WP(C)/4861/2013
2021 Latest Caselaw 1303 Gua

                                                                              Page No.# 1/29

GAHC010193202013




                       THE GAUHATI HIGH COURT
               (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH)

                                 WP(C) 4861/2013

                     Sardarmal Bagaria Industries Pvt. Ltd.
                     (Unit Ratna Tea Factory)
                     A company duly constituted under the Companies Act,
                     1956 having its registered office at R.K.B. Road
                     of Dibrugarh Town, District- Dibrugarh
                                                                  ...............Petitioner
                            -Versus-

                1. The Assam Gas Company Ltd.
                     (A Government of Assam undertaking)
                     P.O. Duliajan, District- Dibrugarh.
                 2. The Managing Director
                    The Assam Gas Company Ltd.
                    Duliajan, District- Dibrugarh
                 3. The Resident Engineer
                    The Assam Gas Company Ltd.
                    (Near V.G. Nursing Home), Dibrugarh, Assam
                 4. The Union of India
                    represented by the Secretary to the
                    Government of India, Ministry of Petroleum and Natural Gas,
                    Government of India, having office at Shastri Bhavan,
                    New Delhi -110001,
                 5. The Oil India Limited (OIL)
                    represented by its Managing Director,
                    having registered office at Duliajan,
                    Pin- 786602, District- Dibrugarh, Assam
                                                          ...................Respondents

Advocates :

For the petitioner              : Mr. G.Z. Ahmed, Advocate
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For the Respondent nos. 1 to 3 :     Mr. S.N. Sarma, Senior Advocate,
                                     Mr. K. Kalita, Advocate

For the Respondent no. 4         : Mr. M.R. Adhikary, Central Government Counsel

For the Respondent no. 5        : Mr. A. Sarma, Advocate
                                  Mr. D. Das, Advocate

Date of Hearing                    : 26.02.2021

Date of Judgment & Order           : 05.04.2021


                                  BEFORE
                    HON'BLE MR. JUSTICE MANISH CHOUDHURY

                           JUDGMENT & ORDER (CAV)

The petitioner company herein is in the business of processing and manufacturing tea and for that purpose, it has a factory, set up in the year 1998, located at Beheating, District - Dibrugarh in the name and style of Ratna Tea Factory. To run the factory, the petitioner company purchases green tea leaves from various sources. The factory is registered as a small scale industry (SSI) with the Industries Department of the Government of Assam. The petitioner company uses Natural Gas in running the said factory. The respondent no. 1 company is a transporter and distributor of Natural Gas ['Gas', for short] which transports and distributes Gas through its pipeline network to various consumers for the areas under its network.

2. The petitioner company approached the respondent no. 1 company [hereinafter referred to as 'the respondent company', for easy reference] for supply of Gas to meet its energy requirement for the said factory. After discussion between the parties, it was agreed between them that the respondent company would supply 70,400 Standard Cubic Meter (SCUM) annually to the petitioner company and to that effect, an agreement was executed between them on 21.03.1998 which had a validity period of 10 years from the date of commencement of supply of Gas by the respondent company to the petitioner company. The agreement further provided that in case the petitioner company required a greater volume of Page No.# 3/29

Gas than stipulated above, the petitioner company had to give the respondent company a prior notice of at least 100 days intimating its estimated future requirement and the respondent company would provide facility for such additional Gas subject to the reservation clause in the agreement and subject to availability of Gas upon terms and conditions to be mutually agreed upon by the parties.

3. The petitioner company started getting Gas from the respondent company from the year 1998 onwards during the term of the agreement and in most of the years, except 2007 and 2008, its annual demand exceeded 70,400 SCUM which the respondent company supplied and raised bills accordingly. The petitioner company on receipt of such bills, also paid the amounts.

4. When the term of the earlier agreement expired, the respondent company informed the petitioner company by its letter dated 02.06.2008 that a fresh agreement for another term could be entered into provided the petitioner company accepted the terms and conditions of the draft agreement, enclosed therewith. It was further informed that the agreement could be signed within 23.06.2008 on acceptance of all the terms and conditions by the petitioner company. Reference was made about the transmission charge; cost of the Gas as per the price fixed by the Ministry of Petroleum and Natural Gas/Producer of Gas from time to time; security deposit; installation of new meters and its cost; etc. in the said letter dated 02.06.2008. The respondent company informed the petitioner company by another letter dated 14.09.2009 that the agreement between them had expired on 20.05.2008 and the petitioner company was drawing Gas for the period beyond 20.05.2008 without a valid agreement. The petitioner company was thereby requested to complete the formalities regarding execution of a new Gas supply agreement within a month therefrom.

5. As the petitioner company's requirement and consumption of Gas increased over the years, it requested the respondent company to enhance the booked quantity of Gas from 70,400 SCUM per annum to 2,00,000 SCUM per annum. The petitioner company vide its letter dated 26.10.2009 had informed that the respondent company had raised the bills charging non-APM Gas price and/or premium price on transportation and the petitioner company was Page No.# 4/29

paying the same either under protest or as per the rate charged both for Gas and transmission charges as per the previous agreement. The outstanding amount, shown in a letter dated 21.10.2009 of the respondent company, was due to difference between the rate charged by the respondent company at non-APM/premium price and the payment made by the petitioner company as per the rates under the previous agreement. The petitioner company had thereby raised a contention that no premium rates should have been charged. As it had sought for clarification on these issues and the process of signing a new agreement was on, the petitioner company would make additional payment once the issues got resolved. It further requested the respondent company not to disconnect supply of Gas to its factory. The petitioner company, by its letter dated 26.10.2009, also raised some other issues with regard to transmission charges and its escalation; installation of new meter, etc.

6. The respondent company in response to the said letter dated 26.10.2009 of the petitioner company, replied vide its communication dated 26.11.2009 stating inter alia that it would not be possible on its part to obtain enhanced quantity of Gas under Administered Price Mechanism ('APM', for short) from the producer since the production of Natural Gas under the APM field was limited. While expressing its inability to enhance the booked quantity, the respondent company had informed the petitioner company that it would be able to sign the agreement for the earlier booked quantity of 70,400 SCUM per annum. By the said communication dated 26.11.2009, the respondent company while clarifying about some of the issues raised by the petitioner company, had informed the petitioner company that as the agreement between them had already expired on 20.05.2008 the petitioner company may complete the formalities of fresh Gas supply agreement as per the draft agreement forwarded to it earlier, within 08.12.2009.

7. The respondent company had also forwarded a notice dated 25.02.2008 of the respondent no. 2 i.e. the Managing Director of the respondent company indicating about the price of Gas to be supplied to the factories coming under its various Tea Gas Grids. The notice mentioned about supply of additional Gas over and above the booked quantity at a market driven price i.e. non-APM price. It further mentioned that the existing consumer(s) who would draw more than its booked quantity of Gas, would have to pay the non-APM/market driven Page No.# 5/29

price for the quantity the existing consumer(s) would draw over its booked quantity. The said notice stated to have come into force w.e.f. 01.03.2008.

8. The petitioner company protested against the term regarding non-APM/market driven price for consumption above the booked quantity of Gas in respect of an existing consumer like the petitioner company. It further raised a contention that the premium charge sought to be raised by the respondent company on transmission cost was not in consonance with the indication given in a letter dated 28.09.2010 of the Petroleum and Natural Gas Regulatory Board.

