Gujarat High Court
Gujarat State Petronet Limited vs M/S.Gail India Limited & 3 on 26 December, 2017
Author: Bela M. Trivedi
Bench: Bela M. Trivedi
C/SCA/21738/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 21738 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS.JUSTICE BELA M. TRIVEDI Sd/-
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ? YES
2 To be referred to the Reporter or not ?
YES
3 Whether their Lordships wish to see the fair copy of
the judgment ? YES
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of YES
India or any order made thereunder ?
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GUJARAT STATE PETRONET LIMITED....Petitioner(s)
Versus
M/s.GAIL INDIA LIMITED & 3....Respondent(s)
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Appearance:
MR MIHIR THAKORE, SR. ADVOCATE WITH MR ASPI M KAPADIA,
ADVOCATE for the Petitioner(s) No. 1
MR KAMAL TRIVEDI, SR. ADVOCATE WITH ,MR MIHIR JOSHI, SR.
ADVOCATE WITH MR VISHWAS K SHAH, CAVEATOR for the Respondent(s)
No. 1
MR S.I. NANAVATI, SR. ADVOCATE WITH MRS SUMAN KHARE,
ADVOCATE for the Respondent(s) No. 2
MR RITURAJ M MEENA, ADVOCATE for the Respondent(s) No. 3
MR DEVANG VYAS, ADVOCATE for the Respondent(s) No. 4
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CORAM: HONOURABLE MS.JUSTICE BELA M. TRIVEDI
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HC-NIC Page 1 of 80 Created On Tue Dec 26 23:13:16 IST 2017
C/SCA/21738/2017 CAV JUDGMENT
Date : 26/12/2017
CAV JUDGMENT
1. The petitioner Gujarat State Petronet Limited (hereinafter referred to as "GSPL") has filed the present petition, seeking following reliefs as contained in paragraph 19 thereof:-
"19. a. To quash and set aside the permission accorded by the respondent No.4 i.e. the Approval Committee in its 76th meeting held on 11.10.2007 at Item No.76.4.1 as well as any subsequent communication to respondent No.1 and/or respondent No.2 in respect thereto;
b. To restrain the respondent Nos.1 and 2
from carrying out any pipeline laying
activity in the Dahej SEZ area for
transportation of Natural Gas;
c. Pending the hearing and final disposal
of this petition, to stay the operation,
execution and implementation of the
permission accorded by the respondent No.4 Page 2 of 80 HC-NIC Page 2 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT i.e. the Approval Committee in its 76th meeting held on 11.10.2007 at Item No.76.4.1;
d. Pending the hearing and final disposal of this petition restrain the respondent Nos.1 and 2 from carrying out any pipeline laying activity in the Dahej SEZ area for transportation of Natural Gas;
e. To grant such other and further reliefs as this Hon'ble Court deems fit and proper in the facts and circumstances of the case; f. To award costs of this petition."
2. It may be noted that the petition filed on 30.11.2017 was sought to be circulated on the same day at 2.30 p.m., and the said permission was granted by the Court, considering the urgency in the matter. The Court after hearing the learned Sr. Advocate Mr.Mihir Thakore for the petitioner and the learned Sr. Advocate Mr.Kamal Trivedi appearing on caveat for the respondent No.1 M/s.GAIL India Limited (hereinafter referred to as "M/s.GAIL"), had issued the notices to the Page 3 of 80 HC-NIC Page 3 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT respondents making them returnable on 1.12.2017 and granted an ad-interim relief restraining the respondent No.1 M/s.GAIL from laying and connecting the 8" Natural Gas Pipeline by tap off from its existing Dahej-Uran Pipeline (DUPL) for supplying gas to the respondent No.2 ONGC Petrol Additions Limited (hereinafter referred to as "M/s.OPAL") situated in Special Economic Zone, Dahej (hereinafter referred to as "SEZ, Dahej") till the next date. The said order is continued till this date. The respondent No.2 M/s.OPAL on filing the Civil Application No.15785 of 2017, seeking vacation of the said ad-interim relief, and the parties having completed the pleadings, the Court heard the Special Civil Application for admission at length along with the said Civil Application.
FACTUAL MATRIX:
3. The case of the petitioner as stated in the petition is that the petitioner GSPL is a listed public limited company, and is subsidiary of Gujarat State Petroleum Corporation Limited (hereinafter referred to as "GSPC"). The main Page 4 of 80 HC-NIC Page 4 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT activity of the petitioner is laying of gas pipelines for developing gas grid in the State of Gujarat for transportation of natural gas. On the Special Economic Zones Act, 2005 (hereinafter referred to as "the SEZ Act") having come into force, the petitioner Company had entered into a Co-Developer Agreement dated 27.7.2009 (Annexure-
A) with the respondent No.3 M/s.DSL, the Developer under the said Act. According to the petitioner, the necessary permission being No.F2/9/2003/EPZ dated 12.11.2009 (Annexure-B) was accorded by the Government of India, Ministry of Commerce and Industry, Department of Commerce (SEZ Section), which was a permission by Board of Approval under Section 3(12) of the SEZ Act. Initially, the said approval was given for a period of three years, which was subsequently extended as per the letter dated 14.5.2012 (Annexure-C), and the validity of the said permission and the Co-Developer Agreement was made coterminous with that of the Developer. It is further case of the petitioner that the petitioner has set up gas infrastructure facility, which includes gas pipeline made for Page 5 of 80 HC-NIC Page 5 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT transmission of natural gas to the units set up in the Dahej SEZ area and accordingly the petitioner is also transmitting gas to the respondent No.2 M/s.OPAL. However, the respondent No.1 M/s.GAIL in violation and in contravention of the provisions contained in the SEZ Act sought permission from the respondent No.4 Approval Committee to lay 8" dia pipeline from its existing Dahej Ural Pipeline to the plant of the respondent No.2 M/s.OPAL for providing facility for transportation of natural gas. The respondent No.4 Approval Committee, Dahej SEZ Limited (hereinafter referred to as "the Approval Committee"), in its meeting held on 11.10.2017 at Item No.76.4.1, decided to approve the said request of the respondent No.1 (Annexure-D). According to the petitioner, such permission could have been granted by the Board of Approval constituted under Section 8 of the SEZ Act and not by the Approval Committee constituted under Section 13 of the said Act. The petitioner being a Co-Developer had exclusivity to develop infrastructure for transportation of gas and distribution of gas Page 6 of 80 HC-NIC Page 6 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT within SEZ area in view of the agreement dated 27.7.2009 entered into with the respondent No.3, DSL. The petitioner, therefore, wrote a letter on 8.11.2017 (Annexure-E) to the respondent No.3 i.e. the CEO, M/s.DSL, requesting him to reconsider the decision of granting approval to the respondent No.1. The CEO of the respondent No.3, therefore, wrote a letter dated 24.11.2017 (Annexure-F) to the respondent No.2 M/s.OPAL with a copy marked to the respondent No.1 GAIL stating that the Gujarat State Petroleum Corporation Limited (GSPC), being a Co-Developer, it should obtain No Objection Certificate (hereinafter referred to as "NOC") from the GSPC. Thereafter, the petitioner wrote a letter dated 29.11.2017 to the respondent No.1 (Annexure-G), requesting it not to undertake any gas pipeline laying activity without seeking due permission from the Developer M/s.DSL and the Co-Developer GSPL. A similar letter was also written to the respondent no.2 on 29.11.2017 (Annexure-H). The petitioner apprehending that the respondent No.1 M/s.GAIL would make the Tap off and lay the pipeline for transportation of gas to the respondent No.2, Page 7 of 80 HC-NIC Page 7 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT filed the present petition on 30.11.2017 seeking afore-stated reliefs.
4. The respondent No.1 GAIL and the respondent No.2 OPAL filed elaborate affidavits-in-reply raising various contentions, including the preliminary objections as regards the maintainability of the petition and alleging that the petition was filed on 30.11.2017 with oblique motive and ulterior purpose suppressing material facts to stall the work of the respondent No.1, which was going on in full swing at the site. The alternative remedy of filing suit under Section 23 and of filing arbitration proceedings under Section 42 of the SEZ Act was available to the petitioner. The petition also suffered from the vice of delay and laches, as after issuing letter on 8.11.2017, the petition was filed on 30.11.2017 with oblique motive.
5. It has been contended by the respondent No.1 inter alia that M/s.DSL is a company floated by GIDC and ONGC duly notified by the Ministry of Commerce and Industry, Government of India, as a Developer of Multi Product SEZ at Dahej. On Page 8 of 80 HC-NIC Page 8 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT 26.5.2004, GIDC had approved the proposal of the respondent No.1 for laying 30" dia pipeline Dahej-Hazira Gas Pipeline through GIDC corridor. The Dahej SEZ was notified by the Ministry of Commerce and Industry, Government of India, as a Multi Product SEZ. On 27.7.2009 an agreement was executed between the DSL and the petitioner, by virtue of which the petitioner became Co- Developer, and was conferred exclusive right with respect to development, operation and maintenance of Gas transmission pipeline and distribution of Gas in SEZ. The respondent No.1 was granted permission on 10.5.2010 by the Petroleum and Natural Gas Regulatory Board under Regulation 17(1) of the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to lay, build, operate or expand Natural Gas pipelines) Regulations, 2008 (hereinafter referred to as "the PNGRB Regulations 2008") (Annexure-R/1). On 27.12.2011 a lease deed was executed between the respondent No.2 M/s.OPAL and respondent No.3 M/s.DSL, and clause 4.6 thereof permitted the M/s.OPAL to obtain any service, amenities or facilities, which are not provided by the M/s.DSL Page 9 of 80 HC-NIC Page 9 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT and the Co-Developer the petitioner (Annexure- R/2). On 12.10.2016 the petitioner by E-mail refused to book additional supply of gas and communicated to M/s.OPAL to look for an alternate arrangement for additional capacity (Annexure- R/3), by which the petitioner had waived its right under the agreement with DSL.
