Gas FIR against Veerappa Moily, Mukesh Ambani valid, Centre to seek SC stay

Written by Amitav Ranjan | New Delhi | Updated: Feb 15 2014, 15:10pm hrs
Veerappa MoilyOil Minister Veerappa Moily has claimed that the decision to file FIRs against him and others was unlawful.
STUMPED by the fact that the FIR ordered by Delhis AAP government in the gas pricing controversy is legally valid, the Centre has decided to approach the Supreme Court for a stay on the probe.

The decision comes three days after Chief Minister Arvind Kejriwal ordered the state governments Anti-Corruption Branch to register FIRs against Petroleum Minister Veerappa Moily, Reliance Industries chairman Mukesh Ambani, former minister Murli Deora and former DG of Hydrocarbons V K Sibal for allegedly conspiring to inflate gas prices.

The Attorney General would be requested to approach the Supreme Court for a stay on the ground that there already are two PILs and one arbitration case pending in the apex court, said an official.

One PIL was filed by CPI MP Gurudas Dasgupta and the other by NGO Common Cause, challenging a gas pricing formula approved by the Cabinet Committee on Economic Affairs in June and seeking the cancellation of Reliances contract to produce gas in the KG-D6 basin, off the Andhra Pradesh coast.

RIL and the petroleum ministry are also locked in arbitration over allegations that RIL deliberately kept production low to benefit from higher prices in the future.

The pricing formula, at the centre of a political storm, was submitted by a committee headed by PMs Economic Advisory Committee chairman C Rangarajan. The formula was notified on January 10 and it would raise the price of gas from $4.2 per unit to $8.4 per unit from April 1, with price calibration every quarter.

The FIR ordered by the Delhi government was registered Wednesday on grounds that most of the alleged offences, including the key decision to finalise the hike in the price of gas, had been committed in Delhi, and the investigation, therefore, could be conducted by the ACB.

Moily, however, claimed Friday that the decision to file an FIR against him and others was unlawful. What the Delhi government is doing is unconstitutional and against federal principles. It is very clear that they are exercising power which is extra-constitutional or contrary to constitutional provisions, he said.

But law ministry sources said the Delhi ACB was empowered to conduct the probe within the territorial jurisdiction of Delhi following the Supreme Court verdict in H N Rishbud vs The State Of Delhi in December 1954 and A C Sharma vs Delhi Administration in February 1973 and the Andhra Pradesh High Court judgment in Dr GSR Somayaji vs the State in September 2001.

The only recourse for the government is to appeal to the Supreme Court since the PILs and arbitration is pending, no termination of the pricing notification can be done nor any other legal process be activated at this stage. There is no propriety in examining the same issue at two places, one source said.

Moily reaffirmed Friday there was no question of stalling the gas price increase from April 1 as demanded by Kejriwal in a letter to Prime Minister Manmohan Singh Wednesday.

Kejriwals letter was sent by the Prime Ministers Office to the petroleum ministry Thursday. In its reply, the ministry rebutted that cost of production cannot be the benchmark for fixing price - a stand taken by Rangarajan while replying to Dasguptas letter to the PM last November.

The ministry claims that the policy decision was taken in consultation with all shareholders, including the user departments and the rationale for the pricing formula was based on legal, contractual and industrial requirements.