9. When during the year 2009 such exchange of communications were going on between the petitioner company and the respondent company as regards execution of a fresh Gas supply agreement and incorporation of certain new terms and conditions in the backdrop of changes came about as regards APM/non-APM prices, their supplies, etc., the petitioner company filed a complaint being C.P. Case no. 38/2009, before the District Consumer Disputes Redressal Forum, Dibrugarh ('the District Forum', for short) under Section 12 r/w Section 13 of the Consumer Protection Act, 1986 praying for declaration, permanent injunction and certain other reliefs stating inter alia that the respondent company was threatening to disrupt the Gas supply if the petitioner company did not abide by the proposed new terms and conditions of the Gas supply agreement and that the respondent company insisted for installation of a new meter. The petitioner company also filed an application purportedly under Section 13(3)(B) of the Consumer Protection Act, 1986 being Misc. Case no. 2/2009, wherein it prayed for an interim order to restrain the respondent company from discontinuing supply of Gas to the factory of the petitioner company. The District Forum on 04.12.2009 passed an ex parte interim order of status quo on the existing Gas supply connection. As the petitioner company was not paying the full amount of the bills raised by the respondent company which resulted into accumulation of an outstanding amount to the extent of Rs. 7,03,772/- for the period from April, 2009 till March, 2011, the respondent company filed an application being Petition no. 230 on 28.06.2011 in Misc. Case no. 2/2009, arising out of C.P. Case no. 38/2009, praying for an order to pay the outstanding amount immediately to the respondent company. The District Forum, by an order dated 14.09.2011, directed the petitioner company to clear the accumulated outstanding dues within a period of one month therefrom failing which the earlier interim order dated 04.12.2009 would stand vacated. When in spite of the order dated 14.09.2011 the petitioner company did not pay the outstanding amount, the respondent company filed an application in Misc. Case no. 2/2009 for vacation of the order of status quo dated 04.12.2009. The District Forum upon consideration of the said application, vide its order dated 29.11.2012, vacated the order dated 04.12.2009. After vacation of the order of status quo on 29.11.2012, the petitioner company paid the outstanding bill amount on 10.01.2013. But on the same date i.e. on 10.01.2013, the petitioner company filed another application being Misc. Case no. 1/2013 in C.P. Case no. 38/2009, for passing an order directing the respondent company to restore the supply of Gas to its tea factory and the District Forum passed another ex parte order on Page No.# 6/29

11.01.2013 whereby the respondent company was directed to restore the Gas supply to the petitioner company's factory until further order.

10. Aggrieved thereby, the respondent company as the writ petitioner, filed a writ petition, W.P.(C) no. 1090/2013, before this Court challenging the proceedings of C.P. Case no. 38/2009, instituted by the petitioner company before the District Forum. This Court by an order dated 05.04.2013 directed the petitioner company herein to submit a bank guarantee covering Rs. 17.49 lakhs within 3 (three) weeks, failing which, the supply of Gas connection should be stopped. The said amount of Rs. 17.49 Lakhs was towards price of Gas and transmission charges computed purportedly at non-APM rate and premium price for the period from 2009 to 2012. Direction was also made to the respondent company herein to restore the earlier booked quantity of 70,400 SCUM to the petitioner company herein, subject to payment of the then prevailing price fixed by the Government of India. It was further mentioned that if the petitioner company wanted to utilize more Gas than the booked quantity then the same would be supplied as fixed by the Government of India and as per non-APM rate and the transmission cost. The writ petition, W.P.(C) no. 1090/2013, was subsequently disposed of by order dated 16.07.2013 with an observation that the interim arrangement provided by order dated 05.04.2013, which was corrected on 11.04.2013, should continue for a period of 45 days and in the meantime, the petitioner company should withdraw C.P. Case no. 38/2009 from the District Forum, Dibrugarh and 'to pursue such legal remedy as may be available under law'. Puruant to the said order dated 16.07.2013, the petitioner company withdrew C.P. Case no. 38/2009 filed before the District Forum, Dibrugarh on 24.07.2013. It may be mentioned that by a communication dated 05.06.2013, the respondent company had asked the petitioner company to confirm that a sum of Rs. 18,49,081/- was lying in arrear being payable by the petitioner company.

11. After such withdrawal of C.P. Case no. 38/2009, the present writ petition has been filed under Article 226 of the Constitution of India seeking inter alia the following reliefs :-

(a) to enhance the booked quantity of Gas from 70,400 SCUM to 2,00,000 SCUM annually to the petitioner company to meet its energy requirement;

(b) to restrain the respondent company from demanding and realizing non-APM rates in respect of the volume of Gas drawn by the petitioner company over 70,400 SCUM per annum;

(c) to quash/set aside the notice dated 25.02.2008 in so far as the existing consumer like the petitioner company is concerned by holding that the booked quantity of Gas was much lower than the actual consumption of Gas by the petitioner company since 1998 and the respondent company ought to have increased the booked quantity of Gas instead of demanding non-APM rates over and above the booked quantity of Gas as per the policy of the respondent company;

(d) to set aside/quash the premium price charged on the transmission charges as well as 3 per cent increase every financial year;

(e) to set aside the demand of changing the meter every 10 years;

(f) to set aside/quash the demand of the difference between APM, non-APM and premium prices amounting to Rs. 17.49 lakhs for which the petitioner company had given bank guarantee and to refund an amount of Rs. 7,03,772/- paid by the petitioner company to the respondent company as per the direction of the District Forum, Dibrugarh in Misc. Case no.

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1/2013; and,

(g) for a declaratory writ declaring that the demand to confirm Rs. 18,49,081/- as per the respondent company's letter dated 05.06.2013 as illegal and not payable.

12. Heard Mr. G.Z. Ahmed, learned counsel for the petitioner and Mr. S.N. Sarma, learned Senior Counsel assisted by Mr. K. Kalita, learned counsel for the respondent nos. 1, 2 and 3. Also heard Ms. D. Das, learned counsel appearing on behalf of Mr. A. Sarma, learned counsel for the respondent no. 5 and Mr. M.R. Adhikary, learned Central Government Counsel for the respondent no. 4.

13. Mr. Ahmed had submitted that even though Clause 6.00 : Volume in the agreement dated 21.03.1998 provided for a prior notice if the petitioner company as the consumer, required additional Gas i.e. more than the booked quantity, the respondent company throughout the term of the previous agreement had supplied additional quantity of Gas over and above the booked quantity to the petitioner company whenever its demand exceeded the booked quantity without insisting for any prior notice and for such additional quantity of Gas supplied, the respondent company did not charge non-APM rate.

13.1. After expiry of the term of the agreement dated 21.03.1998 when the petitioner company requested for additional quantity of Gas, the respondent company set forth new terms and conditions as regards Gas price, transportation charges, installation of meter, etc. in the proposed new Gas supply agreement. It was informed that the petitioner company would have to pay transmission charges @ Rs. 3,000/- per 1000 SCUM of Gas up to 31.03.2009 increasing @ 3% in the beginning of every financial year on previous year's transmission charges. In addition, the petitioner company was to pay the cost of the Gas as per the price of Gas fixed by the Ministry of Petroleum and Natural Gas, Government of India (MoPNG, GoI)/Producer of Gas from time to time. It was laid down in Clause 21.00 : Premium Price of the draft agreement that the respondent company would charge a premium on the transmission charges for the additional Gas consumption over and above the month-wise booked amount as shown in Appendix-II which would be 25% of the transmission charges as stipulated in Clause 11.02 and Clause 11.03 for the additional quantity. The respondent company by Clause 9.01 had sought to impose a new condition for replacement of Gas meter, Page No.# 8/29

at the cost of the consumer, on the ground that the said equipment was likely to be damaged in the long run. According to the learned counsel for the petitioner, incorporation of these terms and conditions were arbitrary, onerous and without any basis.

