Attorney General agrees with Solicitor General on NTPC-RIL case

NTPC Ltd, which is fighting a legal case against Reliance Industries Ltd (RIL) over gas supplies, should approach the Supreme Court to protect the purchase contract, Goolam E Vahanvati, the country’s Attorney General, has said in an endorsement of the opinion given by Solicitor General Gopal Subramanium.

“The price at which NTPC obtains gas is a matter of public interest because that would impact its pricing and consequently, the availability of power at affordable prices,” Vahanvati said in his opinion to the company.

Earlier, Subramanium had advised NTPC to seek transferring the case to the Supreme Court from the Bombay High Court. NTPC had awarded RIL a contract for supply of natural gas at a price of $2.34 a unit for 17 years. However, the agreement was not signed due to differences between the two companies on limiting the liabilities in case of non-supply of gas.

The AG notes that the now-famous dispute on gas supply between RIL and Anil Ambani’s RNRL will obviously have a bearing on the isssues in the NTPC case. “The contentions taken by the Union of India in the proceedings between RIL and RNRL are likely to have a bearing on the nature of the rights under the contract between NTPC and RIL,” he observed.

RIL went to the SC after the Bombay HC ordered it to supply 28 mscmd of gas to RNRL at a price of $2.34 a unit. RIL, however, has stated that it cannot sell gas at a price lower than the $4.2 a unit that has been decided by the government for supplies to sectors like power and fertiliser. *