LexPETROLEUM & NATURAL GAS REGULATORY BOARD versus INDRAPRASTHA GAS LIMITED & ORS.
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[2015] 7 S.C.R. 215 PETROLEUM & NATURAL GAS REGULATORY BOARD A v. INDRAPRASTHA GAS LIMITED & ORS. (Civil Appeal No. 4910 of 2015) JULY01,2015 [DIPAK MISRA AND UDAY UMESH LALIT, JJ.] B Petroleum and Natural Gas Regulatory Board Act, 2008 - ss.20, 22, 61, 11 - Power of the Board - To fix c transportation tariff of a consumer of natural gas - Held: Petroleum and Natural Gas Regulatory Board is not empowered to fix or regulate the maximum retal1 price at which gas is to be sold by entities to the consumers- Board is also not empowered to fix any component of network tariff D or compression charge for an entity having its own distribution network -Act does not confer any such power on the Board and expression "subject to" used in s. 22 makes it a conditional one - It has to yield to other provisions of the Act - Since the power to fix the tariff has not been given to the E Board, the Board cannot frame a Regulation which would cover the area pertaining to determination of network tariff for city or local gas distribution network and compression charge for CNG - As the entire Regulation centres around the said subject, the Regulation is declared ultra vires ~ F Petroleum and Natural Gas Regulatory Board (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008. G Dismissing the appeal, the Court HELD: 1.1 On a reading of the s.20 of the Petroleum and Natural Gas Regulatory Board Act, 2008, it is clear that the Board has been conferred with the power to declare H 215 216 SUPREME COURT REPORTS [2015] 7 S.C.R. A an existing pipeline for transportation of petroleum, petroleum products and natural gas or an existing city or local natural gas distribution network as a common carrier or contract carrier and regulate or allow access to such pipeline or network. Sub-Section (4) enables the B Board to decide on the period of exclusivity to lay, build, operate or expand a city or local natural gas distribution network for such number of years. The objectives by which the Board is to be guided are promoting competition among entities, avoiding infructuous C investment, maintaining or increasing supplies or securing equitable distribution or ensuring adequate availability of petroleum, etc. Section 21 deals with the right of first use. The transportation tariff, which finds 0 place in Section 22(1), commences with the words "subject to the provisions of this Act". The said provision confers power on the Board to lay down, by regulation, the transportation tariff for common carriers or contract carriers or city or local natural gas distribution network E and the manner of determination of such tariffs. [Paras 16 -19) [243-A-B; 244-G-H; 245-A-B; 247-G-H] F G H The Commissioner of Wealth Tax, Andhra Pradesh, Hyderabad v. Trustees of H.E.H. Nizam's Family (Remainder Wealth Trust),Hyderabad (1977) 3 SCC 362: 1977 (3) SCR 735; Ashok Leyland Ltd. v. State of T.N. and Anr. (2004) 3 SCC 1: 2004 (1) SCR 306; K.R.C.S. Balakrishna Chetty and Sons & Co. v. The State of Madras AIR 1961SC1152: 1961 SCR 736; South India Corporation (P) Ltd. v. Secretary, Board of Revenue, T rivandrum and Anr. AIR 1964 SC 207: 1964 SCR 280; B.S. Vadera and another v. Union of India and Ors. AIR 1969 ~C 118: 1968 SCR 575- referred to. .. _,f PETROLEUM & NATURAL GAS REGULATORY BOARD v. 217 INDRAPRASTHA GAS LIMITED 1.2 Sub-section (e) of Section 11 empowers the A Board to regulate, by regulations, in respect of certain aspects. Section 11 (e) (ii) confers power on the Board to determine transport rates for common carrier or contract carrier. Sub-section (f) of Section 11 allows the Board to regulate in respect of notified petroleum, petroleum B products and natural gas and sub-section (e) (iii) of Section 11 empowers the Board to regulate, by regulations, access to city or local natural gas distribution network so as to ensure fair trade and competition amongst entities' as per pipeline access C code. [Para 22) [251-G-H; 252-A-B] 1.3 The analysis of the High Court is in consonance with s.11 and the expression "subject to" as used in Section 22 for the said provision makes it graphically D clear that Section 22 has to yield to Section 11 of the Act which deals with the powers and functions of the Board. Section 11 (e) only uses the words "common carrier" or "contract carrier". Even if one applies the co
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