appealing against acquittals by state government

Legal circles question the locus of Gujarat governmentFollowing quickly in the footsteps of the Central Bureau of Investigation (CBI), the Gujarat government has moved the Supreme Court against the August 29, 2011 Gujarat High Court order acquitting all 12 accused in the Haren Pandya murder case.The CBI filed its appeal on November 25, 2011. The Gujarat government followed suit on December 1. However, legal circles are questioning the locus of the Gujarat government which was not a party to the case. A recent precedent set by the Supreme Court is also being cited in this context. In a 2010 ruling in the disproportionate assets case against former Bihar Chief Minister Lalu Prasad, the Supreme Court held that a State government cannot move the High Court against acquittals by the trial court in cases exclusively investigated by the CBI. The trial court acquitted Mr. Lalu and his wife, Rabri Devi, in the assets case. However, the CBI, which investigated and prosecuted the case, decided not to challenge the acquittal. Following this, the Bihar government moved the Patna High Court on its own.The Gujarat police held charge of the Pandya murder case for a mere two days. Pandya, a Bharatiya Janata Party legislator and former State Home Minister was shot dead in his car in the Law Garden area of Ahmedabad on March 26, 2003. The case was transferred to the CBI on March 28, 2003. On August 29, 2011, the Gujarat High Court overturned the conviction by the trial court of all 12 accused, and adversely commented on CBI's shoddy investigation. Said the Court, “… the investigation clearly appears to have been so botched up and misdirected that the confessional statements recorded during police remand, before any police officer, could not be safely relied [upon] for convicting any of the appellants for commission of, abetment or conspiracy to commit, murder..” The Court remarked that the prosecution version had been rendered improbable by medical and forensic evidence, noting in particular the impossibility of Pandya being shot through the scrotum (one of the injuries) while sitting in a closed car with only a three-inch opening on the driver's side of the window.In appealing against this verdict, the Gujarat government relied on Article 136 of the Constitution under which the Supreme Court has the discretionary power to grant special leave to appeal from any judgment. In the Lalu Prasad case, the Bihar government, invoking Section 378 (1) of the Code of Criminal Procedure, argued that it had the right to file an appeal since the CBI had declined to do so. Rejecting this contention, the Supreme Court said: “…[in that case] we would have to say that no matter that a complaint was not lodged by the State government or its officers; investigation was not done by its police establishment; prosecution was neither commenced nor continued by the State government; a public prosecutor was not appointed by the State government; the State government had nothing to do with the criminal case; all steps from the launching of prosecution until its logical end were taken by the CBI and yet the State government may file an appeal from an order of acquittal under Section 378 (1) of the Cr.PC that would be rendering the exception clause in Section 378 (2) redundant, meaningless and unnecessary..”Available precedentsSenior Supreme Court advocate P.P. Rao told The Hindu that the Supreme Court was bound to consider the precedents available (the Lalu Prasad case among them) to it while considering the Gujarat government's locus. He also pointed that the Court had laid down guidelines in respect of appeals in general, restricting their scope to those rare cases where a gross injustice was seen to be done or where the judgment of the lower court was considered perverse: “Except where there is an injustice, the court in general will be slow to interfere in acquittals.”In its 48th report, the Law Commission noted that India was an exceptional country in the matter of entertaining appeals against acquittals: “In most common law countries, the general rule is not to allow an appeal against acquittals. While a limited right of appeal against acquittals has been given in England in respect of an appellate judgment of acquittal, the general rule mentioned above is still adhered to. An unlimited and general rule given as in India in respect of appeals against acquittals is rare in Anglo-American countries.”Significantly, Pandya's wife, Jagruti Pandya, has been doing the rounds of the Union Home and Law Ministries and petitioning the Supreme Court seeking a re-investigation of her husband's murder. But rather than feeling aggrieved by the Gujarat High Court judgment, she has drawn strength from it, arguing that the “real killers” need to be found.

RIL KG-D6 CONTROVERSY

 CAG in its draft report had rapped oil ministry and its technical arm DGH for allegedly favouring Reliance by allowing it to double KG-D6 gas field’s cost but it stopped short of saying if the Mukesh Ambani firm had overbilled the government and thereby caused loss to the state exchequer.The CAG in its draft audit report on KG-D6 block said the ministry and DGH also bent the rules to grant “huge benefits” to Reliance when it was allowed to retain the entire block, but said gains cannot be quantified
The increase in (Phase-1) cost from ($2.39 billion proposed in the) Initial Development Plan (of May 2004) to ($5.196 billion) in the addendum to the Initial Development Plan is likely to have a significant impact on the government of India’s financial take.The CAG conducted the audit of the Reliance accounts after allegations of ‘gold-plating´, or artificially inflating the development costs of Dhirubhai-1 and 3 gas fields, two of the 18 discoveries in KG-D6 block, were levied by the Anil Ambani Group.
CAG recommended that the “role of DGH and government of India representative on the Management Committee may be closely scrutinised to see why the operator was allowed to violate the provisions of Production Sharing Contract (PSC) and not adhere strictly to the terms of the approved initial development plan.On KG-D6, CAG said the submission of an addendum to the initial Development Plan (IDP) instead of a revised comprehensive development plan, as well as lack of adequate details with regard to the Phase-II development cost of $3.3 billion, made it virtually certain that the operator will submit more addendums.It also found a “similar irregular determination of the entire contract area” as ‘discovery area’ in the case of another block operated by Reliance, dubbed KG-OSN-2001/2.
The petoleum ministry said it will intiate action against RIL for not only digging Dhirubhai-1(D-1),D-3 gas fields but also for continuing fall in production that has gone down to 34 million metric cubic meters a day(mmcmd).The target  out put is 61.88 mmcmd.RIL has also achieved the out put around 80 mmcmd .RIL said it would limit the expenditure it was allowed to recoup.Prime minister has said that the fall in production was a cause of concern and punitive action was being considerd as one of the actions.The PSC doesn't link cost recovery to out put, but the petroleum ministry wants to restricts this in proportion to gas production vis-a-vis the target. If there are changes in PSC they will be introduced from future NELP rounds.They will have a prospective effect.

