New Delhi, Oct 22 (Inditop.com) The Mukesh Ambani-led Reliance Industries Thursday told the Supreme Court that both the 17-year tenure for gas supply from Krishna-Godavari basin to younger sibling Anil Ambani’s firm and the price of $2.34 per unit were unacceptable.
The government’s gas pricing policy is only for five years and because of that the 17-year pact with Reliance Natural Resources is not maintainable, said Harish Salve, the counsel for Reliance Industries.
Salve also told the three-member bench that the gas price had to be in conformity with that fixed by the government, which is $4.20 per unit, adding a higher price will ensure larger share for the exchequer.
The much-watched legal battle between the companies led by the two Ambani brothers is being heard since Tuesday by a three-member bench comprising Chief Justice K.G. Balakrishnan, Justice R.V. Raveendran and Justice P. Sathasivam.
The Reliance Industries counsel also maintained that the gas price of $4.20 per unit was not only just but was also the consideration that one of Anil Ambani’s companies had agreed to pay for a power project in Andhra Pradesh.
He also said that the government had the right to fix the price of gas and that courts cannot intervene in the state’s right to frame a gas distribution policy.
At the crux of the dispute is the supply of natural gas from the Krishna-Godavari basin, awarded for exploration and harnessing to Reliance Industries, before a split in 2005 in the group founded by legendary industrialist, the late Dhirubhai Ambani.
Based on a family reorganisation pact, the Anil Ambani Group wants 28 million units of gas per day for 17 years at $2.34 per unit. But Reliance Industries says it can only sell it for $4.20 per unit, claiming this was the price approved by the government.
