Reliance Industries Limited on Thursday told the Bombay High Court that the promoter members of the Reliance Group, including Ambani family members, had entered into a memorandum of understanding at the time of demerger of the Reliance Group of Companies.

A Division bench of Justices JN Patel and KK Tated was hearing a case on the dispute between Anil Ambani-led Reliance Natural Resources Ltd (RNRL) and Mukesh's Reliance Industries over the supply of gas from K-G basin.

The MoU, signed on June 18, 2005, is the starting point and not a terminus for arriving at a suitable agreement between Mukesh's Reliance Industries and Anil's RNRL, RIL's counsel Harish Salve argued.

RIL is set to begin production of gas from the KG basin from September at the rate of 25 million standard cubic meters per day which would go up to 40 mscm by March next year. The production is likely to go upto 80-120 mscm, said Salve.

RNRL, however, citing the family demerger agreement has claimed right over fixed quantity of gas for the plant at Dardi at a fixed price and not at market price.

Whatever has happened in the past, the two companies can still reach a suitable arrangement, Salve said, adding that interest of both companies was important and not just RNRL.

Millions of dollars are invested in the project and once the extraction starts, it cannot wait for a year. There has to be a continuous flow of the gas, Salve added.