Content Provider | Supreme Court of India |
---|---|
e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Commercial Contract Maintainability of writ petition Unequal bargaining power |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Act(s) Referred | Constitution of India |
Case(s) Referred | Referred Case 0 Referred Case 1 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Constitution of India – Arts. 226, 12, 14 – Commercial Contract – Unequal bargaining power – Maintainability of writ petition – Ministry of Petroleum and Natural Gas issued a letter for allocation of natural gas to IPCL (formerly a PSU) – IPCL entered into a contract with GAIL for supply of natural gas – As per the allocation terms, IPCL had to lay down its own pipelines and those pipelines alone were utilised for carrying gas – IPCL laid down pipelines – However, GAIL levied charge for ‘loss of transportation charges’ in terms of the contract – Clauses of the contract levying such charges were challenged by IPCL after five years of entering into the contract – Clauses quashed – Justification of – Held: Although the dispute arises from a commercial contract, the writ petition was maintainable – At the time of entering into contract, GAIL was enjoying a monopolistic position w.r.t the supply of natural gas in the country – IPCL, having incurred a significant expense in setting up the appropriate infrastructure, had no choice but to enter into agreement with GAIL – Thus, there was a clear public element involved in the dealings between the parties – Writ jurisdiction can be exercised when the State, even in its contractual dealings, fails to exercise a degree of fairness or practices any discrimination – GAIL’s action in levying ‘loss of transportation charges’ was ex facie discriminatory, insofar as IPCL was mandated to build its own pipeline in terms of the allocation letter and was not using GAIL’s pipeline at all – GAIL exercised an unequal bargaining power at the time of signing the contract – The contractual exercise of providing such a clause runs contrary to every commercial and common sense and is arbitrary – While, the quashing of the clauses is upheld, the refund is restricted to a period of three years prior to the date of the filing of the writ petition on account of IPCL’s delay in approaching the court. |
Judge | Hon'ble Mr. Justice Sanjay Kishan Kaul |
Neutral Citation | 2023 INSC 103 |
Petitioner | M/s. Gail (india) Limited |
Respondent | M/s. Indian Petrochemicals Corp. Ltd. & Ors. |
SCR | [2023] 2 S.C.R. 326 |
Judgement Date | 2023-02-08 |
Case Number | 3504 |
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