Think Gas Ludhiana Private Limited v. Petroleum & Natural Gas Regulatory Board

1. This petition essentially seeks to challenge the order dated 13.01.2023, passed by the Secretary of respondent No.1 - Petroleum & Natural Gas Regulatory Board (PNGRB)/ Board with the further direction to place its two Expression of Interests ('EOIs') and two applications before the Board for its consideration. The petitioner has also prayed for various other ancillary and consequential reliefs. For the sake of clarity, the entire relief clause is reproduced as under:- "In the facts and circumstances of the case, it is most respectfully prayed that this Hon’ble Court be pleased to: a) Issue a writ or writs, order or direction as may be considered appropriate to quash and setting aside of the PNGRB Letter dated 13.01.2023 issued by the Secretary of PNGRB and direct PNGRB to place the two EOIs dated 03.06.2020 and the two applications that were the subject matter thereof before the Board for its consideration, once it is duly constituted in a meeting held in accordance with PNGRB (Meetings of Board) Regulations, 2007, particularly Regulation 11 thereof; b) Issue a writ or writs, order or direction as may be considered appropriate to require compliance with Regulation 11 PNGRB (Meetings of Board) Regulations, 2007 by PNGRB and hold that the members who are former Directors of Respondent No. 3/ GAIL (India) Limited have to comply with PNGRB (Meetings of Board) Regulations, 2007 and not participate in matters which directly or indirectly relate to GAIL (India) Limited; c) Issue a writ or writs, order or direction as may be considered appropriate to quash PNGRB Letter Ref PNGRB/Monitoring/2/NGPL-DBNPL/(4)/2012 dated 28.02.2020 issued to GAIL (India) Limited by PNGRB and which was communicated to the Petitioner only on 30.09.2022; d) Declare that the authorization Ref Infra/CGD/Bid/R- 3/7/GA/Jalandhar/01/2013 dated 06.09.2013 for 355 sq. km area of Jalandhar city to “Jay Madhok Energy Private Limited led Consortium” lapsed and ceased to be valid on 08.08.2018 when Respondent No. 4/ Jay Madhok Energy Private Limited and Respondent No. 5/ Jay Madhok Holdings Private Limited were struck off and dissolved which two entities constituted the successful consortium that had ceased to exist on 08.08.2018; e) Declare that the authorization Ref. Infra/CGD/Bid/R- 3/6/GA/Ludhiana dated 25.06.2015 for 211 sq. km of Ludhiana city to “Jay Madhok Energy Private Limited led Consortium” lapsed and ceased to be valid on 08.08.2018 when Respondent No. 4/ Jay Madhok Energy Private Limited and Respondent No. 5/ Jay Madhok Holdings Private Limited were struck off and dissolved; f) If Prayers (d) and (e) above are granted then direct Respondent No. 1/PNGRB that: (i) the area of 211 sq.km. comprising of Ludhiana city; and (ii) the 355 sq.km. area of Jalandhar city covered by the respective authorizations, be placed for competitive bidding; g) Direct Respondent No. 2/ Union of India to appoint the Chairman and one other Member to PNGRB who should not be from GAIL (India) Limited, so as to duly and completely constitute PNGRB; and h) pass any other or further orders as this Hon'ble Court may deem fit and proper in the circumstances of the case in favour of the Petitioner."

2. This petition was taken up for hearing by the Coordinate Bench of this court on 02.02.2023. However, the same was directed to be listed before another Bench subject to directions by Hon'ble the Chief Justice. Accordingly, the matter was placed before this court on 06.02.2023.

3. When this matter was taken up for hearing on 06.02.2023, this court directed for the issuance of notice to the respondents. While noting the submissions advanced by learned senior counsel appearing on behalf of the petitioner, this court directed that in the meantime, any proceedings before respondent No.1/Board shall remain subject to the outcome of the instant proceedings. The matter was thereafter taken up for hearing on 14.02.2023 and on 16.02.2023. The parties filed their respective pleadings and accordingly, today, the matter is listed for consideration.

4. Shri Amit Sibal, learned senior counsel appearing on behalf of the petitioner has raised various grievances. He has taken this court through various orders passed by different authorities. However, during the course of submission he specifically pointed out the manner in which the EOIs of the petitioner have been dealt with by the respondent No.1- Board. He points out that a detailed application was filed before the respondent No.1-Board for various reliefs, as can be seen from (Annexure P-52). One of the reliefs therein was to accept and proceed to implement the EOI dated 03.06.2020, filed by the petitioner in terms of the order passed by this court dated 26.02.2021. He tried to emphasize that taking into consideration, various reliefs therein, respondent No.1- Board, in terms of order dated 22.12.2022, directed the respondents to file their detailed affidavit.