13.2. The learned counsel for the petitioner had further submitted that the condition notified vide notice dated 25.02.2008 that an existing consumer who would draw more than its booked quantity of Gas, would have to pay the non-APM/market driven price for the additional quantity over its booked quantity was also illegal and arbitrary. It was his further submission that the premium charge on the transmission cost was not based on any direction or without any approval of the Petroleum and Natural Gas Regulatory Board ['the PNGRB', for short]. It was incumbent for the respondent company to fix its tariff in compliance of the tariff fixed by the PNGRB as per the PNGRB (Determination of Natural Gas Pipeline Tariff) Regulations, 2008.

13.3. It was contended that as per the pricing policy adopted by the Government of India on Natural Gas, a small scale industry (SSI) like the petitioner's tea factory, was entitled to get allotted Gas at non-APM rate. Since its factory was located in the North-Eastern Region (NER), the price of the Gas was to be supplied at a subsidised rate.

13.4. The respondent company had been procuring Gas under the APM scheme from Oil India Limited (OIL) i.e. the respondent no. 5 and Oil and Natural Gas Corporation (ONGC) to cater to the demands of the SSI units and the tea sectors. The petitioner company was being supplied Gas by the respondent company through its Dibrugarh Gas Grid. The quantity of Gas available for distribution under the APM scheme through the Dibrugarh Gas Grid was more than the demands, he submitted, and as such, the decision of respondent company to charge for the additional Gas above the booked quantity at non-APM/market driven price was arbitrary. To buttress his such submission, reference was made to a RTI reply dated 06.05.2009 made by the respondent no. 5 to an individual whereby it was informed that yearly Gas allocation under APM quota in the Dibrugarh Tinsukia Tea Gas Grid during the period from 2004-2005 to 2008-2009 was 0.186 MMSCMD [MMSCMD = Million Metric Standard Cubic Meter per Day]. He had referred to another RTI reply dated 10.02.2010 Page No.# 9/29

wherein the respondent no. 5 informed about the year-wise quantity of Gas it sold to the tea sector at APM quota rate and non-APM quota rate. He had sought to draw support therefrom to urge the point that the quantity of Gas available for distribution under the APM quota through the Dibrugarh Gas Grid was sufficient to cater to the needs of all the consumers and also to meet the enhanced demand of Gas of the petitioner company at the APM quota rate.

13.5. The learned counsel for the petitioner had also referred to a performance review report in relation to the respondent company prepared for the period from April, 2004 by the office of the Comptroller and Auditor General (CAG). The facts and figures mentioned in the said report were referred to to contend that despite availability of unutilized Gas under APM quota the respondent company illegally and arbitrarily withhold the same from the consumers on the ground of non-availability and had, thereby, sought to hike the price of additional quantity of Gas to be consumed by the petitioner company at non-APM price. It was further contended that it had been reflected from the Report of the CAG that the respondent company had been procuring Gas at a higher price from a private company under non-APM scheme to the detriment of the consumers like the petitioner and had passed the burden to the consumers. Mr. Ahmed had relied in the decision of the Hon'ble Supreme Court of India in Arun Kumar Agrawal vs. Union of India and others, reported in (2013) 7 SCC 1.

13.6. The submissions, in essence, made on behalf of the petitioner company were that the entire process of demanding the price of Gas at non-APM/market driven price for the additional quantity of Gas above the booked quantity; charging of premium price on transmission charge; demanding installation of new meter, at the cost of the consumer, at the end of every 10 years, etc. by the respondent company were unfair trade practices and were an attempt to make more money in an arbitrary and unjustified manner knowing about its dominant position and the terms and conditions set forth by it in the proposed new agreement placed for renewal were onerous and unfair. Contending as above, he had submitted that the petitioner company was entitled to be granted the reliefs it had sought for in this writ petition. It was submitted that the respondent company being a Government of Assam Undertaking and a Government Company, is an instrumentality of the State and its actions were to fair, transparent and non-discriminatory.

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14. Mr. Sarma, learned Senior Counsel appearing for the respondent nos. 1 to 3 had raised a preliminary objection regarding maintainability of this writ petition. It was submitted by him that the petitioner company had completely misconstrued the observation made by this Court in the order dated 16.07.2013 passed in the writ petition, W.P.(C) no. 1090/2013, wherein while disposing of the writ petition, the petitioner company was given the liberty 'to pursue such legal remedy as may be available under the law'.

14.1. He had submitted that a reference to the terms and conditions of the agreement dated 21.03.1998 the validity of which had already expired in 2008, would make it evident that the dispute sought to be raised by the petitioner company was purely an inter partes contractual dispute between the petitioner company and the respondent company. The petitioner company had preferred the writ petition after expiry of 10 years validity period of the previous agreement and at the time of filing the writ petition, there was not even any contractual relation existing between the two parties. There was no violation of any fundamental rights of the petitioner company. It was his submission that the writ petition was not an appropriate remedy in respect of such dispute and hence, the exercise of jurisdiction under Article 226 of the Constitution of India was not called for. It was his further submission that what terms and conditions to be entered into an agreement which was being negotiated between the parties, were beyond the scope and purview of this Court in a writ petition under Article 226 of the Constitution of India.

14.2. It was submitted that the agreement dated 21.03.1998 was a concluded contract and the validity of said contract having expired, no contractual relation existed between the parties. Even if it was assumed that any relation existed between them, the matter would be in the realm of pure contract under private law. The only issue open at that point of time was renewal of the agreement as per the renewal clause contained in the agreement upon terms and conditions to be mutually agreed by the parties. The petitioner company did not have any legal right to enforce execution/renewal of agreement as per the terms and conditions to be set forth by it.

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14.3. It was his submission that the jurisdiction to fix and implement the price of Natural Gas was vested with the MoPNG, GoI through the OIL/ONGC and the respondent company had no role to play in that connection. He had referred to a communication dated 20.06.2005 of the MoPNG, GoI on the subject of allocation and pricing of Natural Gas, which was addressed to the then producers of Natural Gas i.e. OIL, the ONGC and the GAIL (India) Limited. Referring to the contents of the said communication, he had submitted that the consumer price of APM Gas was fixed by the MoPNG, GoI and the MoPNG, GoI also identified the priority sectors to which the APM Gas quota was to be distributed. The specific users/committed under small scale sector consumers having allocations up to 0.50 MMSCMD were included in the priority segments by fixing the revised price at Rs. 3,200/-. From the said communication itself it was evident that the allocation of Gas under APM quota was very limited and the Ministry had formulated the policy, in the changing scenario, to move to the non-APM price regime in course of time.

14.4. Vide Clause 10.1.1 of the agreement, the petitioner itself agreed that the price of Gas to be supplied by the respondent company shall be subject to any revision effected by the MoPNG, GoI /Producers of Gas i.e. OIL from time to time. It was his submission that during the tenure of the previous Gas supply agreement dated 21.03.1998 the additional quantity of Gas over and above the booked/committed quantity of Gas per annum was supplied to the petitioner company at APM rate because the concept of non-APM was not introduced by the GoI at that time and availability of Gas at APM rate was not an issue. The non-APM Gas price was introduced by the respondent company w.e.f. April, 2008 and accordingly, it was incorporated in the draft agreement forwarded to the petitioner company. Such incorporation was in accordance with the communication dated 20.06.2005 of the MoPNG, GoI. It was in consonance with such policy, the notice dated 25.02.2008 was issued to the existing consumers. It was not open for the petitioner company to agitate such issue in a writ petition, Mr. Sarma submitted.

