PETROLEUM AND NATURAL GAS REGULATORY BOARD ACT, 2006

Subject Matter : Fuel coverd under Natutal Gas.
Relevant Section : Section 2: A natural gas means gas obtained from bore holes and consisting primarily of hydrocarbons and includes gas in liquid state, compressed, imported through transnational pipe lines, from gas hydrates as natural gas, methane gas and does not include any other fuel.
Key Issue : Whether word 'fuel' used in Power Purchase Agreement means 'natural gas only' or includes RLNG?
Citation Details : Transmission Corporation of Andhra Pradesh Ltd. and Ors. vs. GMR Vemagiri Power Generation Ltd. and Ors.(16.02.2018-SC): MANU/SC/0132/2018
Summary Judgment :

Facts: The Appellant had invited bids to establish power stations to bridge the demand supply gap of power in the State. Thereafter a gas supply agreement was entered with Respondent and then appellant was unable to supply gas under the agreement, thus Respondent was permitted to purchase natural gas from others. The PPA was further amended to all only natural gas, the Respondent sought permission to use RLNG as fuel for generating power and the Appellant rejected request stating that RLNG price is higher to affecting the price of power generated. Thereafter the appeal was held at Appellate Tribunal and it held RLNG as a natural gas variant and could not be considered as an alternate fuel.

Held: The intention of the parties was to generate power from fuel at reasonable price to make available power to consumers at reasonable rates. Therefore the choice of fuel as only natural gas has to be understood as being confined to natural gas in its natural form. The Respondent was well aware that RLNG was never intended to be included in the definition of natural gas by the parties although it may be a variant of natural gas.

Subject Matter : Fuel coverd under Natutal Gas.
Relevant Section : Section 21: An entity engaged in both marketing of natural gas operating a pipeline for transportation of natural gas on common carrier shall require permission to separate the activities of marketing of natural gas and the transportation including ownership of the pipeline within period allowed by the Board and only within said period, such entity shall have right of first use.
Key Issue : Whether word 'fuel' used in Power Purchase Agreement means 'natural gas only' or includes RLNG?
Citation Details : Transmission Corporation of Andhra Pradesh Ltd. and Ors. vs. GMR Vemagiri Power Generation Ltd. and Ors.(16.02.2018-SC): MANU/SC/0132/2018
Summary Judgment :

Facts: The Appellant had invited bids to establish power stations to bridge the demand supply gap of power in the State. Thereafter a gas supply agreement was entered with Respondent and then appellant was unable to supply gas under the agreement, thus Respondent was permitted to purchase natural gas from others. The PPA was further amended to all only natural gas, the Respondent sought permission to use RLNG as fuel for generating power and the Appellant rejected request stating that RLNG price is higher to affecting the price of power generated. Thereafter the appeal was held at Appellate Tribunal and it held RLNG as a natural gas variant and could not be considered as an alternate fuel.

Held: The intention of the parties was to generate power from fuel at reasonable price to make available power to consumers at reasonable rates. Therefore the choice of fuel as only natural gas has to be understood as being confined to natural gas in its natural form. The Respondent was well aware that RLNG was never intended to be included in the definition of natural gas by the parties although it may be a variant of natural gas.

Subject Matter : Authorisation and Technical Member.
Relevant Section : Section 16: No shall entity operate any pipeline as common carrier or contract carrier or any city or local natural gas distribution network without obtaining authorisation granted by the Board.
Key Issue : Whether the Board can be construed to have laid down an absolute norm for bidders?
Citation Details : Adani Gas Limited vs. Petroleum and Natural Gas Regulatory Board and Ors. (17.02.2020 - SC): MANU/SC/0193/2020
Summary Judgment :

Facts: The Petroleum Natural Gas Regulatory Board conducted the 9th round of bidding for Local Natural Gas Distribution Networks notifying details of the successful bidders in various Geographical Areas. The contest in the present batch of appeals has arisen over the grant of authorisation for laying, building, operating or expanding CGD networks. Thus the appeal was instituted by Adani Gas Limited at Appellate Tribunal for Electricity. By their separate judgments the Chairperson and Member Technical rendered divergent findings which the Chairperson directed that the proceedings in the appeals be placed before the judicial member. The judicial member recused from hearing the appeals. This led to the institution of the present appeals before this Court.

Held: The Board cannot be construed to have laid down an absolute norm by which bids quoting below the minimum of 2% or above the ceiling of 100% of the number of households under census data would automatically be rejected as unreasonable. If the Board note were to be construed in the manner in which Adani and others urged, the automatic disqualification of bidders based on a criterion introduced by the Board note would raise serious doubts about its fairness and legality.

