NTPC seeks Solicitor General’s advice on legal battle with RIL

State-owned NTPC Ltd has sought the advice of the Solicitor General of India on the way forward for it following the judgment of the Supreme Court in the Ambani brothers gas dispute.

“NTPC, which is fighting a legal battle with the Mukesh Ambani’s Reliance Industries Ltd (RIL) in the Mumbai High court, has sought the SGI’s advice as the Supreme Court judgment could impact its case,” a senior power ministry official told on the sidelines of a India-Australia energy resource conference being held at Perth.“We (power ministry) have supported NTPC’s proposal to seek Solicitor General’s advice. NTPC has already met the Solicitor General on May 17,” the source said.

NTPC Chairman and Managing Director R.S. Sharma, who is also in Perth to attend the energy resources conference, confirmed that his is taking the advice of the Solicitor General in its gas dispute with RIL. “These are legal consultations and an ongoing process,” he said.The Supreme Court had on May 7 upheld the government rights over pricing and allocation of gas being produced by RIL from its KG-D6 gas fields in the Krishna Godavari basin. As a result, the price of gas of $2.34 per unit agreed between the two Ambani brothers under a family MoU for supplying gas from Mukesh’s KG-D6 gas block to Anil Ambani’s power plants will not be valid. All gas sales will have to be at the government approved price of $4.2 per unit.

However, Sharma set aside all speculations of an out of court settlement with RIL, “These are speculations. We have not received any offer from RIL for an out of the court settlement,” he said.

Unlike the price of gas agreed between the Ambani brothers under the family MoU, Reliance Industries had, through a bid submitted in a global tender of NTPC in 2004, offered to supply gas to the power plants of state-owned power utility at $2.34 per unit. However, differences between RIL and NTPC over the terms and supply of the gas supply agreement including liabilities over take or pay of gas triggered a legal battle between the two sides, currently being fought in the Mumbai High Court. The case is coming up for hearing on July 26.