SC stays Guj HC order against GAIL on Rs 200 cr refund

The Supreme Court today stayed the Gujarat High Court order directing state-owned GAIL to refund Rs 200 crore it had collected from IPCL towards gas transportation charge.
The Gujarat High Court had asked GAIL to refund the money to Reliance Industries, the new owner of IPCL, as the pipeline used to transport gas to IPCL’s Gandhar plant was laid and owned by IPCL.
GAIL however contended that it had agreed to divert gas from its main HVJ pipeline to IPCL only on the condition that IPCL lays it and the state-run firm gets to charge transportation tariff.
Earlier, Gujarat High Court had struck down the clause relating to payment of transportation cost for supply of gas in the contract signed in 2001 between GAIL and IPCL.
IPCL had moved the High Court in 2006 contending that the clause in the contract for payment of transportation cost to GAIL was untenable.
A Single Bench order giving relief to the IPCL was confirmed by the Division Bench.
Aggrieved by the High Court verdict, GAIL moved the Supreme Court and today the apex court bench headed by Justice Arijit Pasayat issued notice to IPCL.
Solicitor General G E Vahanvati and Dev Dutt Kamat submitted that the court did not have the power to strike down the clause. It was unreasonable on the part of the High Court to entertain the petition regarding the contract which was entered in 2001.
Senior advocate Harish Salve, appearing for IPCL, contended that at two stage in the High Court the clause has been struck down and it should be taken into consideration.
Monday, July 21, 2008; Posted: 10:35 PM
New Delhi, Jul 21, 2008 (Asia Pulse Data Source via COMTEX)
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