ATMIYA CHEMCIALS Vs. GAS AUTHORITY OF INDIA LTD

JUDGEMENT

(1.) The question raised in this writ petition under Article 226 of the Constitution concerns the reasonableness of the charges demanded by the Respondent GAIL (India) Ltd. ('GAIL') from the Petitioner for transportation/transmission of gas to the Petitioner's unit in Bharuch District Gujarat from GAIL's Gas Generating Station (GGS) at Motwan, Gujarat.

(2.) The Petitioner firm entered into an agreement dated 18th July 2003 with the GAIL whereby GAIL agreed to supply to the Petitioner gas from GGS Motwan with effect from 30th November 2003 up to 29th November 2005 on the terms and conditions set out in the agreement. In terms of Clause 4.01, gas was to be delivered to the Petitioner at the Gas Metering Station ('GMS') located at GAIL's premises in Motwan. The gas was to be transported from the downstream flange of the pipeline at the outlet of the GMS located by means of a pipeline to be provided and maintained by the Petitioner. Clause 4.03 of the agreement stated that in addition to the price of gas the Petitioner was to pay monthly transmission charges of Rs. 1,14,605 for the facilities provided by GAIL for supply of gas to the delivery point located in the Petitioner's premises. Clause 4.05 stated that for effecting deliveries GAIL "shall install and maintain at its own risk and cost the piping control and regulation and metering equipment in the aforesaid GMS and all other accessories." The equipment installed by GAIL was to remain its property and it had the right to remove such equipment at any time within twelve months after the expiry of the contract.

(3.) On 29th September 2003, the Petitioner wrote to GAIL stating that it had purchased the land for its project which was at a distance of approximately 360 m. On 8th March 2004, the Petitioner informed GAIL that it had completed the erection of its Sodium Silicate plant and for the pre-commissioning activities of drying of furnace it required gas. It noted that GAIL had laid a pipeline and since its total length was 400 m, GAIL should work out the revised transportation charges on that basis. A further reminder was sent on 11th April 2004. The Petitioner wrote to GAIL on 7th November 2004 pointing out that GAIL had worked out the transmission charges on the basis of a distance of 1.5 km @ Rs. 1,14,605 whereas if it was worked out on the basis of 400 m the amount would be Rs. 30,565. The Petitioner pointed out that despite its request GAIL had been charging @ Rs. 1,14,605 per month as transmission charges for the months April to October 2004. Accordingly, the Petitioner sought refund of the excess amount.