Remunerative energy prices needed to ensure expanded supply: PM

While governmental support can greatly help in developing useful partnerships in the gas and oil sector, prime minister Manmohan Singh said he expected the industry to come forward with innovative ways and means to create a better and sustainable energy future for the Asian region

New Delhi: Stressing that the government was committed to finding solutions for the issues facing the country’s gas industry, prime minister Manmohan Singh on Friday said remunerative energy prices was needed to ensure expanded energy supply, reports PTI.

“The government has initiated gas pricing policy reforms to incentivise production of natural gas. We are conscious that remunerative energy prices are needed to ensure expanded energy supply,” he said at the 7th Asia Gas Partnership Summit here.

“Let me take this opportunity to reaffirm that our government is committed to taking all possible steps to find viable solutions to meet the concerns of the gas industry. We are committed to ensuring the predictability and transparency of our policy and regulatory environment,” he said.

The prime minister’s statement comes at a time when Reliance Industries (RIL), the nation’s largest private oil and gas producer, is seeking a more transparent and credible market price for natural gas.

RIL’s eastern offshore KG-D6 gas fields have seen output drop more than 40% to under 35 million metric standard cubic meters per day (mmscmd). RIL’s partner BP Plc too has called for remunerative prices for further investment to take place.

“The economic exploitation of these resources should lead, therefore, to win-win solutions for both the investors as well as the people of India at large,” Mr Singh said. “At the same time oil and gas are national resources and, therefore, should be within the framework of government and regulatory oversight.”

While governmental support can greatly help in developing useful partnerships in the gas and oil sector, Mr Singh said he expected the industry to come forward with innovative ways and means to create a better and sustainable energy future for the Asian region.

Mr Singh said the use of natural gas offers greater supply security through diversification of the energy basket and also helps in promoting sustainable economic growth and development.

“Compared to other hydrocarbons, the use of gas is not only price-competitive but also environmentally benign for a number of user-industries. Gas is an efficient fuel for power generation, a better feedstock for fertiliser production and a cleaner alternative for vehicular transport,” he said.

During last five years, India’s gas consumption has grown 14%, he said. “Expanding the use of natural gas in India is one of the most important and immediate ways of responding to the challenges of energy security and the management of climate change.”

The New Exploration Licensing Policy (NELP), launched in 1997-98, has attracted over $14 billion investment and discovery of 87 oil and gas blocks. Of these three blocks are in production.

The ninth round of NELP has just been completed covering a sedimentary area of about 88,000 sq km, which saw participation by 37 companies, including eight foreign ones.

“The opening up of the oil and gas sector to private industry participation has resulted in higher domestic gas availability and has also led to growing participation by multinational corporations,” Mr Singh said.

To cater to the large demand for gas, India has accelerated investment in creation of LNG re-gasification facilities. With new re-gasification LNG terminals coming up at Kochi and Dabhol, the country’s current import capacity of 14 million tonnes a year is set to increase to 20 million tonnes a year by 2012-13, he added.

“We have also launched an ambitious pipeline development programme. I understand that the (state-owned) GAIL alone will expand its pipeline length from the existing 9,000 km to around 14,500 km by 2014. Private operators are also expected to add another 5,000 km in the same period.

“The target is to have a countrywide gas grid of about 30,000 km by the end of the 12th Five-Year Plan in 2017,” he added.


Farmers reel under low onion prices

While onion prices could rise from June, experts highlight the urgent need for government intervention to safeguard the interest of the farmers

Thanks to record production, onion growing farmers in Maharashtra are reeling under losses due to crashing prices in the wholesale markets. While prices could rise from June onwards, experts highlight the urgent need for government intervention to safeguard the interest of the farmers.

“The government’s own cost of onion production is Rs897 and the current price of onion is Rs350 per quintal. Farmers have to bear huge losses,” said Raju Shetti—leader of Swabhiman Shetkari Sanghatana (SSS) and a Lok Sabha member from Kolhapur—who led a strike by farmers, in Nashik, demanding that the government revise the MSP (minimum support price) and intervene in the market.

Mr Shetti told Moneylife that, “Apart from MSP, the government should give transport subsidy. Due to the duty on onion exports, there was poor offtake by exporters and hence we have arrived at the situation of excess supply. Plus there should be special internal railway rakes from transporting onions to other parts of the country. We have temporarily called off the strike till 31st March as officials have requested for some time to discuss our demands. If they are not met, we are going on indefinite strike.”

With the arrival of the late Kharif crop, onion production has increased. “The production is 10%-15% higher compared to last year. The total production for this year is pegged at 155 lakh metric tonnes. The market is flooded with arrivals from Maharashtra and Gujarat. Prices are drastically fallen to Rs300-Rs400 per quintal in Lasalgaon market. Farmers can’t even recover their cost of production. Prices from the consumers’ point of view are stable but the government should intervene to support the farmers,” RP Gupta, director, National Horticultural Research and Development Foundation (NHRDF) told Moneylife.

