NTPC case: Ministry, counsel speak in different voices

After the power ministry and state-owned power utility NTPC took strong exception to the petroleum and natural gas ministry’s lawyer Tejinder Singh Doabia telling the Bombay High Court last Thursday that the RIL-NTPC deal was not a ‘concluded’ one, the petroleum ministry has asked the lawyer to withdraw his statement when the case is heard again on September 1.

The twist is that while the ministry says Doabia’s interjection in the Mukesh-Anil Ambani case (Reliance Industries Limited versus Reliance Natural Resources Limited) was beyond his brief, Doabia insists it was the ministry which instructed him to do so.

In a letter to Joint Secretary DN Narasimha Raju last Saturday, Doabia refers to an earlier e-mail by him on August 13 where he had asked the ministry for a copy of the RIL-NTPC agreement so that he could study it for arguing his case.

In this e-mail, Doabia had said: “I believe that this was not final …” and that, in any case, “the price fixed in the NTPC agreement is subject to approval of Government of India”. His letter of August 23 then goes on to say:

“In response to the above e-mail, I was instructed that there is no concluded agreement and mere letter of intent was issued.”

Doabia’s letter comes a day after he was telephoned by Raju asking for details of what had actually transpired in the Bombay High Court following media reports on the proceedings.

Doabia chose not to comment on the letter when asked by Business Standard, saying, “No, no, I will not comment … there has already been a lot of muck on this.”

Petroleum Secretary RS Pandey and Raju, however, both confirmed they had indeed received Doabia’s letter though Pandey stressed all that mattered was that Doabia had been asked to withdraw his statement.

When asked, Pandey said he had no idea who had briefed Doabia to say what he had — Doabia had been hired four or five months ago, Pandey said, and would have briefed by a variety of officials.

Raju said he had never briefed Doabia, while Pandey said he was unaware of whether his predecessor had left any instructions saying the deal was not ‘concluded’.

In 2003, Reliance had won a global bid edging out bidders like Shell to supply NTPC 12 million metric standard cubic metres per day (mmscmd) of gas for 17 years at a price of $2.34 per mmBtu (million metric British thermal units).

Towards the end of 2005, Reliance changed some of the terms of the contract — instead of an unlimited liability in case it failed to supply NTPC the requisite gas, Reliance capped its liability. NTPC refused to accept this and other changes and did not sign on the new terms.

Instead, it filed a case in the Bombay High Court asking that Reliance be told to fulfill its original contract. So, when Doabia said the NTPC-RIL deal was not a ‘concluded’ one, he effectively demolished NTPC’s entire case.

The NTPC case is important in the Reliance Industries Limited-Reliance Natural Resources Limited fight since the commercial terms of their contract were similar to those in the NTPC case. If there is no ‘concluded’ NTPC-RIL contract, there can logically be no concluded RIL-RRNL contract either.