Apex court begins hearing Reliance gas dispute afresh

New Delhi, Nov 5: The Supreme Court Thursday began hearing afresh the dispute over gas from Krishna-Godavari basin, assigned to Reliance Industries, with the Anil Ambani Group once again accusing the oil ministry of colluding with the Mukesh Ambani firm.

Harish Salve, counsel for Reliance Industries, presented the synopsis of the case and arguments on behalf of his client before the bench, while also submitting a 25-page note detailing the entire genesis of the dispute.

The dispute is being heard afresh after Justice R.V. Raveendran recused himself from the case, saying his daughter works for a law firm in Bangalore that advised Mukesh Ambani's Reliance Industries on global acquisitions.

Justice B. Sudershan Reddy joined the three-judge bench as a new member Thursday, which also comprises Chief Justice K.G. Balakrishnan and Justice P. Sathasivam.

The dispute is over the supply of 28 million units of natural gas for 17 years at $2.34 per unit to Anil Ambani-led Reliance Natural Resources from the natural gas fields, off the Andhra Pradesh coast, awarded for exploration and harnessing to Reliance Industries.

The price, tenure and quantity were all based on a family re-organisation pact in 2005 but Reliance Industries subsequently said it could only sell the gas for $4.20 per unit, as this was the price, the company claimed, that was fixed by the government.

The dispute was first heard in the Bombay High Court that gave its verdict in favour of Reliance Natural Resources. But this was subsequently challenged in the apex court by the Mukesh Ambani-led firm.

During the course of the hearing Thursday, Ram Jethmalani, counsel for Reliance Natural Resources, once again charged the oil ministry with unduly favouring the Mukesh Ambani firm, even as Salve maintained it was not possible to sell gas at $2.34 per unit.

"We are fighting with the government saying you (the government) had promised you will not regulate it (the gas supply and pricing issues after discovery), but you have now come up with a gas utilisation Policy (to regulate it)," said Salve.

At this juncture, Jethmalani stood up, contending that Salve's arguments were totally contradictory to what he had advanced earlier.

"He had argued exactly to the contrary," said Jethmalani, while requesting at least 30 minutes every day to make his submissions as well till such time the counsel for Mukesh Ambani's Reliance Industries finished his arguments.

"It would save a lot of time."

As Salve shot back, saying Jethmalani's intervention was akin to reducing the argument to "street brawl", Chief Justice Balakrishnan favoured Salve's argument from a different angle saying: "We are not experts in these matters."

Justice Sathasivam also remarked: "He (Salve) is reading only from various documents."

Earlier, quoting from the minutes of a meeting of a ministerial panel on gas headed by Finance Minister Pranab Mukherjee, Salve said Reliance Industries was bound to take the government's approval for supplies and pricing of natural gas.

The hearing now resumes Tuesday.