J. Venkatesan

NEW DELHI: The Centre on Tuesday maintained in the Supreme Court that gas being a national asset could not be allowed to be divided or allocated on the basis of private agreement entered into between two parties.

Making this submission before a three-judge Bench of Chief Justice K. G. Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam, Additional Solicitor General Mohan Parasaran said “any attempt to dispose of natural gas in an unfair, non-transparent manner that results in the concentration of the same in the hands of an individual or a few would be violative of the Constitution.”

The Bench is hearing appeals filed by Reliance Industries Ltd (RIL), Reliance Natural Resources Ltd (RNRL) and the Centre against a judgment of the Bombay High Court on dispute relating to allocation of gas.

Even as Mr. Parasaran began his arguments, senior counsel for RNRL Ram Jethmalani objected to the Centre being heard as the Centre was accepted only as an intervener in the High Court.

He said “in case the Government becomes a party, it is subject to discovery, inspection and cross examination.”

He argued that the affidavit filed by the Government in the High Court was not worth a look as Mr. Parasaran had said that he was not going to rely on the same affidavit. He said that the theory of sovereign rights of Government was debunked a long back and “you are now servants of the people.”

Mr. Parasaran said “the present SLP by the Centre is maintainable since the High Court judgment has seriously infringed the rights of the Union of India as a sovereign owner of natural gas. Being the aggrieved party the Government has every right to file the appeal as gas is a national asset and a natural resource.”

Continuing his submissions, he said “RIL and RNRL cannot settle between themselves as to how the gas, which is a national asset and a natural resource, which vests in the government and which is to be utilised in the welfare of the nation, is to be distributed.”

Gas Utilisation Policy

He said “the Gas Utilisation Policy (GUP) of the government is in furtherance of the constitutional mandate placed on the Union of India, that is, to try and ensure that natural resources of the community are as widely distributed as possible to sub serve the common good.” He said “gas has to be distributed in terms of the GUP as approved by EGoM (Empowered Group of Ministers) and marketing freedom afforded to RIL was subject to the same.”

He said the decision of the EGoM dated August 28, 2007, which required the contractor to invite bids and discover the price for the sale of gas to consumers was in furtherance of the dictates of Article 14 of the Constitution requiring a fair and transparent manner to be adopted in the distribution of State largesse or national property.

He said there could not be a contract providing for reservation of gas on the basis of contingent future event, namely the setting up of the Dadri power project as the EGoM in its decision had made it clear that the priority list set out by it would not entail reservation of gas in favour of anyone and consumers of gas should be in a position to take delivery and consume the same as and when supply was made by RIL from the KG D6 oil field. He will continue his arguments on Wednesday.