Supreme Court

Essar Steel Ltd. v. Union of India (UOI) and Ors.

MANU/SC/0431/2016

19.04.2016

Constitution

Government’s pool pricing policy for natural gas upheld

The Supreme Court dismissed appeals against the government’s setting uniformly pool in the natural gas sector. The Government had contended that is uniform price pooling was within the executive powers vested, and government intervention had enabled provision of natural resources at lower rates.

Not inclined to not enter into the merits of the policy, reflecting “executive policies are usually enacted after much deliberation by the government”, the court restricted its remit to the usual factors of arbitrariness, unreasonableness and mala fide implementation of the policy.

It concluded that there is no legislative provision for fixing the price of Re-gasified Liquified Natural Gas, allowing government to take such decisions. Furthermore, the Supply Agreement between Appellants and the government stipulated a change in price of RLNG as a result of change in government policy. Moreover, the policy sought to unify prices in a non-discriminatory manner, preventing distinction between new and old customers.

Relevant

Association of Natural Gas v. Union of India MANU/SC/0267/2004
Jaipur Development Authority v. Vijay Kumar Data and Anr. MANU/SC/0827/2011
Villianur Iyarkkai Padukappu Maiyam v. Union of India MANU/SC/0811/2009

Tags : natural gas uniform pool pricing constitutionality

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