Subject Matter : Authorisation and Technical Member.
Relevant Section : Section 31: No person shall be appointment as a Technical Member of the Appellate Tribunal if he is not qualified under this act.
Key Issue : Whether the Board can be construed to have laid down an absolute norm for bidders?
Citation Details : Adani Gas Limited vs. Petroleum and Natural Gas Regulatory Board and Ors. (17.02.2020 - SC): MANU/SC/0193/2020
Summary Judgment :

Facts: The Petroleum Natural Gas Regulatory Board conducted the 9th round of bidding for Local Natural Gas Distribution Networks notifying details of the successful bidders in various Geographical Areas. The contest in the present batch of appeals has arisen over the grant of authorisation for laying, building, operating or expanding CGD networks. Thus the appeal was instituted by Adani Gas Limited at Appellate Tribunal for Electricity. By their separate judgments the Chairperson and Member Technical rendered divergent findings which the Chairperson directed that the proceedings in the appeals be placed before the judicial member. The judicial member recused from hearing the appeals. This led to the institution of the present appeals before this Court.

Held: The Board cannot be construed to have laid down an absolute norm by which bids quoting below the minimum of 2% or above the ceiling of 100% of the number of households under census data would automatically be rejected as unreasonable. If the Board note were to be construed in the manner in which Adani and others urged, the automatic disqualification of bidders based on a criterion introduced by the Board note would raise serious doubts about its fairness and legality.

Subject Matter : Authorisation and Technical Member.
Relevant Section : Section 33: Any person preferring an appeal against decision of the Board levying any penalty shall deposit the amount of such penalty while filing the appeal.
Key Issue : Whether the Board can be construed to have laid down an absolute norm for bidders?
Citation Details : Adani Gas Limited vs. Petroleum and Natural Gas Regulatory Board and Ors. (17.02.2020 - SC): MANU/SC/0193/2020
Summary Judgment :

Facts: The Petroleum Natural Gas Regulatory Board conducted the 9th round of bidding for Local Natural Gas Distribution Networks notifying details of the successful bidders in various Geographical Areas. The contest in the present batch of appeals has arisen over the grant of authorisation for laying, building, operating or expanding CGD networks. Thus the appeal was instituted by Adani Gas Limited at Appellate Tribunal for Electricity. By their separate judgments the Chairperson and Member Technical rendered divergent findings which the Chairperson directed that the proceedings in the appeals be placed before the judicial member. The judicial member recused from hearing the appeals. This led to the institution of the present appeals before this Court.

Held: The Board cannot be construed to have laid down an absolute norm by which bids quoting below the minimum of 2% or above the ceiling of 100% of the number of households under census data would automatically be rejected as unreasonable. If the Board note were to be construed in the manner in which Adani and others urged, the automatic disqualification of bidders based on a criterion introduced by the Board note would raise serious doubts about its fairness and legality.

Subject Matter : Officers and other employees of the Board.
Relevant Section : Section 10: According to this act no such consultation shall be necessary for appointment of the first Secretary of the Board and by approval Central Government the Board may determine the number, nature and categories of other officers and employees required to assist the Board in the efficient discharge of its functions.
Key Issue : Whether an officer of the Corporation can be appointed as a competent authority?
Citation Details : Hindustan Petroleum Corpn. Ltd. and Ors. vs. Yashwant Gajanan Joshi and Ors. (05.12.1990 - SC): MANU/SC/0208/1991
Summary Judgment :

Facts: The proprietary rights of the petitioner were affected by laying down of pipes by the Corporation. The High Court in these circumstances allowed the writ petition and directed the Union of India to appoint another competent authority, Thereafter the High Court further directed that names of certain retired District Judges were discussed which according to the High Court were quite suitable for the purpose so far as the special leave petition filed by the Corporation is concerned, an objection was raised on behalf of the learned counsel for respondent that Union of India alone was the interested party and could have challenged the impugned order of the High Court in as much as the competent authority is appointed by the Union of India.

Held: The High Court by the impugned order had removed Mrs Gadre to function as competent authority and thereafter the Union of India accepted the above position and sought further time to comply with the directions of the High Court. Thus it is clear that we do not agree with the general proposition of the High Court that an officer of the Corporation cannot be appointed as a 'competent authority' because he may be biased in favour of the Corporation by reason of his employment.

Subject Matter : Powers regarding complaints and resolution of disputes by the Board.
Relevant Section : Section 12: The Board shall have jurisdiction to receive any complaint from any person and conduct any inquiry and investigation connected with the activities relating to petroleum, petroleum products and natural gas on contravention of any other provision of this Act or the rules or the regulations or orders made thereunder.
Section 28: The case of a complaint on restrictive trade practice, the amount of civil penalty may extend to five times the unfair gains made by the entity or ten crore rupees, whichever is higher.
Key Issue : Whether the appellant can publish common carrier capacity for the prospective by contracting third party?
Citation Details : Gail (India) Ltd. vs. Petroleum and Natural Gas Regulatory Board and Ors. (13.01.2016 - SC): MANU/SC/0040/2016
Summary Judgment :

Facts: In terms of the Regulations, the appellant published the available common carrier capacity for the prospective contracting by any third party. Thereafter the high court impugned order was upheld stating though the parties have taken elaborate contentions before the Board as well as before the appellate authority, the crucial aspect has not been considered either by the Board or by the appellate authority. Hence appeal present.

Held: It was held that the pleadings by both the parties have not been satisfactory before the original authority. Therefore, as requested by the learned senior Counsel appearing for both the sides, it was permitted both sides to file additional pleadings before the Board and he complainant may file its additional pleadings within two weeks from today and the Appellant will file its reply within two weeks and granted liberty to the complainant and it will be open to both the parties to raise all available contentions before the Board at any stage.

