PNGRB can process pending applications: SC

Issues notices on city gas authorisation powers issue.

Acting on a special leave petition filed by the Petroleum & Natural Gas Regulatory Board (PNGRB), against the Delhi High Court order restricting its powers, the Supreme Court today issued notices to Indraprastha Gas Ltd and others in the case.

“The Court has said the Board can only process pending applications, but it cannot pass any final orders,” said Bimal Roy Jad, counsel for Indraprastha Gas Ltd (IGL). Veteran lawyer Harish Salve is representing PNGRB in this case. The next hearing will take place after four weeks.

The January 21, 2010 order of the Delhi HC struck down the powers of PNGRB to issue authorisation for city gas distribution (CGD) projects. It also rendered the previous authorisations by PNGRB invalid.

The HC judgment put a question mark on the roll out of the CGD network, at a time when the domestic production of natural gas doubled to 140 million standard cubic metres a day (mscmd) on account of KG Basin gas output. Moreover, companies, including GAIL Gas, Reliance and Adani, have already made significant investments in the CGD business.

The HC judgement noted the government had not notified Section 16 of the PNGRB Act that empowers the board to issue authorisation. “In view of non-notification... it is held that the Board has no power to grant authorisation to entities which applied to it for laying, building, operating or expanding city or local natural gas distribution networks... this is in consonance with the Central government’s stand in the counter-affidavit filed before this court,” said the order. The said section, which gives the Board regulatory power to authorise the companies “to lay, build, operate or expand a city or local natural gas distribution network”, was excluded from the notification dated October 1, 2007, when the PNGRB Act came into effect.

In March-April last year, the Board issued city gas licences for six cities — Kakinada in Andhra Pradesh, Mathura and Meerut in Uttar Pradesh, Kota in Rajasthan, Dewas in Madhya Pradesh and Sonepat in Haryana.

In the second round, it invited bids for seven cities — Allahabad, Ghaziabad and Jhansi in Uttar Pradesh, Shahdol (Madhya Pradesh), Rajahmundry and Yanam (Andhra Pradesh) and Chandigarh, but did not award licence on restraint from the court.

Indraprastha Gas Ltd, which had pre-PNGRB authorisation for CNG operations in Ghaziabad, and Voice-of-India, a non-government organisation, had challenged PNGRB’s move in the Delhi High Court. The central government also told the court that the Board was “not currently empowered to issue authorisations”.