Ahmedabad: The Supreme Court has maintained the authorisation given by the PNGRB (Petroleum and Natural Gas Regulatory Board) to Gujarat Gas for mechanical and business gas dissemination in Sanand, Bavla and Dholka in Ahmedabad. This can be the difficulty for Adani Gas
Ruling that the PNGRB regulation under challenge was “neither arbitrary nor ultra vires”, the 3-judge bench of Justice UU Lalit, Justice S Ravindra Bhat and Justice Hrishikesh Roy asked Adani Gas to pay Rs. 10 lakh to the Centre while rejecting its plea seeking gas distribution rights for the three disputed areas.
The court upheld the exclusive power of the Centre under Article 73 of the Constitution to issue such licenses or authorizations, thereby upholding the sectoral regulator PNGRB’s jurisdiction in this regard.
Adani Gas had moved the top court against the June 2016 decision by the PNGRB, claiming that the PNGRB (Authorising Entities To Lay, Build, Operate or Expand City or Local Natural gas Distribution Networks) Regulations, 2008 violated fundamental right to equality and right to practice any occupation. The petition had also contested PNGRB’s powers to authorise companies to carry out retail sale of CNG (Compressed Natural Gas) to automobiles and pipe cooking gas to households.
Noting that the role of the government in granting an NoC is only supportive or collaborative as per 2006 Central Government’s policy, the court held that it can’t confer any “advantage to any entity, which has to seek and be granted specific authorization in terms of the PNGRB Act on the merits of its application.” The top court upheld a 2018 order of the Gujarat High Court in favour of Gujarat Gas, where the state-run gas distributor had accused Adani of illegally expanding its gas distribution network.
Adani Gas had claimed that it was engaged in operating a gas distribution network in Gujarat since 2003, particularly in the Ahmedabad District, having made a substantial investment of Rs. 356 crores in laying down the city gas distribution network. It claimed that PNGRB had excluded these three areas while granting its authorisation in November 2013.
However, the bench held that Adani’s claim was precluded by the principle of “approbate-reprobate”, as it accepted the authorization granted by PNGRB (including exclusion of disputed areas), “furnished the performance bond and even participated in the auction for the excluded areas, and only thereafter challenged authorization when its bid was unsuccessful.”
PNGRB had pointed to past court verdicts to argue that a “person taking advantage under an instrument, which both grants a benefit and imposes a burden, cannot take the former without complying with the latter”. It contended that Adani Gas had an option to accept or reject an authorization for Ahmedabad city and denial for the disputed areas, arguing that Adani Gas unequivocally accepted and acted upon the grant of authorization and exclusivity for Ahmedabad City and Dascroi. It questioned how Adani Gas could contest denial of authorization for the 3 disputed areas “while enjoying the fruits of the order for Ahmedabad city”.