Bombay HC refuses stay on RIL gas order, allows government to fix price

19 July 2007

Mumbai: The Bombay High Court has refused to stay an interim order barring Reliance Industries from selling gas from its KG basin fields to any other entity except the Anil Ambani group and NTPC but allowed the government to go ahead with fixing the gas price.

A division bench of Justices J N Patel and Amjad Sayed adjourned hearing on RIL''s appeal for eight weeks to allow a single bench court to complete hearing on the plea filed by Anil Ambani''s RNRL that sought to prevent the Mukesh Ambani firm from creating third party interest on RIL''s gas assets.

The single judge bench had in an interim order in May barred RIL from selling 40 million standard cubic meters per day (mmscmd) of gas, half of the projected output from KG fields, to anyone other than RNRL and NTPC.

However, after reports of RIL inviting price bids from customers emerged, RNRL again approached the court and the single bench in June barred RIL from creating third party interest on the entire volume.

The division bench refused relief to RIL on the interim order but said "we do not find anything in the impugned (previous) orders which prevent central government from going ahead in the matter of price fixation under the production sharing contract between the central government and the appellant (RIL)".

The price discovery undertaken by RIL, which is being examined by government, would continue.