is an aggrieved party. Any aggrieved party which is affected by a court order could move an appeal before the next higher court.
Moreover, the government was the custodian of public interest and the owner of the national wealth. RIL was only a contractor. It could not distribute and sell the gas in a private arrangement. The government is not sure whether the brothers are in “collusion or really fell apart.” It did not matter to the government. In any case, the government cannot let two brothers share precious resources in a private arrangement when energy is in short supply, counsel emphasised.
Assailing the judgment of the division bench of the Bombay high court, Parasaran said it had overturned the government’s gas utilisation policy and decided the issues as if RIL is the owner of the gas, whereas it was only a contractor. It has no ownership either before or after delivery. The government regulates the distribution and price. Private arrangements are not binding on the government. It is the trustee of national resources, he underlined.
The argument will continue on Wednesday. The court is racing against time, as RNRL wants two weeks. The hearing began last month and the court closes for its vacation some time next month.
The high court should not have made an arrangement by its order, as that would violate the constitutional principle of equality. By creating two classes of gas buyers, its decision went against the principles of non-arbitrariness and reasonableness. If the government had done what the high court had told it to, it may not have stood the test of constitutionality, he argued.
Jethmalani strongly opposed the government’s stand and demanded that he be allowed to cross-examine witnesses from the Ministry of Petroleum and Natural Gas. However, the court did not immediately respond to his demand and continued hearing the Additional Solicitor General.
The Ambani brothers took their legal fight to the Supreme Court two months earlier. While RNRL is seeking gas from RIL at $2.34 per unit, as agreed in an earlier deal between the two, RIL says it cannot honour the commitment made in the family agreement due to the government’s later pricing and gas policies. According to RNRL, there was no independent verification, audit or approval of the transportation cost of the gas.
The government also filed an appeal against the Bombay High Court order of July 15 that directed RIL to supply 28 mscmd of gas to RNRL for 17 years at $2.34 per unit.
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