6. The respondent No.1 has further contended that on 31.8.2017, the respondent M/s.GAIL had sought permission from the respondent No.3 M/s.DSL for laying 8" dia pipeline by Tap off from the existing respondent's DUPL 30" dia natural gas pipeline to M/s.OPAL across GIDC/SEZ area in existing Right of Use (ROU) of the respondent (Annexure-R/6). Accordingly, on 29.9.2017 the respondent No.3 had granted, in principle, approval to the respondent No.1 (Annexure-R/7). Thereafter, on 11.10.2017 the respondent No.4 - Approval Committee in its meeting decided to approve the said request of the respondent No.1 vide Item No.76.4.1. On 27.10.2017, the Development Commissioner of M/s.DSL wrote a letter to the respondent No.1 and the respondent Page 10 of 80 HC-NIC Page 10 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT No.2, stating that the Approval Committee in its meeting held on 11.10.2017 had decided to approve the said request. Despite the said permission and approval granted by the respondent Nos.3 and 4, the respondent No.3 M/s.DSL wrote a letter dated 24.11.2017 asking the respondent No.1 to seek NOC from the GSPC, who had no locus in the entire matter. The said letter was dispatched on 27.11.2017 and delivered at 1.30 p.m., on 29.11.2017. The petitioner, on 29.11.2017 wrote a letter to the respondent No.1 requesting it to refrain from undertaking any gas pipeline activity without seeking permission from the petitioner and the respondent No.3, though the respondent No.3 had already granted permission as per the letter dated 29.9.2017. It is also contended that the respondent No.1 already had its natural gas pipeline laid near the respondent No.2 M/s.OPAL's location. Since the respondent No.2 M/s.OPAL required such quantity of natural gas, which the petitioner was not in a position to fulfill, the respondent No.1 GAIL, who was inclined to provide sufficient quantity of gas to OPAL, came into picture. There was no provision Page 11 of 80 HC-NIC Page 11 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT under the SEZ Act giving exclusivity or monopoly to the petitioner to provide natural gas to the units set up in SEZ. The petitioner and the respondent No.3 had also waived their rights conferred under the agreement in view of the various correspondences and the E-mails that had ensued between the parties. There was a separate and independent natural gas pipeline infrastructure (9 km) existing for the supply of natural gas to one of the units i.e. M/s.Torrent Power Limited, apart from the natural gas pipeline infrastructure of the petitioner and the said unit is not functioning on the basis of natural gas supply and transportation received from the petitioner GSPL. It is also contended that the respondent No.1 is supplying natural gas in liquid form through a pipeline laid and operated by ONGC to ONGC's C-2, C-3 Dahej Plant located in the Dahej SEZ since 2003 and the said pipeline was not installed by the petitioner. There are other various independent pipelines existing, whereby various units are receiving natural gas from different and distinct alternatives other than the petitioner, and Page 12 of 80 HC-NIC Page 12 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT therefore, the petitioner could not claim exclusivity as claimed in the petition. Further, as per the PNGRB Regulation 2008 an obligation is cast on the respondent No.1 to provide connectivity to the consumers within the tariff zone corridor up to 50 kms from either side of the natural gas pipeline and that the premises of M/s.OPAL is located approximately 25 kms from the existing pipeline of the respondent No.1. The respondent No.1, therefore, had accepted the request of the respondent No.2 M/s.OPAL for transportation of natural gas, for which the commercial arrangements were also entered into. According to this respondent, supply of gas by creating Tap off would not fall within the definition of "infrastructure facilities"
contained in Section 2(p) of the SEZ Act. The facility sought to be provided by the respondent No.1 is relatable to Section 14(1) of the said Act as the respondent No.1 would be supplying gas only to the respondent No.2 M/s.OPAL and not to the entire SEZ, and therefore, there was no necessity to obtain approval from the Board. Lastly, it is contended that the action of the Page 13 of 80 HC-NIC Page 13 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT petitioner tantamounted to monopolistic and restrictive trade practice, defeating the purpose of SEZ Act and PNGRB Act.
7. The respondent No.2 M/s.OPAL has also filed detailed affidavit-in-reply raising number of issues and placing on record voluminous correspondences that had ensued between the parties through E-mails and letters, to show as to how the petitioner had suppressed material facts from the Court. Mainly it has been contended that the respondent No.2 is a joint venture company promoted by M/s.Oil and Natural Gas Corporation and co-Promoted by M/s.GAIL i.e. the respondent No.1, and Gujarat State Petroleum Corporation Ltd. (GSPC). The respondent No.2 OPAL has set up their grass root mega petrochemical project of national importance for manufacturing petrochemical products and other allied products at Dahej SEZ, Gujarat in PCPIR/SEZ with an investment of USD 4.5 billion and in a way, M/s.OPAL Plant is Asia's largest single point Petrochemical complex, and has impacted entire polymer industries of the country Page 14 of 80 HC-NIC Page 14 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT by providing world class polymer product. The respondent No.2 M/s.OPAL had entered into a lease agreement with the respondent No.3 on 27.12.2011 (Annexure-R/1). As per Clause 4.5 of the said lease deed the supply of piped gas was to be made by the petitioner GSPL. As per Clause 4.6 of the said lease deed the respondent No.2 M/s.OPAL was free to obtain any service, amenities or facilities, which were not provided by the M/s.DSL or Co-Developer/Service Provider, directly from the concerned third party agencies. Pursuant to the Clause 4.5 of the lease agreement, a Gas Transmission Agreement (hereinafter referred to as "GTA") dated 12.8.2014 came to be executed between the respondent No.2 M/s.OPAL and the petitioner GSPL. According to the said agreement, GSPL was a transporter of Gas through its pipeline network to be supplied in the units of SEZ. Thus, the respondent No.2 M/s.OPAL had an option to secure its supply from any third party and could transport to its plant through Pipeline Net Work of GSPL laid in the SEZ. M/s.OPAL could also increase or decrease the quantity of demand for Page 15 of 80 HC-NIC Page 15 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT the gas as per Clause 5.2 of the GTA. According to the respondent No.2 M/s.OPAL, it had initially demanded CT of 0.5 MMSCMD during the construction and commissioning phase of the plant, however, on the completion of the commissioning of the plant, it had anticipated increase of gas requirement for 100% production of its plant. M/s.OPAL, therefore, in terms of Clause 5.2 of GTA had made a request for the additional booking of transmission capacity to the petitioner through various E-mails, requesting an additional CT of 0.80 MMSCMD for the period from 10.10.2016 to 16.10.2016 and additional CT of 0.5 MMSCMD for the period from 17.10.2016 to 23.10.2016 at PLL- GSPL connectivity. In response to the said request, the petitioner GSPL refused to confirm additional capacity in their pipeline and advised M/s.OPAL to make alternate arrangement by E-mail dated 12.10.2016. M/s.OPAL had again made a request for additional capacity through subsequent E-mails, however, GSPL had refused to provide the same citing reasons of being over- booked, as per the E-mail dated 13.10.2016. According to the respondent No.2, it had made Page 16 of 80 HC-NIC Page 16 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT several requests time and again for additional capacity, however, the petitioner had refused to provide the same. Lastly, it was refused by the petitioner as per the E-mail dated 24.4.2017. All the communications through E-mails have been produced on record by the respondent No.2 as Annexure-R/II (colly).
8. Thus, according to the respondent No.2 M/s.OPAL, the petitioner GSPL had failed to provide the transmission capacity as demanded by M/s.OPAL in terms of Clause 5.2 of GTA and thereby had created a situation for the M/s.OPAL either to close down the unit or to explore other source for booking capacity as advised by GSPL to meet with its energy requirement of gas supply. M/s.OPAL, therefore, had identified already existing 30" dia DUPL natural gas pipeline of the respondent No.1 M/s.GAIL, passing from the M/s.OPAL Plant and had decided to procure its additional requirement of gas by booking gas transmission capacity from the said existing DUPL pipeline by laying 8" dia pipeline for 0.25 meters to its plant. According to the respondent Page 17 of 80 HC-NIC Page 17 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT No.2, the respondent No.1 M/s.GAIL for laying 8"
dia pipeline had sought permission from the Development Commissioner of M/s.DSL, vide the letter dated 31.8.2017 and the respondent No.2 M/s.OPAL had also sought consent from the respondent No.3 DSL, vide its letter dated 15.9.2017 for laying of 8" dia pipeline. The respondent No.3 DSL vide letter dated 29.9.2017 also granted, in principle, approval to M/s.GAIL for laying 8" dia pipeline, subject to the conditions mentioned therein. The Development Commissioner also vide the letter dated 27.10.2017 had intimated the M/s.GAIL about the approval given by the Approval Committee, in its 76th Approval Committee meeting held on 11.10.2017 for laying the said pipeline.
