Bench of Justice S.J. Mukhopadhaya and Justice Bansi Lal Bhat at the National Company Law Appellate Tribunal has on 05.03.2020 dismissed an appeal prefered by Adani Gas Limited (AGL).
Through this Appeal the Company had challenged an order of the Competition Commission of India (CCI) whereby it had imposed a penalty of around Rs.26 crores ie 4% of the average annual turnover of the relevant three years.
The court further upheld that the Appellant Adani Gas had abused its dominant market position by imposing unfair conditions on its buyers under a Gas Supply Agreementand concluded that Appellant has contravened the provisions of Section 4(2)(a)(i) of the Act by imposing unfair conditions upon the buyers under ‘Gas Supply Agreement’ (GSA).
The Commission, apart from directing the Appellant to cease and desist from indulging in conduct found to be in contravention of the provisions of the Act in terms of the impugned order, had directed the Appellant to modify the GSA’s in the light of observations and findings recorded in the impugned order and imposed a penalty @ 4% of average turnover of the last three years quantified at Rs.2567.2764 Lakh.
Faridabad Industries Association (FIA) had alleged that AGL, by grossly abusing its dominant position in the relevant market of supply and distribution of natural gas in Faridabad, had put unconscionable terms and conditions in GSA which were unilateral and lopsided besides being heavily tilted in favour of AGL. It was further alleged that the terms of GSA had been drafted unilaterally by AGL leaving no scope for Members of FIA, who were solely dependent for supplies upon AGL .AGL was alleged to have imposed its diktat upon the buyers of natural gas under the garb of executing GSA and thus clearly demonstrated abuse of dominant position.
CCI had directed AGL to modify the terms of the GSA which AGL had complied.
The Court further stated " The only conclusion deducible on the basis of material available on record is that during the relevant period there was no gaseous substitute of natural gas available to Industrial Units in Faridabad. It is emphatically clear that PNG was not interchangeable with other fuels as contended on behalf of AGL. Furthermore, it cannot be ignored that during the relevant period LPG was not available to Industrial Units as an alternate fuel as revealed from the submissions made before the DG. It is therefore futile on the part of AGL to contend that it had successfully demonstrated that PNG was interchangeable with other fuels at the relevant time."
Counsel for Appellant: Mr. Sharad Gupta and Mr. Vinayak Gupta, Advocates for Respondent No. 2.
Counsel for Respondents: Mr. Pallav Sishodiya, Senior Advocate with Mr. Vikram Sobti and Mr. Mehul Parti, Advocates for Respondent No. 1. Mr. Parcival Billimoria, Ms. Avaantika Kakkar, Ms. Neelambera Sandeepan, Mr. Satvik Mohnaty, Mr. Shubhankar Jain, Mr. Aamir Khan, Ms. Marcellina Kalikotey, Mr. Dhruv Rajan and Mr. Shaurya Vardhan, Advocates.
Judgement by NCLAT in Adani Gas Limited vs CCI dt 05.03.2020 (Downloadable PDF)
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