'RIL became dishonest after gas prices soared'

MUMBAI: Anil Ambani Group company RNRL on Tuesday alleged in the Bombay High Court that Reliance Industries "became dishonest" when the prices of natural gas and crude oil rose sharply towards the beginning of 2006, a charge objected by Mukesh Ambani-led RIL.
    
"They became dishonest only in January 2006 because then the prices of gas began to rise in the international market," Ram Jethmalani, lawyer for RNRL said in Bombay High Court during a hearing on the case over gas supply agreement.
     
Taking a strong objection RIL Milin Sathe said these allegation were being made for the first time in this case.
     
Jethmalani on Tuesday alleged that the price, duration of gas supply and its quantity were not disputed by the RIL during the preliminary talks between June 2005 and December 2006.
    
RNRL says that RIL is bound to supply it with gas at USD 2.34 per British Thermal Unit -- the price at which RIL won NTPC's bid for gas supply. RIL contends that at this price it will suffer heavy losses.
    
Jethmalani on Tuesday said that early on RIL did not object to this price, but "dishonesty started as the price graph took a sharp turn" in 2006 January, when the disputed Gas Supply Master Agreement (GSMA) was signed.
    
RNRL's case is that as per the MOU between the two brothers and their mother Kokilaben Ambani prior to the demerger of Reliance, the GSMA should be on the same terms as RIL's contract with the National Thermal Power Corporation.     

RIL says that MOU is not binding on it.
    
During the arguments, Jethmalani also alleged that RIL, in collusion with "babus" in the petroleum ministry, revised the cost of its exploration plant in Krishna Godavari basin.

RIL lawyer Milind Sathe took a strong objection to this, saying that these allegations were being raised for the first time in this case.
    
But Mukul Rohatgi, who too is representing RNRL, added that while earlier RIL put the cost at Rs 20,000 crore, later it was revised -- with a sanction from government -- to Rs 36,000 crores.
    
"The (government) department is in your pocket," said Rohatgi.
    
RIL is entitled to recover its investment and operation costs by claiming proportionate share of gas produced from the KG fields.
    
Earlier, the division bench of Justices J N Patel and K K Tated indicated that court might want to have a look at part of the MoU that deals with gas supply agreement.
    
"We will direct you to produce MoU if we think it is required," court said, asking parties to make submissions on this point at the next hearing, on September 30.
    
Jethmalani said that Anil Ambani group has "unsigned" copy of the MoU which it can produce.
    
However, RIL lawyer said that MoU was not a part of the record from the beginning. "Let RNRL file an application for producing it, then we will take a stand on the issue," said advocate Sathe.
    
Earlier, single judge of the High Court had ruled that the MOU was binding, and GSMA should adhere to it.