9. It is further contended by the respondent No.2 M/s.OPAL that the petitioner GSPL after denying the requisite gas to M/s.OPAL, addressed a letter dated 8.11.2017 to the respondent No.3 DSL to reconsider its decision granting approval for laying 8" dia pipeline without marking any copy thereof to M/s.OPAL. According to the respondent Page 18 of 80 HC-NIC Page 18 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT No.2, respondent No.3 DSL all of a sudden issued a letter dated 24.11.2017 to the M/s.OPAL informing that for laying 8" dia pipeline, it was required to get NOC from GSPC. According to the respondent No.2 though the said letter was dated 24.11.2017 it was posted on 27.11.2017 and was received by M/s.OPAL only on 29.11.2017, when the work of laying pipeline was almost completed. The respondent No.2 has further alleged that the petitioner GSPL, with mala fide intention had tried to obstruct M/s.OPAL from sourcing its transmission capacity requirement from other alternatives, and after managing with the DSL to issue back-dated letter 24.11.2017, GSPL through its letter dated 29.11.2017 intimated to M/s.GAIL and M/s.OPAL about their not granting NOC for laying of 8" dia pipeline. The said letter dated 29.11.2017 was received on 1.12.2017 after the interim relief was granted by the Court in the present petition. The said letter was replied by M/s.OPAL vide its letter dated 1.12.2017 (Annexure-R/VI).
10. The respondent No.2 has further contended that by Page 19 of 80 HC-NIC Page 19 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT the GTA Amendment Agreement dated 22.11.2017 (Annexure-R/VII) executed between the GSPL and M/s.OPAL, the GSPL had committed the capacity of only 0.75 MMSCMD CT to M/s.OPAL for the period from 1.1.2018 to 31.12.2019. Thus, according to the respondent No.2 all these material facts were concealed by the petitioner in the petition and had created a mirage urgency for filing the petition at the eleventh hour when almost entire work of laying pipeline was already completed by M/s.GAIL, which had started in the month of October, 2017. The respondent No.2 has also alleged other various suppression of material facts as stated in the reply. According to the respondent No.2, the provisions of SEZ Act were misinterpreted by the petitioner and the Approval Committee having validly approved the request of M/s.OPAL and M/s.GAIL, there was no need to obtain any approval from the Board of Approval, the laying of pipeline being not to create infrastructure facility in the SEZ as contemplated in Section 2(p) of the SEZ Act. There was also an arbitration Clause contained in the GTA/Co-Developer Agreement executed between Page 20 of 80 HC-NIC Page 20 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT the parties, and therefore, alternative remedy being available to the petitioner, the petition deserved to be dismissed.
11. The respondent No.3 has filed affidavit-in- reply in cursory manner without dealing with any of the issues raised in the petition or the affidavit-in-rejoinder filed by the other respondents. The petitioner GSPL has filed the affidavit-in-rejoinder to the reply filed by the respondent No.1, supplementary affidavit-in- rejoinder to the reply filed by the respondent No.1 and affidavit-in-rejoinder to the additional affidavit-in-reply filed by the respondent No.2 denying the allegations made by the respondent Nos.1 and 2, and further contending inter alia that the petitioner and the respondent No.2 M/s.OPAL had entered into the GTA on 12.8.2014, valid for a period of five years, under which the petitioner had undertaken to transport the gas through its pipeline. After the execution of the GTA, the parties thereof have to enter into Capacity Tranche (CT) by way of Amendment Agreements from time to time, whereby the Page 21 of 80 HC-NIC Page 21 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT specific period, specific quantity, specific entry point and the tariff applicable as per specific zone under the PNGRB Act 2006 is agreed by the parties. The CTs are executed at the request of the shipper i.e. M/s.OPAL in the instant case. If the CTs are on firm basis, it would contain the provision for "ship or pay"
obligation upon the shipper as well as payment of liquidated damages obligation upon the transporter. Accordingly, in the year 2014 M/s.OPAL had entered into a CT-1 with the petitioner for a period of 2½ years and thereafter further CTs were executed based on the request and requirement of M/s.OPAL. The petitioner had always transported the booked capacity under the said CTs to the M/s.OPAL. It is further contended that the M/s.OPAL was in the process of commissioning its plant till January 2017 and the volume of its requirements were fluctuating, and therefore, M/s.OPAL opted for entering into various short-term CTs for specific volume for additional requirements above the 0.5 MMSEMD booked under CT-1.
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12. As regards E-mail dated 12.10.2016 of the petitioner, wherein it was stated to make alternative arrangements, it has been contended by the petitioner that the said statement was made indicating that M/s.OPAL instead of insisting for capacity from PLL-GSPL, Dahej direct entry point, M/s.OPAL may make alternative arrangement to source and deliver gas at some other entry point including the one at GSPL- M/s.GAIL Dahej inter-connect entry point. It may be noted that the Schematic Diagram of arrangement of pipeline connectivity with the PLL, Dahej terminal and M/s.OPAL unit has been annexed as Annexure-D to the said affidavit-in- rejoinder, and the same is made part of this order to understand the issue in better manner. Page 23 of 80 HC-NIC Page 23 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Page 24 of 80 HC-NIC Page 24 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT
13. According to the petitioner, to overcome the issue of lower pressure at the delivery point, the petitioner GSPL had requested Petronet LNG Ltd (PLL) to provide separate header to GSPL at the PLL, Dahej terminal and accordingly separate header has been provided in September 2017, and therefore, the supply pressure issues are not likely to arise now. It is also stated that the spur-line laid by the petitioner for the supply of gas to M/s.OPAL is capable of transporting 3.4 MMSCMD gas volumes and now the petitioner GSPL is in a position to supply and meet with all the gas volume requirements of M/s.OPAL. While denying the claim of M/s.OPAL that the GSPL had not met with the M/s.OPAL's requirement of gas transportation, it has been stated that during the period from 1.2.2017 to 30.11.2017 on a average 1.43 MMSCMD was transported to M/s.OPAL. To meet with the balance requirement, M/s.OPAL used to invite tenders for short term gas supply on delivered basis, and used to enter into Delivered Contracts with the supplier of Gas. Relying upon Clause 4.5 of the land lease Page 25 of 80 HC-NIC Page 25 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT agreement dated 27.12.2011 entered into between M/s.OPAL and M/s.DSL, it has been stated that the said clause recognized that M/s.OPAL Unit was required to transport gas through pipeline network of GSPL, the Co-Developer of SEZ. Since there was no failure on the part of the petitioner, and M/s.OPAL can not avail services of a third party for gas transportation.
14. During the course of the arguments it was alleged by the learned Sr. Advocate Mr.Nanavati for the respondent No.2 M/s.OPAL that some mischief was played by the officers of the petitioner and the respondent No.3 in issuing the letter dated 24.11.2017 addressed to the respondent No.1 M/s.GAIL and the respondent No.2 M/s.OPAL, which was received by the said respondents only on 29.11.2017, whereas it was received by the petitioner on 27.11.2017, the Court had directed the Company Secretary of the petitioner and the CEO of the respondent No.3 to file their respective affidavits as per the order dated 12.12.2017. Accordingly, the said affidavits were filed and the CEO of the Page 26 of 80 HC-NIC Page 26 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT respondent No.3 had also remained personally present on 13.12.2017. Pertinently, the CEO of the respondent No.3 was not in a position to answer the query of the Court put to him, as to what was the need to issue the letter dated 24.11.2017 when the DSL had already granted, in principle, approval on 29.9.2017 and the approval Committee had also granted approval in its meeting held on 11.10.2017. The said conduct of the CEO has been recorded by the Court in the order dated 13.12.2017.
LEGAL SUBMISSIONS:
During the course of lengthy arguments, series of diverse and multifarious submissions were made by the learned Advocates appearing for the parties. The pith and substance of their submissions may be stated as under:-
15. Submissions of learned Sr. Advocate Mr.Mihir Thakore for the petitioner GSPL:
15.1 As regards the preliminary objection raised by the respondents in respect of alternative remedy being available, it has been Page 27 of 80 HC-NIC Page 27 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT submitted that the Courts have not been designated so far, as contemplated under Section 23 of the SEZ Act. Section 42 of the said Act for deciding disputes by Arbitrator does not apply to the parties as the dispute could not be said to be between two or more entrepreneurs or two or more developers or between an entrepreneurs and a developer. The provisions contained in Section 24 of the PMGRB Act also did not apply as under the said provision, the Petroleum Board has jurisdiction to decide the dispute relating to the matters enlisted in Sub-
section (2) thereof and the present dispute can not fall within any of the matters contained therein. Even otherwise, existence of alternative remedy could not be said to be an absolute bar against preferring writ petition under Article 226 of the Constitution of India, as held by the Supreme Court in case of Calcutta Discount Co. Ltd. Vs. Income Tax Officer, Companies District and Anr., reported in AIR 1961 SC 372 and in case of Whirlpool Corporation Vs. Registrar o Trade Marks, Mumbai, reported in (1998) 8 SCC 1.
Page 28 of 80 HC-NIC Page 28 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT 15.2 As regards suppression of material facts it has been submitted that all the relevant facts for challenging the decision of the approval committee were disclosed in the petition. The GTA entered into between the respondent No.2 and the petitioner was produced by the petitioner upon the observation made by the Court that the GTA should have been filed by the petitioner. Though GTA would throw light on the contractual relationship between the petitioner and the respondent No.2, it was not necessary for deciding the core issue raised by the petitioner in the petition. The communications referred by the respondent Nos.1 and 2 in their respective affidavits-in-reply were not germane or relevant for deciding the issue whether the approval committee's decision was without jurisdiction or ultra vires the provisions of SEZ Act. In this regard, reliance is placed upon the decision of the Supreme Court in case of S.J.S. Business Enterprises (P) Ltd. Vs. State of Bihar and Ors., reported in (2004) 7 SCC 166.