Subject Matter : Transportation tariff.
Relevant Section : Section 22: The Board by regulations shall lay down the transportation tariffs for common carriers or local natural gas distribution network and the manner of determining such tariffs for the purpose of the factors which may encourage competition and benchmarking against a reference tariff calculated based on cost of service, internal rate of return, net present value or alternate mode of transport.
Key Issue : Whether impugned order fixing the maximum retail price or requiring Petitioner to disclose Network Tariff and Compression Charges to its consumers was liable to be quashed?
Citation Details : Indraprastha Gas Ltd. vs. Petroleum and Natural Gas Regulatory Board and Ors. (01.06.2012 - DELHC): MANU/DE/2313/2012
Summary Judgment :

Facts: The petitioner expanded its network by arranging gas, laying down and building a network of inter connected pipelines spread all over the city and set up of CNG Station at a huge cost, while recognizing the authorization granted by the Central Government, granted Exclusivity to the CGD Network of the petitioner for the National Capital Territory of Delhi, subject to the condition that the petitioner shall submit Network Tariff and Compression Charges for CNG as per the Tariff Regulations for the approval of the Board within 30 days. Thereafter though it was the contention of the petitioner that the Board was not empowered to fix prices but the petitioner nevertheless submitted the Network Tariff to the Board, the petition was filed by the petitioner in this Court challenging the action of the Board of initiating the process of granting authorization to others, by calling tenders.

Held: It was held that the PNGR Board is not empowered to fix or regulate the maximum retail price at which gas is to be sold by entities as the petitioner, to the consumers and the Board is also not empowered to fix any component of Network Tariff or Compression Charge for an entity such as the petitioner having its own distribution network and thus the petitioner to disclose the Network Tariff and the Compression Charges to its consumers is struck down.

Subject Matter : Transportation tariff.
Relevant Section : Section 61: The Board may make regulations which may provide for all for regulating open access to and transportation rate for the common carrier or local natural gas distribution network.
Key Issue : Whether impugned order fixing the maximum retail price or requiring Petitioner to disclose Network Tariff and Compression Charges to its consumers was liable to be quashed?
Citation Details : Indraprastha Gas Ltd. vs. Petroleum and Natural Gas Regulatory Board and Ors. (01.06.2012 - DELHC): MANU/DE/2313/2012
Summary Judgment :

Facts: The petitioner expanded its network by arranging gas, laying down and building a network of inter connected pipelines spread all over the city and set up of CNG Station at a huge cost, while recognizing the authorization granted by the Central Government, granted Exclusivity to the CGD Network of the petitioner for the National Capital Territory of Delhi, subject to the condition that the petitioner shall submit Network Tariff and Compression Charges for CNG as per the Tariff Regulations for the approval of the Board within 30 days. Thereafter though it was the contention of the petitioner that the Board was not empowered to fix prices but the petitioner nevertheless submitted the Network Tariff to the Board, the petition was filed by the petitioner in this Court challenging the action of the Board of initiating the process of granting authorization to others, by calling tenders.

Held: It was held that the PNGR Board is not empowered to fix or regulate the maximum retail price at which gas is to be sold by entities as the petitioner, to the consumers and the Board is also not empowered to fix any component of Network Tariff or Compression Charge for an entity such as the petitioner having its own distribution network and thus the petitioner to disclose the Network Tariff and the Compression Charges to its consumers is struck down.

Subject Matter : Transportation tariff.
Relevant Section : Section 46: If any entity of petroleum products or natural gas is without a valid registration or authorisation such person shall be punishable under this act and shall be liable to pay fine for continuing contravention.
Key Issue : Whether impugned order fixing the maximum retail price or requiring Petitioner to disclose Network Tariff and Compression Charges to its consumers was liable to be quashed?
Citation Details : Indraprastha Gas Ltd. vs. Petroleum and Natural Gas Regulatory Board and Ors. (01.06.2012 - DELHC): MANU/DE/2313/2012
Summary Judgment :

Facts: The petitioner expanded its network by arranging gas, laying down and building a network of inter connected pipelines spread all over the city and set up of CNG Station at a huge cost, while recognizing the authorization granted by the Central Government, granted Exclusivity to the CGD Network of the petitioner for the National Capital Territory of Delhi, subject to the condition that the petitioner shall submit Network Tariff and Compression Charges for CNG as per the Tariff Regulations for the approval of the Board within 30 days. Thereafter though it was the contention of the petitioner that the Board was not empowered to fix prices but the petitioner nevertheless submitted the Network Tariff to the Board, the petition was filed by the petitioner in this Court challenging the action of the Board of initiating the process of granting authorization to others, by calling tenders.

Held: It was held that the PNGR Board is not empowered to fix or regulate the maximum retail price at which gas is to be sold by entities as the petitioner, to the consumers and the Board is also not empowered to fix any component of Network Tariff or Compression Charge for an entity such as the petitioner having its own distribution network and thus the petitioner to disclose the Network Tariff and the Compression Charges to its consumers is struck down.