Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2020 Supreme(SC) 169

SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, HEMANT GUPTA, JJ.
Adani Gas Limited – Appellant
Versus
Petroleum and Natural Gas Regulatory Board & Ors. – Respondents
Civil Appeal No. 3992 of 2019 With Civil Appeal Nos. 3234-3235 of 2019 With Civil Appeal Nos. 3247-3248 of 2019 With Civil Appeal No. 3289 of 2019 With Civil Appeal No. 4527 of 2019 With T.C. (C) No. 27 of 2019 With T.C. (C) No. 26 of 2019 And With Civil Appeal No. 106 of 2020
Decided On : 17-02-2020

Advocates appeared:
For the Appellant(s) :Mahesh Agarwal, Aanchal Mullick, Deepika Kalia, Shubham Kulshreshtha, E. C. Agrawala, Nitin Kalra, Pukhrambam Ramesh Kumar, Rohan Sareen, Gaurav Mitra, Anupama Ngangom, Karun Sharma, Gaurav Juneja, Divyanshu, Aayush Jain, Sanjeev Kumar, for M/S. Khaitan & Co. By Courts Motion Divya Roy, Advocates
For the Respondent(s):Utkarsh Sharma, Mahesh Agarwal, Aanchal Mullick, Deepika Kalia, Shubham Kulshreshtha, E. C. Agrawala, Harpreet Singh Ajmani, Gaurav Juneja, Divyanshu, Aayush Jain, Sanjeev Kumar, for M/S. Khaitan & Co. Pukhrambam Ramesh Kumar, Divya Roy, Advocates

IMPORTANT POINTS
Grounds for appeal u/s 37 are akin to those u/s 100, CPC.
Something which is absent in a provision cannot be read into it merely because another provision in the statute refers to it.
Bid document does not over-ride specific requirements in Regulations.

Headnote:
(a) Petroleum and Natural Gas Regulatory Board Act 2006 - Section 37 - Jurisdiction of Supreme Court hearing appeal against order of APTEL - Grounds of such appeal akin to those under section 100, Code of Civil Procedure, 1908. (Para 3)
(b) Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations 2008 - Regulation 5(6)(e) and 7 - Regulation 5(6) providing for procedure for laying, building, operating or expanding of a CGD network - Clause (e) prescribing a net-worth criteria related to 2011 census - Regulation 7 specifying five bidding criteria to evaluate competing bids, however, not linking the same with census figures of 2011. (Para 10)
(c) Interpretation of statute - Reference to 2011 census absent in section 7 of PNGB regulations - Cannot be read into it merely because section 5(6) refers to it. (Para 39)
(d) Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations 2008 - Regulation 5(6)(e) and 7 - Absence of reference to 2011 census data - Justified on the ground that in a model of cross/subsidisation, the viability of the project has to be perceived from a twenty-five-year perspective. (Para 40)
(e) Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations 2008 - Regulation 7 r/w Clause 1 and 2 of Bid document - Map of GA containing a reference to population and household figures on the basis of the 2011 attached with bid document and clause 1.1.1 referring to it - Bidders required to calculate number of domestic PNG connections - Neither the map nor clause 1 dictating how it was to be done - Map does not over-ride specific requirements of bidding criteria as defined in Regulation 7. (Para 41)
(f) Government contract - Evaluation of bid - Clause 4.4.1 - Board reserving to itself power to determine unreasonably high or low bids - Board resolution of 23 July 2018 stipulating a criteria of less than 2% and more than 100% of 2011 census as possible criteria for further scrutinizing the bids - Board resolution of 9 August 2018 deciding to hear bidders with the highest composite score to explain the reasonableness of their bids - No infirmity. (Para 45, 46)
(g) Government contract - Natural justice - Clause 14.2 - Power to decide reasonability of bid resting with Board - Presence and hearing of bidders for Gas other than those under consideration was not necessary. (Para 55)
Facts of the case:
In 2018 the Petroleum and Natural Gas Regulatory Board, conducted the ninth round of bidding for City or Local Natural Gas Distribution Networks,. On 14 September 2018, a press release was placed on the Board‘s website notifying details of the successful bidders in various Geographical Areas, [“GAs”]. The contest in the present batch of appeals has arisen over the grant of authorisation for laying, building, operating or expanding CGD networks in the certain Gas.
The Appellate Tribunal for Electricity, was seized of two appeals – Appeal No. 292 of 2018, instituted by Adani Gas Limited and Appeal No. 323 of 2018, instituted by IMC Limited. By their separate judgments dated 28 February 2019, the Chairperson and Member Technical (Petroleum and Natural Gas) rendered divergent findings, following which the Chairperson directed that the proceedings in the two appeals be placed before the judicial member. The judicial member recused from hearing the appeals on 7 March 2019. Hence these appeals.
Finding of the Court:
Decision of Chairperson was erroneous whereas decision of Member (Technical) was correct.
Result: Appeals dismissed.