15.3 As regards the challenge to the impugned Page 29 of 80 HC-NIC Page 29 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT decision of the Approval Committee, it has been submitted that laying of pipeline for transportation of natural gas by the respondent No.1 in Dahej SEZ area is an "infrastructure facility" within the meaning of Section 2(p) of the SEZ Act read with the definition of "infrastructure" under Rule 2(1)(s) of the Special Economic Zones Rules 2006 (hereinafter referred to as "the said Rules"). As per Section 9(2)(d) of the SEZ Act only the Board has the power and jurisdiction to grant approval for providing infrastructure facility within SEZ area. The approval committee did not have any power under Section 14 of SEZ Act to grant such approval. As per Section 3(11), the person intending to provide infrastructure facility has to submit the proposal to the Board of approval after entering into the agreement with the developer and as per Section 3(12), the person having approval of Board of approval and the Central Government for providing infrastructure facilities would be a Co-Developer. 15.4 There is no restriction under the SEZ Page 30 of 80 HC-NIC Page 30 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Act in respect of granting exclusivity, and therefore, the exclusive right was granted to the petitioner by the respondent No.3 developer under the Co-Developer agreement, which is supported by the provisions of PNGRB Act. The respondent No.1 did not have unfettered right to lay any pipeline anywhere in India under PNGRB Act, as such right would be subject to the provisions of the SEZ Act, which has overriding effect in the event of any inconsistency between the two Acts. The expression "for the time being in force" would not only include the present legislations, but would also include future legislations, as interpreted by the Supreme Court in case of Yakub Abdul Razak Memon Vs. State of Maharashtra, reported in (2013) 13 SCC 1 (p. 653).
15.5 The respondent No.1 being Central Government authorized entity under Regulation No.17 of the PNGRB Regulations 2008 (hereinafter referred to as "the Regulations 2008), the schedule-J thereof does not apply to the respondent No.1.
15.6 Under the GTA, the petitioner has Page 31 of 80 HC-NIC Page 31 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT executed various capacity tranches from time to time, according to which the respondent No.2 has the obligation to supply gas at entry point at PLL-Dahej terminal at a particular pressure range, which the respondent No.2 had failed to provide at the said pressure. The meaning of alternative arrangement referred to in the E-mail dated 12.10.2016 was to off take gas at different entry points and the same was understood to be so by the respondent No.2. The additional capacity could also have been booked from Hazira L & T terminal but the same was never sought from that source by the respondent No.2.
15.7 Denying the allegations of monopolistic and restrictive trade practice, it has been submitted that the petitioner is booking capacity in its pipeline on non-discriminatory basis as per the provision of PNGRB Regulations. However, there were pressure issues due to which the petitioner could not book additional capacity for the respondent No.2. The entities, who had already booked capacities in the petitioner's pipeline were in a position to transport gas Page 32 of 80 HC-NIC Page 32 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT through their booked capacity and accordingly GSPC, the holding Company of the petitioner was able to supply gas from the petitioner's pipeline to M/s.OPAL. Despite the pressure issues, the petitioner has always supported the respondent No.2 in meeting with its gas requirements. 15.8 As regards the letter of M/s.DSL in respect of NOC requirements, it has been submitted that the respondent No.3 M/s.DSL vide its letter dated 29.9.2017 had granted, in principle, approval only for the Right Of Use in Dahej SEZ area, and the respondent No.1 was required to obtain permission from the Development Commissioner/Board of Approval. As the Development Commissioner was not authorized to grant permission, it was only the Board of Approval, which was the competent authority for granting permission for laying of pipeline by the respondent No.1. Against the said approval Committee's decision the petitioner had written letter dated8.11.2017 to the respondent No.3, and realizing their mistake, the respondent No.3 had vide its letter dated 24.11.2017 asked the Page 33 of 80 HC-NIC Page 33 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT respondent No.2 with a copy marked to the respondent No.1 to get the NOC from the petitioner. The judgement of Appellate Tribunal for Electricity in Appeal No.3/2011 relied upon by the respondents was not applicable to the facts of the present case, as the said judgement did not deal with the specific issue of requirement of the Board of Approval for setting up infrastructure in Dahej SEZ.
16. Following submissions were made by the learned Sr. Advocate Mr.Kamal Trivedi and learned Sr. Advocate Mr.Mihir Joshi with learned Advocate Mr.Vishwas Shah for the respondent No.1 M/s.GAIL:-
16.1 Raising the preliminary objection against the maintainability of the petition, it has been submitted that the petitioner has efficacious alternative remedy since the disputes between the petitioner, M/s.OPAL and M/s.GAIL could be resolved in a civil suit to be filed in the Designated Court, or through arbitration under Section 42 of the SEZ Act or by PNGR Board under Section 24 of the PNGRB Act 2006. The writ Page 34 of 80 HC-NIC Page 34 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Court may not interfere with the contractual matters involving technical aspects. The petitioner has approached this Court with gross delay and laches. The petitioner had sent objections on 8.11.2017 with regard to the approval granted by the Approval Committee, and the work of laying pipeline had already been undertaken in October-November, 2017, however, the petitioner approached the Court after a long time and that too, seeking hearing on urgent basis at the eleventh hour on 13.11.2017. 16.2 The petitioner had not approached the Court with clean hands and had suppressed gas transmission agreement between itself and M/s.OPAL, NOC dated 12.10.2016, the in-principle approval granted by the respondent No.3 on 29.9.2017 and other correspondences. The conduct of the petitioner in trying to promote its holding company GSPC for supply of gas and seeking monopoly for transmission and supply of gas itself dis-entitles the petitioner from claiming any relief. The letter dated 24.11.2017 issued by the CEO of DSL was received by M/s.GAIL Page 35 of 80 HC-NIC Page 35 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT on 29.11.2017 and on the same day, the petitioner wrote a letter dated 29.11.2017 refusing NOC to M/s.GAIL, though the letter dated 24.11.2017 was not addressed to the petitioner and though no such NOC was sought by M/s.GAIL or M/s.OPAL from the petitioner, which smacked of mala fide intention of the petitioner.
16.3 The petitioner had waived its rights in the light of the fact that in May 2016 and February 2017 using GSPC pipeline infrastructure, M/s.GAIL had supplied natural gas to M/s.OPAL.
There is an independent and separate natural gas pipeline infrastructure (9 km) existing for supply of natural gas to the Torrent Power Limited, apart from the natural gas pipeline infrastructure of the Co-Developer i.e. the petitioner. The respondent GAIL since 2013 is supplying natural gas in liquid form through the pipeline laid and operated by ONGC to ONGC's C-2 C-3 Dahej plant located in the DSL. The respondent No.2 M/s.OPAL is also sourcing natural gas in liquid form (C-2 C-3) through the pipeline laid by M/s.OPAL within Dahej SEZ. The E-mail Page 36 of 80 HC-NIC Page 36 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT dated 12.10.2016 of the petitioner to M/s.OPAL to make alternative arrangement also established that the petitioner had waived its right of exclusivity.
16.4 There is no inconsistency between the provisions contained in SEZ Act and PNGRB Act and therefore, Section 51 of SEZ Act was not applicable. In this regard reliance is placed on the judgement dated 23.3.2012 of Appellate Tribunal for Electricity in case of Torrent Energy Ltd. Vs. Dakshin Gujarat Vj Co. Ltd. and Ors., reported in (2014) 8 SCC 444.
16.5 Pressing into service the PNGRB Regulations 2008 and Clause 1(g) of Schedule-J to the said Regulation, it has been submitted that the respondent No.1 M/s.GAIL has to provide connectivity to the consumers within a tariff zone in a natural gas pipeline and grant of any restrain order against the M/s.GAIL would compel it to violate and contravene the statutory obligation as mandated in the said Regulations. The M/s.GAIL pipeline has pre-existed the DSL and hence, also M/s.GAIL has right to supply gas Page 37 of 80 HC-NIC Page 37 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT under the PNGRB Act and its Regulations. Supply of gas by M/s.GAIL through its 25 mtr., long pipeline to itself i.e. M/s.OPAL being one of the units in SEZ, and in which M/s.GAIL is one of the major shareholders, cannot be considered to be "development, operation and maintenance of gas transmission pipeline infrastructure facility for the entire Dahej SEZ, under Section 2(p) of the said Act or under Rule 2(1)(s) of the said Rules. The said supply of gas is nothing but sale of goods.
16.6 The definition of "infrastructure facilities" given in Section 2(p) read with Rule 2(1)(s) is exhaustive in nature, inasmuch as Rule 2(1)(s) uses the words "means" followed by "includes" with the enumeration of specific/named facilities. "Transmission of Gas pipeline" is not mentioned therein. Letter dated 12.11.2009 (Annexure-B) granting approval to the agreement dated 27.7.2009 conferring exclusivity in favour of the petitioner in the matter of providing gas transmission pipeline infrastructure would not make the said agreement statutory one. Page 38 of 80 HC-NIC Page 38 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT 16.7 The power to grant approval dated 1.10.2017 by the Approval Committee to M/s.GAIL and communicated by the Development Commissioner vide the communication dated 27.10.2017 could be traced to Section 14(1)(c) of the SEZ Act, or at the best an administrative decision of the approval committee. Such decision could not be said to be without jurisdiction.
16.8 Alternatively, it has been submitted that the requirement of obtaining NOC from petitioner was beyond the purview of the said Act and once DSL having given the permission, the CEO, DSL had no power to issue letter dated 24.11.2017. Invoking the principles of interim relief, it has been submitted that the respondent M/s.GAIL has spent huge amount of Rs.20 crore for various works for laying down 25 mtr long pipeline for the purpose of supplying/selling gas to M/s.OPAL and therefore, apart from prima facie case being in favour of M/s.GAIL, balance of convenience is also in favour of M/s.GAIL. Reliance is placed on the decision of the Supreme Court in case of Prabhjot Singh Mand and Ors. Page 39 of 80 HC-NIC Page 39 of 80 Created On Tue Dec 26 23:13:16 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Vs. Bhagwant Singh and Ors., reported in (2009) 9 SCC 435 and in case of Reliance Natural Resources Ltd. Vs. Reliance Industries Ltd., reported in (2010) 7 SCC 1.
