JUDGMENT :

Sanjay Kishan Kaul, J.

1. M/s Gas Authority of India Limited (for short ‘GAIL’), the appellant herein, is a Government of India undertaking, incorporated on 16.08.1984, engaged primarily in the activity of providing services for the utilisation of natural or associated gas. Indian Petrochemicals Corporation Ltd. (for short ‘IPCL’), respondent no.1 herein, formerly a public sector undertaking, is engaged in the manufacture of petrochemicals. It ceased to be a public undertaking w.e.f. June 2002, when 26% of its shares were sold to Reliance Petroinvestments Ltd. in line with the Government’s disinvestment policy. Respondent no. 2 is a shareholder of IPCL and respondent no. 3 is the Union of India.

Background

2. On 01.01.1999, the Ministry of Petroleum and Natural Gas, Government of India (hereinafter referred to as ‘MoPNG’), the allocating and price-fixing authority for natural gas, issued a letter for allocation of natural gas to IPCL. IPCL was allotted 0.85 MMSCMD of semi-rich gas on firm basis from Hazira to IPCL’s Gandhar Unit (at Dahej) for extraction of C-2 and C-3 fractions. The same was made subject to the following conditions:

“(i) Signing of gas supply contract with G