Document Fragment View
Fragment Information
Showing contexts for: ttz in National Chamber Of Industries & ... vs Gail (India) Ltd. And Others on 12 July, 2013Matching Fragments
15. Pleadings in these petitions have been exchanged and with consent of learned counsel for the parties, these writ petitions have been heard and are being disposed of at the admission stage itself.
16. The submission of the learned counsel for the petitioners primarily is that as per the order dated 30.12.1996 passed by the Supreme Court in M.C.Mehta case (supra) the petitioners were persuaded to convert their industries, which were being run with the use of coal/coke to natural gas as fuel for running their industries. It has been submitted that initially GAIL was hesitant in supply of gas to the TTZ as they were apprehending that there would not be sufficient customers. It was at this stage that the petitioners agreed to convert their industries to gas based and they were supplied APM gas and as such they cannot now be asked to pay for gas at UPM price (which is higher than APM) as they fall in a separate class, having converted their coal/coke based industries to gas based industries under orders of the Supreme Court. It has thus been contended that the petitioners have a right to be supplied APM gas up to the limit of 1.1 MMSCMD as their right flows from the judgment of the Supreme Court and not from any contractual relationship. It has also been contended that as per the judgment of the Supreme Court, there could neither be any new industry established nor could there be expansion of existing industries in the TTZ, and as such the consumers/industries which had converted as per the order of the Supreme Court ought to be supplied APM gas. It has also been contended that it is not the case of the Government of India that supply of such gas cannot be made to the petitioners. It has thus been submitted that the petitioners are a different class and since no new industry can be set up in the TTZ, the question of providing level playing field for any new industry does not exist and there would be no question of grant of equality with any new industry (which may have been set up after the order of the Supreme Court) with the petitioners. It has also been contended that expansion of existing industries or setting up of new industry cannot, and should not, be permitted as the purpose of the Supreme Court's order is to minimize pollution in the TTZ by use of gas as fuel for running the industries in such area. In this regard, it has been submitted that though by use of gas there is minimum pollution but wherever there is combustion, pollution is bound to be there and if new industries are set up in the area or existing industries are allowed to expand, it will cause further pollution, which would be against the spirit of the order of the Supreme Court in M.C.Mehta case (supra). It has also been urged that fixation of price cannot be done unilaterally by GAIL/Gail Gas Ltd., and the same has to have the sanction of the Government of India, which is not there in the present case, as the no objection granted by the Government of India on 27.6.2012 was only conditional, to the extent that the utilisation of APM allocation was to be limited to industries located in TTZ. The petitioners have thus urged that they may not be compelled for being supplied UPM gas and their contracts for supply of APM gas be renewed/extended and the communications dated 27.6.2012 and 19.7.2012 of Government of India and Gail Gas Ltd. be quashed.
27. From the aforesaid observations of the Apex Court, what we find is that the main consideration for directing the industries in the TTZ to either convert to natural gas based units or relocate themselves outside the TTZ or shut down, was because of air pollution caused by the running of the industries by use of coke/coal, which was damaging the grandeur of the Taj Mahal, and was also hazardous to public health. It cannot be said that the Supreme Court was wanting to curb the industrial growth of the TTZ, as it itself observed that the old concept that development and ecology cannot go together is no longer acceptable, and that sustainable development is the only answer, as it is essential for the growth of economy of the country, but with the caveat that the environment and the eco-systems have to be protected. By its further observation in paragraph 30 of the judgment that other industries located in TTZ (besides 292 industries) shall be dealt with separately (for which notices were directed to be sent to such remaining industries in the TTZ to apply for gas connections/relocation) goes to show that the Supreme Court was not averse to any expansion of existing industries in the TTZ, or further conversion of industries to gas based units, or even setting up of new non-polluting industries in the TTZ which adhered to the norms of the UP Pollution Control Board. It may be true that in certain communications or pleadings before the Supreme Court the authorities may have observed that no new industries or expansion of existing industries in the TTZ would be permitted, but nowhere in the judgment of the Supreme Court has the same been accepted or mentioned that expansion of existing industries or setting up of new industries or conversion of existing industries to use gas as fuel in the TTZ would not be permitted. It may be mentioned here that the question of setting up of new industries or expansion of the existing ones is not a matter directly under consideration in these writ petitions. What is in dispute in the present petitions is the issue relating to supply of UPM or APM gas, which in effect is the question relating to pricing of the supply of natural gas in the TTZ. It may only be observed that neither the Supreme Court nor any order of the Government of India has imposed any such ban on expansion or setting up of new industries in the TTZ.
