Reliance Industries Ltd (RIL) on Wednesday reiterated its earlier stand in the Supreme Court that government approval was mandatory on fixing the gas price for supplying to Reliance Natural Resources Ltd (RNRL).

Making this submission before a three-judge Bench of chief Justice K. G. Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam, senior counsel for RIL Harish Salve said that even RNRL had recognised this when it said that the May 12, 2005, draft agreement between RIL and NTPC should be the basis for fixing the price of gas from the KG Basin since the same agreement contained a clause which said “subject to government approval.” Mr. Salve said “If you go by the NTPC draft agreement which the RNRL says is the template agreement for the supply of gas, then there exists a clause that the price of the gas is subject to the government approval.” He made it clear that the Government’s gas pricing policy would prevail over any private agreement.

He cited various letters between the two groups to drive home the point that government approval was an integral part of the gas supply agreement. He said that the gas supply agreement and the MoU were planned between RIL and Reliance Power Ltd (RPL) and not with RNRL. Further, the quantity of 28 mscmd was derived from the simple calculation that the Dadri plant required that much quantity of gas to produce 7,600 MW of power. Mr. Salve said the gas dispute arose because Anil Ambani announced the Dadri power project in Uttar Pradesh without the approval of the RIL board. Earlier, senior counsel for RNRL Mukul Rohatgi concluded his submissions saying that when the family MoU was reached in 2005, K. V. Kamath, a close friend of the Ambanis, was instrumental in the mediation process and, therefore, “there are means for reaching an amicable settlement through negotiations. But the other side is not willing for a settlement and there has been no meeting between the two brothers. They are saying it is for the court to resolve the issue.” Mr. Salve denied the charge that the Mukesh Ambani group was not willing for a settlement and said “we had a host of meetings but nothing fructified.”

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