TRANSMISSION CORPORATION OF ANDHRA PRADESH LTD vs. M/S G M R VEMAGIRI POWER GENERATION LTD

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. 8747 of 2014 TRANSMISSION CORPORATION OF  ANDHRA PRADESH LTD. AND OTHERS   .......APPELLANT(S) VERSUS M/s. GMR VEMAGIRI POWER GENERATION LTD. AND ANOTHER        ......RESPONDENT(S) JUDGMENT NAVIN SINHA, J. The controversy for determination in the present appeal is, whether the word ‘fuel’ as used in clause 1.1.27 of the Power Purchase Agreement (hereinafter referred to as ‘PPA’) means   “natural   gas   only”   or   includes   Regasified   Liquefied Natural Gas (hereinafter referred to as ‘RLNG’) also. Signature Not Verified Digitally signed by VISHAL ANAND Date: 2018.02.16 15:31:35 IST Reason: 1 2. The Andhra Pradesh Electricity Regulatory Commission (hereinafter referred to as “the Commission”), in O.P. No. 20 of 2013 dated 08.08.2013, preferred by the respondent, held that the term ‘fuel’ as used in the PPA meant natural gas only in its natural form, and did not include RLNG.  Simply because the physical composition of natural gas and RLNG are similar, it does   not   automatically   entitle   the   respondent   to   generate power   with   RLNG,   which   was   more   expensive   and   not domestically available, affecting the per unit supply of power generated by it, as ultimately the consumer would have to pay more. 3.  In Appeal No. 222 of 2013 preferred by the respondent, the   Appellate   Tribunal   by   the   impugned   order   dated 30.06.2014 held that use of the word “only” after “natural gas” in the PPA dated 02.05.2007 had to be understood in context of the deletion of other alternate fuel such as Naphtha etc. incorporated in the earlier PPAs, and it was never intended to restrict the meaning of the word natural gas to exclude RLNG, 2 which was a variant of natural gas and did not come in the category of an alternate fuel.   It further held that the higher price of RLNG could not be a determinative factor to exclude it from the agreement as any increase in price of gas was an accepted   risk,   especially   in   view   of   the   non­availability   of natural gas from the KG­D6 basin.  The use of RLNG had also been permitted on earlier occasions without any amendment to the PPA. 4. The predecessor of the appellant, the Andhra Pradesh State   Electricity   Board,   in   May,   1995   invited   bids   for establishing     short   gestation   gas/Naphtha/fuel   oil   based power stations to bridge the demand supply gap of power in the State of Andhra Pradesh.   Pursuant to the same, a PPA was executed between the parties on 31.03.1997 under which Naphtha   was   the   primary   fuel   and   gas   an   alternate   fuel. Considering the high price of Naphtha, in March 2000, the Government   of   Andhra   Pradesh   decided   to   make   gas   the primary   fuel.     The   Ministry   of   Petroleum   on   05.06.2000 3 allotted 1.64 MMSCMD of natural gas to the respondent from the KG­D6 Basin sourced through the Gas Authority of India Ltd   (GAIL),   leading   to   a   gas   supply   agreement   dated 31.08.2001 between the respondent and the latter.  The PPA was   accordingly   amended   on   18.06.2003   making   gas   the primary   fuel   and   Naphtha   an   alternate   fuel.     The   PPA underwent further amendment on 02.05.2007, restricting the term ‘fuel’ to “natural gas only”.  A comparative status of the three PPA’s can beneficially be set out as follows:

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5. GAIL   having   been   unable   to   supply   gas   under   the agreement   due   to   prioritisation   of   other   sectors,   the respondent was permitted to purchase natural gas from M/s. Reliance Industries Ltd (RIL) at GAIL prices.  The respondent, on 07.08.2012 and 27.08.2012, sought permission to allow use   of   RLNG   as   fuel   for   generating   power.     The   appellant rejected the request on 10.09.2012 stating that under the PPA dated 02.05.2007, fuel meant “natural gas only” and did not include RLNG, which was priced much higher affecting the per unit price of power generated from the same to the ultimate detriment of the consumers. 6. Shri   Basava   Prabhu   Patil,   learned   senior   counsel appearing for the appellant, submitted that under the PPA, it was only natural gas in its natural form which was agreed to be used as fuel for generation of power.  Merely because RLNG 5 may be a variant of natural gas, will not suffice to bring it within the definition of fuel under the PPA.  