Business
Apex court asks Reliance Industries to respond to audit report
New Delhi, March 30
The Supreme Court on
Monday asked Reliance Industries Ltd. (RIL) to respond within three
weeks to the official auditor's report that had adversely commented on
its operation of gas blocks in the KRishna-Godavari basin.
A
bench of Justice T.S. Thakur, Justice J. Chelameswar and Justice Kurian
gave time after senior counsel Harish Salve, appearing for the company,
said that as against 30 audit objections initially, the government had
notified 20 on which his client had to respond.
On January 16,
the court sought RIL's response to the report of the Comptroller and
Auditor General of India that had recommended disallowing $357.16
million expenditure the company claimed to have incurred on drilling the
wells and payments to contractors for the said gas blocks.
The
report had also hauled up the oil ministry for the delays in fixing
hydrocarbon prices and for following inconsistent parameters for
expenditure estimation.
The court allowed three petitioners --
former Communist law maker Gurudas Dasgupta, non-government organisation
Common Cause and advocate Manohar Lal Sharma -- and the government to
file their replies to the company's reaction to the audit report.
The
court also permitted Solicitor General Ranjit Kumar to file the status
report in pursuant of the proceedings of the Public Accounts Committee -
a parliamentary panel that is examining the report.
As court
deliberated on the next date of hearing, it was requested to assign an
early date as RIL's plea for an arbitration on the gas pricing was
listed for hearing by Justice Ranjan Gogoi.
The court directed the listing of the matter for May 5 for directions on the hearing of the matter.
Besides
other issues, Dasgupta, Common Cause and Sharma had moved the court
challenging the previous government's decision to double gas prices from
then $4.2 per unit to $8.4 per unit.
However, Prime Minister
Narendra Modi-led government by an October 25, 2014, notification issued
new domestic gas pricing guidelines which came into force from November
1, 2014.
Under the new guidelines, the price of the gas was
increased from $4.2 per unit to $5.61 per unit. But this was applicable
to normal discoveries and not for deep, ultra-deep and other difficult
operations. A decision on that is pending.
The new domestic
natural gas pricing guidelines superseded the January 10, 2014, decision
taken by the then government that was to be notified to come into force
from April 1, 2014.
Besides pricing of the gas, petitioners
Dasgupta and Common Cause have sought the relinquishment of the gas
fields not developed as provided under the production-sharing contract.
The
petitioners have also sought the cancellation of the contract with
Reliance Industries and NIKO Resources, concerning the block.