Ccpl Developers Pvt. Ltd. & Anr v. Gail (India) Limited

RAJIV SAHAI ENDLAW, J. DECEMBER 15, 2015 bs/gsr (corrected and released on 12th January, 2016)

*IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 15th December, 2015 + W.P.(C) No.11621/2015 CCPL DEVELOPERS PVT. LTD. & ANR. ….. Petitioners Through: Mr. Parag P. Tripathi, Sr. Adv. with Mr. Ashish Mohan and Mr. Mohit Kumar, Advs. Versus GAIL (INDIA) LIMITED ….. Respondent Through: Mr. Arvind Nayar, Mr. Shashi Mohan and Ms. Nanda Devi Deka, Advs. CORAM:- HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW CM No.30820/2015 (for exemption) 1. Allowed, subject to just exceptions. 2. The application is disposed of. W.P.(C) No.11621/2015 & CM No.30819/2015 (for stay) 3. The petition seeks quashing of (i) Article 14 of the Gas Sales Agreement (GSA) dated 26th December, 2008 between the petitioner No.1 and the respondent GAIL (India) Limited on the ground of being onerous, arbitrary, illegal, mala fide, unreasonable, harsh and against public policy and thus void; and (ii) quashing of Article 19 of the said Agreement to the extent that it does not provide for right of termination to the petitioners in the event of the petitioners being unable or unwilling to purchase / consume gas allocated by respondent particularly due to non-requirement, on the ground of being onerous, arbitrary, illegal, mala fide, unreasonable, harsh and against public policy and thus void. 4. It is the case of the petitioners: (i) that the petitioners are engaged in the business of constructing and managing Shopping Complexes, Malls and other real estate and for the purposes of the various units in the East Delhi Mall, situated at plot No.1, Kaushambi, Ghaziabad, Uttar Pradesh were in need of Regenerated Liquefied Natural Gas (RLNG) as an alternate source for generation of electricity at the Mall during power cuts; (ii) that the respondent at the relevant time was the only supplier of RLNG in the area where the aforesaid Mall is located and anyone, in the year 2004, if in need of RLNG, could enter into a contract for supply thereof with the respondent only; the respondent was thus then enjoying monopolistic position and had superior bargaining power; (iii) that the petitioners accordingly approached the respondent and the respondent made the petitioners sign a standard form agreement dated 14th September, 2004 with the price stated therein being valid until 1st January, 2009 and a new agreement to be executed by 30th September, 2008; (iv) that the respondent made the petitioners sign a new contract namely Gas Sale Agreement (GSA) dated 26th December, 2008 on the dotted lines; the terms and conditions mentioned in the said agreement were pre-determined by the respondent and are patently onerous and formulated without discussing or taking consent of the petitioners; the respondent even then was the only supplier of RLNG in the area where the Mall of the petitioners is located; (v) that the entire contract nowhere provides for termination of the same by the petitioners as buyer in the event of the petitioners not willing to buy RLNG or having no further requirement for the same or if unable to run their business for any reason whatsoever; (vi) that the provision in the agreement for payment by the petitioners for allocated RLNG despite non-consumption thereof is patently unfair, unreasonable, illegal, arbitrary and unjust and against public policy and violative of Article 14 of the Constitution of India; (vii) that the petitioners now, because of the better availability of the power supply from the grid, have no further requirement for RLNG and their requirement for RLNG has thus substantially reduced; (viii) that even till now only 60% of the units in the mall are occupied and the balance 40% are lying vacant; (ix) that the petitioners vide communication dated 14th May, 2013 to the respondent informed of the aforesaid and requested the respondent not to charge the petitioners for the minimum quantity which the petitioners in the agreement had agreed to consume and / or pay for; (x) that however inspite of repeated reminders of the petitioners, the respondent did n