The Hindu Business Line : HC defers NTPC petition against Reliance

THE Bombay High Court deferred till Friday the petition filed by the National Thermal Power Corporation (NTPC) seeking an ad interim relief against Reliance Industries Ltd (RIL).

The relief has been sought, as RIL wants changes in the terms of the Gas Sale & Purchase Agreement (GSPA) that it signed with NTPC for the latter's Kawas and Gandhar power projects.

NTPC has petitioned that the contract be executed by RIL in accordance with the bid conditions and that the latter be restrained from selling gas to any other customer in the interim. Mr Justice S.F. Vajifdar adjourned the case as both sides sought time to argue the matter.

Mr A.P. Chinoy representing RIL said his client's main contention was the issue of unlimited liability in the GSPA. If the Kawas and Gandhar projects were to have unlimited liability then no bank would stand by the projects and would not get any financial support, he said.

Mr Justice Vajifdar observed that the matter was delicate and the two parties must arrive at some solution.

The Advocate-General of Maharashtra, Mr Ravi Kadam, representing NTPC, pleaded that if there was no unlimited liability and if RIL did not comply with the GSPA in the future, then NTPC would be left high and dry. RIL should be restrained from selling the gas to a third party. Given the quantity of gas NTPC needs for its projects, it cannot be sourced from any other company, he said.

RIL won the contract to supply 13 million standard cubic metres of gas per day at the rate of $2.97 per million British Thermal Units to NTPC and had signed a letter of intent in June 2004. RIL is to source gas for NTPC's Kawas and Gandhar projects from its Krishna-Godavari basin gas field. The contract between RIL and NTPC is for a period of 17 years.

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