17. The learned Sr. Advocate Mr.S. I. Nanavati for the respondent no.2 M/s.OPAL has made following submissions:-
17.1 The petition was filed by the petitioner concealing material facts and misinterpreting the provisions of the Act and creating imaginary urgency, when almost entire work of laying pipeline was completed by M/s.GAIL which had started in October-November, 2017. The material facts not stated in the petition have been highlighted during the course of the submissions and relying upon the various decisions of the Supreme Court the prayer has been made to dismiss the petition on the ground of suppression of material facts alone. To buttress his submission, Mr.Nanavati has placed reliance on the decision of Supreme Court in case of Prestige Lights Ltd. Vs. State Bank of India, reported in (2007) 8 SCC 449, in case of Dalip Page 40 of 80 HC-NIC Page 40 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Singh Vs. State of Uttar Pradesh and Ors., reported in (2010) 2 SCC 114 and in case of Bhaskar Laxman Jadhav and Ors. Vs. Karamver Kakasaheb Wagh Education Society and Ors., reported in (2013) 11 SCC 531.
17.2 In addition to the submissions made on behalf of the respondent No.1, it has been submitted that M/s.OPAL is a joint venture company promoted by ONGC with 49.36% share and co-promoted by M/s.GAIL with 49.21% share and GSPC with 1.43% share, which is parent company of the petitioner GSPL. In response to the request made by M/s.OPAL for transportation of additional supply of gas on firm basis by various E-mails and for a period from 1.2.2017 to 31.1.2022, the petitioner GSPL had refused to supply additional quantity of gas by E-mail dated 12.10.2016 and other E-mails and advised M/s.OPAL to make alternative arrangement of gas supply, citing reasons of capacity being overbooked. The petitioner had created a situation where either M/s.OPAL had to close down its unit or to explore other source of its energy requirement of gas Page 41 of 80 HC-NIC Page 41 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT supply. According to Mr.Nanavati, the petitioner GSPL with GSPC tried to see that M/s.OPAL had to pay higher transmission cost for M/s.GAIL-GSPL connectivity and for PLL-GSPL connectivity.
Submissions were also made to show as to how the petitioner had tried to use monopolistic structure against M/s.OPAL by not confirming the transmission through its network on firm basis. 17.3 Relying upon the decision of the Supreme Court in case of Hardeep Singh Vs. State of Punjab and Ors., reported in (2014) 3 SCC 92, it was sought to be submitted that the words "means" and "includes" used in definition clause gives "hard and fast definition" and no other meaning can be assigned. Hence, the definition of infrastructure facilities as contained in Section 2(p) read with Rule 2(1)(s) is required to be construed strictly. In the instant case, the pipeline is laid by M/s.GAIL to provide gas only to M/s.OPAL and to no other units, and therefore, could not be said to have created infrastructure facility for SEZ.
17.4 As gas is raw-material required for the Page 42 of 80 HC-NIC Page 42 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT M/s.OPAL's plant, the power to grant approval for import and to monitor the utilization of gas and services or warehousing or trading in SEZ, would be with the Approval Committee under Section 14(a) and (c) of the SEZ Act. Hence, approval granted by the Approval Committee in its meeting held on 11.10.2017 was within its powers and agenda.
17.5 All manufacturing units arrange a redundant back up system for their raw material supply so that in case of any eventuality, the running plants are not stopped, because any stoppage of gas supply for even five minutes will result into approximately Rs.15 crore loss to M/s.OPAL. The balance of convenience tilts towards the respondent No.2 as it is only M/s.OPAL which is incurring huge financial loss every day. If at all GSPL has any exclusive rights then it is an inter se dispute between GSPL and DSL, to which a non-party to the agreement should not be made to suffer.
18. The learned Advocate Mr.Meena for the respondent No.3 has submitted that the respondent Page 43 of 80 HC-NIC Page 43 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT No.3 had granted, in-principle approval to the respondent No.1 as per its request as per the letter dated 29.9.2017, however, realizing that such approval was likely to result into breach of contract dated 1.7.2009 entered into by the respondent No.3 with the petitioner, the CEO of the respondent No.3 had written the letter dated 24.11.2017 to the respondent GAIL and OPAL for obtaining NOC from the petitioner company before the execution of the work at the site. According to him, the petitioner company was given office copy of the said letter dated 24.11.2017 on 27.11.2017, and the letter was dispatched to the respondent Nos.1 and 2 on 27.11.2017 as 24th and 26th were public holidays.
PROVISIONS OF SEZ ACT:
19. Before adverting to the submissions made by the learned Advocates for the parties with regard to the provisions contained in SEZ Act and the PNGRB Act, it would be beneficial to reproduce the relevant provisions. Some of the relevant Clauses contained in Section 2 are as under:- Page 44 of 80
HC-NIC Page 44 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT "2. Definition. In this Act, unless the context otherwise requires,
(a) xxx
(b) "Approval Committee" means an Approval Committee constituted under subsection (1) of section 13;
(c) & (d) xxx
(e) "Board" means the Board of Approval constituted under subsection (1) of section 8;
(f) "CoDeveloper" means a person who, or a State Government which, has been granted by the Central Government a letter of approval under subsection (12) of section 3;
(g) "Developer" means a person who, or a State Government which, has been granted by the Central Government a letter of approval under subsection (10) of section 3 and includes an Authority and a CoDeveloper;
(h) to (o) xxx
(p) "infrastructure facilities" means industrial, commercial or social infrastructure or other facilities necessary for the development of a Special Economic Zone or such other facilities which may be prescribed;"
Section 3 pertains to the procedure for making proposal to establish Special Economic Zone. Subsections (11) and (12) thereof read as under: (11) Any person who, or a State Government which, intends to provide any infrastructure facilities in the identified area referred Page 45 of 80 HC-NIC Page 45 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT to in subsection (2) to (4), or undertake any authorised operation may, after entering into an agreement with the Developer referred to in subsection (10), make a proposal for the same to the Board for its approval and the provisions of subsection (5) and subsections (7) to (10) shall, as far as may be, apply to the said proposal made by such person or State Government. (12) Every person or a State Government referred to in subsection (11), whose proposal has been approved by the Board and who, or which, has been granted letter of approval by the Central Government, shall be considered as a CoDeveloper of the Special Economic Zone.
Section 8 pertains to constitution of Board of approval and Section 9 pertains to the duties, powers and functions of Board, the relevant part thereof is reproduced as under:
9. Duties, powers and functions of Board. (1) Subject to the provisions of this Act, the Board shall have the duty to promote and ensure orderly development of the Special Economic Zones.
(2) Without prejudice to the generality of the provisions contained in subsection (1), the powers and functions of the Board shall include -
(a) to (c) xxx
(d) granting of approval or rejecting of proposal for providing infrastructure facilities in a Special Economic Zone or modifying such proposals;
(e) to (i) xxx The functions of Development Commissioner are enumerated in Section 12. Section 13 pertains to constitution of Approval Committee and Section 14 Page 46 of 80 HC-NIC Page 46 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT pertains to powers and functions of the Approval Committee, the relevant part thereof is reproduced as under:
14. Powers and functions of Approval Committee. (1) Every Approval Committee may discharge the functions and exercise the powers in respect of the following matters, namely:
(a) & (b) xxx
(c) monitor the utilisation of goods or services or warehousing or trading in the Special Economic Zone;
Section 51 giving overriding effect to the Act reads as under:
51. The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.
The Central Government has framed the Rules namely the Special Economic Zones Rules, 2006 in exercise of the powers conferred by Section 55 of the SEZ Act. The relevant definition "Infrastructure" as contained in Rule 2(1)(s) reads as under: "2(s) infrastructure' means facilities needed for development, operation and maintenance of a Special Economic Zone and includes industrial, business and social amenities like development of land, roads, building, sewerage and effluent treatment facilities, solid waste management facilities, port, including jetties, single point moorings, storage tanks and interconnecting pipelines for liquids and gases, Inland Container Depot or Container Freight Station, warehouses, airports, railways, transport system, generation and distribution of power, gas and other forms Page 47 of 80 HC-NIC Page 47 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT of energy, telecommunication, data transmission network, information technology network, hospitals, hotels, educational institutions, leisure, recreational and entertainment facilities, residential and business complex, water supply, including desalination plant, sanitation facility;"
20. It is beyond any cavil that the provisions of the statute must receive strict interpretation and that scrupulous compliance thereof is imperative. However, before appreciating the submissions made by the learned Advocates for the parties in the light of the provisions of the SEZ Act and PNGRB Act, the conduct of the petitioner GSPL before and after approaching this Court needs to be highlighted. It can not be gainsaid that the writ jurisdiction is an extraordinary equitable jurisdiction. It is a rule of equity as well as of law that a suppresio veri is equivalent to a suggestio falsi. Suppression of truth is the suggestion of what is false. The first and foremost preliminary objection raised by the learned Advocates for the respondents is that the petition was filed with oblique motive and ulterior purpose suppressing material facts from the Court. According to them, the petitioner had not disclosed all the correct, Page 48 of 80 HC-NIC Page 48 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT material and relevant facts in the petition and the same were sought to be brought on record by way of affidavits-in-rejoinder, in reply to the affidavits-in-reply filed by the respondent Nos.1 and 2. In this regard, it may be stated that as held by the Division Bench of this Court in case of Hiralaxmi and Ors. Vs. Municipal Corporation of the City of Ahmedabad and Anr., reported in AIR 1967 Gujarat 198, by and large the writ jurisdiction proceedings, which are prerogative proceedings have to be decided on the contents of the petitions and the affidavits filed in reply. Contentions not found amongst the grounds on which relief is sought in the petition, if are raised for the first time in rejoinder affidavit, it would not be proper even to accept such contentions, except in exceptional cases. In matters of the nature of high prerogative writs it is not only desirable, but necessary that the petitioner should be precise in putting forward his case, which the opposite party is called upon to meet. It is also but proper that the petitioner should state grounds with sufficient particularity and disclose in the petition all Page 49 of 80 HC-NIC Page 49 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT the material and the grounds on which they move the Court for the relief asked. It would otherwise lead to most undesirable and unsatisfactory results if petitioners are allowed to raise new pleas or grounds by way of supplementary pleas or trot out a plea not at all made out in the petition.