JUDGMENT :

Dr. Dhananjaya Y. Chandrachud, J.

1. In 2018 the Petroleum and Natural Gas Regulatory Board, [“the Board”] conducted the ninth round of bidding for City or Local Natural Gas Distribution Networks, [“CGD Networks”]. On 14 September 2018, a press release was placed on the Board‘s website notifying details of the successful bidders in various Geographical Areas, [“Gas”]. The contest in the present batch of appeals has arisen over the grant of authorisation for laying, building, operating or expanding CGD networks in the following GAs:

(i) GA 51 - Puducherry District;

(ii) GA 61 - Kanchipuram District; and

(iii) GA 62 - Chennai & Tiruvallur Districts.

2. The Appellate Tribunal for Electricity, [“APTEL” or “Tribunal”] was seized of two appeals – Appeal No. 292 of 2018, instituted by Adani Gas Limited and Appeal No. 323 of 2018, instituted by IMC Limited. These appeals were instituted before the APTEL under Section 30(1) of the Petroleum and Natural Gas Regulatory Board Act 2006, [“PNGRB Act”]. By their separate judgments dated 28 February 2019, the Chairperson and Member Technical (Petroleum and Natural Gas) rendered divergent findings, following which the Chairperson directed that the proceedings in the two appeals be placed before the judicial member. The judicial member recused from hearing the appeals on 7 March 2019. This led to the institution of the present appeals before this Court. Noting that no other judicial member was available in the APTEL to conduct the hearing, this Court by its order dated 1 April 2019 admitted the appeals and issued directions in exercise of its powers under Article 142 of the Constitution for the transfer of the proceedings before the APTEL to this Court in order to bring finality to the present dispute. In assessing the merits, the Court has had the benefit of appraising the differing views which have been expressed by the Chairperson and by the Member Technical (Petroleum and Natural Gas).

3. The APTEL has been constituted in terms of sub-Section (1) of Section 30 of the PNGRB Act which is extracted below:

“30. Appellate Tribunal. (1) Subject to the provisions of this Act, the Appellate Tribunal established under section 110 of the Electricity Act, 2003 (36 of 2003) shall be the Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall exercise the jurisdiction, powers and authority conferred on it by or under this Act:

Provided that the Technical Member of the Appellate Tribunal for the purposes of this Act shall be called the Technical Member (Petroleum and Natural Gas) and shall have the qualifications specified in sub-section (2) of section 31.”

Section 33 stipulates that any person aggrieved by an order or decision of the Board has recourse to an appeal to the Tribunal. The jurisdiction of the APTEL while hearing an appeal is spelt out in sub-Section (6) of Section 33 in the following terms:

“33.(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.”

An appeal lies to this Court against an order of the APTEL, other than an interlocutory order, under Section 37 on the grounds set out in Section 100 of the Code of Civil Procedure 1908. With this background, we now turn to the PNGRB Act under the aegis of which the ninth round of CGD bidding occurred.

PNGRB Act and regulations

4. The content of the PNGRB Act is summarised by its long title as:

“An Act to provide for the establishment of Petroleum and Natural Gas Regulatory Board to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding produ

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Judicial Analysis

gpt-4

2020 Supreme(SC) 169

IMPORTANT POINTSGrounds for appeal u/s 37 are akin to those u/s 100, CPC.Something which is absent in a provision cannot be read into it merely because another provision in the statute refers to it. Bid document does not over-ride specific requirements in Regulations.

Judicial Analysis

IMPORTANT POINTS
Grounds for appeal u/s 37 are akin to those u/s 100, CPC.
Something which is absent in a provision cannot be read into it merely because another provision in the statute refers to it.
Bid document does not over-ride specific requirements in Regulations.