Solicitor General accuses RIL of 'breach' of contract

Solicitor General of India Gopal Subramanium has criticised the state-owned power major NTPC Ltd for delaying legal action against Mukesh Ambani’s Reliance Industries Ltd over the gas purchase deal struck in 2004. Anupama Airy reports.

Solicitor General of India Gopal Subramanium has criticised the state-owned power major NTPC Ltd for delaying legal action against Mukesh Ambani’s Reliance Industries Ltd (RIL) over the gas purchase deal struck in 2004.

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Subramanium has also recommended that NTPC transfer its case against RIL from Bombay High Court to the Supreme Court.

He accused NTPC of showing either a clear lack of sincerity in the bidding process or unwillingness to take up legal obligations.

Despite repeated attempts, NTPC chairman R.S. Sharma, however, could not be contacted. He said NTPC, in order to see the contract through, went on examining RIL’s numerous requests made for modification of the gas supply and purchase agreement. “In my view, NTPC should not have entertained such requests,” he said.

Subramanium also blamed India’s biggest private sector company, RIL, for breach of contract. Referring to the letter of intent (LoI) NTPC awarded to RIL for purchasing gas under a global tender in 2004, the he said, “NTPC should actually have proceeded to deal with RIL firmly in this matter by discovering its (RIL) intention to be one of utter breach, not only of the contract, but of faith when an internationally competitive bidding process has been undertaken.”?

Commenting on a letter written by Mukesh Ambani to NTPC where he thanked NTPC for awarding him the LoI, the Solicitor General said, “After the careful and express letter of Mukesh Ambani, the volte face of RIL was regrettable and blameable.”

“I regret to say that if international competitive bidding processes are intended to be treated with such disdain by a responsible bidder, the world of business founded on trust and faith will breakdown.”

An RIL spokesperson refused to comment on the issue.

The SGI further told NTPC to brief the Prime Minister about its case. “It is necessary that the matter be considered at the highest level,” he said.

“It is necessary that NTPC must without loss of time bring all the facts to the attention of the ministry of power as well as the chief executive of the executive government (the PM)…and a careful decision must be taken in the matter.”