New Delhi: The memorandum of understanding (MoU) signed four years ago between the sparring Ambani brothers over supply and price of gas can be placed before the Supreme Court as Mukesh Ambani-led Reliance Industries (RIL) has no objection to it.
On the third day of inconclusive arguments, RIL counsel Harish Salve said only the text of the MoU had been seen by the Bombay High Court and if the apex court wants he wouldn't have an objection to submitting its copy to the judges.
At this, Ram Jethmalani, the counsel for Anil Ambani-led Reliance Natural Resources (RNRL) quipped, "I thought you had an objection to making it public.''
Justice R V Raveendran, who has been raising various pertinent queries on behalf of the bench that includes Chief Justice K G Balakrishnan and Justice P Sathasivam, had asked if the MoU was before the HC or shareholders when the demerger of RIL took place.
"Nobody has seen the MoU. Only its text is known," Salve said.
There were exchanges of arguments on leaking the MoU to the media and Salve sought to clarify, "As far as RIL board is concerned, I have no knowledge about it."
At this, Justice Raveendran, who also holds equal equity in the rival companies, asked, "Are shareholders not entitled to know about the scheme of demerger formulated on the basis of MoU?'' "If there was no MoU, would there be division of RIL or demerger of the flagship company?'' Justice Raveendran queried. "There would have been no need to touch the well-oiled RIL," went his poser for Salve.
The court also asked Salve about the explanation it had given to shareholders for the company's demerger.
The RIL counsel replied that the demerger of RIL was aimed at focused growth of the companies shared between the two brothers and for better growth, entailing bright future for the stakeholders.
He termed the MoU "worthless" since the government has "unreasonably" snatched its freedom to market gas.
"The MoU is not worth the paper on which it is written as far as RIL is concerned," the senior counsel, a former Solicitor General, added. "We had assumed marketing freedom when we divided gas in 60:40 ratio between the two groups (in the gas sale master agreement signed in 2006).''
The present proceedings are over the law suits filed by the two brothers in which RIL is opposed to RNRL's enforcement of the MoU to sell gas at $2.34 per mmBtu for 17 years as agreed upon under the mutual family arrangement.
RIL says it can't sell gas at a price less than the government approved rate of $4.20 per mmBtu and is bound by the Gas Utilisation Policy.
Interestingly, Salve said it was the rival RNRL that had made a representation to the Union government to frame gas utilisation policy as it felt "we are crooks and would hold everyone for ransom."
The government enacted it.
Hearing in the case will resume on Tuesday.


