By Rana Ajit
New Delhi, Dec 17 (IANS) Mukesh Ambani-led Reliance Industries Ltd (RIL) Thursday told the Supreme Court that the government can even undo a judicial verdict, if it is held that it has no powers to regulate gas prices based on production sharing contracts.

RIL counsel Harish Salve made this assertion before the three-member bench of Chief Justice K.G. Balakrishnan, in his counter-arguments in the legal battle with Reliance Natural Resources Ltd (RNRL) over gas supplies from the Krishna-Godavari basin.

“If I challenge the gas utilisation policy and the court says ’sorry, you do not have the power’, the government will discover the power elsewhere,” Salve told the bench, which includes Justice B. Sudershan Reddy and Justice P. Sathasivam.

He asserted that the government has complete powers to regulate gas prices as per the provisions of production-sharing contracts and its gas utilisation policy. According to him, this authority could be derived from the Essential Commodities Act.

Seeking to explain to the court why RIL does not challenge the gas utilisation policy, Salve said RNRL, too, is right in not challenging it to the extent of fixing of gas price for other consumers.

“I know that if I push the Government of India to a corner, they will force me out of the business,” he said, adding RNRL had itself asked the government with a plea to regulate the gas price.

“The government is opening various sectors to private players. If we do not behave responsibly, we may earn profit for 15 days, but will eventually be out of business.”

RIL counsel also sought to refute RNRL’s claim over a suitable bankable agreement on gas supplies with RIL for 28 million units for 17 years at $2.34 per unit, and referred to Reliance Energy Ltd (REL), which is part of the Anil Ambani group.

“The only suitable agreement for supply of gas to the REL’s Dadri power plant is supply of gas under the gas utilisation policy and at the price arrived at as per the formula approved by the empowered group of ministers,” he said.

This decision by the ministerial group is applicable to all the gas produced by RIL, Salve said, adding this compelled his client to supply gas to specific customers, in defined quantities and at the notified price.

The government has also specified that a firm commitment on gas supplies can be made only for five years, based on the ministerial panel’s recommendations, he said.