Furthering its arguments on the Ambani family MoU, Reliance Industries Limited (RIL) told the Supreme Court today that the demerger scheme worked out with RNRL was categorical that gas supplies from the K-G Basin were not meant for trading but rather meant for promoting a power generation plant.

“The idea was to promote power distribution and transmission company... Clause (2) of the family MoU which the demerger scheme picks up as an important clause deals with promoting power plant and not for making money on trading of gas,” senior advocate Harish Salve submitted before the bench led by Chief Justice K G Balakrishnan.

The bench, also comprising Justices B Sudershan Reddy and P Sathasivam, was further told, “The real purpose of supply of gas to the Anil Ambani firm was for promoting an electricity plant and not promoting trading in gas.”

RIL, which has all along maintained that the family MoU of 2005 could not be the basis for arriving at a suitable arrangement for the supply of gas, today argued that it (the MoU) only set down the “road map and guidance” on how things were to be worked out.

“The MoU had set a road map for how the demerger should be done depending on various approvals including those cleared by the board, shareholders, etc. The document doesn’t bind the company as the board of directors and the shareholders had not approved it,” Salve argued. Anil’s RNRL had sought immediate supply of gas as per the Bombay High Court order of July 15. This was opposed by RIL which said the gas was meant for the proposed plant in Dadri in UP, which had not come up, and not for trading.

... contd.