21. In the instant case, as stated herein above an urgent hearing of the petition was sought by the learned Advocate for the petitioner on 30.11.2017 and the matter was permitted to be circulated and heard at 2.30 p.m. on the same day. The Court after considering the averments made in the petition and the documents annexed thereto, and after hearing the learned Sr. Advocate Mr.Mihir Thakore appearing with learned Advocate Mr.Aspi Kapadia for the petitioner and learned Sr. Advocate Mr.Kamal Trivedi and learned Sr. Advocate Mr.Mihir Joshi with learned Advocate Mr.Vishwas Shah appearing on caveat for the respondent GAIL, had granted an ad-interim relief, restraining the respondent No.1 GAIL from laying and connecting the 8" natural gas pipeline Page 50 of 80 HC-NIC Page 50 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT by tap off from its existing Dahej-Uran pipeline for supplying gas to the respondent M/s.OPAL situated in SEZ, Dahej. The respondents after service of the notices appeared and filed their respective affidavits-in-reply in detail, raising various contentions, including the contention that the petition suffered from the vice of suppression of material facts. The petitioner thereafter filed three affidavits-in-rejoinder one after the other, from which it has been found by the Court that the petitioner had not made true and correct disclosure of material facts and suppressed very relevant and important documents and the correspondences that had ensued between the parties, more particularly with the respondent No.2 M/s.OPAL with regard to the subject matter of the petition.
22. It is pertinent to note that though the petitioner had entered into Gas transmission agreement with the respondent No.2 M/s.OPAL on 12.8.2014 agreeing to make necessary arrangements for transportation of gas for the respondent No.2 M/s.OPAL from time to time, subject to the terms Page 51 of 80 HC-NIC Page 51 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT and conditions mentioned therein, and had also entered into various capacity tranches under the said agreement from time to time, and had entered into number of correspondences with the respondent No.2 through E-mails and letters with regard to the transportation of the additional supply and also lastly entered into the GTA Amendment agreement with M/s.OPAL on 22.11.2017, there was not even a whisper made in the petition about any of such agreements or the documents or correspondences. It was only when the respondents raised the contentions and the Court also found that GTA and other documents should have been produced on record, the same were produced. The main contention raised by the respondent No.2 in its affidavit-in-reply is that because the petitioner refused additional booking capacity for transmission of gas through its pipeline, and suggested to look for an alternative arrangement, the respondent No.2 had sought for the alternative arrangement from the respondent No.1 and accordingly the respondent Nos.1 and 2 had sought the permissions from the respondent No.3 DSL and the Approval Committee. Page 52 of 80 HC-NIC Page 52 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT It is also pertinent to note that the petitioner had already raised objections against the said permissions before the respondent No.3 DSL vide the letter dated 8.11.2017. Under the circumstances and in the background of these facts, it was incumbent on the part of the petitioner to place on record the basic and material facts and documents along with the petition.
23. As rightly submitted by the learned Sr. Advocate Mr.S. I. Nanavati it is for the Court and not for the litigant to decide as to which fact is or is not material. It is the obligation of the litigant to state candidly all material facts. It is also well settled legal position that if there is any suppression of material facts on the part of the petitioner or twisted facts have been placed on record by the petitioner, the petition should be dismissed without entering into the merits of the matter. In this regard a very pertinent observations made by the Supreme Court in case of Prestige Lights Ltd. Vs. State Bank of India, reported in (2007) Page 53 of 80 HC-NIC Page 53 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT 8 SCC 449 deserve to be reproduced as under:-
"33. It is thus clear that though the appellantCompany had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter.
34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136], in the following words:
"It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should made a full and fair disclosure of all the material facts facts, not law. He must not misstate the law if he can help it. The Court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the Page 54 of 80 HC-NIC Page 54 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT imperfect statement".
35. It is well settled that a prerogative remedy is not a matter of course. In exercising extraordinary power, therefore, a Writ Court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the Court, the Court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of Court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible."
24. In case of Bhaskar Laxman Jadhav and Ors. Vs. Karamver Kakasaheb Wagh Education Society and Ors., reported in (2013) 11 SCC 531, it has been observed in paragraphs 44, 45, and 46 as under:-
44. It is not for a litigant to decide what fact is material for adjudicating a case and what is not material. It is the obligation of a litigant to disclose all the facts of a case and leave the decision making to the Court. True, there is a mention of the order dated 2nd May 2003 in the order dated 24th July 2006 passed by the JCC, but that is not enough disclosure. The petitioners have not clearly disclosed the facts and circumstances in which the order dated 2nd Page 55 of 80 HC-NIC Page 55 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT May 2003 was passed or that it has attained finality.
45.We may only refer to two cases on this subject. In Hari Narain v. Badri Das, AIR 1963 SC 1558 stress was laid on litigants eschewing inaccurate, untrue or misleading statements, otherwise leave granted to an appellant may be revoked. It was observed as follows:
"9. ...It is of utmost importance that in making material statements and setting forth grounds in applications for special leave, care must be taken not to make any statements which are inaccurate, untrue or misleading. In dealing with applications for special leave, the Court naturally takes statements of fact and grounds of fact contained in the petitions at their face value and it would be unfair to betray the confidence of the Court by making statements which are untrue and misleading. That is why we have come to the conclusion that in the present case, special leave granted to the appellant S.L.P. (C) No. 30469 of 2009 ought to be revoked. Accordingly, special leave is revoked and the appeal is dismissed. The appellant will pay the costs of the respondent."
46. More recently, in Ramjas Foundation v. Union of India, (2010) 14 SCC 38 the case law on the subject was discussed. It was held that if a litigant does not come to the Court with clean hands, he is not entitled to be heard and indeed, such a person is not entitled to any relief from any judicial forum. It was said:
"21. The principle that a person who does not come to the court with clean hands is not entitled to be heard on the merits of his grievance and, in any Page 56 of 80 HC-NIC Page 56 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT case, such person is not entitled to any relief is applicable not only to the petitions filed under Articles 32, 226 and 136 of the Constitution but also to the cases instituted in others courts and judicial forums. The object underlying the principle is that every court is not only entitled but is duty bound to protect itself from unscrupulous litigants who do not have any respect for truth and who try to pollute the stream of justice by resorting to falsehood or by making misstatement or by suppressing facts which have a bearing on adjudication of the issue(s) arising in the case."
1. In view of the afore-stated legal and factual position, the Court has no hesitation in holding that the petitioner having suppressed material facts from the Court and having made incorrect and inaccurate statements in the petition, the same deserves to be dismissed on the said ground alone. Nonetheless, the petition having been argued at length on various other issues, the Court deems it proper to deal with those issues also.
2. As regards alternative remedy, it was sought to be submitted by the learned Sr. Advocate Mr.Trivedi for the respondent No.1 GAIL that the disputes between the parties could be resolved by Page 57 of 80 HC-NIC Page 57 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT filing civil suit under Section 23 or through arbitration under Section 42 of the SEZ Act or under Section 24 of PNGRB Act. However, the said submission can not be accepted. It is not disputed that the Courts have not been designated to try the suit of civil nature arising in the SEZ, as contemplated under Section 23 of the SEZ Act. Whether the dispute raised in the petition could be referred to the arbitration under Section 42 of the SEZ Act or under section 24 of PNGRB Act or not would be a debatable issue, which the Court is not called upon to decide in this petition. Even if it is presumed that the same could be referred to the arbitration, whether the said remedy could be said to be effective or efficacious remedy or not, would be another issue. In any case, as held by Supreme Court in Whilepool Corporation Vs. Registrar of Trade Mark (supra), the existence of the alternative remedy itself would not operate as bar, where the writ petition is filed for the enforcement of any fundamental rights, or where there has been violation of the principles of natural justice or where the order or proceedings Page 58 of 80 HC-NIC Page 58 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT are alleged to be wholly without jurisdiction or where the vires of the Act is challenged. In the instant case, the statutory powers of the Approval Committee and the Development Commissioner have been challenged by the petitioner, amongst others, and therefore, the petition could not be rejected on the ground of availability of an alternative remedy alone. Having said that, let us examine the other issues involved in the matter.
3. The bone of contention raised by the learned Sr. Advocate Mr.Mihir Thakore for the petitioner is that the action of laying of pipeline for transportation of natural gas by the respondent No.1 GAIL in Dahej SEZ area being an "infrastructure facility" within the meaning of Section 2(p) of SEZ Act, the necessary permission was required to be obtained by the GAIL from the Board of approval constituted under Section 8, and that the approval granted by the Approval Committee constituted under Section 13 was dehors the provisions of the said Act. The said submission made by Mr. Thkore though sounds very Page 59 of 80 HC-NIC Page 59 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT attractive and impressive, on the close reading of the provisions of the Act, the Court does not find any substance in the same.
