Court notice to centre, Reliance on gas price

New Delhi, July 29 (IANS) The Supreme Court Monday issued notice to the central government, Petroleum Minister Veerappa Moily and Reliance Industries Ltd on a PIL seeking review of the recent government decision to hike natural gas prices from $4.2 to $8.4 per million British thermal unit (mmBtu) from April 2014.

Besides Reliance Industries Ltd, notices have also been issued to NIKO Resources Ltd and BP Exploration (Alpha) Limited.

A bench of Chief Justice P. Sathasivam, Justice Ranjana Prakash Desai and Ranjan Gogoi issued notice on the public interest litigation (PIL) by Communist Party of India leader Gurudas Dasgupta contending that the government decided to hike the gas prices without taking into account its disastrous consequences on the country's economy, particularly power and the fertiliser sector.

Former petroleum secretary E.A.S. Sarma is second petitioner along with Gurudas Das Gupta.

The PIL has urged the court to direct the government to produce records of its decision increasing the price of the gas and thereafter quash the said decision.

Dasgupta has contended that the price hike was decided even when four cabinet ministers had opposed the move.

Accusing the government for batting for RIL, Dasgupta, after the court hearing, told media persons that for every trivial issue, the government sets up a group of ministers (GoM) but for doubling the prices of natural gas, it did not done so.

"I wrote four letters to the prime minister (Manmohan Singh). He acknowledged my letters but did not give answers to the points raised by me," he said.

"Prime minister is insensitive to what remains of fruitful democracy," the CPI parliamentarian said, alleging that after then petroleum minister Jaipal Reddy was removed, every decision he took was changed by Moily.

Appearing for the petitioners, senior counsel Colin Gonsalves told the court that Moily over-ruled all the objects raised by his own ministry's officials and that by Director General of Hydrocarbons.

Both Gupta and Sarma have sought direction to the cabinet secretary to place before the court the entire records relating the gas exploration by RIL in KG basin, the price increase effective April 2014 and other aspects raised in the PIL.

It also sought the enforcement of relinquishment clause by which government should reclaim 80 percent of the KG Basin gas field that has not been utilised by Reliance.

The PIL has sought direction to RIL and NIKO to "forthwith relinquish those areas of KG basin as are recommended by the CAG in its report... and delineated by the DGH" and further direct the government to "forthwith take the possession of the relinquished area".

Seeking direction that the price of domestically produced gas be fixed in rupee and not in dollars or any other currency, the PIL has sought the setting up of a court commission to "inquire into the real cost of gas at the well-head in the KG basin and also into the capacity of the basin itself and other related issues".

The PIL has also sought direction to the CAG to "expeditiously complete the performance and fiscal audits of the project costs" and with the liberty to approach the court for directions as and when obstacles are put in the way of said audit.

If any criminal conduct surfaced in the findings of the CAG, the PIL urged the court to set up a Special Investigating Team to probe the findings of criminal conduct and prosecute the offenders.

The court has also been asked to direct the government and others to proceed with the arbitration of the financial dimensions on account of shortfall in production in natural gas production.

The arbitration is rooted in the government informing the RIL that based on the cumulative shortfall in the production vis a vis approved production target upto year 20111-12, $1005 million would be disallowed from the cumulative cost incurred till that time.

Senior counsel Harish Salve sought to debunk this prayer contending that it was RIL which had sought the arbitration of the issue and government back-tracked on it.

Salve accepted notice on behalf of Reliance. Notices are returnable in four weeks.

The court directed listing of the matter Sep 6.