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Updated: October 22, 2009 01:53 IST

Government gas pricing policy must prevail over private MoU: Salve

J. Venkatesan
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Senior counsel Harish Salve. File Photo: Shiv Kumar Pushpakar
The Hindu Senior counsel Harish Salve. File Photo: Shiv Kumar Pushpakar

When there is a public interest involved in the Centre’s gas pricing policy, it will prevail over any private memorandum of understanding between two parties, senior counsel Harish Salve argued in the Supreme Court on Wednesday.

Mr. Salve made this submission before a Bench of Chief Justice K.G. Balakrishnan and Justices R.V. Raveendran and P. Sathasivam, hearing the dispute between Reliance Industries Ltd. (RIL) and Reliance Natural Resources Ltd. (RNRL) over gas supply.

Grey areas

Mr. Justice Raveendran said there could be an “arbitration or mediation” of the dispute between the Ambani brothers. He said there were certain grey areas in the scheme envisaged for gas supply, and suitable arrangements could be arrived at mutually or through third party intervention. “Someone should decide the suitable arrangements. What should be the suitable arrangements? Why you don’t go [in] for arbitration or mediation?”

Mr. Salve, appearing for RIL, said he considered the government’s gas utilisation and pricing policy the suitable arrangement rather than going for arbitration.

Collusion alleged

On the RNRL’s stand that the government had no locus standi in the matter, Mr. Salve said, “When the government had certain perception then it must be heard.” At this, senior counsel Ram Jethmalani, appearing for the RNRL, alleged that the government and Mr. Mukesh Ambani were in collusion.

Mr. Salve contended that the disputed MoU on the supply of gas could not be covered by the provisions of the Companies Act dealing with merger and de-merger of the companies. “These provisions broadly, under Sections 391 to 394 of the Companies Act, would come into play only when the interest of the company, its creditors or the shareholders is affected.”

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