Reliance Industries admits gas policy wasn't notified

New Delhi: The Supreme Court on Thursday asked Reliance Industries if the gas utilisation policy had been notified by the government and if the same was in the nature of an industrial policy. And the answer was no.

Continuing with the hearing on the gas dispute between companies led by the two Ambani brothers, Mukesh and Anil, the three-member bench of the apex court raised the issue after the counsel for Reliance Industries based his arguments on the gas utilisation policy.

Inferring from the so-called policy, Harish Salve, the counsel for Reliance Industries, said both the 17-year tenure for gas supplies to Anil Ambani's Reliance Natural Resources from the Krishna-Godavari basin and the price of $2.34 per unit were unacceptable.

Salve told the bench that the price of $2.34 per unit sought by Reliance Natural was not in conformity with the price of $4.20 per unit fixed by the government on the basis of the recommendations by a ministerial group.

To this, the bench queried if the government had notified this gas utilisation policy like it does in the case of various industrial policies. Salve replied: "It is not a notified policy. It is not like an industrial policy."

The counsel said it was in the form of an "instruction" given by the government and also formed a part of the minutes of the meeting convened by the empowered group of ministers. He said the government also issued a press note in this regard.

The closely-watched legal battle between the companies led by the two Ambani brothers is being heard since Tuesday by a three-member bench comprising Chief Justice K G Balakrishnan, Justice R V Raveendran and Justice P Sathasivam.

The Reliance Industries counsel also maintained that the gas price of $4.20 per unit was not only just but was also the consideration that one of Anil Ambani's companies had agreed to pay for a power project in Andhra Pradesh.

He said the government had the right to fix the price of gas and that courts cannot intervene in the state's right to frame a gas distribution policy.

At the crux of the dispute is the supply of natural gas from the Krishna-Godavari basin, awarded for exploration and harnessing to Reliance Industries, before a split in 2005 in the group founded by legendary industrialist, the late Dhirubhai Ambani.

Based on a family reorganisation pact, the Anil Ambani Group wants 28 million units of gas per day for 17 years at $2.34 per unit. But Reliance Industries says it can only sell it for $4.20 per unit, claiming this was the price approved by the government.