Amends special leave petition in Supreme Court, says NTPC will not fight case.
In an attempt to distance itself from differences between the Ambani brothers Mukesh and Anil, and distinguish between legal disputes involving state-owned NTPC and Reliance Natural Resources Ltd (RNRL) with Reliance Industries Ltd (RIL), the government today made significant amendments to its special leave petition to the Supreme Court. The fresh plea states that the government’s policy and production sharing contract should gain supremacy over the private arrangement, insofar as it deals with the sale or regulation of gas from the D6 field.
The amended petition also states that the rights and obligations between RIL and NTPC cannot be regarded as similar to the “private arrangement” between RIL and RNRL. Following the amendment, Power Secretary H S Brahma told Business Standard that state-owned NTPC would not be taking its dispute directly to the Supreme Court.
The power secretary pointed out that, through the amendment, the government has clarified that NTPC has the status of a public utility and is engaged in international competitive bidding and, therefore, there was no link between the two cases.
The Supreme Court is hearing a case between Mukesh Ambani-led RIL and Anil-Ambani-led RNRL over the price and quantity of gas that RIL will supply to RNRL from the D6 field in the Krishna-Godavari basin. A 2005 family agreement between them set the price of gas at $2.3 per unit, against a later government-mandated price of $4.2 a unit.
NTPC is also fighting a case in the Mumbai High Court against RIL for gas supply at a committed price of $2.34 per unit, which is a price RIL quoted in a competitive tender.
“The ministry of petroleum and natural gas has taken NTPC’s concerns on board. There is no need to go to the Supreme Court now,” said Brahma.
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In effect, today’s amendment protects the state-owned power utility’s right to buy gas from RIL at the tendered $2.3 a unit, irrespective of any outcome on the RIL-RNRL case, in which the government has contended that the gas price is based on a family agreement and not an “arm’s length” commercial negotiation.
Though RNRL did not comment on the government’s stand of distinguishing between the NTPC and RNRL cases, a senior RNRL executive said the government’s petition mentioned that the empowered group of ministers’ decision on $4.2 price was without prejudice to both the cases.
In its July 18 petition, the government had prayed that the Ambani family MoU to “the extent that it has as its consideration a property not belonging to the signatories to the MoU is blatantly illegal and diregards the provisions of production sharing contract and should be declared null and void”. Asserting its ownership over gas from KG-D6 fields, the government’s SLP had criticised the Mukesh and Anil Ambani groups for “surreptitiously” appropriating national resources, treating it as personal and family property.
In its petition today, the government modified its stance slightly. “It is not the intention of the government to enter into the arena of private arrangements entered into between parties or question the validity and legality of the MoU, lock, stock and barrel,” the government said today, making it clear that it was not seeking any relief “to set at naught” any private family arrangement on the pricing and supply of gas.
The application was filed by the government in accordance with the decision taken by a group of ministers, headed by Finance Minister Pranab Mukherjee, in the face of a bitter public battle in which the Anil Ambani group is seeking fuel from RIL at the same price as one sought by NTPC. “It has been the unequivocal stand of the government that the approval of the price of sale of gas at $4.2 per million British thermal unit (mBtu) in respect of (RIL’s) D6 block was without prejudice to the rights of NTPC in the pending suit filed by it against RIL before the Bombay High Court,” the government said today.
The government application also sought to set aside a Bombay High Court decision on the RIL-RNRL case that concerns the interpretation of its gas utilisation policy and provisions of the production sharing contract.