The government has no role to play in a private gas sharing dispute it has with Mukesh Ambani-led Reliance Industries Ltd, Anil Ambani group company RNRL told the Supreme Court on Tuesday.
Reliance Natural Resources Ltd, in its reply to Reliance Industries Limited's petition that names government as an intervener, said the Mukesh-run company was trying to portray the dispute as one between RNRL and the government rather than one between RIL and RNRL and the government had little role to play in the private dispute.
"The sale of gas is from RIL's share over which it has complete marketing freedom. RNRL is not concerned with any part of the government's share of gas," it stated, adding the impugned Bombay High Court judgement had no fiscal impact on the government and protected its interests.
The high court ruling in no way undermined the government's power to value the gas, but on the contrary had held that the value which the government was free to put on gas might be different from the price at which RIL sells the same to RNRL, the Anil Ambani group firm submitted.
". . .Since the government does not receive any part of the proceeds of the sale of gas by RIL from its share of gas, there is no revenue implication to the government in the present dispute," RNRL stated in its affidavit.
Alleging that RIL's special leave petition was 'confused, contradictory and self defeating,' the affidavit said that the Mukesh-run firm had been taking different and shifting stands before different fora.
With regard to memorandum of understanding, RNRL said that RIL had contended before the single judge of the High Court that it was neither aware of the existence of the MoU nor its terms, and later, when exposed, RIL changed its stand saying that gas supply agreement was completely in line with the MoU.
"The pleas that RIL was not aware of the terms of the MoU and that nevertheless miraculously the terms of the GSMA conform to the MoU are not merely contradictory, but are mutually destructive," RNRL said, adding that production sharing contract and the MoU were perfectly compatible.
According to RNRL, RIL again changed its stand with regard to the government's role on the issue.
RIL had stated before the single judge of the high court that the government was not obliged to value the gas at which the contractor actually committed for sale.
However, the Mukesh-run firm changed its stand before the division bench saying the contractor could not commit any gas before having the price approved by the government.
The affidavit said that RNRL had moved the high court seeking directions to make the sanctioned demerger scheme workable and only two parties -- RIL (demerged company) and RNRL (resulting company) -- were concerned with the effective implementation of the scheme.
Basically the issue is related to the demerger and effective transfer of the gas-based energy undertaking under the scheme but RIL in order to frustrate the same made the scheme unworkable by introducing unilateral terms in GSMA, according to RNRL.
RNRL said that the apex court's directions were required to make the scheme workable and amend the clauses in GSMA so that gas-based energy undertaking stood demerged and the government had absolutely no role to play in the demerger of the business.
Blaming RIL for delay in starting its Dadri power project, RNRL said it was RIL's wrongful conduct that delayed its gas-based power plant by four years. However, it had sought a direction to RIL to supply the gas immediatley to it.
Stating that there was no reason for the apex court to interfere in the gas supply issue and RIL's petition should be dismissed as the three benches of the high court had concurrently found that RIL had wrongfully executed a one- sided contract, which made the approved scheme unworkable, and thus the agreement was required to be amended to make its a bankable contract.
On July 7, the Supreme Court issued notice to RIL, RNRL and the Centre (as intervener) on cross-appeals by both the companies on their gas supply dispute.
While RNRL moved the apex court seeking to restrain RIL from supplying or entering into a contract for supply of natural gas for 40 mmscmd with any other party, RIL also challenged the high court judgment that asked it to supply 28 mmscmd gas per day from its Krishna-Godavari basin fields to the former at $2.34 per mmBtu for 17 years from the date of setting up of the Dadri power plant.
