Tue. Sep 22nd, 2020

Petroleum and Natural Gas Regulatory Board cannot determine the MRP, and compression charges for CNG with regard to city or local gas distribution network

2 min read

Supreme
Court: While deciding the issue that whether the Petroleum
and Natural Gas Regulatory Board (hereinafter the
Board) is empowered to regulate/fix the maximum retail price (MRP) of the gas
sold by entities like Indraprasth Gas Ltd., and fix network tariff and
compression charge for entities having their own distribution network, the
Division Bench of Dipak Misra and U.U. Lalit, JJ., held that the Board, as per
the legislative scheme, has not been conferred with the power to frame
regulations to fix network tariff and compression charges for CNG with regard
to a city or local gas distribution network thereby declaring the Natural
Gas Regulatory Board (Determination of Network Tariff for City or Local Natural
Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008 as ultra vires the Petroleum and Natural Gas Regulatory
Board Act, 2008   

The present appeal pertained to the
interpretation of the provisions of 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 and the Petroleum and Natural Gas Regulatory Board Act, 2008.
The Delhi High Court had earlier held that as per the construction of the 2008
Regulations, the Board does not have the power with respect to fixing of MRP
and compression charges. Counsel for the appellant Arvind Datar contended that,
the Delhi HC had committed a gross illegality in its finding. Whereas counsel
for the respondent Harish Salve argued that, a careful reading of Sections 20
to 22 of the 2008 Act reveals that the Board does not have the authority to
regulate the MRP. Appearing for the Union of India, Pinky Anand put forth
before the Court that the Legislature never intended to confer the Board with
the power to determine the MRP.

The Court upon perusing the contentions and after
detailed analysis of the concerned provisions observed that, the Board has the
power to determine transportation tariff for common/contract carrier. The Court
stated that upon construing Sections 11 and 22 of the 2008 Act, it comes out
that the Board has not been given the power to fix the compression charges and
MRP, therefore the Board cannot frame a Regulation which will cover the area
pertaining to determination of network tariff for city or local gas
distribution network and compression charge for CNG. [Petroleum and Natural
Gas Regulatory Board v. Indraprastha Gas Limited, 2015 SCC OnLine SC 578, decided on 01.07.2015]
Source: Legal news India

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