Gas row: RNRL accuses RIL of pushing complex formula for price

New Delhi, Dec 1 (PTI) Indian industrialist Anil
Ambani-led Reliance Natural Resources Limited (RNRL) Tuesday
alleged in the Supreme Court of India that Mukesh Ambani Group
Reliance Industries Limited (RIL) played a "fraud" by coming
out with a complex formula on gas pricing to artificially
enhance its rate.

Describing the formula submitted by RIL as a "broad
day light robbery", RNRL contended that gas was to be made
available at a reasonable price for the consumption of
domestic market.
Senior advocate Ram Jethmalani, appearing for the Anil
Ambani Group, said the contract signed between RIL and RNRL
envisaged that the gas was to be supplied at USD 2.34 per unit
and government policy on gas utilisation and pricing was not
applicable in the dispute.
"The role of the Government is only to undertake the
valuation of the gas and not to determine the price. Price is
to be determined as per the contract between RIL and RNRL," he
said before a Bench headed by Chief Justice of India K G
Balakrishnan.
"The mischief arose when RIL produced a complex
formula for valuation and did not mention the price in dollars
or rupees but a formula that came under attack from the high
powered economic advisory committee," the senior advocate
said.
"Fraud has been committed in giving approval to the
complex pricing policy," Jethmalani said before the Bench,
also comprising Justices B Sudershan Reddy and P Sathasivam.
"The complex formula was put by the RIL to
artificially raise the price to USD 4.20 per unit (from USD
2.34) which is contrary to public interest. We need cheap gas
for power and fertilizer plants," he said.


The Ambani brothers are engaged in a high-voltage
legal battle over the supply and price of the gas from KG
basin.
While RNRL is seeking gas at a committed price of USD
2.34 per unit, RIL says it cannot honour the commitment made
in the family agreement due to government's pricing and gas
policy.
RNRL said when the National Thermal Power Corporation
(NTPC) had invited global tender there were parties ready to
supply gas at the rate of USD 3.18 per unit and now "how can
can you fix the price at USD 4.20".
"People who were prepared at USD 3.18 have been
knocked out," Jethmalani said adding that "the legal position
is that you cannot create a policy on retrospective basis".
He said minutes of the Empowered Group of Ministers
(EGOM) held on August 27 and September 12, 2007 also only
speaks about the valuation of the gas and left out the issue
of contract between RIL and NTPC and RIL and RNRL.
Jethmalani said the contracts were not discussed in
the EGOM as it felt the matters were pending in the court.
` RNRL, which has accused the Government of siding with
RIL, said if the Anil Ambani Group consented to Government
becoming a party in the dispute then it has all rights to
secure vital documents from the Indian Ministry of Petroleum
which has been denied.
Jethmalani said if RNRL consented to this, the
Government must agree to give documents sought by the company.
PTI IB
MYR