ESSAR STEEL LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) 1.0 While dealing with the diverse contentions raised by the parties in the petition, the consequential issues which arose for consideration of this Court are (i) whether a government monopolistic company established with the object of accelerating the growth of national economy should concentrate on profit motive alone in the course of discharge of its functions, and (ii) whether such a company has the authority to deviate from the directions issued by the Central Government in policy matters and act arbitrarily and unreasonably for the sole purpose of making super profit.

(2.) The petitioner Essar Steel Limited has prayed for quashing and setting aside notice dated 1.5. 2001 whereby the respondent nos.3 to 5 have sought disconnection of supply of gas for non-payment of transportation charges; to restrain the respondents, their officers, servants from acting in any manner contrary to the Government pricing orders dated 31.12.1991, 18.9.1997 and 30.9.1997; to direct the respondents to implement orders dated 21.5.1999 and 5.7.1999 issued by the respondent no.1 pursuant to the recommendations dated 5.4.1999 tendered by the Committee constituted by the respondent no.1 and to issue revised invoices in consonance with the said orders; to hold and declare that the petitioner company is not liable to pay the transportation charges or the price for supply of gas along the Ex-HBJ pipeline and to hold and declare that the respondent nos.3 to 5 are not entitled to charge any price or charges contrary to the pricing orders issued by the respondent no.1. from time to time.

(3.) To decide the controversies raised in this petition it is necessary to set out the facts which led to the filing of the present petition as under: (1) The petitioner M/s Essar Steel Limited is a public limited company incorporated and registered under the provisions of the Indian Companies act, 1956, which is engaged in the business of production of sponge iron and steel at Surat. At that time vide allocation letter dated 10.10.1986 the petitioner was allotted 0.50 MMSCMD of gas on firm basis. Thereafter vide allocation letter dated 6.8.87 the petitioner was alloted 0.35 MMSCMD of gas on fall back basis. The steel complex was set up in the year 1989-90 solely for the reason that natural gas was available in abundance at Hazira and most of the gas had remained unutilized on account of lack of the requisite demand. The petition company therefore set up the aforesaid steel complex at Hazira at an infrastructural costs of Rs.6000 crores as it appears that there was an assurance from the ONGC/Government of India that the price for supply of gas would be such price as may be fixed by the Government of India from time to time. According to the petitioner, it is on the aforesaid assurance that the petitioner has invested the aforesaid amount and approximately 10000 people depend on the petitioner company for their livelihood on account of the direct/indirect employment as well as in the ancillary activities.