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RIL gas case: HC questions govt move

October 16, 2008 17:14 IST

The Bombay high court on Thursday asked the central government why it wanted to intervene in the appeal filed by Reliance Industries [Get Quote] Limited in its case against Reliance Natural Resources [Get Quote] Limited over gas supply agreement.

"How is the government affected by grounds on which RIL has filed appeal against single judge's order?" Division Bench of Justices J N Patel and K K Tated asked government's lawyer T S Doabia.

The main issue in the case is terms of Gas Supply Master Agreement whereby Mukesh Ambani-led RIL is to supply natural gas from its Krishna Godavari reserves to Anil Ambani's RNRL.

Both parties have filed appeals before division bench, not satisfied with single judge's verdict last year.

Government is seeking to intervene in the matter. But Justice Patel on Thursday wondered why government did not object when high court approved the scheme of Reliance demerger.

The disputed GSMA was framed as a part of the Reliance demerger scheme, judge noted.

The high court has currently restrained RIL from entering into contract with third parties for sale of gas.

But Justice Patel pointed out that stay did not affect production- sharing contract between government and RIL.

Court adjourned the hearing till tomorrow, saying that Doabia will have to satisfy the court as to why government was a necessary party, and how RIL's appeal prejudices its rights.

Earlier, RNRL lawyer Ram Jethmalani said that government has not intervened in the case between National Thermal Power [Get Quote] Cooperation -- its own company -- and RIL over gas supply agreement, but it sought to intervene in this case.

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