Civil Misc. Writ Petition Nos. 34863, 37099 and 39367 of 2012. Case: National Chamber of Industries and Commerce U.P. and Others Vs GAIL (India) Ltd. and Others. High Court of Allahabad (India)
| Case Number | Civil Misc. Writ Petition Nos. 34863, 37099 and 39367 of 2012 |
| Counsel | For Appellant: A.K. Goyal, S.P. Gupta, Yashwant Verma, R.K. Garg, Navin Sinha and Nikhil Agarwal, Advs. and For Respondents: A.S.G.I., Madhur Prakash, Shanti Bhushan, Anil Bhushan, R.B. Singhal, Ravi Kant, H.N. Singh, M.N. Singh, Rishabh Agarwal and Sanjay Kumar Om and Sudhir Chandra, Advs. |
| Judges | Vineet Saran and Mushaffey Ahmad, JJ. |
| Issue | Constitution of India - Article 19(1)(g); Industrial Disputes Act, 1947 - Sections 25B, 25F(b) |
| Citation | 2013 (6) ADJ 435 |
| Judgement Date | July 12, 2013 |
| Court | High Court of Allahabad (India) |
Judgment:
Vineet Saran, J.
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For running any industry, fuel is the most important component. In the 19th century, the main fuel was coal and coke, which in the 20th century was oil. In the 21st century the main fuel for the industry is, and is likely to continue to be, natural gas. The dispute in the present petitions is primarily with regard to the fixation of price of natural gas, earlier supplied by Gail (India) Ltd. (in short GAIL) and now by Gail Gas Ltd., to the industrial units of Agra and Firozabad falling in the Taj Trapezium Zone (in short TTZ).
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The history of this litigation stems from a Public Interest Litigation filed by one M.C. Mehta for curtailing the pollution in Agra because emission from the industries of the area was eroding and damaging the grandeur of the Taj Mahal, which is a national monument and is one of the Seven Wonders of the World. The said writ petition (PIL) was filed in the year 1984 and after hearing the parties concerned, as well as seeking reports from the expert committees, namely, Vardharajan Committee and National Environment Engineering Research Institute (NEERI), the Supreme Court, vide its order dated 30.12.1996 passed in M.C. Mehta v. Union of India, AIR 1997 SC 734, gave certain directions to the effect that the polluting industries in TTZ be either closed down, or re-located outside TTZ, or converted to be run by natural gas instead of coal/coke. The directions in this regard have been given in paragraph 29 of the judgment, which are re-produced below:
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We order and direct as under:
(1) The industries (292 listed above) shall approach/apply to the GAIL before February 15, 1997 for grant of industrial gas-connection.
(2) The industries which are not in a position to obtain gas connections and also the industries which do not wish to obtain gas connections may approach/apply to the Corporation (UPSIDC)/Government before February 28, 1997 for allotment of alternative plots in the industrial estates outside TTZ.
(3) The GAIL shall take final decision in respect of all the applications for grant of gas connections by March 31, 1997 and communicate the allotment letters to the individual industries.
(4) Those industries which neither apply for gas connection nor for alternative industrial plot shall stop functioning with the aid of coke/coal in the TTZ with effect from April 30, 1997. Supply of coke/coal to these industries shall be stopped forthwith. The District Magistrate and the Superintendent of Police shall have this order complied with.
(5) The GAIL shall commence supply of gas to the industries by June 30, 1997. As soon as the gas supply to an industry commences, the supply of coke/coal to the said industry shall be stopped with immediate effect.
(6) The Corporation/Government shall finally decide and allot alternative plots, before March 31, 1997, to the industries which are seeking relocation.
(7) The relocating industries shall set up their respective units in the new industrial estates out-side TTZ. The relocating industries shall not function and operate in TTZ beyond December 31, 1997. The closure by December 31, 1997 is unconditional and irrespective of the fact whether the new unit outside TTZ is completely set up or not.
(8) The Deputy Commissioner, Agra and the Superintendent (Police), Agra shall effect the closure of all the industries on December 31, 1997 which are to be relocated by the date as directed by us.
(9) The U.P. State Government/Corporation shall render all assistance to the industries in the process of relocation. The allotment of plots, construction of factory buildings, etc., and issuance of any licence/permissions, etc., shall be expedited and granted on priority basis.
(10) In order to facilitate shifting of industries from TTZ, the State Government and all other authorities shall set up unified single agency consisting of all the departments concerned to act as a nodal agency to sort out all the problems of such industries. The single window facility shall be set up by the U.P. State Government within one month from today. The Registry shall communicate this direction separately to the Chief Secretary, Secretary (Industries) and Chairman/Managing Director, UPSIDC alongwith a copy of this judgment. We make it clear that no further time shall be allowed to set up the single window facility.
