Notice to Centre, Reliance on plea to cancel KG-D6 contract

A file photo of Reliance Industries' KG-D6 control and riser platform.  


NGO Common Cause, others, allege mala fide conduct by RIL

The Supreme Court on Monday issued notice to the Centre, Reliance Industries and others on a public interest litigation petition filed by NGO Common Cause and others seeking a direction to the Union of India to cancel the production sharing contract (PSC) between Reliance Industries Limited (RIL) and NIKO Resources for extracting gas in the KG block.

A Bench of Chief Justice P. Sathasivam and Justice Ranjan Gogoi, after hearing counsel Prashant Bhushan, issued notice returnable in four weeks. The Bench, which had earlier issued notice to the Centre on a PIL plea filed by CPI MP Gurudas Dasgupta, directed the present petition to be tagged with that case.

The petitioners, including T.S.R. Subramanian (former Cabinet Secretary), Admiral (Retd.) L. Ramdas (former Chief of Naval Staff) and Ramaswamy R. Iyer (former Secretary, Government of India), also wanted an appropriate penalty to be levied as RIL had failed to adhere to commitments and indulged in deliberate underproduction, gold plating and mala fide conduct.

The petitioners raised five issues related to RIL — viz., hoarding of gas; gold plating of expenditure; non-relinquishment of area; mala fide doubling of gas price and retrospective tax concession.

Lack of action

The petition sought a thorough investigation — by an SIT or the CBI under the supervision of the Supreme Court — into the alleged high-level collusion between RIL and the political establishment, including lack of action against RIL for hoarding gas, increasing the gas price to $4.2 mmbtu amid a subsisting bid to NTPC for 17 years at $2.34 mmbtu, subsequently doubling the price to $8.4 mmbtu, giving retrospective tax benefit and not insisting that RIL relinquish area.

The petitioners asserted that this was one of the biggest — if not the biggest — scandal in the country. Despite the fact that the CAG had exposed the gold plating by RIL and the company was issued a show-cause notice for its deliberate underproduction, no action was taken and eventually the matter was not pursued.

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Printable version | Feb 25, 2017 12:15:31 AM |