JUDGEMENT

PER HON’BLE Mr. BHUPINDER S. BHALLA, TECHNICAL MEMBER (P&NG)

1. The present appeal has been filed by the Appellant under Section 33 of the Petroleum and Natural Gas Regulatory Board Act, 2006 (hereinafter referred to as “PNGRB Act”) challenging the order dated 22.12.2022 of the Petroleum and Natural Gas Regulatory Board (Respondent No. 1) in the matter of SGL v Crystal Ceramics & Ors. (Legal/267/2018) (hereinafter referred to as the “impugned order” disposing off the complaint filed by the Appellant on 05.09.2018. The Appellant has prayed for setting aside the impugned order on several grounds.

Brief facts of the case

2. The Appellant, Sabarmati Gas Limited, is the joint venture company between Bharat Petroleum Corporation Limited and Gujarat State Petroleum Corporation Limited and the authorised entity for the geographical area of Sabarkanta, Mehsana and Gandhinagar District (SGL GA) in the state of Gujarat for establishing city gas distribution project vide Ministry of Petroleum and Natural Gas, Government of India, communication dated 06.12.2005. The Appellant is an entity authorised by the Central Government prior to the appointed date of the PNGRB Act and provisions of section 16 of the PNGRB Act coming into force.

3. The Appellant states that it has laid down the CGD Network infrastructure comprising of 385 KMs of Steel Pipelines and 3800 KMs of MDPE Pipelines, and serves approximately 1,30,000 households, approx. 576 commercial customers and approx. 288 industrial customers located within the SGL GA. The Appellant states that it has made a cumulative investment of approximately Rs. 552 Crores till 31^st March 2018 for developing the CGD Network in the SGL GA.

4. Respondent No. 2 to Respondent No. 7 (collectively referred to as “Respondent Entities”) are existing customers of Appellant’s CGD Network and obtaining gas supply from the Appellant.

5. The Appellant states that the Respondent Entities have unlawfully been laying, building, operating and expanding natural gas pipelines without an authorisation from the Respondent No. 1/PNGRB to off-take natural gas from the ONGC gas fields which amounts to creation of a CGD network as defined under section 2 (i) of PNGRB Act in the geographical area of Gandhinagar, Mehsana and Sabarkanta. It alleges that such willful action of the Respondent Entities is in blatant violation of the SGL CGD Authorisation whereby infrastructure exclusivity for the SGL GA is vested with the Appellant under the provisions of the PNGRB Act, Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008 (hereinafter referred to as “CGD Authorisation Regulations”), PNGRB CGD Exclusivity Regulations and other applicable laws.

6. The Appellant states that each of the Respondent Entities is having a consumption requirement of less than 50,000 SCMD of natural gas and undertook the laying of their own natural gas pipelines thereby creating an unauthorised CGD Network.

7. It is the case of the Appellant that none of the Respondent Entities have obtained any permission or authorization from the Respondent No. 1 /PNGRB either under section 16 read with section 17 of the PNGRB Act or under Regulation 19(2) of the PNGRB (Authorizing Entities to Lay, Build, Operate or Expand Natural Gas Pipelines) Regulations, 2008 (hereinafter referred to as "NGPL Authorization Regulations").

8. The Respondent No. 1/ PNGRB held an Open House Discussion on 13.11.2017 for the application of Respondent No. 5 /Advatech Cera tiles and KEI-RSOS Petroleum & Energy Pvt Ltd for laying dedicated pipelines. The Appellant agreed to supply the gas through their network subject to it meeting the quality standard as specified for the CGD network. However, ONGC, from whose field the gas is being sourced, stated that it is not economically viable to sell the off-spec gas in dry condition or quality as desired by the Appellant for the small quanti