RELIANCE Industries has told the Supreme Court that it would lose money by selling natural gas at $2.34 per million British Thermal units or mmbtu. The companyâ€™s lawyer Harish Salve told the court that RIL had not told the Bombay HC that sale at $2.34 per unit would be profitable and that the HC appeared to have misunderstood the matter.
The hearing before Indiaâ€™s apex court was also marked by interjections by the justices. The judges observed the natural gas belongs to the government and all contracts on sharing of gas is subject to the governmentâ€™s approval. The court also said that it may issue a direction to the two feuding companies, RIL and RNRL, to arrive at a suitable arrangement.
"Gas belongs to the government. Gas is national property", said a three-judge bench headed by chief justice KG Balakrishnan. The CJI, speaking for the bench, observed: â€œAll contracts are subject to it (governmentâ€™s ownership concept over gas).â€
In the initial stages of court proceedings Salve explained the difficulty on arriving at an agreement with RNRL on supply of gas zeroing in on various aspects of the MoU, demerger and governmentâ€™s gas utilisation policy. Salve said a contract between both the parties cannot be arrived at by using the agreement with NTPC as a template.
The court then said: "There must be some parameters to arrive at a suitable agreement.â€ Justice Raveendran speaking for the bench remarked: â€œWhat power is available to the court, if there is no suitable agreement. We will do two things. We will direct you to arrive at a suitable agreement or refer the issue to an arbitrator to pass an award."
Salve, however said, any agreement between RIL and RNRL could be on the
basis of the governmentâ€™s gas utilisation policy. The MoU could not be a basis for arriving of a suitable agreement, Salve said.
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