Nothing wrong in Mukta-Panna contract, says SC

The high court in the impugned judgement had observed that the courts could not review decisions of the government awarding contracts unless mala fide was shown. However, the Supreme Court bench passed strictures against the Central Bureau of Investigation (CBI) for its involvement in an incident in which a file containing an officer’s recommendations for registering an FIR against the Reliance Industries and conducting searches at its premises went missing.

“If this is the state of affairs with the premier investigating agency, on which the court has often relied, it should better put its house in order before it is too late in the day,” observed Justice Hegde who wrote the judgement.

While rejecting the appellant’s plea to entrust investigation of the contract to an independent agency, the court said it had considered the arguments on comparative economics, oil reserves, royalties, profit-sharing contracts and other aspects of the contract including the allegation of payment of bribes. The conclusion: there was nothing wrong in the allotment of the contract.

The appellant alleged that the Mukta-Panna oil fields which had oil and gas reserves worth more than Rs 20,000 crore, and from which the Oil and Natural Gas Commission was extracting oil at an operating expenditure of less than three dollars per barrel were handed over to the consortium for less than Rs 12 crore.

The Comptroller and Auditor General of India, according to the appellant, had submitted a critical report pointing out a number of irregularities in the contract’s allotment.

The appellant had also alleged that the estimate of oil reserves had been downgraded from 55 million tonnes to 14 million tonnes by an officer of the ONGC who, immediately after the negotiations of the contract, joined the Reliance.

According to the appellant, the private secretary of the then Petroleum Minister Captain Satish Sharma, who awarded the contract had made a statement before the CBI in the JMM bribery case that he had personally received Rs four crore from Reliance on behalf of the minister during negotiations of the contract.