Gail (India) Ltd. v. Petroleum and Natural Gas Regulatory Board & Ors.

KURIAN, J. I. The main issue raised in this appeal is whether the denial of access to common carrier capacity on reasonable endeavor basis to the two pipelines laid by the appellant to the second respondent, is discriminatory and amounting to Restrictive Trade Practices or not. In the nature of the order we are required to pass in this case, it is unnecessary to go in detail to the factual matrix.

¶2The issue arises under the Petroleum and Natural Gas Regulatory Board (Authorising entities to lay, huild, operate or expand natural gas pipeline) Regulations, 2008 and Petroleum and Natural Gas Regulatory Board (Guiding Principles for Declaring or Authorising Natural Gas Pipeline as Common Carrier or Contract Carrier) Regulations, 2009.

¶3In terms of the Regulations, the appellant published the available common carrier capacity for the prospective contracting by any third party.

¶4On 19.11.2012, the appellant published an Expression oflnterest for booking capacity by intrested parties mentioning therein that the common carrier capacity thus available is on Ship or Pay basis.

¶5Respondent No. 2, on 04.05.2013, expressed its desire to avail the common carrier capacity on reasonable endeavour basis.

¶6Failing to resolve the disputes between ship or pay and reasonable endeavour basis, Respondent No.2 filed a complaint· before the Petroleum and Natural Gas Regulatory Board (in short, "the Board") on21.09.2013.

¶7The Board, after elaborate discussions, allowed the complaint. We shall extract the relevant portion as under :- 52. The respondents explanation does not deserve any acceptability or credibility at all because the common carrier capacity has to be non-discriminatory reserved 011 jirst-cu111-first-serve' basis without making any specific classification for reservation of co1111non carrier capacity.

¶53The practice adopted by the respondent on the one hand reveals discrimination towards the custo111er like complainant and on the other hand, results in additional burden for the shippers who are not the regular and long standing customers of the re>pondent and such practices also discourage fair co111petition in the market.

¶54In view of above, it would not be appropriate for us to direct the respondent for booking common carrier capacity on reasonable endeavour basis but we hold that the practice being adopted by the respondent, while booking common carrier capacity, is not only discriminatory, it also amounts to restrictive trade practice and must follow the consequence under Section 28 in the light of the provision of Section 11 (a) read ll'ith Section 12(/)(bJ(v) of the Petroleum & Natural Gas Regulatory Board Act.

¶55On giving careful consideration to all the facts and circumstances, we hereby direct the respondent to i111mediately cease its restrictive trade practice of preventing the shippers like complainant, the access of common carrier capacity in its common carrier pipeline and also impose civil penalty of Rs. 1.00 lac under Section 28 of the PNGRB Act, 2006. to be deposited within a month from today. "

¶8Aggrieved, the appellanttook up the matter before the Appellate Tribunal for Electricity (in short, "Appellate Authority"), leading to the impugned order dated 28.11.2014, by which the Appellate Authority dismissed the appeal in the following terms :-

"On giving carefitl consideration to the facts and circumstances of the Appeal, including the pleadings and submissions made by the parties, we are of the opinion that it has been established that the Appellant, in the instant case, while booking common carrier caracity in its pipeline, has acted in a discriminatory manner leading to restrictive trade

practices and as such, the Appellant is liable to pay the penalty of Rs. 1 /akh to the Board Thus, the h11pugned Order is upheld Consequently, the Appeal is hereby dismissed"

¶9Feeling aggrieved by the impugned order passed by the Appellate Authority, the appellant has preferred this appeal before us.

IO. Though the parties have taken elaborate contentions both before the Board as well as before the Appellate Authority, having extensively heard Mr.Tushar Mehta, learned Addit.ional Solicitor General appearing forthe appellant and Mr. Parag Tripathi, learned senior counsel appearing for the second respondent, we find that the following crucial aspect has not been considered either by the Board or by the Appellate Authority. The main arguments of the learned counsel for the respondents rests on the application of the Petroleum and Natural Gas Regulatory Board (Affiliate Code of Conduct for Entities Engaged in M,arketing of Natural Gas and Laying, Building, Operating or Expanding Natural Gas Pipeline) Reglations, 2008 and without addressing this issue, the dispute as raised in the complaint cannot be resolved.

¶11In the facts and circumstances of the case, we are of the view that unless the issue, which is formulated below, is addressed, the complaint filed by the second respondent before the Board should not have been disposed of. Therefore, we propose to frame the following issue and send the matter back to the Board :- Issue - To what extent, the Petroleum and Natural Gas Regulatory Board (Affiliate Code of Conduct for Entities Engaged in Marketing ofNatural Gas and Laying, Building, Operating or Expanding Natural Gas Pipeline)' Regulations, 2008 are applicable to the complainant.

¶12While addressing this issue, the interplay between the scheme as per the Act and the regulations will also be addressed.

¶13We find 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, we permit both sides to file additional pleadings before the Board. The complainant may file its additi.onal pleadings within two weeks frqm today and the appellant will file its reply within two weeks thereafter. Based on the additional pleadjngs, we make it clear, it will be open to the Board to raise additional is.sues, ifrequired.

¶14Having regard to the factthat the original of complaint was filed in the year 2013, we direct the Board to dispose the complaint within six months from today. We also grant liberty to the complainant, if so required, to make an application before the Board for an appropriate interim order after completion of the pleadings and in which case, the Board may dispose of the application within three months.

IS. In that view of the matter, we set aside the impugned order passed by the Appellate Authority dated 28.11.2014 in Appeal No. 52 of 2014 .as also the original order passed by the Board dated 26.12.2013 in Case No. 68 of2013.

¶16We make it clear that we have not expressed any opinion on the merits of the case and it will be open to both the parties to raise all available contentions before the Board at any stage.

¶17With the above observations and directions, the Civil Appeal is disposed of with no order as to costs.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11450 of2014.

From the Judgment and Order dated 28.11.2014 of the Appellate Tribunal for Electricity New Delhi in Appeal 52of2014.

Mukul Rohtagi, A.G, Tushar Mehta. ASG, Yoginder Handoo, Rajat Nair, Darpan Sachdeva for the Appellant.

Parag !'. Tripathi, Piyush Joshi, Uttara Babbar, Sumiti Yadava, Saurav Agrawal, Munawwar Naseem, Astha Gaur, Pradeep Kumar Bakshi for the Respondents.