The cost of RLNG being   three   to   four   times   higher   than   natural   gas,   the Commission rightly held that it was also a relevant factor to hold   that   RLNG   was   never   intended   by   the   parties   to   be included in the agreement.  7.  The word ‘fuel’, as defined in the agreement, had to be given its natural meaning by confining it to natural gas only as intended by the parties.  The definition could not be extended so as to include RLNG, as the parties never intended the same. There is no ambiguity in language warranting any inclusion to the definition either by implication or intention.  Even if there was   any   ambiguity   with   regard   to   the   intendment   of   the parties,   the   true   intent   has   to   be   gathered   from   the   plain meaning   of   the   words   used,   read   conjunctively   with   all surrounding   circumstances   and   documents.     Applying   the common   parlance   test,   RLNG   was   not   synonymous   with natural   gas   in   the   business   and   neither   interchangeable, 6 because of the additional processes required in the latter and the resultant higher cost involved including importation, as distinct   from   natural   gas   available   at   a   lesser   price   and domestically.  8. Under   the   PPA   dated   31.03.1997,   Naphtha   was   the primary fuel and gas was an alternate fuel.  Clause 3.3 dealing with energy charge defined cost of fuel based on indigenous and importation cost.  The PPA contemplated approval of the fuel supply agreement by the fuel supply committee, to ensure reasonable   prices   as   the   cost   of   power   generation   was   of paramount consideration in the interest of the consumer.  The cost of Naphtha being higher, the PPA came to be amended on 18.06.2003 making natural gas the primary fuel, and Naphtha an alternate fuel.  If RLNG was in contemplation of the parties, and was considered to fall within the term natural gas, there would   have   been   some   discussion   regarding   it   in   the deliberations   of   the   Commission   while   approving   the amendments   to   the   PPA,   especially   in   view   of   the   price 7 difference. Such absence makes it manifest that the parties never intended to include RLNG in the term natural gas.  The significance of the words “only” after “natural gas” in the third PPA   dated   02.05.2007   cannot   be   lost   sight   of.   It   was necessitated in context of the realization that the parties may have resorted to other costly alternate fuels consequent to the dismantling of the administered price mechanism and the fuel supply committee. 9. The fact that RLNG may have been permitted to be used for   a   short   period   of   seven   days   from   16.04.2009   to 23.04.2009 under pressing circumstances of a power crisis, by special orders under Section 11 of the Electricity Act, 2003 or again   for   a   short   duration   from   15.02.2011   to   31.05.2011 cannot be stretched to contend that RLNG was intended to be included   within   the   term   natural   gas.     The   cost   of   power generated from natural gas was Rs.1.75 per KWH while that from RLNG works out to Rs.4.63 per KWH and the financial burden for this short duration is Rs.427 crores.  In March and 8 April use of RLNG was permitted at per unit generation cost of Rs.9/­ compared to Rs.3/­ per unit with existing natural gas leading to a financial burden of Rs.3.7 crores per day.  These exceptions   can   never   be   construed   to   mean   the   norm   to contend that use of RLNG was always in the contemplation of the parties and was intended to be included within the term natural   gas.   The   very   fact   that   the   respondent   sought permission on 07.08.2012 and 27.08.2012 to use RLNG for power   generation   makes   it   manifest   that   even   as   per   its understanding,   RLNG   was   not   included   within   the   term natural   gas   according   to   the   intent   of   the   parties.     The appellant in its reply dated 10.09.2012 had reiterated that RLNG  did  not fall within  the ambit  of the  PPA which was confined to natural gas only citing the cost difference of power per unit also.  10. A contract document had to be interpreted in accordance with the language used, with reference to the context in which it came to be prepared.  A technical view of an agreement, torn 9 out of context, cannot be taken to reinterpret the agreement and arrive at a new finding with regard to the intendment of the parties by including something which was never intended to be included, to the prejudice of a party to the contract, while   giving   an   undue   advantage   to   the   other.   