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2018 Supreme(Gau) 885

IN THE HIGH COURT OF GAUHATI
Kalyan Rai Surana, J.
Segunbari Tea Company - Appellant
Vs.
Assam Gas Company Limited - Respondent
First Appeal From Order No. 35 of 2018
Decided On : 26-09-2018

Advocates Appeared:
B. Dutta, Adv., K.H. Choudhury, Adv.

The main legal point established in the judgment is the application of the principles for grant of ad-interim injunction and the interpretation of contractual rights and obligations under the Indian Contract Act, 1872 and the Specific Relief Act, 1963.

Headnote:

natural gas supply - contractual dispute - - [Indian Contract Act, 1872 - Section 73, Indian Contract Act, 1872 - Section 74, Specific Relief Act, 1963 - Section 37] - The court discussed the contractual dispute regarding the supply of natural gas, focusing on the interpretation of the agreement between the parties, the billing process, and the enforcement of dues. The key legal provisions of the Indian Contract Act, 1872 - Section 73 and Section 74, and the Specific Relief Act, 1963 - Section 37 were considered in determining the rights and obligations of the parties.

Fact of the Case:

The appellant, a consumer of piped natural gas, entered into agreements with the respondent for supply. A dispute arose regarding the enhancement of the booked quantity of piped natural gas and the billing for excess gas consumption.

Finding of the Court:

The court found that the appellant had consumed more gas than the approved limit and had failed to pay the billed amount. The court also noted that the respondent had the right to enforce its dues.

Issues: The issues revolved around the interpretation of the agreements, billing for excess gas consumption, and the legality of the demand for dues by the respondent.

Ratio Decidendi: The court held that the learned trial Court had exercised jurisdiction with material irregularity by refusing injunction and then proceeding to grant a temporary injunction in mandatory form. The court also found the presence of all the three golden principles for grant of ad-interim injunction.

Final Decision: The appeal was partly allowed with modification of the impugned order, providing specific directions for the appellant to make payments and for the respondent to continue the supply of piped natural gas.

JUDGMENT :

Kalyan Rai Surana, J.

Heard Mr. B. Dutta, learned counsel for the appellant as well as Mr. K. H. Choudhury, learned senior counsel assisted by Mr. S. Muktar, learned counsel for the respondent/caveator.

2. By this appeal under Order 43 Rule 1(r) CPC, the appellant has challenged the order dated 25.05.2018 passed by the learned Civil Judge, Dibrugarh in Misc. (J) 28/2016 in Title Suit No. 21/2016, thereby granting conditional injunction. With the consent of both sides, this appeal was heard along with the accompanying I.A.(Civil) No. 2294/2018.

3. Bereft of the details, it would be sufficient to mention here that by virtue of an agreement dated 12.05.2005, the appellant, who is consumer of piped natural gas for its tea factory had booked for the supply of piped natural gas of 164.000 SCUM per annum from the respondent, who is the transporter of pipe natural gas, which is being supplied in this case from the Oil India Ltd. The agreement dated 12.05.2005 for such supply expired on 11.05.2010. On 04.03.2015 another agreement w.e.f. 12.05.2010 to 11.05.2015 was entered between the parties, wherein the booked quantity of piped natural gas was 164.000 SCUM per annum, or 0.449 SCUM per day or 0.019 SCUM per hour (figure in 1000 SCUM).

4. By an Amendment Agreement dated 21.04.2015, the booked quantity of piped natural gas was enhanced from 164.000 SCUM to 536.595 SCUM, requiring the appellant to deposit a further security of Rs. 28,63,000/- with the respondent. It is this amendment agreement, which is the cause of the dispute between the parties.

5. While the petitioner projects that the amendment had taken effect from the effective date of the previous agreement i.e., 12.05.2010, in so far as the booked quantity of piped natural gas is concerned, whereas stand of the respondent is that as per amendment agreement, the enhancement of the booked quantity of the piped natural gas would come into effect only from the 21.04.2015, being the effective date of agreement, which would not have any retrospective effect from 12.05.2010.

6. It is projected by the respondent that the piped natural gas supply from 12.05.2010 to 21.04.2015, the bills were raised in respect of the booked quantity of 164.000 SCUM at the APM (i.e. Administrative Price Mechanism) rate, whereas, the excess quantity drawn over and above the booked quantity of 164.000 SCUM, price was charged at the non- APM rates, which is also known as "market driven price".

7. Accordingly, as per the stand of the respondent, there was an unpaid balance of Rs. 106.14 lakh in respect of the 'natural gas' supplied for the period from 12.05.2010 to 21.04.2015. However, the stand of the appellant is that the respondent could not have raised the bill for Rs. 106.14 lakh, as the said amount was not due and payable by the appellant. Accordingly, the appellant had filed a suit before the learned Civil Judge, Dibrugarh for declaration and injunction, inter-alia, praying for a declaration that the demand made by letter dated 23.11.2015 for a sum of Rs. 106.14 lakh was illegal, arbitrary and not binding, and for a perpetual injunction from giving effect to and for enforcing the said demand letter and for mandatory injunction, directing the respondent to resume supply of piped natural gas, etc.

8. The said suit was registered as Title Suit No. 21/2016, along with the said application, a separate ad-interim injunction, which was registered as Misc. (J) Case No. 28/2016.

9. The respondent contested the said injunction application and upon hearing the learned counsel appearing for both the parties, the learned Civil Judge, Dibrugarh, arrived at the conclusion that the appellant had consumed more gas than the approved booked limit as mentioned in the agreement and it had failed to pay the billed amount and by prima-facie concluding that the extra quantity of gas consumed by the appellant would attract non-APM price, the learned trial Court had passed a conditional injunction order by directing the appella














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