(11) The State Government shall frame a scheme for the use of the land which would become available on account of shifting/relocation of the industries before June 30, 1997. The State Government may seek guidance in this respect from the order of this Court dated May 10, 1996 in I.A. No. 22 in Writ Petition (Civil) No. 4677 of 1985.
(12) The shifting industries on the relocation in the new industrial estates shall be given incentives in terms of the provisions of the Agra Master Plan and also the incentives which are normally extended to new industries in new industrial estates.
(13) The workmen employed in the above mentioned 292 industries shall be entitled to the rights and benefits as indicated hereunder:
(a) The workmen shall have continuity of employment at the new town and place where the industry is shifted. The terms and conditions of their employment shall not be altered to their detriment.
(b) The period between the closure of the industry in Agra and its restart at the place of relocation shall be treated as active employment and the workman shall be paid their full wages with continuity of service.
(c) All those workmen who agree to shift with the industry shall be given one year's wages as 'shifting bonus' to help them settle at the new location. The said bonus shall be paid before January 31, 1998.
(d) The workmen employed in the industries who do not intend to relocate/obtain natural gas and opt for closure, shall be deemed to have been retrenched by May 31, 1997, provided they have been in continuous service (as defined in Section 25-B) of the Industrial Disputes Act, 1947) for not less than one year in the industries concerned before the said date. They shall be paid compensation in terms of Section 25-F(b) of the Industrial Disputes Act. These workmen shall also be paid, in addition, six years' wages as additional compensation.
(e) The compensation payable to the workmen in terms of this judgment shall be paid by the management within two months of the retrenchment.
(f) The gratuity amount payable to any workmen shall be paid in addition.
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By such directions, the Supreme Court ensured that coal/coke based industries within TTZ, which were the main cause of pollution, were either converted to gas based industries or they be located outside the TTZ or else they may shut down. The concept of use of natural gas for running the industries in the TTZ was itself introduced for the first time through the order dated 30.12.1996 passed by the Supreme Court. The direction of there being no coal/coke based industry in the TTZ was very clear for all industries.
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The supply of natural gas was to be made available by GAIL, for which an obligation was cast on GAIL to ensure such supply to the industries in Agra and Firozabad which opted for conversion to gas as fuel for running their industries instead of coal/coke. The initial supply of gas by GAIL was made to such industries at the administered price mechanism (APM), which included the cost price of natural gas produced by National Oil Companies plus some profit and transportation cost. As would be clear from the communication dated 1.7.2005 of the Government of India, APM gas, which may be termed as domestic natural gas at the administered price, was meant only for priority sectors such as Power and Fertilizer Industries as well as consumers covered under Court orders and Small Scale Consumers having allocation up to 0.05 MMSCMD.
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With the increase in demand of natural gas for running of industries in the TTZ, gas was imported by the Government of India through GAIL in liquefied form, known as re-gasified liquid natural gas (RLNG). This gas is procured at a much higher price than the domestic natural gas procured from National Oil Companies. The initial allocation of gas for TTZ was 0.6 MMSCMD, which was later increased to 1.1 MMSCMD, for supplies to the industries located in TTZ which had agreed to conversion of their industries from coal/coke to natural gas as fuel for running their industries under the orders of the Supreme Court. Such supply of gas was made at APM price fixed by GAIL and as per the orders/instructions/directions of the Government of India.
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Since the demand for natural gas increased in TTZ, supply beyond 1.1 MMSCMD was made by GAIL at RLNG price, which was higher than the APM price. The units which had converted to gas based industries had initially entered into agreements with GAIL for supply of such gas at a price which is termed as APM. The initial agreements by consenting industries with GAIL were entered in the year 1996, which were renewed from time to time and the last such agreements were entered into by such industries on 31.3.2006 which were valid from 1.4.2006 to 30.9.2010. No fresh agreements were entered thereafter and the supply of gas continued on the basis of temporary extensions.
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In the meantime, with effect from 29.9.2011, the supply of gas by GAIL was transferred to Gail Gas Ltd., which is a wholly owned subsidiary of Gail (India) Ltd. Representations by other industries (besides the ones which had initially converted to gas based industries under orders of Supreme Court) with regard to supply of gas and discrimination in pricing of gas, were filed before GAIL and Gail Gas Ltd. Thereafter, Gail Gas Ltd., by its order dated 19.7.2012, informed the consumers of natural gas in TTZ that it shall supply commingled gas under the uniform price mechanism (for short 'UPM') to all industrial consumers in the TTZ. It also informed that the commingled gas for supply at UPM was to comprise 1.1 MMSCMD of APM gas and such quantities of RLNG...
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