Alleging collusion between the government and Reliance Industries Ltd., veteran communist lawmaker Gurudas Dasgupta Tuesday told the Supreme Court that Petroleum Minister Veerappa Moily overruled every recommendation adversely affecting the company's operations in KG basin without justifying his decision.

 

 "Moily overruled every authority" and "series of people from the petroleum ministry, finance ministry, two parliamentary committees, hydrocarbon regulator DGH, CAG, and experts" and changed decisions that were inconvenient to RIL, said counsel Colin Gonsalves, appearing for the Communist parliamentarian.

 

 Praising officials for not budging from "technical and principled" positions despite Moily coming in as petroleum minister in place of S. Jaipal Reddy, Dasgupta told the the bench of Justice B.S. Chauhan, Justice J. Chelameswar and Justice Kurian Joseph that even three months before the general elections, Moily was committing the government with a decision that will "saddle the future governments and generations" with the consequences of doubling the gas prices from $4.2 to $8.4 mmbtu.

 

 The court was told this in the course of a hearing of two PILs seeking the junking of the government decision to increase the gas price from $4.2 mmbtu to $8.4 mmbtu and NGO Common Cause seeking an SIT/CBI probe into the increase of gas prices, giving retrospective tax benefits and not insisting on the relinquishment of gas blocks in KG basin by Reliance Industries.

 

 Gonsalves told that court that the CAG had pointed to huge irregularities in the records that were shown to it by Reliance Industries and the government auditor faced a large scale obstruction in accessing the records.

 

 He argued that there was whole range of breaches of the production sharing contract by the company. In the course of the hearing, when the court inquired why Reliance was being paid in dollars, Gonsalves told the court that it was serious matter as the entire gas produced was being used within the country.

 

 As he touched on the way Director General, Hydrocarbons (DGH), R.N. Chaubey was shunted out for not falling in line, lawyer Prashant Bhushan referred to (former corporate lobbyist Niira) Radia tapes where the appointment of the DGH was discussed. 

 

 He said it was one of the several points that the apex court had asked the CBI to investigate. "There was a collusion across the board between the government and the RIL," Bhushan, appearing for Common Cause, told the court. As Gonsalves targeted RIL for getting the huge gain due to doubling of gas prices from April 1, Justice Chauhan asked who were the main beneficiaries.

 

 Counsel Harish Salve told the court that two PSUs – ONGC and OIL – were the major beneficiaries of the hike in prices as they together accounted for 72 percent of the natural gas in the country.

 

 Taking the court through the journey from the exploration, development and eventual production of hydrocarbons, Salve said it was initially estimated that the wells in block D1 and D6 in KG basin would produce 80 mmscmd of gas but due to fall in pressure, there was fall in the production of gas which today stands at 8 mmscmd (million standard cubic metre per day).

 

 He told the court that it was the government which was the actual beneficiary of the hike in gas prices as RIL would recover the cost of exploration, development and production in lesser period than otherwise envisaged in the PSC and then the gains would accrue to the government.

 

 Gonsalves will continue with his arguments Wednesday.