4. It is significant to note that Section 3 of the said Act pertains to the procedure for making proposal to establish Special Economic Zone. Sub-section (11) thereof provides inter alia that any person, who, or a State Government, which intends to provide any infrastructure facility in the identified area referred to in Sub-section (2) to (4) or undertake any authorized operation made, after entering into an agreement with the developer referred to in Sub-section (10) make a proposal for the same to the Board for its approval. As per Sub-section (12) thereof, the person whose proposal has been approved by the Board and who has been granted letter of approval by the Central Government would be considered as Co-Developer of the SEZ. Now, so far as "infrastructure facilities" are concerned, the same has been defined in Section 2(p) of the Act, to mean industrial, commercial, or social infrastructure or other facilities necessary for Page 60 of 80 HC-NIC Page 60 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT development of Special Economic Zone or other facilities which may be prescribed. What is significant in this definition is the word "necessary". The definition is in two parts. In the first part, it is stated that the industrial, commercial or social infrastructure or other facilities necessary for the development of a Special Economic Zone. It does not state about the facilities necessary for the development of the units set up in the SEZ. In the second part, it is stated that "or other facilities which may be prescribed". In the opinion of the Court the words "infrastructure facilities" themselves imply that such facilities would be required at the time of establishment and development of the Special Economic Zone. Further, the other infrastructure facilities have been prescribed in the Rule 2(1)(s) of the said Rules. According to Rule 2((1)(s), "infrastructure" means facilities needed for the development, operation and maintenance of a Special Economic Zone and includes industrial, business and social amenities as enumerated in the said Clause. Here also, the emphasize is on the facilities "needed" Page 61 of 80 HC-NIC Page 61 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT for development, operation and maintenance of the Special Economic Zone and not on the facilities "needed" for the development, operation or maintenance of the units set up by an entrepreneurs in the Special Economic Zone. By necessary corollary, it would mean that the facilities or amenities needed for the units could not be said to be the infrastructure facilities needed for the Special Economic Zone.
5. It is well settled principle of interpretation of statutes that no word or provision should be considered redundant or superfluous. The legislature attributes a particular meaning to each word in a statute, and that word of a statute must prima facie be given its ordinary meaning. In this regard, a pertinent observations made by Supreme Court in case of Sankar Ram & Co. Vs. Kasi Nasicker and Ors., reported in (2003) 11 SCC 699, be made.
"7. It is a cardinal rule of construction that normally no word or provision should be considered redundant or superfluous in interpreting the provisions of a statute. In the field of interpretation of statutes, the courts always presume that the legislature inserted every part thereof Page 62 of 80 HC-NIC Page 62 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT with a purpose and the legislative intention is that every part of the statute should have effect. It may not be correct to say that a word or words used in a statute are either unnecessary or without any purpose to serve, unless there are compelling reasons to say so looking to the scheme of the statute and having regard to the object and purpose sought to be achieved by it. A Constitution Bench of this Court in Jaipur Zila Sahakari Bhoomi Bank Ltd. Vikas vs. Shri Ram Gopal Sharma and Ors. [JT 2002 (1) SC 182] while interpreting and considering the effect of proviso to Section 33(2)(b) of the Industrial Disputes Act, 1947 in para 13 observed:(SCC pp. 25253) "13. The proviso to Section 33(2)(b) as can be seen from its very unambiguous and clear language, is mandatory........... Taking a contrary view that an order of discharge or dismissal passed by an employer in contravention of the mandatory conditions contained in the proviso does not render such an order inoperative or void, defeats the very purpose of the proviso and it becomes meaningless. It is wellsettled rule of interpretation that no part of statute shall be construed as unnecessary or superfluous. The proviso cannot be diluted or disobeyed by an employer......... The interpretation of statute must be such that it should advance the legislative intent and serve the purpose for which it is made rather than to frustrate it."
6. In case of Gurudevdatta VKSSS Maryadit and Ors. Vs. State of Maharashtra and Ors., reported in (2001) 4 SCC 534, it has been observed as under:- Page 63 of 80
HC-NIC Page 63 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT "26. Further we wish to clarify that it is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law giver. The Courts have adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute.
Bearing in mind, the aforesaid principle of construction, if the expression any new member society occurring in the proviso to sub section (3) of Section 27 is construed, it conveys the only meaning that it refers to the societies to be formed hereafter and not of those societies which have already become member societies of the federal society. Therefore, the requirement of the completion of the period of three years from the date of its investing any part of its fund in the shares of such federal society would apply only to those societies which became member society of the federal society after 20th August, 2000. In this view of the matter, the impugned judgment of the High Court does not suffer from any infirmity. Even if there remained any doubt in the matter of interpreting the proviso, the Page 64 of 80 HC-NIC Page 64 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Ordinance that has been promulgated on 27th February, 2001, called the Maharashtra Ordinance No. X of 2001, after the first proviso to subsection (3), a second proviso had been inserted, has removed any doubt or controversy in as much as it has been indicated therein that the first proviso will not apply to the member society which has invested any part of its fund in the share of the federal society before the commencement of the Maharashtra Cooperative Societies (Amendment) Act, 2000 dated 20th August, 2000. The aforesaid Ordinance also has been given a retrospective effect, to be effective from 23rd August, 2000. The Ordinance having been held to be valid by us as stated above, the socalled prohibition contained in the first proviso to sub section (3) of Section 27 will not apply to all those societies which have already become members of the federal society prior to 2382000."
7. In the light of afore-stated proposition of law, the words "necessary for the development of a Special Economic Zone" contained in Section 2(p), and the words "needed for development, operation and maintenance of a Special Economic Zone" contained in Rule 2(1)(s) have to be given their ordinary meanings, which would advance the legislative intent and serve the purpose of the Act.
8. Further, the facilities and amenities enumerated in Rule 2(1)(s) do not cover the amenity of Page 65 of 80 HC-NIC Page 65 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT laying of natural gas pipeline for the supply of gas to a particular unit. Though Mr.Thakore had sought to submit that such amenity would be included in the amenity of "generation and distribution of power, gas or other form of energy", it is difficult to accept the said submission. As held by Supreme Court in case of Hardeep Singh Vs. State of Punjab (supra), wherever the words "means and include" are used, it is an indication of the fact that the definition "is a hard and fast definition", and no other meaning can be assigned to the expression that is put down in the definition. It indicates an exhaustive explanation of the meaning which for the purpose of the Act, must invariably be attached to the words and expression.
9. In the instant case, it is not disputed that the respondent No.2 M/s.OPAL needed an additional supply of gas, which the petitioner had refused to book for transmission through its pipeline laid in the respondent No.3 SEZ, and therefore, the respondent No.1 had agreed to supply the Page 66 of 80 HC-NIC Page 66 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT additional quantity of gas to the respondent No.2 by laying 8" dia pipeline by Tap off from the existing M/s.GAIL DUPL. Such necessity of facilities or services of the respondent No.1 M/s.OPAL, which is one of the units set up in the DAL could not be said to be an infrastructure facility necessary or needed for the development of the respondent No.3 DSL, as contemplated in Section 2(p) read with Rule 2(1)(s) of the said Rules. In that view of the matter, the Court is of the opinion that under the circumstances, the respondent No.1 and respondent No.2 were not required to take any approval from the Board of Approval under Section 9(d) of the said Act. It is also pertinent to note that neither the Approval Committee, nor the Development Commissioner, at any point of time asked the respondent Nos.1 and 2 to obtain the approval from the Board of Approval, probably because they also did not consider such necessity of procuring additional supply of gas by M/s.OPAL from M/s.GAIL to be an infrastructure facility. The approval granted by the Approval Committee in its meeting held on 11.10.2017, and conveyed by the Page 67 of 80 HC-NIC Page 67 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT Development Commissioner vide letter dated 27.10.2017 is required to be construed as the approval granted in respect of the matter contained in Section 14(1)(c) read with Section 12(2) of the Act. The respondent No.3 DSL had also granted in-principle approval to the respondent No.1 as per the letter dated 29.9.2017. The petitioner itself while raising objection against such approval in its letter dated 8.11.2017 had not contended that such facility being infrastructure facility, the respondent No.1 GAIL would be required to obtain approval from the Board of Approval, or that the Approval Committee had no such powers to grant approval. Such contention has been raised for the first time in the petition, which is thoroughly misconceived.
10. Placing heavy reliance on the Dahej, Co- Developer agreement dated 27.7.2009 (Annexure-A) entered into by and in between Ms.DSL and GSPL, the learned Sr. Advocate Mr.Thakore would submit that the petitioner had sole and exclusive right with respect to the development, operation and Page 68 of 80 HC-NIC Page 68 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT maintenance of gas transmission pipeline infrastructure and distribution of gas in the SEZ. In this regard, it is pertinent to note that the said agreement was entered into between the petitioner GSPL and the respondent No.3 DSL. The same could not be made binding to the respondent No.1 or respondent No.2, who were not the parties to the said agreement. None of the provisions contained in the said Act contemplates exclusivity to the Co-Developer for providing infrastructure facilities.
11. Mr.S.I. Nanavati, learned Sr. Advocate for the respondent No.2 in this regard has rightly relied upon the various clauses of the Sub-lease deed dated 27.12.2011(Annexure-R/1) entered into between the respondent No.3 M/s.DSL and the respondent No.2 M/s.OPAL to submit that the respondent No.2 was free to obtain any service, amenities or facilities not provided by the DSL/Co-Developer/service provider in Dahej SEZ directly from the concerned agency. Further, though the petitioner GSPL was the Co- Developer/service provider for the supply of Page 69 of 80 HC-NIC Page 69 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT piped gas to the units of Dahej SEZ, the respondent No.2 had an option to apply to GSPL for gas supply on such terms and conditions as may be mutually agreed between the sub-lessee M/s.OPAL and the Co-Developer GSPL, as contemplated in Clause 4.5 of the said sub-lease agreement. Under the circumstances, in absence of any provision under the Act and in absence of any clause contained in the agreement between the petitioner Co-Developer and the respondent No.2 as the sub-lessee, conferring exclusive right on the petitioner for providing infrastructure facilities, more particularly of laying the pipeline for the transmission of gas supply to the units set up in the special economic zone, the claim of exclusivity made by the learned Sr. Advocate Mr.Thakore for the petitioner is found devoid of any merits.
