SC upholds permission to Torrent Gas for CGD infra in Chennai, Tiruvallur

In a major relief to an Ahmedabad-based city gas distribution (CGD) player, the Supreme Court recently upheld Petroleum and Natural Gas Regulatory Board (PNGRB)'s authorisation to Torrent Gas to lay the CGD infrastructure in Chennia and Tiruvallur districts in Tamil Nadu.

The judgment came in the form of dismissal of Adani Gas Limited's (AGL) appeal challenging such authorisation to Torrent Gas. 

Following an international competitive bidding process on September 7, 2018, PNGRB had authorised Torrent Gas to lay the CGD infrastructure to provide Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in the districts of Chennai and Tiruvallur.

However, Adani Gas challenged the same on the ground that the bid of Torrent Gas was unreasonably high and PNGRB ought to have rejected the bid. 

In its February 17 order, the apex court held that the power to determine the reasonability of the bids resides solely with the PNGRB by virtue of Clause 14.2 of the bid document. While dismissing AGL's plea, SC also held that PNGRB’s determination on reasonability was neither arbitrary nor in violation of the principles of natural justice. 

With Chennai and Tiruvallur arguably the only metro regions in the country where CGD infrastructure does not exist to date, the judgment paves way for the same to be laid by Torrent Gas, part of the Rs 21,000 crore Torrent Group which has strong presence in pharmaceuticals and power, as well.