A   primary consideration will also be the understanding of the parties of the terms of the contract and what was intended, as reflected inter alia from their conduct.  The contract being a commercial document, utmost importance had to be given to its efficacy. Shri Patil, in support of the submissions placed reliance on Polymat India (P) Ltd. & Anr. vs. National Insurance Co. Ltd.   &   Ors.,   2005   (9)   SCC   174,   Gedela   Satchidananda Murthy vs. Dy. Commissioner, Endowments Department, A.P. & Ors.,  2007 (5) SCC 677,  Timblo Irmaos Ltd., Margo ., 1977 (3) SCC 474, vs. Jorge Anibal Matos Sequeira & Anr Sappani   Mohamed   Mohideen   and   Anr.   vs.   R.V. 1974   (1)   SCC   615, Sethusubramania   Pillai   and   Ors.,   Trutuf Safety Glass Industries vs. Commissioner of Sales 10 Tax, U.P.,   (2007) 7 SCC 242,   The Union of India vs. M/s.   1976  (4) SCC 147,   D.N.  Revri and Co. and Ors., Nabha Power Ltd. vs.  Punjab State Power Corporation  Ltd.  & 2017   SCC   Online   1239   and   Anr.,   Bharat   Aluminum Company vs. Kaiser Aluminum Technical Services Inc., 2016 (4) SCC 126. 11. Shri Vikas Singh, learned senior counsel appearing for the Respondent, submitted that the original bid documents permitted import of fuel also, and fuel tie up linkage was the responsibility   of   the   bidder.   The   Respondent   invested approximately   Rs.1153.10   crores   in   setting   up   the   power generation plant, of which, 68.29% of the funding was from banks   and   financial   institutions.     The   plant   has   operated intermittently for approximately 64 months only in the last 11 years.     The   conduct   of   the   appellant   in   not   accepting availability declaration with regard to RLNG was unjustified. The appellant was well aware of the possibility of future hike in gas prices, and more particularly after dismantling of the 11 administrated   price  mechanism  inclusive  of   inflation,   all of which would make the gas prices market driven.   Therefore, merely because the cost of RLNG was higher could not be a ground to contend that it was never intended to be included within the definition of natural gas or was contrary to interest of   the   consumer.   RLNG   was   but   a   form   of   natural   gas, compressed for transformation from gaseous to liquid state, reducing the volume to facilitate transportation in a safe and stable   manner.   Once   delivered   at   the   destination,   it   is regasified and then supplied to the consumer.  Even according to the dictionary meaning they are the same. 12. The deletion of the words “intended to be used” after the words   “natural   gas”,   as   used   in   the   second   PPA,   and   the replacement thereof in the third PPA by the words “natural gas only” gave a much wider meaning and amplitude to the word natural gas so as to take within its ambit RLNG also.   The deletion of “importation charges” in the PPA dated 18.06.2003 was of no significance as RLNG was to be delivered at the 12 project site through the pipeline, and the cost of fuel was to be at   the   metering   point   at   the   project   site,   which   would   be inclusive   of   importation   cost.   Evidently   there   would   be   no separate charges by GAIL towards importation of RLNG. So long   as   the   supplies   were   at   GAIL   prices,   the   appellants cannot raise objections with regard to price.  13. The term natural gas has not been defined under the PPA. The definition of natural gas in Section 2(za)(i) of the Petroleum   and   Natural   Gas   Regulatory   Board   Act,   2006 (hereafter   referred   to   as   the   “PNGRB   Act”)   includes   both liquefied natural gas (LNG) and RLNG. The appellants on more than one occasion had themselves permitted use of RLNG for production   of   power   in   2011,   2012   and   2013.     It   is demonstrative of the fact that RLNG was never intended to be excluded under the PPA.   It was only when the respondent wrote to the appellant for operationalising the RLNG scheme, that the appellant replied on 27.03.2015 raising objection to RLNG being outside the terms of the PPA.  The respondent had 13 never sought permission from the appellant for use of RLNG by its letters dated 07.08.2012 and 27.08.2012, but merely given intimation about what was otherwise permissible under the   PPA.   After   the   dismantling   of   the   administered   price mechanism   and   the   fuel   Supply   Committee,   there   was   no requirement for consent or approval of the appellant. 