Supreme Court to take up gas dispute

By Krittivas Mukherjee and Devidutta Tripathy

NEW DELHI (Reuters) - India's highest court on Monday said it would consider on Sept. 1 the dispute between Reliance Industries and Reliance Natural Resources over a gas sales-pact, and the government's attempt to step in.

Shares in Reliance Industries, which challenged a lower court ruling to supply gas to Reliance Natural at below-market price and had asked the government to intervene, ended up 5 percent.

Reliance Natural shares lost 2.65 percent as the overall market gained 3 percent.

The court made no final ruling and set a Sept. 1 date for the next hearing in the battle between the billionaire Ambani brothers, which has raised questions over the role of powerful business families in India's economy.

Top Indian conglomerate Reliance Industries (RIL), headed by Mukesh Ambani, and Reliance Natural, led by estranged brother Anil, have been fighting over terms of a gas-supply agreement struck when the Reliance empire was split in 2005.

The government made a petition over the weekend to intervene, arguing that the gas is its property and that the private pact between the Ambanis over the gas is not valid.

The court on Monday did not exclude the government from the proceedings for now. Reliance Industries wants the government in the case, while Reliance Natural opposes it.

"The government role in this case is not conducive to public interest," Ram Jethmalani, a lawyer for Reliance Natural, told reporters after the hearing.