Proper procedure and satisfaction required before issuing a notice under Section 28 of the PNGRB Act, and the significance of NOCs issued in the proceedings.

JUDGMENT

Prathiba M. Singh, J. (Oral) W.P.(C) 4975/2023 & CM APPL.19413/2023 (seeking interim relief)

1. This hearing has been done through hybrid mode.

2. The present petition challenges the impugned order dated 21st October, 2022 issued by Respondent No. 1-Petroleum and Natural Gas Regulatory Board (`PNGRB') under Section 28 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (hereinafter referred as `PNGRB Act').

3. The brief background of this petition is that the Petitioner-THINK Gas Ludhiana Pvt. Ltd. is an authorized entity under Section 19 of the PNGRB Act read with the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008 (hereinafter `CGD Authorization Regulations') for development of City Gas Distribution (CGD) Network in the geographical area of Jalandhar District, Kapurthala District & SBS Nagar Districts and Ludhiana District, Barnala District and Moga District. Pursuant to the said authorization dated 26th October 2018, the Petitioner supplies natural gas to its customers in these areas.

4. The case of the Petitioner is that in the city of Ludhiana, as there was no authorized entity for supply of natural gas, its customer namely Vardhaman Special Steels Limited (`VSSL') requested for supply of natural gas pursuant to an order passed by the National Green Tribunal (`NGT') dated 10th July, 2019 in the matter titled `News item published in "The Asian Age" Authored by Sanjay Kaw Titled "CPCB to rank industrial units on pollution levels"' bearing Original Application No. 1038/2018. The Petitioner then started supply of natural gas to VSSL through trucks for consumption in Ludhiana.

5. This was perceived by the PNGRB as a violation of the authorization issued to the Petitioner and, accordingly, proceedings were commenced against the Petitioner under Section 28 of the PNGRB Act. Section 28 of the PNGRB Act is as follows: "Section 28: Civil penalty for contravention of directions given by the Board. In case any complaint is filed before the Board by any person or if the Board is satisfied that any person has contravened a direction issued by the Board under this Act to provide access to, or to adhere to the transportation rate in respect of a common carrier, or to display maximum retail price at retail outlets, or violates the terms and conditions subject to which registration or authorisation has been granted under section 15 or section 19 or the retail service obligations or marketing service obligations, or does not furnish information, document, return of report required by the Board, it may, after giving such person an opportunity of being heard in the matter, by order in writing, direct that, without prejudice to any other penalty to which he may be liable under this Act, such person shall pay, by way of civil penalty an amount which shall not exceed one crore rupees for each contravention and in case of a continuing failure with additional penalty which may extend to ten lakh rupees for every day during which the failure continues after contravention of the first such direction: Provided that in the case of a complaint on restrictive trade practice, the amount of civil penalty may extend to five times the unfair gains made by the entity or ten crore rupees, whichever is higher."

6. It is the contention of Mr. Amit Sibal, ld. Senior Counsel for the Petitioner, that under the PNGRB Act and the CGD Authorization Regulations, Section 28 is the consequence of proceedings under Regulation 16 of the said CGD Authorization Regulations. Thus, notice under Section 28 of the PNGRB Act could not have been issued by PNGRB without following the proper procedure as mandated under Regulation 16 of the CGD Authorization Regulations.

7. The Petitioners contend that unless and until PNGRB arrives at a satisfaction in terms of Section 28 of the PNGRB Act, following the procedure in CGD Authorization Regulation