On Thursday, the central government was questioned by the Bombay High Court as to why it wanted to interfere in the petition filed by Reliance Industries Ltd in its case against Reliance Natural Resources Ltd over gas supply agreement.  

A division bench of Justices J N Patel and K K Tated questioned government's lawyer T S Doabia, “How is the government affected by grounds on which RIL has filed appeal against single judge's order?”

The terms of Gas Supply Master Agreement (GSMA) constitute the main issue of the case, under which Mukesh Ambani-led RIL is to supply natural gas from its Krishna Godavari reserves to Anil Ambani's RNRL. Since both parties were not satisfied with the verdict passed by a single judge last year, they filed an appeal before the division bench.

Now that Govt. is interfering in the matter, Justice Patel speculated that why didn’t it object when the scheme of Reliance demerger was approved by the High Court. It was noted by the judge that the disputed GSMA is a part of the Reliance demerger scheme.

Till now, RIL was instructed by High Court to not to enter into contract with the third parties with the aim to sell the gas. However, today it was pointed out by Justice Patel that stay did not affect production- sharing contract (PSC) between government and RIL.  

The hearing has been adjourned by the court till tomorrow, ordering that Doabia should have a satisfactory reason to explain as how the government was a necessary party and also how RIL's appeal prejudices its rights.

RNRL lawyer Ram Jethmalani had earlier reported, “Government has not intervening in the case between National Thermal Power Corporation - its own company - and RIL over gas supply agreement, but it sought to intervene in this case.”