M. PIRAVI PERUMAL (Advocate & Consumer Rights) 12 August 2009

RIL files caveat in Supreme Court

Reliance Industries Limited filed a caveat in the Supreme Court on Tuesday, seeking to be heard before it considers any petition by the National Thermal Power Corporation in a gas supply dispute

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Prakash Yedhula (Lawyer) 01 September 2009

The RIL\'s move comes at a time when NTPC is expected to file a petition challenging last month\'s order of the Bombay High Court that allowed RIL to amend its plea in its dispute with NTPC. The high court on July 30 had dismissed NTPC\'s plea and had allowed RIL to modify its original plea and introduce the government affidavit of January 13, 2009 of the RIL-RNRL case. The court had stayed the order on the amendment for four weeks allowing NTPC to appeal in the apex court. This is following NTPC\'s constant attempts to get RIL to sign a gas sale purchase agreement (GSPA) at $2.34 million british thermal unit (mmbtu) for gas supply to its Kawas and Gandhar plants as per their original agreement. NTPC is in discussions with RIL for gas supply to its three other plants Anta, Faridabad and Varbala plants for which it has accepted the price of $4.20 per mmbtu.

RIL through the proposed amendment had brought on record the affidavit filed by the Centre in the ongoing RIL-RNRL case on gas supply to buffer its argument that its bid for NTPC tender stands perturbed due to the government\'s policy. RIL had bid to supply gas to NTPC\'s Kawas and Gandhar projects for 17 years at $2.34 per mmBtu. It, however, did not sign the contract and the matter is pending in Bombay High Court for resolution.

NTPC has been constantly arguing that the amendments suggested by RIL are not in contention to the case and that they were aware of the empowered group of ministers (eGoM) decisions as per eGoM minutes of September 12, 2007 which was prior to commencement of trial. Moreover the eGoM minutes state that it is subject to RIL-NTPC suit and hence the amendments should not be allowed.

On the other hand, RIL argued that the contract between the companies was not a concluded one. If the plea is not amended, RIL\'s rights will be affected but if the amendment is allowed NTPC\'s rights do not get affected. RIL also pointed out that NTPC was a government nominee as per article 21 (6) and that the amendment was sought as Union of India Affidavit in the RIL-RNRL Case on Jan 2009 states that the decision on price as per eGoM meeting September 12, 2007 will be applicable to all sectors.