The Bombay High Court on Wednesday said that it would decide after two weeks whether to allow the Mukesh Ambani-promoted Reliance Industries Ltd (RIL) to amend its plea in its legal war with state-owned NTPC over a gas supply contract.
RIL is seeking to include the government’s official stance on gas utilisation and pricing policy in its plea. The amendment will facilitate RIL in its argument that, in view of the government’s policy on pricing and allocation of Krishna-Godavari (K-G) basin gas, even if it had a valid contract with NTPC, the contract stands frustrated, RIL counsel Milind Sathe told Business Standard.
The hearing was the first one after the Bombay High Court order directed RIL and the Anil Ambani-owned Reliance Natural Resources Ltd (RNRL) to enter into a contract for sale of gas at $2.34 per million British thermal unit (mBtu).
In 2003-04, RIL and NTPC had negotiated a contract for supply of 12 million metric standard cubic metres per day (mmscmd) of gas for 17 years from RIL’s K-G basin, to NTPC’s power projects in Gujarat at a price of $2.34 per mBtu.
RIL had quoted the lowest price in 2004 in the bidding process and was subsequently issued a Letter of Intent (LoI). However, NTPC went to court in 2005 after RIL did not sign the gas sale and purchase agreement (GSPA) because of a dispute over a clause relating to unlimited liability.
In January this year, the government had filed an affidavit in the high court in the RIL-RNRL case, stating decisions of the Empowered Group Of Ministers (EGoM) on K-G gas-pricing and allocation. The EGoM had fixed $4.20 per mBtu as the sale price for RIL gas for five years.
More From This Section
NTPC, on the other hand, said EGoM’s decisions were not relevant, as the EGoM had clearly noted that its decisions were “without prejudice” to the RIL-NTPC case pending before the high court.
A single-judge bench of the high court had earlier allowed RIL to amend the petition, but had stayed its own order for six weeks to enable NTPC to file an appeal. This stay has been extended by a further two weeks by the division bench.
Meanwhile, according to a report by PTI, the Anil Dhirubhai Ambani group firm Reliance Natural Resources Ltd (RNRL) is all set to intervene in the RIL-NTPC gas supply case.
“RNRL will intervene in the RIL-NTPC high court matter,” a source familiar with the matter said.