47. The said approval was given on the request of the Gail Gas Ltd. made on 4.5.2012. A perusal of the said letter goes to show that the Government of India had transferred the APM gas allocation of 1.1 MMSCMD to GAIL Gas Ltd. for supply of natural gas to downstream industries in the TTZ region. It was also mentioned therein that the additional demand of gas in the TTZ region was there, which could be met only through outsourcing of RLNG, since the domestic supplies were constrained, and for additional supply, GAIL had already completed the network capacity augmentation in Firozabad to meet the demand up to 2.5 MMSCMD. The Gail Gas Ltd. had also pointed out that the U.P. Pollution Control Board had identified around 629 industries for supply of natural gas in TTZ region, which supply could not be made due to limited APM allocation, and because of huge price difference with regard to RLNG, all the industries could not be converted to natural gas, and that the competition within the industries having APM allocation makes RLNG/spot RLNG unaffordable in the market. The letter also pointed out that the growth prospects of the local glass/choori industries were diminishing as the other fuel was not permitted for use in the TTZ region. The Gail Gas Ltd. also mentioned that for implementation of City Gas Distribution Project in TTZ, spanning approximately 10500 Sq. Kms. (covering Mahamayanagar, Bharatpur, Fatehpur-Sikri, Vrindawan, Gowardhan, Koshi etc.) it was desirable that all industrial customers were provided the opportunity of using gas on a uniform and non-discriminatory basis in the TTZ region. The letter also pointed out that because of wide price difference in the gas from different sources, i.e. APM gas and RLNG/spot RLNG gas, being supplied in the Agra-Firozabad region, several litigation in various courts had been initiated seeking additional APM gas and new APM gas connections. Advocating UPM method of pricing, the Gail Gas Ltd. had written that with uniform pricing, gas distribution business in the TTZ region would get the requisite impetus as the same would be a workable solution for all issues, and will provide a level playing field for all industries, and that gas would be available to a larger customer base at an equitable and affordable price, thereby encouraging healthy competition and growth in the region. It also mentioned that UPM would also be helpful to curb the internal trading of APM gas by industries having APM allocation. On such basis, Gail Gas Ltd. proposed to implement the Uniform Price Mechanism for all types of gas (APM, RLNG and Spot RLNG etc.) available from different sources, to meet the market demand of TTZ.
50. From a reading of the no objection given by the Government of India on 27.6.2012, what we notice is that the condition was that utilization of APM would be limited to industries in TTZ. The UPM also provides for the same, as after pooling of the APM gas for TTZ with RLNG gas etc., a uniform price is fixed for the gas to be supplied to all the consumers in the TTZ. The utilization of APM allocation is not intended to be made by industries located outside TTZ. From a joint reading of the letter dated 4.5.2012, as well as no objection letter dated 27.6.2012, it is clear that the entire consideration is for the TTZ region and not outside it. The APM gas for TTZ is to be pooled in with other gases for supply in the TTZ region alone and then the price of UPM gas is to be determined. In its communication dated 1.7.2005 the Government of India had decided that APM gas would be supplied only to the industries of (i) Power sector; (ii) Fertilizer sector; (iii) consumers covered under Court orders; and (iv) consumers having allocation of less than 0.05 MMSCMD. The supply of APM gas to the petitioners would be covered under the third category of "consumers covered under Court orders". APM gas could be supplied to the other sectors also. On a joint reading of no objection of the Government of India dated 27.6.2012 along with communication of the Government of India dated 1.7.2005, it would be clear that no objection for UPM given by Government of India was only for TTZ region (i.e. consumers/industries in the TTZ) and not for other sectors like power, fertilizer and consumers having less allocation. Thus, it would be clear that APM gas consumers of four categories, as mentioned in the communication dated 1.7.2005, would now be only for the three remaining categories and UPM would be for the consumers covered under Court orders in the TTZ area. The free market gas would be available for all other remaining consumers. As such, instead of two categories earlier i.e. gas priced under APM and non APM (free market gas), price of gas would now be of three categories i.e. gas priced under APM, gas priced under UPM and free market gas. APM gas would now be for Power/Fertilizer sector, court mandated consumers except TTZ region and consumers having less allocation of gas. UPM gas would be for industries in TTZ region and free market gas for rest of the industries/consumers. In such facts, we are of the clear view that the stand of the petitioners that it was a conditional no objection granted by the Government of India, which is being violated, does not have force.