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Andhra Pradesh High Court - Amravati

Mms Steel And Power Pvt Ltd vs Union Of India on 8 May, 2024

Author: B Krishna Mohan

Bench: B Krishna Mohan

         HIGH COURT OF ANDHRA PRADESH AT AMARAVATHI

                 MAIN CASE: W.P.No.18774 of 2023

                              PROCEEDING SHEET

Sl.No.                                                                      Office
                                          ORDER

          DATE                                                              Note
12.      08.05.2024 BKM, J
                                     I.A.No.4 of 2024

Heard Sri B. Adi Narayana Rao, the learned Senior Counsel for the petitioner and the learned Advocate General appearing for the 2nd respondent-Oil Corporation.

This I.A. has come up for consideration which is filed by the writ petitioner in view of the issuance of the proceedings of the 2nd respondent dated 04.04.2024 giving notice regarding termination of GSA Agreement dated 27.03.2023 as per Article 24.01 of the GSA.

The learned Senior Counsel appearing for the petitioner submits that there is a direction by way of an interim order by this Court in I.A.No.2 of 2023 in W.P.No.18774 of 2023 dated 27.07.2023 wherein the authorities are directed not to take any coercive steps against the petitioner. However, if there are any arrears pending as of now or if the petitioner fails to pay the invoices in future, the authorities are not precluded from taking steps in 2 accordance with law.

By referring to the said interim order dated 27.07.2023, the learned Senior Counsel explains the change of circumstances in the matter as they are not receiving any supply of gas from the 2nd respondent-Corporation and they are only paying MMGO charges. Since it has become burdensome to meet over and above the agreed charges under the agreement, as the 2nd respondent-Corporation is adopting dual mechanism of levying in charges, the petitioner stopped taking supply of gas from the 2nd respondent-Corporation. But still the 2nd respondent-Corporation came up with the issuance of notice vide proceedings dated 04.04.2024 stating that, the GSA will be terminated within 30 days unless the outstanding dues are cleared and the payment security is submitted by 04.05.2024. The out-standings shown in the impugned notice of the 2nd respondent dated 04.04.2024 is under the head of MMGO invoices and interest invoices.

Since the main relief sought in the writ petition is to be considered finally in this writ petition, no prejudice would cause for the 2nd respondent-Corporation if no termination of GSA is affected in respect of the petitioner by invoking the Article 24.01 of the GSA at this stage.

On the other hand, the learned Advocate General appearing for the 2nd respondent- Corporation submits that in pursuance of the orders of this Court passed earlier dated 27.07.2023, the respondent authority has to act upon by following the due procedure when there is a default committed by the petitioner in respect of the payments towards invoices and other charges since the petitioner stopped taking gas supplies and stopped payment of outstanding dues, the 2nd respondent is constrained to issue this notice regarding termination of GSA as per the Article 24.01 of the GSA dated 04.04.2024.

Unless, the termination of contract is affected with the petitioner, the 2nd respondent- Corporation will not be in a position to proceed with the fresh tenders inviting tenderers to accept assignment under the above said GSA for the purpose of smooth flowing of supply of gas, which cannot be deferred for a long time.

In view of the above said facts and circumstances, the petitioner is permitted to make a representation to the 2nd respondent-Corporation pursuant to the impugned notice dated 04.04.2024 within a period of two (02) weeks from the date of receipt of this order to consider the deferment of termination of agreement. The same shall be 4 considered by the 2nd respondent-Corporation within a period of four (04) weeks thereafter.

Accordingly, this I.A. is disposed of.

In the main writ petition, the 1st respondent is yet to file counter affidavit, though the 2nd respondent filed counter affidavit in the main writ petition.

In view of the pendency of this writ petition for hearing immediately after vacation, list on 26.06.2024, under the caption "for hearing".

_________ BKM, J PGT