'Gas row: NTPC case isolated from RIL'

Government on Wednesday filed its affidavit in the Supreme Court on the ongoing gas row between the Ambani brothers saying that the arrangement for public sector NTPC cannot be equated with any agreement between Reliance Industries Limited and Reliance Natural Resources Limited.

The apex court had sought the response after Anil Ambani-led RNRL had consented to government being made a party in the dispute. RNRL contended that it was entitled to receive the gas at $2.34 per unit from Mukesh Ambani group RIL which had entered into an arrangement for supplying gas to NTPC at that rate.

"The rights and obligation of NTPC and RIL cannot be regarded as similar in status to the private arrangement as in the case of RIL and RNRL because NTPC is not only a PSU but the process involved for price determination in the case of NTPC gas was by international competitive bidding," the government said in the affidavit.

However, the government said the price offered by the contractor to the NTPC will require scrutiny and approval of the government under the production sharing contract.

"The central government will take an appropriate decision in the case of NTPC as and when a need arises. Such a decision based on public interest, if in favour of NTPC cannot be termed as discriminatory or arbitrary," the affidavit placed before a bench headed by K G Balakrishnan said.

Government said that a decision in respect of NTPC will be taken when either its rights gets established in the pending suit with RIL in the Bombay high court or if overriding public interest warrants any government intervention.

The decision taken by EGoM at its meeting held on September 12, 2007, May 28 and October 23, 2008 additionally reflects that it has not excluded the entitlement of NTPC for consideration.

"It may be pointed out that since there exists an ongoing suit between NTPC and RIL the decisions of the central government were stated to be without prejudice to the rights of NTPC," the affidavit said.

It said any request of NTPC for supply of gas will be considered by the government in the light of the relevant provisions of the production sharing contract.

Further, the affidavit said the Government has on the one hand left NTPC to establish its right in the pending suit in the high court, and on the other hand it has not foreclosed any options available under PSC.

However, such a decision would be taken by a competent authority keeping in view the character of the PSU and other relevant circumstances having a bearing on public interest.

The government clarified that the affidavit filed on January 13 before the high court was not intended to convey that government has rejected the case of NTPC or that it has chosen to signify any implied termination of the PSU's rights.

The Ambani brothers are engaged in a high-voltage bitter legal battle over the supply and price of the gas from KG Basin.

While RNRL is seeking gas at a committed price of $2.34 per unit, RIL says it cannot honour the commitment made in the family agreement due to government's pricing and gas policy.