New Delhi, May 7 (ANI): Union Petroleum and Natural Gas Minister Murli Deora on Friday welcomed the verdict of the Supreme Court in favour of Mukesh Ambani's Reliance Industries Limited (RIL) in the Krishna Godavari Basin Gas row, and called it a vindication of the Government's stand.
"I am given to understand that entire gas belongs to nation and is upheld by the honourable Supreme Court. And the government has power and authority to allocate the price," said Deora.
Oil Secretary S Sundareshan also welcomed the decision of the apex court saying the government would continue to decide the allocation and price of gas in future also.
"We are given to understand that this viewpoint of the government has been upheld. We are allocating the gas, we are deciding the price of the gas and we would continue to do so in the future," said Sundaresan.
Emphatically stating that the government is the owner of natural resources, including gas available in the country, the apex court on Friday said that no individual or commercial entity could claim right to such resources.
Delivering a judgement on the Krishna Godavari Basin Gas row between Anil Ambani's Reliance Natural Resources Limited (RNRL) and Mukesh Ambani's Reliance Industries Limited (RIL), a three judge bench of the apex court, consisting Chief Justice K G Balakrishnan, Justices P Sathasivam and B Sudershan Reddy said only the government can decide rates of these resources.
Quashing the family formula evolved by Kokilaben Ambani to solve the long drawn out dispute between her two sons, Anil and Mukesh, over sharing of gas, the court asked both to solve the matter through renegotiations within six weeks.
In June 2009, the Bombay High Court had upheld the RNRL's claim of family agreement.
At the heart of the war is the gas produced by Mukesh Ambani's Reliance Industries Limited (RIL) in the Krishna Godavari (KG) Basin.
On December 18, 2009, the apex court bench had reserved its judgement in the case.
The apex court heard the case for 26 days spread over nine weeks, beginning October 20, 2009.
The gas is sold to Anil Ambani's Reliance Natural Resources Limited (RNRL) for its power plants.
The RIL had wanted to raise the price that was agreed upon by a family agreement in 2005 after the brothers decided to split the empire built by their father, Dhirubhai Ambani.
In 2007, the government said that the agreed-upon rate of 2.34 dollars per unit was far too low.
The RIL said it had to raise his rates accordingly to 4.2 dollars per unit and follow Government orders because it owns the gas, and that the RIL is just a contractor.
The RNRL accused the RIL of artificially inflating its costs and decreasing its output to make super-normal profits.
The government said it doesn't recognize the family contract between Anil and Mukesh because the Krishna Godavari Gas is a government property.
Government said that two private parties cannot strike a deal without its clearance.
The government also said it has set the new price based on a fair formula. (ANI)