14.5. It was also submitted by him that the conduct of the petitioner company was also a relevant factor for consideration. The petitioner company upon receipt of the letter dated 02.06.2008 and the draft Gas supply agreement, did not reply to it nor it came forward to Page No.# 12/29

execute the fresh Gas supply agreement. Instead, it went on consuming Gas at old Gas price and transmission charges even after expiry of the earlier agreement. It was in such situation, the respondent company vide its letter dated 14.09.2009 informed to the petitioner company to execute a fresh Gas supply agreement within a month as the term of the earlier agreement expired on 20.05.2008. The petitioner company thereafter raised some irrelevant issues in its letter dated 26.10.2009 and thereafter, instituted the complaint before the District Forum despite it being not a consumer under the Consumer Protection Act, 1986. Despite knowing that the writ jurisdiction was not the proper remedy the petitioner company had been pursuing this proceeding deliberately misconstruing the wordings 'to pursue such legal remedy as may be available in law' in the order dated 16.07.2013.

14.6. He had further submitted that the respondent company after the advent of non-APM regime, used to book the sum total of booked/committed quantities of Gas of all its consumers with the OIL and the OIL used to raised bills for the said booked quantity under the APM system in the name of the company. Accordingly, the respondent company used to collect the bill amounts from its individual consumers according to their respective booked quantity of Gas and pay, in turn, the same to the OIL. If the individual consumers consumed Gas in excess their booked quantity then the OIL used to raise bills for such excess quantities of Gas consumed under the non-APM system. It that regard, he had referred to a circular dated 31.05.2010 of the MoPNG, GoI and communications dated 02.04.2008 and 10.04.2010 written by the OIL to the respondent company.

14.7. It was his further submission that the respondent company transported and distributed Gas through its various Gas grids and Dibrugarh Gas Grid was one of them. Each Gas grid catered to a large number of domestic consumers as well as commercial consumers like the petitioner company. As per the policy of the Government of India, the domestic consumers were to be provided Gas at a subsidised rate. The consumers in priority sectors like power sector, fertilizer sector, etc. were also to be supplied Gas under the APM quota. The respondent company had to take many other factors into consideration to cater to the needs of its large base of consumers. In such situation, it was unjustified on the part of the petitioner company to claim that there was availability of APM Gas at the end of the Page No.# 13/29

respondent company and yet, it sought to extract higher prices at non-APM price for the additional quantity over and above the booked quantity. It was merely an allegation without there being any material basis and he had, thus, submitted that all these issues were disputed questions of facts and such issues could only be decided after leading of detail evidence - oral as well as documentary - in a full-fledged trial and could not be adjudicated in a writ proceeding. He had further submitted that Natural Gas was not the only option for the petitioner company to run its factory as electricity was another option and by this writ petition, it had sought to obtain its entire required quantity of Gas at a subsidised rate to operate its tea factory, run for profit, and to avoid paying market driven price in order to earn more profits. The petitioner company was unjustly enjoying the interim order.

14.8. Submitting as above, the learned Senior Counsel had submitted that this writ petition was not to be entertained because it had raised issues merely confined to contractual obligations falling in the realm of private law, disputed questions of facts, etc. which were not in the realm of public law.

14.9. The decisions of the Hon'ble Supreme Court of India in Bhagwandas Goverdhandas Kedia vs. Girdharilal Parshottamdas and Company and others, reported in AIR 1966 SC 543; Rickmers Verwaltung GMBH vs. Indian Oil Corporation Ltd., reported in (1999) 1 SCC 1; and Oil and Natural Gas Commission and another vs. Association of Natural Gas Consuming Industries of Gujarat and others , reported in 1990 (Supp) SCC 397, had been referred to by the learned Senior Counsel in support of his submissions.

15. The learned counsel for the respondent no. 5 submitted that the issues raised in this writ petition were confined entirely between the petitioner company and the respondent company which arose out of the agreement dated 21.03.1998 and the subsequent proposed agreement which was being negotiated and supposed to be entered between the parties for supply of Gas. He had submitted that the respondent no. 5 at no point of time was a party to the agreement dated 21.03.1998. As the issues raised in this writ petition were internal issues between the petitioner company and the respondent company, the respondent no. 5 had no role in the subject-matter. In support of his submissions, he had referred to the affidavit-in-

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opposition filed on behalf of the respondent no. 5.

15.1. The learned Central Government Counsel appearing for respondent no. 4 had also submitted in similar lines that it had no role with the issues raised in this writ petition as the same were related to the agreement dated 21.03.1998 and were confined to contractual rights and obligations between the petitioner company and the respondent company.

16. I have duly considered the submissions of the learned counsel for the parties and also perused the materials on record brought by the parties through their respective pleadings.

17. The petitioner company is a company incorporated under the provisions of the Companies Act, 1956 and it is involved in the business of processing and manufacturing tea, as has already been mentioned above. The respondent company is also a company incorporated under the Companies Act, 1956 and is a Government of Assam Undertaking. Its main activities are transportation and distribution of Natural Gas in the areas covered by its pipeline network to various categories of consumers. It is not a producer of Natural Gas. The respondent company procures Gas from the producers of Natural Gas like Oil India Limited and others against payment. Transportation charge from industrial and non-industrial consumers constitutes its main source of income.

18. The genesis of the issues raised in this writ petition by the petitioner company is the agreement executed between the petitioner company and the respondent company on 21.03.1998. To appreciate the issues sought to be raised and to decide about the reliefs sought in this writ petition, reference to few of the clauses of the said agreement appears necessary :-

"2.00 SCOPE :

2.01 The CONSUMER will receive gas from the COMPANY and the COMPANY will transport and deliver the gas to the CONSUMER from COMPANY'S pipeline system to the extent and for the purpose and period and on the terms and conditions as set forth herein after from the date of commencement of the delivery of gas to the CONSUMER.

               *       *       *        *       *        *       *        *       *        *
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4.00    RESERVATION BY COMPANY :

The COMPANY hereby expressly reserves upto itself the following rights with regard to the supply of gas to the CONSUMER and the CONSUMER hereby agrees to the said reservations.

4.01 The COMPANY will transport the gas to the CONSUMER subject to the gas being made available by the producer of gas. In the event of stoppage or curtailment of the gas by the producer due to requirement of gas by any gas based industries owned wholly or partly by the Central Govt. or State Govt. whose requirement cannot be met from the other sources, the CONSUMER shall not claim any compensation from the COMPANY.

*        *           *     *        *        *        *        *        *      *
6.00    VOLUME :
6.01    The total volume of gas required by the CONSUMER in one calendar year will not

exceed the respective quantities as shown in column 4 of the Appendix-I. The volume is measured at 1 KG/Cm2abs. (14.7 PSIA) and 160C (600F) temperature and irrespective of the Calorific Value of gas.

6.02 The total volume of gas required by the CONSUMER on any single day (from 00:00 hours to 24:00 hours) will not exceed the quantity shown in column 5 of the Appendix-I to this Agreement. The volume is measured at 1 KG/Cm 2abs. (14.7 PSIA) pressure and 160C i.e. 600F temperature and irrespective of the Calorific Value of the gas. 6.03 The maximum hourly volume of gas required will not exceed the quantity shown in column 6 of the Appendix-I to this Agreement at the above mentioned pressure and temperature.