14. The  appellant having  itself  permitted use  of  RLNG on more   than   one   occasion,   cannot   contend   its   exclusion especially   when   the   agreement   clearly   is   suggestive   of   its inclusion.   Alternately, there had been waiver on part of the appellant   by   having   permitted   its   use   on   more   than   one occasion.  The appellant cannot be permitted to approbate and reprobate.   Natural gas had been defined in   Association of 2004 (4) SCC Natural Gas & Ors. vs. Union of India & Ors.,  489. The plea that power generated by RLNG would be more costly and not in the interest of the consumer is belied by the fact that today the appellant is purchasing power at higher 14 rate. The Director General, Petroleum Planning and Analysis Cell   had   now   fixed   price   for   marketing   including   pricing freedom for gas to be produced from discoveries in deepwater, ultra­deepwater and high pressure­high temperature areas for the period 01.04.2016 to 31.09.2016 at US$ 6.61/MMBTU on GCV   basis.     On   05.05.2016,   the   respondent   wrote   to   the appellant informing that GAIL had communicated that ONGC has indicated availability of the gas in the KG basin from its deepwater fiels­S1 and VA fields at the rate of 6.3$/MMBTU even which has not been acceded to, as being beyond the PPA. 15.  We have  considered  the submissions  on  behalf  of the parties, and are not in agreement with the conclusions of the Appellate Tribunal. 16. The original PPA dated 31.03.1997, provided for Naphtha to be used as the primary fuel for generation of power and gas was an alternate fuel. Importation was also permissible.  The 15 price was to be fixed by the fuel supply committee, both to keep it reasonable, and to ensure that the cheaper option was always   used.   In   March   2000,   the   Government   of   Andhra Pradesh, due to the cost factor, decided to replace gas as the primary fuel, and Naphtha was made an alternate fuel leading to allotment of natural gas by the Ministry of Petroleum and execution of an agreement between the respondent and GAIL. The PPA was then amended on 18.06.2003 making gas the primary fuel.  Subsequently, when GAIL was unable to supply the   allocated   quantities   of   natural   gas   to   the   respondent because of sector prioritisation, the respondent was permitted to obtain supplies of natural gas from RIL.   The realisation that in the circumstances, the generator could resort to use of other costly fuels also, led to the third amended PPA dated 02.05.2007 confining the definition of ‘fuel’ to “natural gas only”.  17. It   is   relevant   to   notice   that   at   both   stages   of   the amendment   to   the   PPA,   in   the   proceedings   before   the 16 Commission   under   Section   21(5)   of   the   Andhra   Pradesh Electricity Reforms Act, 1998, the parties never referred to the availability   of   RLNG   as   fuel   contemplated   within   the   term “natural gas” and the discussion was confined to “natural gas only”.  Had the parties intended otherwise, or the respondent had any such inkling in mind of RLNG being a variant of natural gas and consequently intended to be included in it, coupled with its availability as compared to natural gas, surely it would have figured in the discussion before the Commission. The absence of the same, combined with RLNG having to be imported,   deletion   of   the   importation   clause   in   the   PPA  of 18.06.2003, the higher price of RLNG, leads to the inevitable conclusion   that   it   was   never   in   the   contemplation   of   the parties that RLNG was to be included in the term “natural gas” even though it may be a variant of the same.   It stands to reason that if Naphtha was removed as primary fuel because of the cost factor and made an alternate fuel in the second amendment to the PPA, the question of RLNG being included 17 within the term of “natural gas only” irrespective of the cost factor, will not stand the test of reason. 18. A wrong question will inevitably lead to a wrong answer. The question for consideration presently is not if RLNG is a form   of   natural   gas,   but   whether   the   parties   intended   to exclude   any   form   of   gaseous   fuel   from   the   ambit   of   the contract except for natural gas in its natural form from the domestic   market,   keeping   the   price   of   gas   in   mind,   which would ultimately set the price per unit of electricity for the consumer. The PPA is a technical commercial document.   It has been drafted by persons conversant with the business. RLNG   and   natural   gas   as   used   in   the   agreement   are   not synonymous   or   interchangeable.   The   principle   of   business efficacy will also have to be kept in mind for interpreting the contract.  The terms of the agreement have to be read first to understand   the   true   scope   and   meaning   of   the   same   with regard to the nature of the agreement that the parties had in mind.  It will not be safe to exclude any word in the same.  In 18 Khardah Company Ltd. vs. Raymon & Co. (India) Private,

