As reported by PTI in on 04 September 2011:

ASG 'conceded' to Essar Steel while representing Govt

Additional Solicitor General A S Chandhiok had ''conceded'' to the prayer of opposite party Essar Steel while representing the Government in a case of natural gas supply which was ''contrary'' to the brief given to him, Oil Ministry had said seeking his replacement.

The communication between the Petroleum Ministry and the Law Ministry, now made public under the RTI Act, shows that assurance given by Chandhiok before the Delhi High Court in the case was "contrary" to the stand of the Government.

"Mr A S Chandhiok, learned ASG, states that the stand of the EGoM in the matter will be made explicit by an affidavit to be filed on its behalf on or July 4, 2011," an Oil Ministry official quoted the Delhi High Court order in the note-sheet while recommending to replace Chandhiok.

In a letter provided to S C Agrawal in RTI response, Oil Secretary G C Chaturvedi asked the Law Ministry to replace Chandhiok saying his statements before the court were "contrary" to the stand of the Government despite being personally briefed by Minister Jaipal Reddy on the issue.

"The ASG, by his statement before the Court has, in effect, conceded to the main demand of petitioner without arguing the case on merits," he said.

Chaturvedi said although the High Court passed orders based on his statement on June 3, he took nearly a month to intimate the Government on "the action to be taken on the orders" and asked the Cabinet Secretariat to file an affidavit on the behalf of the E-GoM.

Chandhiok represented the Government in a case where Essar Steel had approached the High Court challenging the Petroleum Ministry's move to reduce the supply of natural gas from the Reliance KG-D6 fields to non-core sectors.In the note sheet, an oil ministry official Tikam Singh had said the stand taken by the ASG was contrary to the instructions not to accede to such a reference to EGoM.

Singh said in Ministry's reply (before the High Court) also which was settled by Chandhiok himself it was "categorically stated that there is no question of referring the decision taken by this Ministry to EGoM for confirmation."

After getting the letter from Chaturvedi, Law Ministry replaced Chandhiok with Vivek Tankha to represent in the case.

In April, the Oil Ministry has ordered the Mukesh Ambani-run Reliance Industries to immediately stop natural gas sales to non-core users like Essar Steel to meet the full demand of fertilizer and power plants.

Essar Steel had challenged the decision in its plea arguing that if supply is reduced, it will face hardships.

Reliance had refused to abide by the ministry's previous order that wanted the fuel to go to sectors like steel, refineries and petrochemical only if there was any gas left after meeting demand of core sectors.

At that time, the company was producing around 50 million cubic metres a day of gas from its eastern offshore KG-D6 gas block, just enough to meet contracted demand of priority sectors -- urea manufacturing units, power plants, LPG extraction plants and city gas distribution companies.

Non-core sponge iron plants, petrochemicals units and oil refineries had cornered 13.13 mmscmd out of the 60.76 mmscmd of KG-D6 gas that the government had allocated in 2008 and 2009