JUDGMENT

SURINDER SINGH NIJJAR, J. –

1. The appellant, Oil and Natural Gas Corporation Ltd. is a statutory corporation constituted by and under the Oil and Natural Gas Commission Act, (Central Act, 43 of 1959). In 1967, the appellant commenced supply of natural gas to the industries in and around Vadodra. The Federation of Gujarat Mills and Industries agreed to purchase the gas supplied by ONGC at Rs.100/- per unit.

2. The industries subscribing to the gas supplied by the appellant formed an association in 1978 called “The Association of Natural Gas Consuming Industries of Gujarat” (hereinafter referred to as ‘Association’). Respondent- Ambica Mills Co. Ltd. is one among the members of the said Association. The supply of gas to the member industries was based on individual contracts entered into with each of the concerns. The appellant and the members of the said Association entered into an agreement for supply of natural gas. The agreement provided the price payable for supply of gas and the rate of interest in the event of failure to pay the stipulated prices.

3. On 30th March, 1979, the contractual period of the aforesaid contract expired. After the expiry of the contract, a new c