6.04 In the event of the CONSUMER requiring a greater volume of gas than those stipulated above the CONSUMER shall give the COMPANY notice not less than 100 (one hundred) days in writing and shall state in such notice the estimated future requirement of gas by the CONSUMER. The COMPANY shall provide facility for such additional gas, subject to Clause 4 (RESERVATION BY COMPANY) above and subject to availability of gas upon terms and conditions to be mutually agreed upon beforehand. Although the COMPANY'S transportation system is capable of transportation the above quantities of gas the consumption of gas by the CONSUMER will be restricted to what is made available by the producer.

*        *           *     *        *        *        *        *        *      *
8.00    METERING :
8.01     In order to determine the quantities of gas delivered to the CONSUMER, it is

mandatory that the CONSUMER will install such meters as may be advised by the COMPANY, and the meter will be sealed by the COMPANY. The CONSUMER will pay the COMPANY for such quantities of gas as are metered, measured and recorded by or through Page No.# 16/29

the said Meter. The COMPANY will take meter reading but the CONSUMER will have the right to inspect the readings as and when the CONSUMER may think it necessary.

*        *         *         *        *         *      *       *        *        *
10.00 GAS PRICE :
10.01    The CONSUMER shall pay to the COMPANY price of gas Rs. 1200.00 (rupees one

thousand two hundred) only per 1000 SCUM of gas delivered plus Royalty, taxes and other levies etc. as applicable from time to time. Price discount if any, agreed to by Govt. of India for this case specifically, will also be applicable.

10.01.01The price of gas as above shall be subject to any revision effected by Ministry of Petroleum and Natural Gas, Govt. of India/Oil India Limited from time to time. 10.02 TRANSMISSION CHARGE :

10.02.01. The CONSUMER shall pay to the COMPANY the gas transmission charge of Rs. 2200.00 (rupees two thousand two hundred) only per 1000 SCUM. The T.C. of Rs. 2200.00 (rupees two thousand two hundred) only per 1000 SCUM will remain valid for the 1 st year of consumption and thereafter an escalation @ 3% (three percent) per annum from 2 nd year onwards on the previous year's T.C. till the currency of the Agreement will be made.

*        *         *         *        *         *      *       *        *        *
12.00 BILLING :
12.01    The COMPANY shall raise monthly Invoices/Bills on the CONSUMER within 10

(ten) days of the close of the month for the price of gas delivered to the CONSUMER and transmission charge for the same during the preceding month on the basis of the certified Gas Volume figures of the COMPANY.

*        *         *         *        *         *      *       *        *        *
17.00 ARBITRATION :
17.01    Any dispute or difference arising out of or in connection with this Agreement

including any dispute or difference regarding its interpretation on any Clause thereof, shall be referred to the Board of Directors of Assam Gas Company Limited. The CONSUMER will nominate representatives and at the discretion of the CONSUMER a Lawyer, who will discuss about the disputed matters with the Board of Directors in a meeting. The decision arrived at by the Board shall be final and binding on the COMPANY as well as the CONSUMER.

17.02 Notwithstanding dispute or difference which might have been referred to the arbitration as mentioned in Clause 17.01, all obligations under this Agreement shall continue to be fulfilled by both COMPANY and CONSUMER unless otherwise directed by the COMPANY in writing, except as provided expressly in the Agreement itself.

*        *         *         *        *         *      *       *        *        *
19.      TERMS:
                                                                                        Page No.# 17/29

This Agreement shall be valid in force and binding on the COMPANY as well as on the CONSUMER for a period of 10 (ten) years from the date of commencement of supply of gas by the COMPANY to the CONSUMER. On expiry of this period of 10 (ten) years both the COMPANY and the CONSUMER may enter into a fresh Agreement for the transportation of gas, and the transmission cost will be revised inter-alia keeping in view the depreciated cost of the pipeline by then and escalated cost of operation, maintenance, etc.

20.00 The transportation of gas by the COMPANY to the CONSUMER under this Agreement is subject to producers i.e. Oil India Limited's making the required gas available to the COMPANY for this purpose. If for any reason whatsoever Oil India Limited, does not supply the required gas to the COMPANY, the COMPANY will discontinue transportation of gas to the CONSUMER and in the event of such discontinuance the CONSUMER will pay to the COMPANY the compensation as mentioned in Clause 11.02 above for the unexpired period of this Agreement.

21.00 The statements enclosed in Appendix-I and Appendix-II herein will form parts of this Agreement and the quantities stated therein will be binding on both parties to this Agreement.

19. With regard to the issues raised by the petitioner company vide its letter dated 26.10.2009, the respondent company had replied by its letter dated 26.11.2009 on the subject of signing a fresh Gas supply agreement. In the said letter, it was stated by the respondent company that the transmission charge of Rs. 3,000/- per 1,000 SCUM was the minimum transmission charge fixed by the respondent company for the financial year 2008- 2009. Annual escalation of 3% on transmission charge was a standardized clause applicable to all agreements for last several years and was also in the previous agreement signed with the petitioner company. It further stated that both transmission charge and annual escalation were evaluated as per the guidelines of the Petroleum and Natural Gas Regulatory Board.

20. Regarding the installation of new meter and the petitioner company's request not to change the meter, it was informed by the respondent company that all equipments had certain estimated life-time and similarly, the Gas meter with certain various moving parts inside it also had an estimated life-time. Clause 9.01 Metering of the proposed model agreement stated to have covered that point. It was mentioned that consideration for life time of moving parts and upgradation/change of technology had to make way for better and Page No.# 18/29

improved metering of Natural Gas. The petitioner company was, thereby, informed that as the previously installed meter was 10 years old, a new meter shall be installed as per the terms of the agreement. In the counter-affidavit, it was further contended the respondent company earlier installed turbine meter for measurement of gas. After analyzing the performance of such meter, it found that the Gas consumption pattern in tea factories was not uniform and finally a consumer friendly meter, turbine meter with electronic volume converter (EVC) was developed to give solution to such problems as it was capable of calculating actual Gas consumption figures and thereafter, to store it in the memory as connected/converted/billing figures. The respondent company was procuring such meters from vendors and the consumers were asked to deposit the landed cost of such meter as per the purchase order placed to the vendor which would be adjusted suitably after installation of the meter.

21. Regarding charging of premium price on transmission charge, it was the stance of the respondent company that by nature, the consumption of Gas by tea factories used to fluctuate from time to time. The consumers had been supplied Gas through a common network of Gas pipeline and over-drawal by one consumer used to upset the whole network by reducing availability of Gas for the other consumers which used to cause suffering to the end consumers of the network. The respondent company did not have monitoring and controlling devices to physically restrict consumers within their respective booked quantities and it was in order to restrict over-drawal of Gas by the consumers imposition of charge of premium for consumption of Gas exceeding 120% of the booked quantity was required to be incorporated in the proposed agreement as a financial deterrence clause. According to the respondent company, the imposition of premium price in Clause 21.00 in the proposed agreement was necessitated in order to solve the said problem and to restrain the consumers from over-drawal of Gas over their respective booked quantities. Such imposition of premium rate on transmission charge, according to it, did not require any approval of the Petroleum and Natural Gas Regulatory Board.

