Interpreting the law

The government’s notice sent last week to Reliance Industries Ltd (RIL), disallowing it cost recovery of about $1 billion (Rs 5,300 crore) for the company’s investment in the KG-D6 offshore gas field it operates, will in all probability set off a prolonged legal dispute. The government’s argument is that RIL should not be allowed to recover a part of its investment from its overall revenue as it has not drilled the committed number of wells, resulting in a decline in the gas field’s output. 

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