RELIANCE NATURAL RESOURCES LTD. versus RELIANCE INDUSTRIES LTD.

RELIANCE NATURAL RESOURCES LTD. versus RELIANCE INDUSTRIES LTD.

MoU between Ambani family members is not binding on RIL or shareholders, and cannot be incorporated into or override the Scheme sanctioned by Company Court; Company Court has wide powers under Sections 391-394 to supervise and modify schemes for working arrangements, but cannot rewrite their basic fabric. Gas supply...

Source-derived case information.

Parties
Appellant: Reliance Natural Resources Ltd.; Respondent: Reliance Industries Ltd.; Intervenor: Union of India
Jurisdiction
India
Judgment Date
07 May 2010
Procedural Posture
Civil Appeal No. 4273 of 2010 / Supreme Court Final Judgment
Outcome
Appeals allowed in part; judgments of Single Judge and Division Bench of Bombay High Court set aside
Legal Topics
Scheme of Arrangement, Production Sharing Contract, Gas Pricing, Mo U Interpretation, Public Trust Doctrine, Directive Principles
Company Law Natural Resources Law Constitutional Law Contract Law Scheme of Arrangement Production Sharing Contract Gas Pricing Mo U Interpretation +2 more

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Summary, issues, holding and outcome

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Parties

Reliance Natural Resources Ltd.

Appellant

Reliance Industries Ltd.

Respondent

Union of India

Intervenor

Procedural Posture

Civil Appeal No. 4273 of 2010 / Supreme Court Final Judgment

Legal Issues

  1. 1 Whether the company petition filed by RNRL under Section 392 of the Companies Act was maintainable
  2. 2 Whether the GSMA constituted a suitable arrangement under Clause 19 of the Scheme
  3. 3 Whether the MoU between Ambani family members was binding on RIL

Ratio Decidendi

MoU between Ambani family members is not binding on RIL or shareholders, and cannot be incorporated into or override the Scheme sanctioned by Company Court; Company Court has wide powers under Sections 391-394 to supervise and modify schemes for working arrangements, but cannot rewrite their basic fabric. Gas supply arrangement must comply with Government policies, PSC, and broader public interest. Renegotiation must be within government framework, de hors MoU.

Court Disposition

Appeals allowed in part; judgments of Single Judge and Division Bench of Bombay High Court set aside

Orders

  • RIL directed to initiate renegotiation with RNRL within eight weeks, to be completed within six weeks thereafter, within government framework and approvals regarding price, quantity, tenure; resultant decision to be placed before Company Court for necessary orders