On Thursday, in the Lasalgaon market, a key producing market in India, wholesale prices were in the range of Rs161-Rs474 per quintal. While in other important retail markets in the country onion prices are in the range of Rs6-Rs10 per kg.

Ashok Walunj, director, onion-potato market, APMC (Agricultural Produce Marketing Committee), Vashi says that, “Currently the wholesale prices are in the range of Rs3-Rs4 per kg. They might go up from May once the current stock is consumed. The government has to come out with minimum support price in the interest of onion growers.”

Prithviraj Chavan, chief minister of Maharashtra recently announced in the state legislative assembly that he would request the central government to reduce the minimum export price (MEP) to stabilise falling prices in the interest of onion farmers. Currently the MEP is $125 per tonne after it was reduced from $600 per tonne last year.


Caretaker, servants cannot claim ownership of property: SC

SC asks courts to deal firmly with those embroiling innocent owners in prolonged real estate litigations

One cannot acquire title to a property only because he or she had been allowed to stay in the premises gratuitously for long, the Supreme Court has ruled, asking courts to deal firmly with those embroiling innocent owners in prolonged real estate litigations.

A three-judge bench of Justices Dalveer Bhandari, H L Dattu and Deepak Verma also laid fresh guidelines that caretakers, watchman or servants do not acquire any title to a property merely because of its possession by them for several years.

“No one acquires title to the property if he or she was allowed to stay in the premises gratuitously. Even by long possession of years or decades such person would not acquire any right or interest in the said property,” the court said.

“False claims and defences are really serious problems with real estate litigation, predominantly because of ever escalating prices of the real estate.”

“Litigation pertaining to valuable real estate properties is dragged on by unscrupulous litigants in the hope that the other party will tire out and ultimately would settle with them by paying a huge amount.”

“This happens because of the enormous delay in adjudication of cases in our courts. If pragmatic approach is adopted, then this problem can be minimised to a large extent,” said Justice Bhandari writing the judgement for the bench.

The apex court passed the ruling while upholding an appeal of Maria Margarida Sequeria Fernandes who was embroiled in a two-decade-long legal battle with her brother and former Member of Parliament Erasmo Jack de Sequeria, whom she had appointed as a caretaker of her property in Goa.

“Caretaker, watchman or servant can never acquire interest in the property irrespective of his long possession. The caretaker or servant has to give (up) possession (of the property) forthwith on demand,” the apex court said.

In this case, Maria wanted to take back her property from Erasmo Jack, but the latter declined to part with it and claimed ownership.

The civil court ruled in his favour and the Bombay High Court concurred with it following which she appealed in the apex court.

The apex court on perusal of the documents arrived at the conclusion that Maria was the owner of the property which she entrusted to her as she was way with her husband, a Naval officer staying in different parts of the country.

Noting that several instances of persons refusing to hand over possession of properties to the original owners and dragging them into litigations, the apex court laid down the following guidelines to deal with such issues.

“The Courts are not justified in protecting the possession of a caretaker, servant or any person who was allowed to live in the premises for some time either as a friend, relative, caretaker or as a servant.

“The protection of the court can only be granted or extended to the person who has valid, subsisting rent agreement, lease agreement or license agreement in his favour.

“The caretaker or agent holds property of the principal only on behalf of the principal. He acquires no right or interest whatsoever for himself in such property irrespective of his long stay or possession," the bench said.

The apex court cited its earlier judgement in Ramrameshwari Devi and others case that unless wrong doers are denied profit from frivolous litigation, it would be difficult to prevent it.

“In order to curb uncalled for and frivolous litigation, the courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that otherwise scarce time of courts is consumed or more appropriately, wasted in a large number of uncalled for cases,” the bench said.

The apex court said imposition of heavy fines would also control unnecessary adjournments by the parties in these type of litigations and in appropriate cases, courts may consider ordering prosecution "otherwise it may not be possible to maintain purity and sanctity of judicial proceedings."

The bench said the safe and better course is to give short notice on injunction application and pass an appropriate order after hearing both the sides.

“In cases of grave urgency, if it becomes imperative to grant an ex-parte ad interim injunction, it should be granted for a specified period, such as, for two weeks.

“Experience has shown that all kinds of pleadings are introduced and even false and fabricated documents are filed in civil cases because there is an inherent profit in continuation of possession.

“In a large number of cases, honest litigants suffer and dishonest litigants get undue benefit by grant or refusal of an injunction because the courts do not critically examine pleadings and documents on record,” the bench said.

The apex court directed Erasmo's family to vacate the premises within three months failing which Maria would be entitled to recover possession of the premises with the help of police.


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