22. On the issue of pricing of Gas, it was mentioned that the production of Gas under the APM field had become limited and it was not possible on the part of the respondent company to obtain enhanced quantity of Gas under APM rate from the producer. Reference was made Page No.# 19/29

to Clause 11.00 : Gas Price of the proposed agreement. Reference was also made to a letter of the MoPNG, GoI wherein it was notified that any additional Gas would be sold at market- driven price only. The petitioner company booked fixed quantity of Gas directly from the respondent company as per the original agreement and the respondent company had booked sufficient Gas quantity with the producer of the Gas, Oil India Limited which fell under APM rate. It was, thereby, informed that it would not be possible on the part of the respondent company to obtain enhanced quantity of Gas from the producer. The petitioner company was informed that upto the booked quantum, the petitioner company would have to pay at APM rate and for any quantity of Gas beyond the booked quantity, the petitioner company had to pay at market-driven price only based on the restriction made by the MoPNG, GoI. To highlight the issues regarding price fixation and administered prices of Natural Gas, etc. the decision in Oil and Natural Gas Commission (supra) was relied on by the learned Senior Counsel for the respondent company.

23. It was the stand of the respondent company that non-APM Gas price was introduced by the respondent company w.e.f. April, 2008 and the same was incorporated in the draft agreement forwarded by it to the petitioner company which was, according to it, in accordance with the notification dated 20.06.2005 of the MoPNG, GoI.

24. The communication dated 20.06.2005 of the MoPNG, GoI was addressed to OIL, ONGC and GAIL and not addressed to the respondent company. It mentioned about allocation and pricing of Natural Gas. It was mentioned that for the Gas produced by ONGC and OIL, the determination of producer prices would be referred to the Tariff Commission. It was also mentioned that the consumer price of APM Gas which was produced by ONGC and OIL at that point of time at 55 MMSCMD of APM Gas, would be increased to Rs. 3,200/- per MCM on ad-hoc basis till determination by the Tariff Commission. The power and fertilizer sectors were earmarked as priority sectors. It further mentioned that the specific end users committed under Court's order/small scale consumers having allocations upto 0.05 MMSCMD also deserved priority in their supplies. Accordingly, it was decided to supply APM Gas to these priority sectors at the afore-mentioned reserved price. Reference was also made to two communications dated 02.04.2008 and 10.04.2010 of the respondent no. 5 wherein Page No.# 20/29

respondent no. 5 had informed the respondent company that any quantity of Gas in excess of committed quantity through different Gas Grids would attract non-APM price. Reliance was also placed on another communication dated 31.05.2010 of the MoPNG, GoI regarding sale of APM Gas and non-APM Gas to consumers and fixation of their rates. A number of other contentions were raised on behalf of the respondent company which were, in essence, to show that it was not possible for it to supply any additional quantity of Gas over and above the booked quantity committed under the earlier agreement dated 21.03.1998 at APM price and such additional quantity of Gas would be charged at non-APM price.

25. It had been urged by the learned counsel of the petitioner company that the present writ petition had been preferred consequent to the order dated 16.07.2013 passed in the writ petition, W.P.(C) No. 1090/2013 as it was the proper legal remedy available under the law. The reasoning he had advanced in that connection was that the respondent company is a Government of Assam Undertaking and a Government Company incorporated under the Companies Act, 1956 and, thus, it is an agency of the State which comes under the purview of Article 12 of the Constitution of India making its actions amenable to the jurisdiction under Article 226 of the Constitution of India. Such contentions of the learned counsel for the petitioner had been opposed by the learned Senior Counsel for the respondent company on the ground that even if it is a Government of Assam Undertaking and a Government Company, the rights and obligations of the parties sought to be raised herein are governed by the laws of private contract and hence, the instant writ petition is not maintainable. In view of the above rival contentions made by the learned counsel for the parties it has necessitated a discussion as about the status of the respondent company and maintainability of the writ petition.

26. The agreement dated 21.03.1998 has indicated that the respondent company is a Government of Assam Undertaking incorporated under the Companies Act, 1956 having its registered office at Duliajan, District- Dibrugarh, Assam. Thus, it is evident that the respondent company is a company incorporated under the Companies Act, 1956 and a Government of Assam Undertaking. It is not created by any statute as it does not owe its existence to a statute. It is not a statutory body, unlike a statutory body created by or under a Central Act or State Act. It is a company incorporated under the provisions of Companies Act, 1956 but not established by the Companies Act, 1956. It has come into existence in accordance with the provisions of the Companies Act and its activities are to be regulated and abide by the statutory provisions contained in the Companies Act. Section 617, Companies Act, 1956 (since repealed) had defined 'Government Company' as a Company in which not less than fifty-one per cent of the paid-up share capital was held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments and included a Company which was a subsidiary of a Government Company. The conduct of affairs of such a Government Company was to conform by the provisions contained in Section 619, Section 619A, and Section 620 of the Page No.# 21/29

Companies Act, 1956. In the Companies Act, 2013, corresponding provisions, similar to Section 617, Section 619A, and Section 620 of the Companies Act, 1956, are contained in Section 2(45), Section 394 and Section 395. Being not a statutory body, the respondent company cannot be held to have been discharging statutory functions. A Government Company cannot be equated either as the Government or as a department of the Government, meaning thereby, it is distinct from the Government or a department of the Government. It has a separate legal existence and bears an independent juridical identity. A Government Company has its own Memorandum of Association and Articles of Association and also a Board of Directors to conduct and regulate its affairs.

27. No material has been brought to the notice of this Court as to how much of the paid- up share capital in the respondent company is held by the Government of Assam. It is also not brought on record as to whether the respondent company enjoys any State protection. It has not been urged on behalf of the petitioner that there exists deep and pervasive State control in the financial and administrative affairs and functioning of the respondent company. Be that as it may, we proceed on the assumption, for the time being to test the contention advanced on behalf of the petitioner, that it being a Government of Assam Undertaking and a Government Company is an instrumentality or agency of the State for the purpose of Article 12 of the Constitution of India.

28. Article 226 of the Constitution of India, which deals with powers of the High Courts to issue certain writs inter alia stipulates that every High Court has the power to issue directions, orders or writs to any person or authority, including, in appropriate cases, any Government, for the enforcement of any of the rights conferred by Part III of the Constitution of India and for any other purpose. If an authority/body is 'State' within the meaning of Article 12 of the Constitution of India, a writ petition under Article 226 of the Constitution of India is maintainable against such an authority/body for the aforesaid purposes. The definition contained in Article 12 is for the purpose of application of the provisions contained in Part III. The provisions of Article 12 of the Constitution of India have provided that 'the State' includes the Government and Parliament of India and the Government and Legislature of each States as well as 'all local or other authorities within the territory of India or under the control of the Government of India'. If an authority/body falling under the purview of 'other authority' as per Article 12 of the Constitution of India violates the fundamental rights of any person or citizen, a writ petition can be filed under Article 226 of the Constitution of India invoking the extraordinary jurisdiction of the High Court seeking appropriate direction, order or writ. Thus, under Article 226 of the Constitution of India the power of the High Court is not limited to the Government or authority which qualifies to be 'State' under Article 12 of Page No.# 22/29

the Constitution of India but is extended for issuing directions, orders or writs 'to any person or authority' also. Again, this power of issuing directions, orders or writs is not limited to enforcement of fundamental rights conferred by Part III, but also 'for any other purpose'. Thus, the power of the High Court takes within its sweep more authorities than stipulated in Article 12 of the Constitution of India and the subject matter which can be dealt with under Article 226 of the Constitution of India is also wider in scope. The words 'any person or authority' used in Article 226 of the Constitution of India are not to be confined only to statutory authorities and instrumentalities of the State. They may cover any other person or authority/body performing public duty and it is the nature of duty imposed on the authority/body which is relevant. The guiding factor is the nature of duty imposed on such an authority/body, namely, public duty to make it covered under the ambit of Article 226 of the Constitution of India. The term 'authority' used in Article 226 of the Constitution of India has to receive wider meaning than the very term used in Article 12 of the Constitution of India.

