REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11450 OF 2014
GAIL (INDIA) LTD. Appellant(s)
VERSUS
PETROLEUM AND NATURAL GAS REGULATORY
BOARD & ORS. Respondent(s)
J U D G M E N T
KURIAN, J.
1. 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 discreminatory
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.
2. The issue arises under the Petroleum and Natural Gas Regulatory Board
(Authorising entities to lay, build, 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.
3. In terms of the Regulations, the appellant published the available
common carrier capacity for the prospective contracting by any third party.
4. On 19.11.2012, the appellant published an Expression of Interest for
booking capacity by intrested parties mentioning therein that the common
carrier capacity thus available is on Ship or Pay basis.
5. Respondent No. 2, on 04.05.2013, expressed its desire to avail the
common carrier capacity on reasonable endeavour basis.
6. Failing 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") on 21.09.2013.
7. The Board, after elaborate discussions, allowed the complaint. We
shall extract the relevant portion as under :-
" .........
52. The respondent's explanation does not deserve any acceptability or
credibility at all because the common carrier capacity has to be non-
discriminatory reserved on 'first-cum-first-serve' basis without making any
specific classification for reservation of common carrier capacity.
53. The practice adopted by the respondent on the one hand reveals
discrimination towards the customer 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 respondent and such practices also
discourage fair competition in the market.
54. In 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 with
Section 12(1)(b)(v) of the Petroleum & Natural Gas Regulatory Board Act.
55. On giving careful consideration to all the facts and circumstances,
we hereby direct the respondent to immediately 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."
8. Aggrieved, the appellant took 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 careful 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 capacity 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 lakh to the
Board. Thus, the Impugned Order is upheld. Consequently, the Appeal is
hereby dismissed"
9. Feeling aggrieved by the impugned order passed by the Appellate
Authority, the appellant has preferred this appeal before us.
10. 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 Additional Solicitor General appearing for the
appellant and Mr. Parag Tripathi, learned senior counsel appearing for the
second respondent, we find that the 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 Marketing 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.
11. In 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 of Natural Gas
and Laying, Building, Operating or Expanding Natural Gas Pipeline)
Reglations, 2008 are applicable to the complainant.
12. While addressing this issue, the interplay between the scheme as per
the Act and the regulations will also be addressed.
13. We 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
additional pleadings within two weeks from today and the appellant will
file its reply within two weeks thereafter. Based on the additional
pleadings, we make it clear, it will be open to the Board to raise
additional issues, if required.
14. Having regard to the fact that the original complaint was filed in
the year 2013, we direct the Board to dispose of 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.
15. 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 of
2013.
16. We 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.
17. With the above observations and directions, the Civil Appeal is
disposed of with no order as to costs.
.......................J.
[ KURIAN JOSEPH ]
.......................J.
[ ROHINTON FALI NARIMAN ]
New Delhi;
January 13, 2016.
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 11450 OF 2014
GAIL (INDIA) LTD. Appellant(s)
VERSUS
PETROLEUM AND NATURAL GAS REGULATORY
BOARD & ORS. Respondent(s)
J U D G M E N T
KURIAN, J.
1. 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 discreminatory
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.
2. The issue arises under the Petroleum and Natural Gas Regulatory Board
(Authorising entities to lay, build, 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.
3. In terms of the Regulations, the appellant published the available
common carrier capacity for the prospective contracting by any third party.
4. On 19.11.2012, the appellant published an Expression of Interest for
booking capacity by intrested parties mentioning therein that the common
carrier capacity thus available is on Ship or Pay basis.
5. Respondent No. 2, on 04.05.2013, expressed its desire to avail the
common carrier capacity on reasonable endeavour basis.
6. Failing 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") on 21.09.2013.
7. The Board, after elaborate discussions, allowed the complaint. We
shall extract the relevant portion as under :-
" .........
52. The respondent's explanation does not deserve any acceptability or
credibility at all because the common carrier capacity has to be non-
discriminatory reserved on 'first-cum-first-serve' basis without making any
specific classification for reservation of common carrier capacity.
53. The practice adopted by the respondent on the one hand reveals
discrimination towards the customer 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 respondent and such practices also
discourage fair competition in the market.
54. In 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 with
Section 12(1)(b)(v) of the Petroleum & Natural Gas Regulatory Board Act.
55. On giving careful consideration to all the facts and circumstances,
we hereby direct the respondent to immediately 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."
8. Aggrieved, the appellant took 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 careful 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 capacity 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 lakh to the
Board. Thus, the Impugned Order is upheld. Consequently, the Appeal is
hereby dismissed"
9. Feeling aggrieved by the impugned order passed by the Appellate
Authority, the appellant has preferred this appeal before us.
10. 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 Additional Solicitor General appearing for the
appellant and Mr. Parag Tripathi, learned senior counsel appearing for the
second respondent, we find that the 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 Marketing 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.
11. In 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 of Natural Gas
and Laying, Building, Operating or Expanding Natural Gas Pipeline)
Reglations, 2008 are applicable to the complainant.
12. While addressing this issue, the interplay between the scheme as per
the Act and the regulations will also be addressed.
13. We 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
additional pleadings within two weeks from today and the appellant will
file its reply within two weeks thereafter. Based on the additional
pleadings, we make it clear, it will be open to the Board to raise
additional issues, if required.
14. Having regard to the fact that the original complaint was filed in
the year 2013, we direct the Board to dispose of 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.
15. 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 of
2013.
16. We 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.
17. With the above observations and directions, the Civil Appeal is
disposed of with no order as to costs.
.......................J.
[ KURIAN JOSEPH ]
.......................J.
[ ROHINTON FALI NARIMAN ]
New Delhi;
January 13, 2016.