observed as follows:

19.     It will not be a safe method to interpret a contract by picking   out   one   clause   of   the   same   defining   fuel,   apply   a technical   scientific   meaning   to   it   as   observed   in   Truetuf (supra) and then conclude that being Safety Glass Industries  19 a form of natural gas, RLNG was intended to be impliedly included in the definition of fuel.  The terms of a contract have to be given their plain meaning with regard to the intendment of the parties as to what was intended to be included and what was not intended to be included, as distinct from an express exclusion. The commercial parlance test will also have to be applied as to whether those in the business consider the two forms   of   gas   as   synonymous   and   interchangeable.   Quite obviously the answer has to be in the negative considering the importation of RLNG, additional processes involved and the consequent higher costs involved.  20.  In the event of any ambiguity arising, the terms of the contract   will   have   to   be   interpreted   by   taking   into consideration   all   surrounding   facts   and   circumstances, including   correspondence   exchanged,   to   arrive   at   the   real intendment of the parties, and not what one of the parties may contend subsequently to have been the intendment or to say 20 as included afterwards, as observed in  Bank of India & Anr.

21.  The   respondent’s   letters   dated   07.08.2012   and 27.08.2012 become crucially relevant for the understanding that it was itself under no misapprehension that RLNG was never intended to be included within the definition of natural gas under the contract. In the former, the respondent wrote, “We await the confirmation from your good office to take it up further for obtaining necessary consent, if any, in accordance with law for use of RLNG and the resultant tariff increase.” The   latter   again   requested   for   permission   to   use   RLNG   to 21 supplement shortfall in gas from the KG­D6 Basin, requesting to acknowledge its usage. The contention of the respondent that   these   were   only   intimations   and   not   request   for permission to use RLNG stands belied from the plain language used in them.   The appellant in its reply dated 10.09.2012 explicitly stated that under the agreement no other fuel except natural   gas   could   be   used   and   that   RLNG   was   never contemplated in the definition of fuel declining to accept the spot supply agreement for RLNG supplies, citing the cost of power per unit from the same at Rs.9­10 in comparison to Rs.3/­ per unit from natural gas.   It is only thereafter the respondent approached the Commission in OP No.20 of 2013. The pleadings of the respondent, as quoted hereinafter, further confirm its own understanding that RLNG was never intended to be included in the definition of fuel which was confined to natural gas only :­ “9.   Since   the   above   scenario   affects   the generation   activities   of   the   Petitioner,   the Petitioner   proposed   to   use   RLNG.     In   this respect,   the   Petitioner   has   already   made representations to the Respondent Nos. 2 and 3 22 vide its letters dated 7.8.2012 and 27.8.2012 (produced   as   Annexures   P­2   and   P­3 respectively).     In   both   these   letters,   the Petitioner appealed to the said Respondents to allow   usage   of   RLNG   and   substantiated   the circumstances/reasons for the said request of the petitioner. 10. To   the   utter   surprise   and   shock   of   the Petitioner,   instead   of   acceding   to   the   above requests of the Petitioner, the Respondent No.3 has   rejected   the   above   requested   of   the Petitioner vide its letter dated 10.09.2012.” 22. The sporadic use of RLNG on one or two occasions under pressing circumstances, after due orders under Section 11 of the Electricity Act, 2003, for short durations, cannot make the exception the norm to contend either that RLNG was included in the term fuel or that the appellant had agreed to its use. The question of waiver by the appellant or application of the principle of approbate and reprobate does not arise in the facts of the case.

