Mahanagar Gas Limited v. Petroleum and Natural Gas Regulatory Board and Others

1. This hearing has been done through hybrid mode. CM APPL.52346/2022 (for exemption)

2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 16628/2022 & CM APPL.52345/2022

3. This petition raises two issues, one on merits and one on the constitution of the Appellate Tribunal for Electricity (hereinafter ‘APTEL’).

4. The present dispute is between the Mahanagar Gas Limited (‘MGL’), Oil and Natural Gas Corporation (‘ONGC’) and GAIL. It is the stand of ONGC that monies are owed to it from GAIL, which have not been paid due to pending recoveries between the GAIL and MGL. The matter was referred to the Petroleum and Natural Gas Regulatory Board (hereinafter ‘PNGRB’) under 11 and 12 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (hereinafter ‘PNGRB Act’) and the impugned order dated 30th September, 2022 has been passed.

5. In the said order the PNGRB, directed payment of transportation charges as per the tariff order dated 30th December, 2013 with effect from 1st January, 2014. The operative portion of the order reads as under: “In view of the above facts, circumstances, and deliberations, we hereby direct the Complainant/MGL to pay the transportation charges as per the transportation tariff fixed by PNGRB for UTNGPL vide Tariff Order dated 30.12.2013 for the period from 1st January 2014 onwards, which shall be paid within two months of passing of this Order, failing which interest shall be paid by MGL at interest rate mentioned in the Gas Sales and Transportation Contract. No order as to costs All the issues are answered accordingly. The copy of this order be sent to the Hon'b1e APTEL.”

6. In terms of the Section 33 of the PNGRB Act, the above order is appealable before the APTEL. Section 33 of the PNGRB Act reads as: “33. Appeals to Appellate Tribunal:- (1) Any person aggrieved by an order or decision made by the Board under this Act may prefer an appeal to the Appellate Tribunal: Provided that any person preferring an appeal against an order or decision of the Board levying any penalty shall, while filing the appeal, deposit the amount of such penalty: Provided further that where in any particular case, the Appellate Tribunal is of the opinion that deposit of such penalty would cause undue hardship to such person, it may dispense with such deposit subject to such conditions as it may deem fit to impose so as to safeguard the realisation of penalty. (2) Every appeal under sub-section (1) shall be filed within a period of thirty days from the date on which a copy of the direction or order of decision made by the Board is received by the aggrieved person and it shall be in such form, verified in such manner and be accompanied by such fee as may be prescribed: Provided that the Appellate Tribunal may entertain an appeal after the expiry of the said period of thirty days if it is satisfied that there was sufficient cause for not filing it within that period. (3) On receipt of an appeal under sub-section (1), the Appellate Tribunal may, after giving the parties an opportunity of being heard, pass such orders thereon as it thinks fit. (4) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the Board. (5) The appeal filed under sub-section (1) shall be dealt with by the Appellate Tribunal as expeditiously as possible and endeavor shall be made by it todispose of the appeal finally within ninety days from the date of receipt of appeal: Provided that where any such appeal could not be disposed of within the said period of ninety days, the Appellate Tribunal shall record its reasons in writing for not disposing of the appeal within the said period. (6) The Appellate Tribunal may, for the purpose of examining the legality or propriety or correctness of any order or decision of the Board referred to in the appeal filed under sub-section (1), either on its own motion or otherwise, call for the records relevant to disposing of such appeal and make such orders as it thinks fit.” However, since GAIL is a party to the proceedings and one of the technical members in APTEL is an ex-employee of GAIL, by an order dated 25th February, 2022, the Supreme Court has stayed all the proceedings in which GAIL is a party before the APTEL. Hence, the Petitioner is unable to avail of the effective appellate remedy as provided under the Act. It has thus preferred the present writ petition challenging the PNGRB’s order.

7. Section 30 of the PNGRB Act provides for multiple technical members. But it is not in dispute that as on date there is only one technical member, and the said member is an ex-employee of GAIL. Section 30 of the PNGRB Act reads as:

8. The ld. CGSC, on the last date, was requested to seek instructions as to whether other technical members could be appointed in the APTEL so as to make available multiple benches. On the said issue, Ms. Shiva Lakshmi, ld. CGSC submits that the department needs more time to examine the same.