5. The petitions filed by the petitioner which were registered as Legal/26/2022 and Legal/27/2022 before the Board, were directed to be taken up on 02.02.2023, at 11:00 AM. He therefore, states that on 02.02.2023, the matter could not be heard by the concerned Board. The respondent No.1-Board through its Secretary, in terms of impugned communication dated 13.01.2023, however, has unilaterally rejected his prayer. He, therefore, prays that firstly, the procedure followed by respondent No.1-Board is dehors the mandate of the Petroleum and Natural Gas Regulatory Board Act, 2006 (Act, 2006) and the regulations made there under and secondly, having fixed the matter for 02.02.2023, the Board could not have taken any decision on the said issue. He also, while taking this court to various grounds tries to emphasise that notwithstanding the directions issued by the Appellate Tribunal for Electricity (APTEL) in its final order dated 28.09.2022, the petitioner still has the rights for consideration on his EOI. He has referred various provisions envisaged under the Act of 2006 and the regulations made there under.

6. Shri Utkarsh Sharma, learned counsel appearing on behalf of the respondent No.1-Board strongly objects to the submissions made by the learned senior counsel appearing on behalf of the petitioner and he submitted that the Board has dual responsibility to discharge. According to him, the action of respondent No.1-Board cannot be found fault with for the reason that the petitioner does not have any vested right for operation of any particular geographical area. He states that the EOI submitted by the petitioner since was not on the basis of any vested right and therefore, in terms of communication dated 13.01.2023, the same has rightly been rejected. He also states that the EOIs are to be considered on the regulatory side and not on the judicial side.

7. Shri Rajiv Nayar, learned senior counsel appearing on behalf of respondent No.4 and 5 states that the petitioner does not have any locus to maintain the present petition and secondly the petitioner if at all has any grievance, there is an efficacious alternate remedy under Section 33 of the Act, 2006. He also states that even respondent No.1-Board is not considering his application of transfer in terms of paragraph no. 138 of the order of the APTEL dated 28.09.2022.

8. Shri Gopal Jain, learned senior counsel appearing on behalf of respondent no.3-GAIL (India) Limited/GAIL, submits that firstly, GAIL has been unnecessarily arrayed as a party in the present petition, as GAIL is not a party in the main petition which is stated to be considered by the respondent No.1-Board and secondly, GAIL is discharging its function strictly in accordance with law and in view of various directions issued by the Central Government and the applicable rules and regulations thereto. He therefore, states that the instant petition against GAIL (India) Limited is not maintainable. He further states that any direction to allow the petitioner to incorporate additional pleadings would be construed to be an expression, by this court.

9. I have heard submissions made by learned counsel appearing on behalf of the parties and perused the record.

10. In the final relief claimed by the petitioner in its petition NO. 27/2022, stated to have been filed under Section 25 read with Section 19(2), read with Section 13(1), read with Section 13(3) and read with Section 11(c) of the Act, 2006 with various regulations of the concerned regulation, it is seen that one of the prayers made therein was to accept and proceed to implement the EOI dated 03.06.2020. The entire controversy in the present case centers around the prayer for consideration of the EOIs submitted by the petitioner from time to time. The final relief in one of the petitions i.e. Legal/27/2022, filed by respondent No.1-Board reads as under:

for any transfer through slump sale "on going concern no longer being possible; b. Declare the authorisations granted to the consortium of Jay Madhok Energy Private Limited and partnership firm of Jay Madhok Holdings for Jalandhar City GA and the Ludhiana City GA are void and stand terminated in light of the CBI FIR and the fact that records show prima facie that the said authorisations having been obtained on the basis of the networth of the partnership firm Jay Madhok Holdings were in the nature of "proceeds of crime" and cannot be permitted to be held and enjoyed, c. Declare that in light of s.[3] PMLA, the transfer of the said CGD authorisations granted to the consortium of Jay Madhok Energy Private Limited and partnership firm of Jay Madhok Holdings for Jalandhar City GA and the Ludhiana City GA is prohibited and not permissible in accordance with applicable law; d. Declare that in light of the change in shareholding of the successful bidding consortium within first five years of grant of authorisation, in violation of the limitations of Regulation 10(1) CGD Authorisation Regulations, JMEPL was no longer holding the largest interest as lead partner in the consortium for the authorisations granted for Jalandhar City GA and the Ludhiana City GA and consequently, the successful bidding consortium had ceased to exist and could not have validly incorporated itself under Companies Act, 2013 in terms of Regulation 5(6)() GGD Authorisation Regulations and the said authorisations granted to "Jay Madhok Energy Private Limited Led Consortium ceased to be valid and lapsed: e. In alternate to Prayer (a), Prayer (b) and Prayer (c) above, declare that since no CGD network was developed in the Jalandhar City GA and the Ludhiana City GA for the entire duration of the marketing exclusivity period granted under Regulation 6 CGD Exclusivity Regulations, the infrastructure exclusivity did not survive the expiry of the marketing exclusivity as there was no CGD network for the duration of whose economic life the said infrastructure exclusivity would have remained; f. In alternate to Prayer (a), (b), (c) and (d) above, declare that in light of complete failure of the authorised entity to develop CGD network during the marketing exclusivity period in the Jalandhar City GA and the Ludhiana City GA, the infrastructure exclusivity shall be terminated in accordance with the mandate under Regulation 10(1) and Regulation 10(2) CGD Exclusivity Regulations and initiate the process for termination of the same; and g. Pass such order in favour of the Petitioner as it deems fit and necessary in the interest of equity and justice.

11. It can also be seen that the respondent No.1- Board in terms of order dated 22.12.2022, decided to call upon the respondents to file a detailed affidavit. The order dated 22.12.2020 (Annexure P-53) is reproduced as under:- ORDER 22.12.2022 The matter was called up today for hearing. Heard the Parties. Issue Notice, the Ld. Counsel Ms. Aakriti Dawar lead by Ld. Sr. Counsel Mr. Parag Tripathi (Sr. Adv.) accepts the notice appearing on behalf of the Respondent(s). Let the Respondent(s) file detailed affidavit as regards of the Company along with the complete records of any other pending civil, criminal and any other cases, on similar cause of action against “Ishar Gas Jalandhar Pvt. Ltd.”, advance copy to be served to opposite party. The Interlocutory Applications (IA) No. 72/2022 titled “Interim Application on behalf of Complainant for review of Order dated 15.12.2022 under section 13(1)(h) of the PNGRB Act with supporting affidavit” and I.A. No. 73/2022, titled “Interim Application on behalf of Complainant for review of Order dated 15.12.2022 under section 13(1)(h) of the PNGRB Act with supporting affidavit” dated 21.12.2022, will be taken up for consideration on the next date of hearing. List the matter on 02.02.2023 at 11:00 Hours. Sd/- Sd/- Sd/- Gajendra Singh A.K. Tiwari Ajit Kumar Pande (Member-I) (Member-II) Member (Legal)"

12. From the impugned communication i.e. 13.01.2023, it can be seen that the rejection of the EOI dated 03.06.2020, 07.12.2020 and 08.12.2020, appears to be on the premise that APTEL had revived the authorisation for the development of CGD network and the respondent No.1-Board was not inclined to accept any EOI, NOC/ permission for the said area. For the sake of clarity, impugned communication dated 13.01.2023, is reproduced as under:- "PNGRB/Auth/1-CGD(12)/2020 (OP-945) 13 January, 2023 To Shri Hardip Singh Rai Director Think Gas Ludhiana Private Limited 3rd Floor, Dhanraj Complex, Near Gate No.2, Punjab Agricultural University Punjab Ludhiana-141001 Subject: i. Rejection of Expression of Interest(s) dated 03.06.2020 and a copy of the same dated 05.11.2020 from you for extending your CGD Network in the Geographical Areas of Ludhiana and Jalandhar ii. Rejection of the application dated 07.12.2020 submitted by Think Gas Ludhiana Private Limited regarding amendment in authorization of Ludhiana (except are already authorised), Barnala and Moga District and iii. Rejection of the application dated 08.12.2020 submitted by Think Gas Ludhiana Private Limited requesting NOC/Permission for supply/distribution of natural gas through cascades and setting up of CNG Daughter Booster stations in Ludhiana (211 sq.km. area) Ref: i. Think Gas Ludhiana EOI dated 03.06.2020 and a copy of the same submitted vide letter dated 05.11.2020 ii. Think Gas Ludhiana Private Limited's letters dated 07.12.2020 and 08.12.2020 Sir. This is with reference to the Eols dated 03.06.2020 and a copy of the same submitted by you vide letter dated 05.11.2020, your letter dated 07.12.2020 and 08.12.2020 on the subject matter.