In a status report filed by the company with the petroleum and natural gas ministry, it has stated that the Dhirubhai 1 and 3 (D1 ans D3 ) the first two of the 18 gas discoveries in KG basin that have been put on production and the MA oil field in the same area.The drop on production is due to the dip in pressure in the wells and the increased water ingress led to lower pre- well gas out. Out of 18 wells drilled and put on production o D1 and D3, four wells A2,B1,B2, and B13  had to be closed due to high water cut/sanding issues. As per the status report, out of 22 wells planned in phase-1 of D1 and D3 field development, 18 wells have been drilled and completed so far.

OIL PRICING IN INDIA

Thanks to the author of this article Rhaguvir srinivasan dated :04-12-2011, THE HINDU.It is an eye opener and every line is worth reading.

Have you ever wondered why when petrol prices go up or down they do so uniformly across the retail outlets of the three oil marketing companies — Indian Oil, Hindustan Petroleum and Bharat Petroleum? If they are three different companies with their own refineries and distribution systems, then surely their costs and selling prices must be different?

Welcome to the strange world of petroleum product pricing in the country. A world where the laws of economics are turned on their heads, where there is no competition between the different players and where the price that we pay for petrol (or for that matter diesel or aviation turbine fuel) has no resemblance whatsoever to its cost of production.

It is a complicated world of subsidies and strange concepts such as “under-recoveries.” It is a hybrid world of controls and freedom — the oil companies have the supposed “freedom” to revise prices, yet that is subject to a discreet government nod.

The oil companies adopt a strange pricing policy that is linked neither to their costs nor to the competition in the market. The prices of the products that they sell in the domestic market are driven by the prices of the same products in the global markets; currently domestic prices are determined by the price swings in the Singapore oil market.

This is unlike in any other industry. Let's take the case of steel. The price of finished steel produced by an Indian company will be determined by its cost of raw materials such as iron ore and coking coal, the cost of power used to produce the steel plus other items of cost such as salaries and other overheads. The competition that the company faces in the market will determine how much margin it can add to this cost base.

The oil companies simply take the price of petrol in the Singapore market, apply the rupee-dollar exchange rate to that price, add other costs such as freight and import duties and lo, there comes the price that they should charge domestic consumers. Interestingly, not a litre of the petrol that these companies sell in the market is imported from Singapore; they are all produced here in their own refineries.

Now, the problem is that most often the price that they so arrive at has no relation to the prevailing domestic retail price, which is invariably lower. Thus is born the concept of “under-recoveries,” something that is unique to our oil companies. You should note that they don't call this loss, simply because it is not a loss. A loss will be caused when a company is forced to sell a product below its cost of production. In this case, we have no idea what the cost of production is for petrol or diesel or, for that matter, any petroleum product.

Under-recoveries are therefore bogus numbers that bear no resemblance to reality. Yet, pricing decisions for the domestic market are based on these numbers.

A careful reading of the statements that the oil companies put out whenever prices are revised will be enlightening. Here is an extract from the latest one released on November 30. “Review of international oil prices and INR-USD exchange rate of relevant fortnight for prices effective 01.12.11 brings out a further downtrend in international oil prices and a further weakening of the exchange rate. Thus, while petrol international prices have moved down significantly from $116/barrel approx. to $109/barrel approx., the exchange rate has deteriorated from Rs. 49.32/USD to Rs 51.50/USD. The combined impact of the two factors is an over-recovery of Rs. 0.65/litre. It has therefore, been decided to revise the petrol prices downward by Rs.0.65/litre (excluding state levies) w.e.f 1st Dec. 2011.”

Simply put, what this statement from Indian Oil Corporation says is that petrol prices have dropped in the global markets and despite the depreciation in the rupee, there is still room to reduce the domestic retail price. Of course, it goes without saying that if there is a rise in petrol price in the Singapore market and the rupee continues to depreciate, domestic prices will be revised upwards.

The question is: why should we in India pay for petrol a price that has no resemblance to either the cost structure of Indian Oil (or Hindustan Petroleum or Bharat Petroleum) or to competition in the market? Prices in Singapore dance to various tunes ranging from fundamental reasons such as consumption levels by countries in the region or shutdown of refineries or pipelines to market-related reasons such as levels of speculation and money flows into the commodities market. How are we in India affected by these when we do not import a litre of petrol or diesel from Singapore?

This flawed pricing model is a legacy of the control era when we had the administered price mechanism in place. The model does not belong in a liberalised market where the prices should be free and be determined by the costs of refining petroleum products and market competition, say analysts.

A senior official in a leading oil company concedes that this model is flawed and interestingly, says his company is all for a cost-plus pricing structure with competition between the three oil retailers — Indian Oil, Hindustan Petroleum and Bharat Petroleum.

The collusive pricing policy of the oil companies is an anti-competitive practice and has come under the radar of the Competition Commission in the past. Would the government tolerate a situation where MRF, Apollo Tyres and Ceat collude on pricing their tyres? So why should we allow oil companies to collude?

These problems arise because the winds of change that led to serious reform in industries such as telecom have largely bypassed the oil industry. What we need is a strong dose of reform in the form of freeing of pricing of petroleum products while simultaneously encouraging competition. We also need a strong regulator for the retail market; the existing Petroleum and Natural Gas Regulatory Board is not tasked with regulating the retail market.

These are important issues that need to be addressed sooner than later by the government.