Charged with conflict of interest, PNGRB chief reconstitutes bench

After filing a suit against the Petroleum & Natural Gas Regulatory Board (PNGRB), government-controlled GAIL India has forced PNGRB chairman L Mansingh to reconstitute a regulatory bench, alleging conflict of interest.

During the hearing of a petition filed by Welspun group against it last week, GAIL had alleged Mansingh’s house in Gandhinagar had been taken on rent by Welspun. Mansingh was a part of the bench that was hearing the case. A person privy to the proceedings said the hearing had to be adjourned after the GAIL lawyer showed pictures of the house and submitted proof to back the claim.

Following this, PNGRB is in the process of reconstituting the bench. “My house was leased to one of the employees of Welspun sometime in May 2006 when I was secretary, consumer affairs, and there was no issue of conflict of interest then,” Mansingh told Business Standard. Mansingh has recused himself from the hearing of the case.

GAIL did not respond to queries. In an email response, a Welspun Maxsteel spokesperson said the company had contested a gas price increase imposed by GAIL from retrospective effect. “It’s true it was adjourned due to conflict of interest,” he said.

Welspun currently pays Rs 30,000 as rent for the house. The house was taken on rent on May 1, 2006, for Rs 20,000 a month without payment of any security deposit. “It may be noted Welspun Maxsteel came into the Welspun portfolio much later in 2009 when it was bought from Grasim,” said the response.

GAIL, India’s biggest gas transporter and marketer of natural gas, has been running into dispute with the regulator. Recently, it moved the Supreme Court, challenging the PNGRB’s decision to authorise state venture Gujarat State Petronet Ltd to commission three pipeline projects. It alleged the decision violated an apex court judgement that directed “all pending and new applications shall be dealt with by a multi-member board”.

The functioning of the board has attracted controversy right from the beginning when it was taken to court by Indraprastha Gas Ltd, questioning its power to issue authorisation since the government had not notified Section 16 of the PNGRB Act. The government notified the section only in June 2010 after almost four years of its constitution.