29. If a person or an authority is 'State' within the meaning of Article 12 of the Constitution of India, admittedly a writ petition under Article 226 of the Constitution of India would lie against such a person or an authority. But even in such cases writ would not lie to enforce private law rights. It is the basic principle of judicial review of an action under the administrative law. The reason is private law is that part of the legal system which is part of common law that involves relationships between individuals, such as law of contract or torts. Thus, even if a writ petition is maintainable against an authority, which is 'State' under Article 12 of the Constitution of India, before issuing writ, particularly writ of mandamus, the Court has to satisfy that action of such an authority, which is challenged, is in the domain of public law as distinguished from private law. Ordinary private law remedies are not enforceable through extraordinary writ jurisdiction. More particularly, contractual and commercial obligations are enforceable only by ordinary action and not by judicial review. It is also settled that even if a person or an authority does not come within the sweep of Article 12 of the Constitution of India, but is performing public duty, writ petition can lie and writ of mandamus or appropriate writ can be issued. Such a private body should either run substantially on State funding or discharge public duty/positive obligation of public nature or is under liability to discharge any function under any statute, to compel it to perform such a statutory function Page No.# 23/29

[K.K. Saksena vs. International Commission on Irrigation and Drainage and others, (2015) 4 SCC 670].

30. It is also not urged on behalf of the petitioner that the task of supplying of Natural Gas by the respondent company is relatable to any statutory activity or any policy decision of either the Central Government or the State Government or of any regulatory authority. It is also to be taken note of the fact that the previous agreement dated 21.03.1998 was not a statutory contract nor the proposed agreement the terms and conditions of which are being negotiated between the parties, would be a statutory contract. Merely because the respondent company, a Government of Assam Undertaking and a Government Company, had entered into the agreement dated 21.03.1998 with the private entity like the petitioner company the same had not made the said contract a statutory one.

31. The principle of judicial review prima facie governs the activities of bodies performing public functions. It has been observed in Ramakrishna Mission and another vs. Kago Kunya and others, reported in (2019) 16 SCC 303, that only functions which are similar or closely related to those that are performed by the State in its sovereign capacity qualify as public functions or a public duty. A writ under Article 226 of the Constitution can lie against a person if it is a statutory body or performs a public function or discharges a public or statutory duty. It has been observed that although it is not easy to define what a public function or public duty is, it can reasonably be said that such functions are similar to or closely related to those performable by the State in its sovereign capacity. The scope of mandamus is limited to enforcement of public duty. Contracts of a purely private nature would not be subject to writ jurisdiction.

32. Reverting back to the facts of the case in hand and in the light of the discussion made above, this Court is of the clear view that the respondent company in so far the obligations undertaken to supply Natural Gas to the petitioner company by the agreement dated 21.03.1998 was concerned, did not discharge any kind of statutory function or public functions. The agreement dated 21.03.1998 was not a statutory contract nor it was controlled by any statutory provision. The petitioner company was purchasing Natural Gas from the Page No.# 24/29

respondent company under the agreement 21.03.1998 to run its tea factory and the running of tea factory is obviously for commercial consideration and not for any charitable purpose. It is also not the case of the petitioner company that the respondent company had supplied Natural Gas under the said contract in discharge of any public activity. It is reflected from the Report of the CAG Comptroller and Auditor General, annexed to the writ petition, that it procures Natural Gas from producers and supplies Natural Gas to commercial and domestic consumers through its pipeline and transportation charge it charges from industrial and non- industrial consumers constitutes the main source of income of the respondent company. It is, thus, obvious that the activity of supply of Natural Gas by the respondent company though its pipeline network to commercial and domestic consumers is for commercial consideration. In such view of the matter, the relationship between the petitioner company and the respondent company were not governed by any Constitutional or statutory provisions but by the rights and obligations laid down inter se in the agreement dated 21.03.1998. Thus, the agreement dated 21.03.1998 between the petitioner company and the respondent company was a contract in the realm of private law and an ordinary contract governed by the laws of contract. The petitioner has not been able to show and has not urged in any manner that the action of the respondent company in offering the terms and conditions in the proposed Gas supply agreement is against any kind of public interest.

33. In M/s Radhakrishna Agarwal and other vs. State of Bihar and others, reported in (1977) 3 SCC 457, it has been held that after the State or its agents have entered into the field of ordinary contract, the relations are no longer governed by the Constitutional provisions but by the legally valid contract which determines rights and obligations of the parties inter se. No question arises of violation of Article 14 or any other Constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State or its agents in the contractual field which is apart from the contract. Where the contract entered into between the State and the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract and the petitioner complains about pure alleged breaches of Page No.# 25/29

such contract by the State no writ or order can be issued under Article 226 of the Constitution in such cases "to compel the authorities to remedy a breach of contract pure and simple".

34. It is to be iterated that it is not the case of the petitioner, as could be seen from above, that the relationship between the petitioner company and the respondent company were or are governed by some statutory power or relatable to some public function or public duty. A look at the reliefs sought for in this writ petition, as enumerated in paragraph-13 herein above, gives a clear indication that the petitioner herein is seeking directions, order or writ in the nature of mandamus to the respondent company inter alia to compel it to supply Natural Gas to the petitioner company at a certain quantity annually and at a certain price. It has further sought for setting aside of the decision taken by the respondent company notified by a notice dated 25.02.2008 and refund of certain amount as well as nullification of certain demand. All these matters have been found to be subject matters of negotiations and claims and counter claims made in the communications exchanged between the petitioner company and the respondent company. The issues raised therein are in the realm of private law inter se between the two parties. The reliefs sought further indicate that the petitioner company has approached this Court seeking to compel the respondent company to agree to the terms and conditions set forth by and purportedly advantageous to the petitioner company only. The disputes and differences relating to interpretation of the terms and conditions of a proposed non-statutory contract cannot be agitated in a writ petition under Article 226 of the Constitution of India.

35. A contract enforceable at law is the result of an agreement between two or more parties after they agree mutually on the terms and conditions of such agreement and upon their understanding of the nature of the agreement. The Court is not to act as a Court of appeal in respect of a contract and a proposed contract, that too, a non-statutory one in nature involving no public law elements one of which was concluded with expired validity and the other one are being negotiated by the parties. This Court in exercise of extra-ordinary jurisdiction is not to substitute its own decision as regards such terms and conditions of the contract which are to be mutually agreed between the two parties. Creation of a new contract on terms and conditions found reasonable by the Court on the basis of contentions and rival Page No.# 26/29

contentions of the parties in a writ petition is not permissible as it cannot act as an appellate forum to impose its views in respect of the terms and conditions for the parties to enter into a new agreement. As these are matters within the realm of private law it is clearly outside the purview of the writ petition under Article 226 of the Constitution of India.