12. The respondent No.3 M/s.DSL had already granted, in-principle approval to the respondent No.1 for offering land on Right of Use by letter dated 29.9.2017, subject to the conditions mentioned therein. One of the conditions was Page 70 of 80 HC-NIC Page 70 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT that the respondent No.1 M/s.GAIL had to obtain permission/approval from the development Commissioner SEZ, Government of India/Board of approval MOCI, Delhi for laying 8" dia pipeline by Tap off from existing M/s.GAIL - DUPL 30" dia natural gas pipeline to M/s.OPAL in Dahej SEZ area. The proposal being not for providing infrastructure facility for the development of SEZ, the approval of Board was not required, and hence the permission was rightly sought by the GAIL from the Development Commissioner who, in turn, had put up the proposal before the approval committee, and the said committee in its 76th meeting held on 11.10.2017 had decided to approve the said proposal.
13. It further transpires that the petitioner after having come to know about the said approval granted by the approval Committee had raised objection by writing letter dated 8.11.2017 (Annexure-E) to the CEO of the respondent No.3 DSL. The petitioner in the said letter had referred to the Co-Developer agreement executed with Dahej SEZ and stated that the GSPL was Page 71 of 80 HC-NIC Page 71 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT entrusted with the sole responsibility to develop, operate and maintain complete natural gas infrastructure facilities in Dahej SEZ, and therefore, the decision to approve the proposal of M/s.GAIL and M/s.OPAL for development of natural gas pipeline for M/s.OPAL was required to be reconsidered. From the said letter, it clearly emerges that the petitioner was aware at least on 8.11.2017 about approval granted by the Approval Committee and, about the in-principle approval granted by the respondent No.3, and if it was so aggrieved, could have approached the Court, but it did not. It is further interesting to note that the CEO of the respondent No.3 thereafter suddenly on 24.11.2017 addressed a letter to the respondent No.2 M/s.OPAL with a copy marked to the respondent No.1 M/s.GAIL informing the respondent No.2 that M/s.Gujarat State Petroleum Corporation (GSPC) being Co- Developer for supply of natural gas in Dahej SEZ area, the respondent No.2 was required to get no objection certificate from M/s.Gujarat State Petroleum Corporation (GSPC) before execution of the work at the site. It is pertinent to note Page 72 of 80 HC-NIC Page 72 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT that M/s. Gujarat State Petroleum Corporation is the holding company of the petitioner GSPL, and it was the petitioner GSPL who was the Co- Developer and not the GSPC. Be that as it may, it is further pertinent to note that though the said letter was addressed to the respondent Nos.1 and 2, and not even marked to the petitioner, the CEO had furnished the office copy of the said letter to the petitioner before dispatching the said letter to the respondent Nos.1 and 2. The said letter was dispatched on 27.11.2017 and was received by the respondent Nos.1 and 2 only on 29.11.2017. Interestingly, though no such NOC was asked for either by the respondent No.1 or by the respondent No.2, the petitioner on 29.11.2017 issued a letter to the respondent No.1 M/s.GAIL (Annexure-G) and to the respondent No.2 M/s.OPAL (Annexure-H), intimating that the petitioner was not in a position to issue NOC either to the M/s.GAIL or to the M/s.OPAL for developing natural gas pipeline to connect M/s.OPAL, and requested the GAIL to cease all activities including pipeline laying activities immediately. When the letter dated 24.11.2017 issued by the Page 73 of 80 HC-NIC Page 73 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT CEO of the respondent No.3 was received by the respondent Nos.1 and 2 only on 29.11.2017, there was no question of seeking NOC from the petitioner by the respondent Nos.1 and 2 before 29.11.2017 and therefore, there was no occasion for the petitioner to write letters on 29.11.2017 refusing to grant NOC to them. The Court, therefore, having found substance in the submission made by Mr.S.I. Nanavati for the respondent No.2 that the said letter dated 24.11.2017 was issued by the CEO of the respondent No.3 in collusion with the petitioner, with a view to create an imaginary urgency in the matter for filing the petition on 30.11.2017, though the petitioner was very much aware about the approval granted by the Approval Committee and the respondent Dahej SEZ as back as on 8.11.2017, the Court had directed the CEO of DSL to remain personally present with his affidavit explaining the situation. On his remaining present before the Court, a specific query was put by the Court as to what was the need for issuing the letter dated 24.11.2017 when the respondent No.3 DSL had already granted, the in- Page 74 of 80 HC-NIC Page 74 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT principle approval on 29.9.2017, and the approval committee had also granted approval on 11.10.2017, the CEO of the respondent No.3 was not in a position to answer the said query. The said conduct of the CEU has been recorded by the Court in the order dated 13.12.2017.
14. From the afore-stated conduct of the petitioner and the CEO of the respondent No.3 it clearly transpires that the said letters dated 24.11.2017 issued by the CEO of the respondent No.3 and the letters dated 29.11.2017 issued by the petitioner refusing to grant NOC were prepared in collusion with each other to create an artificial urgency in the matter, to file petition on 30.11.2017, though the petitioner was aware about the granting of approval by the respondent No.3 DSL and by the Approval Committee as back as on 8.11.2017, and though the work of laying 25 mtr., pipeline was already started by the respondent No.1 in October 2017 as stated by the respondent No.2 in its affidavit-in-reply, which has remained un-controverted by the petitioner. Under the circumstances, the Court Page 75 of 80 HC-NIC Page 75 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT is constrained to hold that by seeking urgent hearing of the petition, which contained inaccurate and incorrect statements, and which suffered from the vice of the suppression of material facts, the petitioner had tried to misuse the process of law. Such conduct on the part of the petitioner has not only led to miscarriage of justice, but huge financial loss to the respondent No.2. The other technical issues arising out of the contractual disputes being highly disputed questions are not required to be gone into, and therefore, not dealt with.
15. Much was argued on whether there is any inconsistency between the SEZ Act and PNGRB Act, and whether the SEZ Act has an overriding effect over the PNGRB Act or not. It can not be gainsaid that in view of Section 51 of the SEZ Act, the provisions of the said Act would have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. The expression "for the time being in force" would not only include the existing legislations but would also include Page 76 of 80 HC-NIC Page 76 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT future legislations, as observed by Supreme Court in case of Yakub Abdul Razak Memon Vs. State of Maharashtra (supra). Hence, though the PNGRB Act has been enacted later in point of time, the provisions of SEZ Act would override the provisions of the PNGRB Act, if there is any inconsistency between any of the provisions contained in the two Acts. As transpiring from the long title of the PNGRB Act, the Act has been enacted to provide the establishment of Petroleum and Natural Gas Regulatory Board to regulate amongst others transportation, distribution, marketing etc.,of petroleum products and natural gas so as to protect the interests of consumers and entities engaged in the specified activities to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country and to promote competitive markets. It is not disputed that the provisions of PNGRB Act applies to both, the petitioner GSPL and the respondent No.1 GAIL. Both are authorized entities as per Section 2(d) and common carriers as per Section 2(j) of the PNGRB Act. The PNGRB Board, in exercise of the Page 77 of 80 HC-NIC Page 77 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT powers conferred under Section 61 of the PNGRB Act, has framed and amended the Regulations from time to time, and has amended latest as per the Amendment Regulations,2016. The learned Sr. Advocate Mr.Thakore though relied upon the provisions of both the Acts, had failed to point out any inconsistent provision contained in the PNGRB Act, which would get overridden by the SEZ Act. According to him, the respondent No.1GAIL could not be said to have an unfettered right to lay pipelines for the supply of gas in any part of the country,and that its rights and obligations are subject to the SEZ Act, if the area falls under the SEZ. There can not be any disagreement to the said proposition, however, in the facts and circumstances of the case, and in view of the afore-discussed legal position, the facilities or services sought to be provided by the respondent No.1 to the respondent No.2 being not the infrastructure facilities, the Court does not find any inconsistency between the provisions of the said two Acts. The issue whether Clause- 1(g) of Schedule J of the PNGRB Authorisation Regulations, 2008, as amended in 2016, is Page 78 of 80 HC-NIC Page 78 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT applicable to the respondent No.1 GAIL or not, also pales into insignificance, in view of the fact that requisite approvals have already been obtained by the respondent Nos.1 and 2 under the SEZ Act for the purpose of laying 8" dia pipeline in question. There is no provision contained in the SEZ Act, which grants exclusivity to any person, which otherwise would encourage monopolistic and restrictive trade practices, or which would run counter to and frustrate the very purpose and object of promoting competitive markets in the matter of petroleum, petroleum products and natural gas, as contained in the PNGRB Act.
16. In the afore-stated premises, the petition being devoid of any merits and having been filed suppressing material facts and documents, deserves to be dismissed and is dismissed. Ad- interim relief stands vacated forthwith. Notices stand discharged.
(BELA M. TRIVEDI, J.) Page 79 of 80 HC-NIC Page 79 of 80 Created On Tue Dec 26 23:13:17 IST 2017 C/SCA/21738/2017 CAV JUDGMENT FURTHER ORDER:-
The request made by the learned Sr. Advocate Mr.Mihir Thakore for the petitioner to extend the ad-interim relief is rejected for the reasons stated in the judgement.
(BELA M. TRIVEDI, J.) vinod Page 80 of 80 HC-NIC Page 80 of 80 Created On Tue Dec 26 23:13:17 IST 2017