SC roasts government in Ambani v Ambani
19 November 2009
Hearing the dispute over natural gas pricing between the two Ambani brothers for the 12 day on Wednesday, the Supreme Court asked the government – an incongruous third party to the dispute – some probing questions.
The three-judge bench, comprising Chief Justice K G Balakrishnan and justices B Sudershan Reddy and P Sathasivam, asked the government why it had not objected to the memorandum of understanding signed between the members of the Ambani family for sharing of gas from the Krishna-Godavari basin in 2005, when the brothers split up.
''Why did the government not object to the family agreement and the gas sharing and marketing agreement (GSMA) when it came to know about it for the first time?'' the judges asked.
The query saw the government lawyer, additional solicitor general Vivek Tankha, ducking and weaving. He said the agreement for supply of gas from Reliance Industries (RIL) to Reliance Natural Resources (RNRL), which is referred to in the MoU as a 'suitable arrangement,' should not have been drafted without the consent of the government.
''What is a suitable agreement between them (RIL and RNRL) is not a suitable agreement for the national interest,'' said Tankha, without defining what the national interest is. He argued that ''The government had no occasion to present these facts before the high court as it was only a division bench that tried to superimpose the family agreement over the product-sharing contract between RIL and the C\centre.'' The remark drew a smirk from the bench.
Tankha presented a chart claiming the government will lose Rs25,000 crore, apart from leaving idle industrial infrastructure worth Rs75,000 crore, if the original agreement is implemented.