Two Supreme Court judges exit from Ambani cases

At least two court cases involving the Ambanis look set to get further delayed due to a sudden decision by two judges to withdraw themselves from hearing them following “conflicts of interest”.

Justice RV Raveendran, who only the other day disclosed major interests in shares of Reliance companies belonging to both the Ambani brothers, Mukesh and Anil, on Wednesday opted out of the bench hearing the gas pricing dispute between Reliance Industries Ltd (RIL) and Reliance Natural Resources Ltd (RNRL).

Reason: his lawyer daughter’s firm AZB Partners has dealings with Mukesh Ambani’s Reliance. The government has impleaded itself in the gas dispute on the plea that gas pricing is its business, and cannot be the result of a private agreement between the Ambani brothers.

In another dispute involving RIL and Bharat Petroleum Corporation Ltd (BPCL), justice Markandey Katju recused himself from hearing the case because his wife had some Reliance-related (mutual fund) investments.

These unprecedented events in the history of the Supreme Court have resulted in a gross waste of the court’s time as justice Raveendran, a member of the three-judge bench hearing the gas case, has already spent six days listening to the arguments. In the BPCL case, justice Katju had already finished hearing the case in September, and a judgment was awaited. Now, a new judge will have to hear the case afresh.

In a communication later in the evening, RIL said it was not aware that AZB Partners employed justice Raveendran’s daughter at its Bangalore office. “This fact came as a surprise to our senior counsel and us. AZB Partners, who have been advising us from time to time, should have informed us of this fact and RIL regrets that six working days of the honourable court were lost.”

“Such things shouldn’t happen,” says a former chief justice of India (CJI). “The CJI should not have marked cases to judges who have pecuniary interests in the matter,” he told DNA on the condition of anonymity. But another former CJI felt that one shouldn’t make a big deal of the two decisions. “It’s not a crisis of law or efficacy of resolutions; it is a matter of one’s conscience.” Both former CJIs, however, expressed “shock” and “anguish” at the two recusals.

Prashant Bhushan, who is part of a lawyers’ association seeking transparency and accountability in the higher judiciary, said the code of conduct framed by judges needed a fresh look. Under this code, judges only have to reveal potential conflicts of interest. They need to withdraw from a case only if one of the litigants had an objection.

“There’s something called judicial  propriety and the 2002 Bangalore resolution adopted by courts in different countries bars a judge from hearing any matter in which he has personal  interest,” Bhushan said.   Justice Raveendran’s decision to recuse himself in the gas case came up during Wednesday’s hearing when RIL’s lawyer Harish Salve stood up to resume the arguments.

The judge said: “I am recusing myself from hearing this matter since I came to know only yesterday that my daughter is associated with a solicitor firm which is advising one of the parties in other matters relating to projects of global acquisitions’’.

“I know my conscience is clear. But justice should not only be done, but also seen to be done, for upholding the respect and dignity of the institution,” the judge said, and added: “I wish somebody had brought it to my notice earlier.”

RNRL’s counsel Ram Jethmalani wanted Salve’s arguments to be heard for he was about to conclude them, but justice Raveendran didn’t agree and chief justice KG Balakrishnan observed that the entire hearing, which began on October 20, would be reheard by the bench which would have Justice B Sudershan Reddy  in the recused judge’s place. Justice Reddy, like the CJI, doesn’t investment in stocks.

Outside the court room, additional solicitor general Mohan Parasaran, who represents the petroleum ministry, said “the court will start fresh hearings from tomorrow (Thursday). The match will be replayed.”

In another court room not too far off from the CJI’s high-dome office, justice Katju left the lawyers dumbfounded when he revealed that his wife had investments in Reliance and recused himself from the proceedings. Thus, the RIL vs BPCL case will also be replayed.

Another bench in this case had passed an interim order in June last year asking   RIL to pay Rs 50 crore to BPCL against its demand of Rs 110 crore within two weeks. This amount related to the price difference in naphtha supplied by the state-run oil company to an RIL plant in Raigad.

An arbitration decision went against RIL, and also a subsequent high court ruling. The apex court had, however, directed BPCL not to execute the decree allowed earlier by the Bombay high court. Justice Katju was supposed to give his final verdict in this case, but by recusing himself, the case will have to be heard all over again.