GAIL (INDIA) LTD.versusPETROLEUM AND NATURAL GAS REGULATORY BOARD & ORS.

                          [201.6] 1 S.C.R. 525



                         GAIL (INDIA) LTD.                                A
                                   v.
 PETROLEUM AND NATURAL GAS REGULATORY BOARD &
                     ORS.
                                                         0


                      (Civil Appeal No. 11450 OF 2014)                    B
                         JANUARY 13, 2016
          [KURIAN JOSEPH AND R.F. NARIMAN, JJ.]
         Petroleum and Natural Gas Regulatory Board Act, 2006 - ss.
  28, ll{a) rw s. 12(J)(b)(v)--' Restrictive Trade Practice- Petroleum
  and Natural Gas Regulatory Board (Guiding Principles for
                                                                          c
  Declaring or Authorising Natural Gas Pipeline as Common Carrier
  or Contract Carrier) Regulations, 2009 - 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) Regulations, 2008          D
  - Denial of access to common carrier capacity on reasonable
  endeavor basis to the two pfpelines laid by the appellant to second
   respondent - Whether discriminatory and amounts to Restrictive
   Trade Practices - The Board as also the Appellate Authority held
   the said practice as discriminatory and amounts to Restrictive Trade
                                                                          E
   Practice - On appeal, held: Issue as regards the applicability 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)
  ·Regulations, 2'008 to the complainant-second respondent not
   considered either by the Board or by the Appellate Authority- Unless   F
  .the said issue is addressed, the complaint filed by the second
   respondent before the Board should not have been disposed of-
   Said issue framed and matter remanded back to the Board - Order
   passed by the Appellate Authority as also by the Board set aside -
   Petroleum and Natural Gas Regulatory Board (Authorising Entities
                                                                          G
   to Lay, Build, Operate or Expand Natural Gas Pipeline)
   Regulations, 2008.
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11450
 of2014.

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                                  525
526                    SUPREME COURT REPORTS                     [2016] I S.C.R.



 A          From the Judgment and Order dated 28.11.2014 of the Appellate
      Tribunal for Electricity New Delhi in Appeal 52of2014.
            Mukul Rohtagi, A.G, Tushar Mehta. ASG, Yoginder Handoo, Rajat
      Nair, Darpan Sachdeva for the Appellant.
            Parag !'. Tripathi, Piyush Joshi, Uttara Babbar, Sumiti Yadava,
 B    Saurav Agrawal, Munawwar Naseem, Astha Gaur, Pradeep Kumar
      Bakshi for the Respondents.
            The Judgment of the Court was delivered by
             KURIAN, J. I. The main issue raised in this appeal is whether
 c    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 discriminatory 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
 D
      Regulatory Board (Authorising entities to lay, huild, 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
 E
      common carrier capacity for the prospective contracting by any third
      party.
            4. On 19.11.2012, the appellant published an Expression oflnterest
      for booking capacity by intrested parties mentioning therein that the
      common carrier capacity thus available is on Ship or Pay basis.
 F
            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
 G    the Petroleum and Natural Gas Regulatory Board (in short, "the Board")
      on21.09.2013.
           7. The Board, after elaborate discussions, allowed the complaint.
      We shall extract the relevant portion as under :-


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  GAIL (INDIA) LTD. v. PETROLEUM AND NATURAL GAS                             527
       REGULATORY BOARD & ORS. [KURIAN, J.)

      52. The respondents explanation does not deserve any                   A
      acceptability or credibility at all because the common carrier
      capacity has to be non-discriminatory reserved 011 jirst-cu111-
      first-serve' basis without making any specific classification
      for reservation of co1111non carrier capacity.
      53. The practice adopted by the respondent on the one hand             B
      reveals discrimination towards the custo111er 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 re>pondent and such practices also discourage fair
      co111petition in the market.
                                                                             c
      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          D
      under Section 28 in the light of the provision of Section 11
      (a) read ll'ith Section 12(/)(bJ(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 i111mediately        E
      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. "                                 F
      8. Aggrieved, the appellanttook 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 carefitl consideration to the facts and                     G
      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 caracity in its pipeline, has
      acted in a discriminatory manner leading to restrictive trade
                                                                             H
528                    SUPREME COURT REPORTS                     (2016] I S.C.R.


 A          practices and as such, the Appellant is liable to pay the penalty
            ofRs. 1 /akh to the Board Thus, the h11pugned 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.
 B           IO. 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 Addit.ional Solicitor General
      appearing forthe appellant and Mr. Parag Tripathi, learned senior counsel
      appearing for the second respondent, we find that the following crucial
 c    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 M,arketing of
      Natural Gas and Laying, Building, Operating or Expanding Natural Gas
      Pipeline) Reglations, 2008 and without addressing this issue, the dispute
 D    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
 E    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 ofNatural
      Gas and Laying, Building, Operating or Expanding Natural Gas Pipeline)'
      Regulations, 2008 are applicable to the complainant.
 F
             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
 G    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 additi.onal pleadings within two weeks frqm today and the appellant
      will file its reply within two weeks thereafter. Based on the additional
      pleadjngs, we make it clear, it will be open to the Board to raise additional
      is.sues, ifrequired.
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   GAIL (INDIA) LTD. v. PETROLEUM AND NATURAL GAS                              529
        REGULATORY BOARD & ORS. [KURIAN, J.]

       14. Having regard to the factthat the original complaint was filed      A
                                                  of
in the year 2013, we direct the Board to dispose 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.
                                                                               B
       IS. 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 of2013.
      16. We make it clear that we have not expressed any opinion on           c
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.
NidhiJain                                                Appeal disposed of.   D