Government stance has ‘beggared’ NTPC, says RNRL

Lawyers representing Anil Ambani's Reliance Natural Resources (RNRL) and government counsel clashed in the Supreme Court on Thursday over an affidavit filed by the oil ministry which spelt out the state's stance on the right of power utility National Thermal Power Corporation (NTPC) to gas from Reliance Industry's Krishna-Godavari block.

The government-owned power company is fighting a separate legal battle with RIL in the Bombay high court over a disputed contract under which the Mukesh Ambani-led RIL is supposed to supply gas to NTPC basin at $2.34 per million British thermal units (mmBtu).

RIL says the contract was never concluded, while NTPC says it was.

In the affidavit, the union government had said the price of $2.34 per mmBtu needed its approval though it also said it would protect NTPC's interests. Ram Jethmalani, RNRL's senior counsel, said the affidavit had reduced NTPC to a 'beggar', and had diminished its chances of signing a valid contract with RIL.

But lawyers representing the government said NTPC's rights will be protected and the state will take all possible steps under the provisions of the production sharing contract (PSC) - a contract signed between the producer of oil and gas and the government - to protect its interests. (See: NTPC has no automatic right to cheap gas: government)

Solicitor general Gopal Subramanium on behalf of the union government told the three-judge bench headed by Chief Justice K G Balakrishnan that the government had repeatedly advised the estranged Ambani brothers Mukesh and Anil to mutually resolve their differences, as they are the captains of Indian industry.