|
| RIL questions RNRL's demand for gas without power plant |
| Press Trust of India / New Delhi Nov 12, 2009, 19:48 IST |
|
 Mukesh Ambani's Reliance Industries (RIL) today questioned in the Supreme Court the demand of brother Anil Ambani's Reliance Natural Resources (RNRL) for the immediate supply of gas from KG basin saying that it cannot be done in the absence of the proposed power plant as per the agreement reached between them.
"There was assurance given for the supply of gas but the other side (Anil Ambani Group) failed to establish the power plant. Now they want to make money out of the gas which was never contemplated in the demerger scheme," Senior advocate Harish Salve, appearing for RIL said before a Bench headed by Chief Justice K G Balakrishanan.
Continuing his argments in the high-votage gas row, Salve said the assured supply of gas was the vital ingredient of the agreement for the power plant to be established by the RNRL at Dadri, near Ghaziabad in Uttar Pradesh.
"Therefore, no court can modify the scheme which they (RNRL) sought," Salve submitted before the Bench, also comprising Justices B Sudershan Reddy and P Sathasivam.
RIL's submission revolved around the question of a suitable arrangement for the supply of gas from KG Basin to RNRL.
When the day's hearing was about to conclude, RNRL's counsel Ram Jethmalani contended that the seven affidavits filed in the apex court by RIL's directors relating to the family MoU of 2005 saying were not the part of record when the dispute was heard in the Bombay High Court.
Jethmalani submitted that if RIL consents and affidavits were allowed to be the part of the records then under company court procedure, the seven directors were open to cross-examination in the court.
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.
However, before the intervention by RNRL, Salve said the scheme of demerger provided that the gas has to be supplied up to the delivery point after which it would be for the Anil Ambani's Reliance Energy (REL) to transport the gas to its power plant.
"The suitable arrangement would be that RNRL take the gas from delivery point for REL. However, what they wanted is that from the delivery point RNRL would take the gas and market it," he said, adding that "no court could grant such a relief to RNRL for taking the natural resource and making profit by marketing."
RIL said supply of gas to RNRL at $2.34 per mmBtu was not possible as it would have to make up for the loss from its own pocket.
If RIL supplies gas at $2.34 and not as per the government approved price of $4.2, "it will have to suffer net loss of $1.86 per mmBtu and this will be debited from its account", Salve said.
Salve argued that the applicability of the Gas Utilisation Policy does not depend upon the MoU but on the interpretation of the production-sharing contract (PSC) and the government's right to make a policy.
He said the family MoU cannot override the PSC which was signed before it. While the PSC was reached in 2000 between RIL and the government, the MoU came only in 2005.
"If the view of the government that it was within its rights to regulate the marketing of gas is accepted, then notwithstanding any of the provisions of the MoU, the question of supply of gas other than pursuant to an allocation by the government does not arise. The MoU which is subsequent to PSC cannot and does not purport to override PSC," RIL stated.
Salve termed as baseless the RNRL's allegations that the Dadri plant was delayed due to RIL failing formalise its commitment on gas supply.
He said that it was not RIL but RNRL itself which was responsible for the delay in setting up of the power plant.
Hinting that the Anil Ambani firm was sitting over huge public money, he said that RNRL had raised Rs 11,000 crore from the market besides few hundred crores from the external commercial borrowings but had failed to set up the plant.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