generated from fuel which was reasonably priced so as to keep 23 in check the cost of power generated from the same, in the interest of the consumer.   Undoubtedly, cost of fuel was a primary   consideration   in   the   mind   of   the   appellant.     The contextual background in which the PPA originally came to be made, the subsequent amendments, the understanding of the respondent   of   the   agreement   as   reflected   from   its   own communications   and   pleadings   make   it   extremely   relevant that   a   contextual   interpretation   be   given   to   the   question whether RLNG was ever intended to be included within the

24. In the facts and circumstances of the present case, there can be no manner of doubt that the parties by their conduct and dealings right up to the institution of proceedings by the respondent   before   the   Commission   were   clear   in   their 24 understanding that RLNG was not to be included within the term   “Natural   Gas”   under   the   PPA.   The   observations   in   (supra)   are   considered Gedela   Satchidananda   Murthy apposite in the facts of the present case :­ “32…The principle on which Miss Rich relies is that   formulated   by   Lord   Denning,   M.R.   in Amalgamated Investment & Property Co. Ltd. v.   Texas­Commerce   International   Bank   Ltd., [1982] 1 QB at p.121:  ‘If parties to a contract, by their course of dealing, put a particular interpretation on the terms of it—on the faith of which each of them—to the knowledge of the other—acts and conducts their mutual affairs—they are bound by that interpretation just as much as if they had written it down as being a variation of the contract. There is no need to inquire   whether   their   particular interpretation is correct or not—or whether they were mistaken or not—or whether they had   in   mind   the   original   terms   or   not. Suffice it that they have, by their course of dealing,   put   their   own   interpretation   on their contract, and cannot be allowed to go back on it.’  (emphasis supplied)" 25. A   commercial   document   cannot   be   interpreted   in   a manner   to   arrive   at   a   complete   variance   with   what   may 25 originally have been the intendment of the parties. Such a situation can only be contemplated when the implied term can be considered necessary to lend efficacy to the terms of the contract.   If   the   contract   is   capable   of   interpretation  on  its plain meaning with regard to the true intention of the parties it   will   not   be   prudent   to   read   implied   terms   on   the understanding   of   a   party,   or   by   the   court,   with   regard   to business efficacy as observed in  Satya Jain (D) thr. Lrs. & , (2013) 8 Ors. vs. Anis Ahmed Rushdie (D) thr. Lrs. & Ors. SCC 131, as follows:­  “33. The   principle   of   business   efficacy   is normally   invoked   to   read   a   term   in   an agreement   or   contract   so   as   to   achieve   the result   or   the   consequence   intended   by   the parties   acting   as   prudent   businessmen. Business efficacy means the power to produce intended results. The classic test of business efficacy   was   proposed   by   Lord   Justice Bowen,L.J.   in   Moorcock.   This   test   requires that   a   term   can   only   be   implied   if   it   is necessary   to   give   business   efficacy   to   the contract   to   avoid   such   a   failure   of consideration   that   the   parties   cannot   as reasonable   businessmen   have   intended.   But only   the   most   limited   term   should   then   be implied–the   bare   minimum   to   achieve   this goal.   