Twenty minutes. That's all it took the Supreme Court to adjourn by 40 days a hearing of appeals filed by the estranged Ambani brothers over the supply of gas from the Krishna-Godavari basin.
It has scheduled the next hearing on September 1 when it will also examine whether other contenders such as GVK, GMR and Gautami could approach the court at this stage as they weren’t parties before Bombay High Court.
A three-judge bench will now hear the case.
The proceedings were witnessed by a packed-to-the-rafters court. Arguing were Ram Jethmalani and Mukul Rohtagi for Reliance Natural Resources Ltd (RNRL), Harish Salve for Reliance Industries and additional solicitor general Mohan Parasaran on behalf of the petroleum ministry.
A bench of chief justice K G Balakrishnan and P Sathasivam asked the three petitioners to file replies to appeals — also filed by the parties.
The government, in a belated appeal, had claimed absolute ownership of the gas being produced and to be produced by RIL saying under the Constitution it’s its property.
Aggrieved by the government’s new-found stand that hadn’t been revealed during the prolonged proceedings over the gas dispute before the Bombay High Court, Jethmalani minced no words in charging the petroleum ministry of colluding with RIL.
“The ministry is in the pocket of the respondent (RIL)… and the government’ s conduct in this matter is worse than the respondent’s,” he said.
It drove Salve to defend: “I have not looked inside my client’s pocket.”
Even outside the court, Jethmalani repeated the accusation and Salve again dubbed it as a “remark made for the gallery”.
Salve said RIL isn’t against the Bombay High Court judgment per se, for it says that the January arrangement between RIL and RNRL would remain in operation.
In other words, an analyst said, since the Union government has laid its claim on the gas produced by RIL and sought quashing of a clause in the memorandum of understanding (MoU) between the company and the government, there’s no question of gas being supplied to any party pending final decision by the apex court.
The government has fixed the gas price is $4.20 per mmBtu, but the MoU said $2.34 per mmBtu.
The government has fixed the gas price is $4.20 per mmBtu, but the MoU said $2.34 per mmBtu.
RNRL wants it at that rate but RIL says the price is fixed by the Union government, so it can’t supply at a rate lower than the fixed price.
RNRL counsel Rohtagi said: “So far as our (RNRL) plea is concerned the high court has found a crucial clause including price, quantity and number of years in our favour’’.
The gas should be supplied immediately as per the order, he said.
In an apparent reaction to what Jethmalani had said and also to rebut the charge of the delayed move in the gas case by the Union government, petroleum secretary R S Pandey told media, “We (government) for the first time got to know from the high court judgment last month that all volumes beyond 28 mmscmd committed to (Anil Ambani’ s) RNRL and 12 mmscmd to NTPC were divided between RIL and RNRL in 60:40 ratio’’.
Peak gas out from KG-D6 fields may be 100-120 million standard cubic meters per day.
“The MoU also states that they are free to price the volumes beyond those locked in litigations. So practically, RIL may transfer KG-D6 gas for use in its refineries and petrochemical plants at $1 per mmBtu,” he said.
Other industries will be dependent on the mercy of RIL and RNRL to get the scarce fuel, Pandey said, adding the government filed a petition in Supreme Court to get the MoU declared null and void to prevent such appropriation of natural resource through private agreements.
“We have so far not taken any action against RIL as it has so far not done anything in contravention to the gas pricing and utilisation policy as derived from the production sharing contract,” Pandey said. “I cannot today say that no action will be taken.”
Interestingly, the shift to the Supreme Court also saw the ministry of petroleum and natural gas file a case against a private understanding by the brothers on division of assets, including gas, among the two.
It accused the promoter of its contractor, Mukesh Ambani, of promising to give his brother Anil gas which he did not own. The petition urged the court to strike down the personal agreement as the gas was not Mukesh’s to give, and claimed it owned all the oil and gas in India.
RNRL filed a rejoinder to the ministry’s petition seeking the scrapping of the memorandum between the two brothers, accusing it of “abuse the court process”.
The government had withdrawn all its affidavits in the case in the Bombay High Court in December last year.
“The ministry is seeking to re-introduce allegations, statements and averments that were withdrawn before the high court. S M Sundaram , who is the deponent of the ministry affidavit before the Supreme Court was also the deponent before the high court. In order to avoid cross examination which would have exposed the falsity of various statements made by the ministry, the ministry withdrew its affidavits before the high court. The affidavit now filed by the ministry is therefore clearly an abuse of process of court,” it said.
RNRL also wondered why the government is objecting the division of gas after giving written approvals in 2005.
“The scheme of de-merger [implementation of family settlement] was sanctioned by the Bombay High Court on December 9, 2005, after the approval of creditors, lakhs of shareholders and the government. The ministry did not object to the scheme,” it pointed out.
Complications...
Those expecting a quick resolution of the Ambani gas drama were in for disappointment on Monday.
There are several applications around the core issue, which started with the first petition filed by ADAG in 2006 over non-implementation of RIL demerger clauses.
While both brothers have fought all the way to the SC, the govt joined the fight as an intervener, promising to help the court make sense of the contract between itself and RIL.
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