Gurudas Dasgupta's petition on RIL argued in SC

His counsel argued that government's decision to double the natural gas price was to benefit the company

This article has been modified. Please see the clarification at the end.

Opening the arguments in CPI leader Gurudas Dasgupta’s petition against Reliance Industries Ltd, his counsel argued in the Supreme Court today that the decision of the government to double the natural gas price was to benefit the company.

The Petroleum Minister rejected the recommendations of all sectors of the government to raise the price on the eve of the elections, counsel Colin Gonslaves told a bench headed by Justice B S Chauhan. Officials in various ministries like power and coal had opposed the hike, the CAG was also against it as well as two parliamentary committees. However, the minister ignored all these views.

According to counsel, Reliance has deliberately reduced production to demand increase in price, creating shortage of power and gas required by a large number of industries which had invested huge amounts on the expectation that they would get the supply of these vital ingredients. “Reliance is holding the country to ransom,” Dasgupta lawyer stated repeatedly.

The CPI leader has asked the court to order initiation of termination proceedings against RIL for extraction of natural gas from the KG basin. He has also questioned the credentials of the members of the Rangarajan Committee, which had supported the new formula for fixing the price that would effectively double the price to $8.4 per mmBtu.

Counsel said that officers who came out in opposition have been shunted out from  their positions, like the former Director General of Hydrocarbons. Every single recommendation on the files in the ministries  has been overruled. The “collusion” is serious, especially since it is coming  on the eve of the elections.    

Reliance counsel Harish Salve intervened at one stage and submitted that the company had invested huge amounts in exploration and development. All the explorations do not yield result in discovery of oil and gas. Success rate in India is 1:7 to discover oil. Moreover, even if the wells yield satisfactorily in the beginning, it might decline over a period, which is what happened in the KG basin, he said giving reasons for the shortage in supply. Salve also questioned the locus standi of Dasgupt in the matter. He will make comprehensive arguments later in the week.

Common Cause, an organization represented by lawyer Prashant Bhushan, has also challenged the price hike and other irregularities in the production sharing contract between the Government, Reliance and a Canadian company. Arguments will continue on Wednesday.

CLARIFICATION
In an earlier version of this article Gurudas Dasgupta was mentioned as belonging to CPM, which is incorrect. He is a CPI leader. This article has been corrected. We regret the error.