Government tells court it is not against Ambani pact

New Delhi: Reversing its earlier stand, the Government on Tuesday told the Supreme Court that it was not in favour of declaring "null and void" the family pact between the two Ambani brothers, Anil and Mukesh.

The Government also told the apex court, ahead of a hearing on October 20 on the feud between the companies led by the two brothers, that its policy on pricing and allocation of gas was without prejudice to another legal case involving state-run power utility NTPC.

The Anil Dhirubhai Ambani group, which is fighting a bitter legal battle for securing natural gas from the Krishna-Godavari basin fields awarded to Mukesh Ambani-led Reliance Industries, immediately welcomed the Government's stand.

In the application filed with the Supreme Court, the Government said it was not concerned with the private dispute between Reliance Industries and Anil Ambani-led Reliance Natural Resources.

"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 memorandum of understanding - lock, stock and barrel," it said.

"It is only concerned with its rights as owner and regulator of natural gas."

At the same time, the Government's application also bats for NTPC, which is fighting another legal battle with Reliance Industries for gas supplies at $2.34 per unit for 17 years, based on a tender floated a few years ago.

The Government's application said the rights and obligations between Reliance Industries and NTPC cannot be regarded as similar to the private arrangement between the companies led by the two Ambani brothers.

This, it said, was because NTPC was not only a public utility and a state-run enterprise, but also sought to secure its gas supplies through international competitive bidding, in which the Mukesh Ambani group had participated and won.

PAGE_BREAK

Reacting to the Government's application, Reliance Natural Resources chairman Anil Ambani welcomed the "substantial" amendment in its latest petition filed before the Supreme Court.

"Reliance Natural Resources also welcomes the effective legal steps taken by the Government to protect the interests of its navratna NTPC, thereby protecting it from potential losses of up to Rs 30,000 crore, and preserving the wider national and public interest," he said.

According to him, with Tuesday's application, the Government's role in the dispute was restricted to the interpretation of the gas utilisation policy and the contents of the production-sharing contract.

The decision on the Government moving the apex court as a party to the legal dispute over Krishna-Godavari gas was taken at a meeting among the members of a high-powered ministerial panel set by Prime Minister Manmohan Singh.

The panel was formed to coordinate the Government's position over two disputes - one over supplies to Reliance Natural Resources being heard in the apex court and the other over sale to NTPC being adjudicated in the Bombay High Court.

In June, the Mumbai court asked Reliance Industries to supply 28 million units of gas from the Krishna-Godavari fields to Reliance Natural Resources for 17 years at $2.34 per unit.

But Reliance Industries challenged the verdict in the Supreme Court, which heard the case on July 20 and again on August 28 and fixed October 20 as the actual date from which hearing will commence.