36. The submissions of the learned counsel for the parties veered around the clauses of the agreement dated 21.03.1998 and the exchange of communications between the parties with regard to the terms and conditions to be incorporated in the proposed contract of Gas supply. Clause 19 of the agreement dated 21.03.1998 clearly provided that the agreement would be valid in force and binding on the respondent company as well as on the petitioner company for a period of 10 (ten) years from the date of commencement of supply of Gas by the respondent company to the petitioner company. As per the communication dated 14.09.2009 of the respondent company, the term of the contract expired on 20.05.2008. Thus, after 20.05.1998 there was no binding contract between the petitioner company and the respondent company. The only thread which was connecting the parties was the provision for renewal of the contract contained in Clause 19 itself which said that on expiry of the period of 10 (ten) years both the petitioner company and the respondent company 'may' enter into a fresh agreement for the transportation of Gas, and the transmission cost would be revised inter alia keeping in view the depreciated cost of the pipeline by then and escalated cost of operation, maintenance, etc. The existence of the word 'may' itself gives indication that the renewal of the agreement would not be an automatic one but only on mutually agreed terms.

37. The decision in Bhagwandas Goverdhandas Kedia (supra) has been referred to on behalf of the respondent company to urge the point that mere making of an offer does not form part of a cause of action for damages for breach of a contract which has resulted from acceptance of the offer. A contract cannot be unilateral. If there is no meeting of minds no contract may result. There has to be an offer by one party and there has to be consequent acceptance of that offer by the other party which results in a contract enforceable at law. Offer and acceptance on mutually agreed terms only will result in a binding contract. The decision in Rickmers Verwalpung GMBH (supra) has been cited for the proposition that when the parties have not executed any contract on mutually agreed terms it cannot be said that any concluded, enforceable and binding contract has come into existence. There is a vast difference between negotiating a bargain and entering into a binding contract. With regard to the issue as to when there is a binding contract between the parties, this Court has taken Page No.# 27/29

note of the following observations made by the Hon'ble Supreme Court of India in Suresh Kumar Wadhwa vs. State of Madhya Pradesh and others, reported in (2017) 16 SCC 757 :-

"26. Equally well settled principle of law relating to contract is that a party to the contract can insist for performance of only those terms/conditions, which are part of the contract. Likewise, a party to the contract has no right to unilaterally "alter" the terms and conditions of the contract and nor they have a right to "add" any additional terms/conditions in the contract unless both the parties agree to add/alter any such terms/conditions in the contract.

27. Similarly, it is also a settled law that if any party adds any additional terms/conditions in the contract without the consent of the contracting party then such addition is not binding on the other party. Similarly, a party, who adds any such term/condition, has no right to insist on the other party to comply with such additional terms/conditions and nor such party has a right to cancel the contract on the ground that the other party has failed to comply such additional terms/conditions."

38. The exchange of communications, referred above, between the parties in the case in hand does not show that after expiry of the 10-years tenure of the earlier agreement dated 21.03.1998, there is any binding contract between the two parties in the subsequent period. The correspondence exchanged between the parties rather go to show that nothing has been expressly agreed between the parties and no concluded, enforceable and binding contract has come into existence between them. The parties have been found only negotiating without any kind of binding contract between them as on date.

39. The decision in Arun Kumar Agrawal (supra), referred to by the learned counsel for the petitioner, is of no assistance to the case of the petitioner. The decision was cited with regard to the report of the CAG made in respect of the respondent company wherein certain comments with regard to the functioning of the respondent company were made. The Report of the CAG was made in view of requirement of making audit report in respect of Government Companies by the CAG in terms of Section 619A of the Companies Act, 1956. The Hon'ble Supreme Court has observed that though such report of the CAG being a Constitutional functionary, commands respect but with regard to granting relief by merely placing reliance on such report of the CAG is not acceptable as such report is always subject to Parliamentary debates and acceptance or rejection by the Parliament pursuant to comments of the Public Accounts Committee. The Hon'ble Supreme Court in Arun Kumar Agrawal (supra) has observed as under :-

"14. ............................. This Court sitting in the jurisdiction cannot sit in judgment over the commercial or business decision taken by parties to the agreement, after evaluating and assessing its monetary and financial implications, unless the decision is in clear violation of any statutory provisions or perverse or taken for extraneous considerations or improper motives. States and its instrumentalities can enter into Page No.# 28/29

various contracts which may involve complex economic factors. State or the State undertaking being a party to a contract, have to make various decisions which they deem just and proper. There is always an element of risk in such decisions, ultimately it may turn out to be correct decision or a wrong one. But if the decision is taken bona fide and in public interest, the mere fact that decision has ultimately proved to be wrong, that itself is not a ground to hold that the decision was mala fide or taken with ulterior motives."

40. The above discussion also leads to another aspect of the matter. The petitioner company had contended that there was sufficient availability of APM Gas in the Dibrugarh Gas Grid of the respondent company to meet the annual demands of the petitioner company. On the other hand, it was the contention of the respondent company that it had to cater to a large number of commercial and domestic consumers through the Dibrugarh Gas Grid and the supply of APM Gas from the producers of Gas was not sufficient. The introduction of non- APM price since the year 2008 had seriously disturbed the equilibrium and it was no longer possible for it to enhance the booked quantity of APM Gas to the petitioner company. There were differences between the parties in relation to requirement to install new meter and bearing cost of such installation. There were differences between the parties in many other aspects. All these issues had raised disputed questions of facts and to decide on those issues elaborate evidence, both oral and/or documentary, are required to be led by the parties in an arbitration proceeding or a civil suit, as the case may be, as an arbitrator under the contract or the civil court, as the case may be, after reception of oral evidence and/or documentary evidence can go into and adjudicate those issues. Such disputed questions of facts cannot be the subject-matters to be agitated and decided in a writ petition under Article 226 of the Constitution of India through evidence on affidavits.

41. In view of the discussions made above and for the reasons arrived at above, the present writ petition is found to be not the proper legal remedy available under the law for the petitioner. The writ petition is, thus, found to be misconceived. Consequently, the writ petition being devoid of merit, deserves to be dismissed and it is accordingly done. There shall, however, be no order as to cost.

42. This Court has taken note of the fact that on 27.08.2013, an interim direction was made after hearing the learned counsel for the parties and it was provided that in terms of the earlier interim orders dated 05.04.2013 and 16.07.2013 passed in the writ petition, W.P. (C) no. 1090/2013 (since disposed of), the respondent company shall continue to supply the earlier booked quantum of Natural Gas to the petitioner company, subject to the monthly payment of prevailing price fixed by the GoI under the APM system. It was further provided that in case the petitioner company wanted to utilize more Natural Gas than the allotted quantity, they would have to pay the price of Gas as fixed by the GoI under the non-APM system. The petitioner company was also made liable to pay the transmission charge apart from the price of Natural Gas supplied to it. The dismissal of the present writ petition might result in sudden disruption of supply of Natural Gas to the tea factory of the petitioner company which might, in turn, impact in the operation of the factory. In such view of the Page No.# 29/29

matter, this Court is of the considered view that supply of Natural Gas by the respondent company to the respondent company to its tea factory shall continue for a further period of 2 (two) months from today in terms of the earlier order dated 27.08.2013 and after expiry of the said period of 2 (two) months, it shall automatically cease to operate. There might be changes in the arena of availability, fixation of price, etc. in respect of Natural Gas during the period from 2013 when the present wit petition was filed, to till date. The Court has not been apprised of the subsequent developments, if any, in respect of supply and availability of Natural Gas and fixation of prices of APM Gas as well as non-APM Gas after the year 2013 and as such, this Court has refrained from making any comments in respect of those aspects. It would, however, be open for the parties to negotiate the terms and conditions for any proposed agreement for supply of Natural Gas on mutually agreed terms, if so advised. It would also be open for the petitioner company to take recourse to proper legal remedy, if available under the law.

JUDGE

Comparing Assistant