9. A similar situation was dealt with by the Supreme Court in the context of Intellectual Property Appellate Board (IPAB), in Civil Appeal Nos. 6004- 6018 of 2018, titled ‘Natco Pharma Limited Vs. Union of India & Ors.’ wherein one of the parties before the IPAB had raised an objection of conflict of interest against a Technical Member of the IPAB. While dealing with the said matter, the Supreme Court had, appointed another technical member in place of the technical member, who was conflicted to hear the particular matter. The said order reads as under: “ Leave granted. A piquant situation has arisen in this case on account of absence of Technical Member in the Intellectual Property Appellant Board (IPAB) constituted under the provisions of Section 116 of the Patents Act, 1970. On 2nd April, 2007, Central Government appointed S.Chandrasekaran as Technical Member (Patent) of IPAB vide notification of even date. On 3rd April, 2007, notification was issued notifying 2nd April, 2007 as the date for transfer of appeals pending before any High Court to IPAB. The appeals were transferred to the IPAB by the High Court vide its order dated 4th April, 2007. On 16th June, 2007, Misc. Petition Nos.[1] and 2 of 2007 were filed by respondent No.4 herein before IPAB praying for the appointment of another Technical Member in place of S.Chandrasekaran on the ground that the said Member had earlier filed an affidavit in the matter taking a particular position in the dispute which has a direct bearing on the case in hand. It is under these peculiar facts and circumstances of the case and, particularly, in view of the fact that the controversy involved before IPAB is concerning crystal modification of a N-Phenyl-2-Pyrimidineamine derivative and since the dispute is regarding patentability of the process as well as the product that we are of the view that such complicated disputes need to be resolved by IPAB which must have a Technical Member in it. In the above facts and circumstances of this case only and without making our order a precedent for future cases, we called for a panel/list of Controllers duly qualified under Section 116 of the Patents Act, as amended by the Patents (Amendment) Act, 2006. From that list submitted to us, we have opted for the name of Dr.P.C.Chakraborti, Deputy Controller of Patents & Designs, who holds postgraduate degree of M.Sc.(Chemistry) as well as Ph.D. We, accordingly, direct that all preliminaries will be completed by the parties in the month of October, 2008 and the IPAB duly reconstituted under our orders, which would include Dr. P.C.Chakraborti, would hear and decide the pending Appeal Nos.TA/001/2007/PT/CH to TA/005/2007/PT/CH preferably in the month of November, 2008. We direct the IPAB to list the above Appeals before it for directions on 3rd November, 2008. The matter will be heard and disposed of on day-to-day basis. As a special case, Dr.P.C.Chakraborti will continue to be the Member of the said Board till the hearing and final disposal of the said appeals. He will be the Member of the IPAB only for the said Appeals. He will be paid remuneration payable to the Technical Member of IPAB, namely, salary of Rs.86,286/- per month with other perquisites as mentioned in the annexure to this order. This annexure has been given to us by the Union of India. It is also made clear that Dr.P.C.Chakraborti, who is presently Deputy Controller of Patents and Designs, will not be entitled to draw his salary for the aforestated period as Deputy Controller of Patents and Designs but, he would be entitled to protection of his seniority and other incidental benefits. We hope that the Board would preferably dispose of the Appeals within one month, if possible, from the date of the commencement of hearing. Both sides have accepted the name of Dr.P.C.Chakraborti to act as Technical Member in the above Appeals. Civil Appeals are disposed of accordingly, with no order as to costs.”

10. Considering that these are matters involving technical issues relating to transportation and tariff of gas as also the fact that all the GAIL matters before the APTEL are currently not being heard, the Central Government keeping in mind the order dated 1st October, 2008 of the Supreme Court, may place on record a list of persons, who could act as technical members for all GAIL related matters. This would ensure that the hiatus, which has been created, due to the issue of conflict of interest of the present member, can be resolved. Ld. Counsels for the Respondent UOI as also the ld. ASG submits that the matter would be considered by the Ministry and a report in this regard would be placed before this Court on the next date of hearing.

11. Insofar as the merits of the matter is concerned, the tariff which would become payable by the Petitioner, in terms of the impugned order of the PNGRB is stated to be over Rs. 300 crores, which according to the Petitioner, has already been safeguarded by the following factors.

(i) That the Petitioner is a listed company providing gas in

(ii) A letter of credit is stated to have been issued, which is valid for a sum of Rs.75 crores.