If   the   contract   makes   business   sense 26 without the term, the courts will not imply the same. The following passage from the opinion of Bowen, L.J. in the Moorcock (supra) sums up the position: (PD p.68) “…In business transactions such as this, what the law desires to effect by the implication is to give such business efficacy to the transaction as must have been   intended   at   all   events   by   both parties who are business men; not to impose on one side all the perils of the transaction, or to emancipate one side from all the chances of failure, but to make   each   party   promise   in   law   as much,   at  all  events,  as   it  must  have been   in   the   contemplation   of   both parties that he should be responsible for   in   respect   of   those   perils   or chances.” 34. Though in an entirely different context, this court in United India Insurance Co. Ltd. v. Manubhai Dharamasinhbhai Gajera and Ors. had   considered   the   circumstances   when reading an unexpressed term in an agreement would be justified on the basis that such a term   was   always   and   obviously   intended   by and   between   the   parties   thereto.   Certain observations   in   this   regard   expressed   by Courts   in   some   foreign   jurisdictions   were noticed by this court in Para 51 of the report. As   the   same   may   have   application   to   the present case it would be useful to notice the said observations :(SCC p.434) “51. …’…”Prima facie that which in any contract is left to be implied and need not   be   expressed   is   something   so obvious that it goes without saying; so 27 that, if, while the parties were making their   bargain,   an   officious   bystander, were to suggest some express provision for   it   in   their   agreement,   they   would testily   suppress   him   with   a   common ‘Oh, of course!’ ‘’ Shirlaw v. Southern Foundries (1926) Ltd., KB p.227.’ * “An expressed term can be implied if and only   if   the   court   finds   that   the   parties must have intended that term to form part of their contract: it is not enough for the court to find that such a term would have been   adopted   by   the   parties   as reasonable men if it had been suggested to them: it must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, although tacit, formed part of the contract which the parties made for themselves.   Trollope   and   Colls   Ltd.   v. North   West   Metropolitan   Regl.   Hospital Board, All ER p.268a­b.’ ” 35.   The   business   efficacy   test,   therefore, should be applied only in cases where the term that is sought to be read as implied is such   which   could   have   been   clearly intended   by   the   parties   at   the   time   of making of the agreement...” 26.  The  definition of   natural gas in  Section  2(za)(i)  of the PNGRB Act, has no relevance to the present controversy as the 28 Act   was   enacted   with   the   object   to   oversee   and   regulate refining, processing, distribution and marketing of petroleum products and natural gas.  Similarly, the observation made in   (supra)   in   context   of   the Association   of   Natural   Gas controversy with regard to legislative entry has no relevance to the interpretation of the PPA.  27. The   aforesaid   discussion,   therefore,   leads   to   the inevitable conclusion that the intention of the parties under the agreement, as amended from time to time, was to generate power from fuel reasonably priced, so as to ultimately make available  power  to  the   consumers   at reasonable   rates.  The choice   of   fuel   as   natural   gas   only   has,   therefore,   to   be understood as being confined to natural gas only in its natural form. The respondent was well aware that RLNG was never intended to be included in the definition of natural gas as understood by the parties, notwithstanding that it may be a variant of natural gas. 29 28. The appeal, therefore, has to be allowed, the Appellate Tribunal   judgment   is   reversed,   and   the   Commission   order dated 08.08.2013 is affirmed. ……………………………….J.  (Rohinton Fali Nariman )        …….………………………..J.    (Navin Sinha)  New Delhi, February 16, 2018 30