HC holds as "bad" PNGRB's Model GTA guidelines

The Delhi High Court today held "to be bad" the Model Gas Transmission Agreements (GTA) guidelines issued by the Petroleum and Natural Gas Regulatory Board (PNGRB) for fixing and regulating the tariff of gas transport.
A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw said PNGRB can fix and regulate the rates for transporting natural gas only by way of regulations.
It made it clear that the Board in exercise of its adjudicatory functions also cannot pass an order having the effect of determining and regulating transportation tariff.
"We accordingly hold that the PNGRB can exercise power of fixing the transportation rate, of regulating transportation rate and of laying down the transportation tariff and the manner of determining such tariff, only by Regulations.

"We accordingly hold the provisions of the Model GTA guidelines, purporting to fix the transportation rate and/or regulating the transportation rate and/or to lay down the transportation tariff and the manner of determination thereof, though issued by the PNGRB but otherwise than by way of Regulations, to be bad," it said.
The bench further said "the PNGRB can by making regulations in accordance with the PNGRB Act do what it has sought to do by framing the Model GTA guidelines and which has now been held to be not permissible.
"Without PNGRB doing so and in the absence of any regulations qua transportation tariff and the manner of determination thereof, PNGRB, in exercise of its adjudicatory functions, also cannot pass an order having the effect of regulating transportation tariff or manner of determination thereof."

The bench passed the order on the plea of GAIL India Limited which had challenged the Model GTA guidelines issued by the Board as being ultra vires to the Constitution as well as amounting to encroaching on the right of a transporter like GAIL to enter into GTAs on agreed terms.