Appellate Tribunal For Electricity
Sabarmati Gas Limited vs Petroleum And Natural Gas Regulatory ... on 2 December, 2025
Judgment in APL No. 515 of 2023
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IN THE APPELLATE TRIBUNAL FOR ELECTRICITY
(Appellate Jurisdiction)
APPEAL No. 515 OF 2023
Dated: 02.12.2025
Present : Hon'ble Mr. Virender Bhat, Judicial Member
Hon'ble Bhupinder Singh Bhalla, Technical Member (P&NG)
In the matter of:
Sabarmati Gas Limited
Through: Mr. Milap Dholakia, Manager
(Legal)
Plot No. 907,
Sector-21, Gandhinagar-382021
Gujarat, India
Email: [email protected] Appellant
...
Versus
Petroleum and Natural Gas Regulatory
Board
Through the Secretary
1st floor, World Trade Centre, Babar Road,
New Delhi- 110001
Email: [email protected] Respondent No. 1
Crystal Ceramic Industries Ltd.
Through the Director
F.F. 101,102, Elanza Vertex,
Nr. Zainobiya, Sindhu Bhavan Road,
Bodakdev,
Ahmedabad- 380059, Gujarat, India
Email: [email protected] Respondent No. 2
Page 1 of 38
Judgment in APL No. 515 of 2023
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Ajita Sil-Chem Pvt. Ltd.
Through the Director
232, Village-Mudarada,
Dhanali-Mudarada Road, Opp. Linch GGS,
Tal-Jotana, District Mehsana-384261
Gujarat, India
Email: [email protected] Respondent No. 3
Akash Ceramics Pvt. Ltd.
Through the Director
7, Yogi Complex, 3rd Floor,
Opp. Drive-In Cinema, Drive-in-road,
Ahmedabad-380054, Gujarat, India
Email: [email protected] Respondent No. 4
Advatech Cera Tiles Ltd
Through the Director
Dhanali Taluka Kadi, District
Mehsana- 382715, Gujarat, India
Email: [email protected] Respondent No. 5
Sterling Ceramics Pvt. Ltd.
Through the Director
Survey No. 1239, 1227, 1242, Kalol-
Mehsana Highway,
Nr. Hotel Garden Safari, Nandasan Dist.
Mehsana-382715 Gujarat, India
Email: [email protected] Respondent No. 6
Heavy Metal and Tubes Ltd.
Through the Director
201, Ashwarath Complex,
Usmanpura, Ashram Road,
Ahmedabad, Gujarat, India- 380013
Email: [email protected] Respondent No. 7
Page 2 of 38
Judgment in APL No. 515 of 2023
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Counsel on record for the Respondent(s) : Piyush Joshi
Sumiti Yadava for App.
Counsel on record for the Respondent(s) : Sanskriti Bhardwaj
Suyash Gaur
Tanuja Dhoulakhandi
Mohit Budhiraja
Harshita Tomar
Kartikey Joshi
For Res. 1
Gourab Banerjee, Sr. Adv.
Ashish Tiwari
For Res. 2,3, 5 and 6
Prashant Bezboruah
For Res. 4
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.
Page 3 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________ 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 31st 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 Page 4 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ 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 Page 5 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ 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 quantity. The Appellant states that vide letter dated 21.12.2018 it informed the Respondent Entities that the pipeline of the Appellant is equipped to carry the gas from the marginal fields of ONGC to the Respondent Entities and that under CGD Authorisation Regulations, the Respondent Entities ought to off-take gas supply from the Appellant.
9. The Appellant then issued notices to the Respondent Entities between 11.04.2018 to 05.05.2018 to desist from using the unauthorised natural gas pipelines, developed by the Respondent Entities in contravention of the PNGRB Act, regulations and SGL CGD Authorisation, immediately and in any case on or before 30.04.2018 or 31.05.2018 as the case may be, failing which legal proceedings will be initiated by the Appellant against the Respondent Entities. However, the Respondent Entities refused to comply with the Notices issued by the Appellant. The Appellant then filed a complaint under section 25 of the PNGRB Act, against Respondent nos. 2 to 7, before the Respondent No. 1/ PNGRB on 05.09.2018.
10. The Respondent No 1 passed the Impugned Order dated 22.12.2022 concluding that that pipeline laid down by the Respondent Entities is dedicated in nature, which is being laid for procurement of off-spec gas from the field of ONGC, and the Appellant after denying to accept the off-spec to flow from its network, at this stage, cannot compel the Respondent Entities Page 6 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ to cease its present arrangement and start its supply from Appellant's CGD network.
Contentions of the Appellant
11. It is the contention of the Appellant that the Impugned Order permits wet natural gas to be transported by natural gas pipelines in violation of applicable law, judgements of this Tribunal and in violation of safety standards. It states that the Impugned Order is arbitrary, in violation of PNGRB Act and regulations and wrong in law and ought to be set aside, and the operations of the natural gas pipelines laid by Respondent CGD Customers ought to be stopped.
12. The main grounds on which the Appellant has challenged the impugned order are as follows:
(a) The said order has not been duly signed by the members that heard the SGL Complaint and is non-est in law and is not a valid communication of a decision or order of the PNGRB as it does not bear the signatures of the members who had heard the matter and whose decision it is seeking to communicate. The Appellant has quoted the judgment of this Tribunal dated 16.07.2021 in the case of Mahanagar Gas Limited v PNGRB & ORS (Appeal 110/2020) to support this contention.
(b) The Impugned Order has erred in law in holding that ONGC and MoPNG are "necessary parties" to the SGL Complaint that had been filed by the Appellant. This is because MoPNG is not Page 7 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ governed by the PNGRB Act and the PNGRB has no jurisdiction over MoPNG. This is also completely contrary to Respondent No. 1/PNGRB's decisions in its Judgement dated 18.11.2022 in the matter of Haryana City Gas Distribution (Bhiwadi) Ltd. v. GAIL (India) Limited (Legal/24/2021) and Judgement dated 29.11.2022 in the case of Charotar Gas Sahakario Mandali Limited v. GAIL (India) Limited & Kaira District Co-operative Milk Producers Union (AMUL) (Legal 264/2018).
(c) The Impugned Order is in violation of Regulation 3(2)(a) of CGD Authorisation Regulations since it is permitting the Respondent Entities to lay dedicated pipeline when they have gas requirement of less than 50,000 SCMD. The pipeline laid by the Respondent Entities falls within the low pressure range and is therefore clearly a pipeline that is to be considered as part of "CGD Network"
governed by the regulations governing CGD Networks, including CGD Authorisation Regulations.
(d) The Respondent No. 1/PNGRB in the Impugned Order has relied on the Open House Discussion held on 13.11.2017. However, the Respondent No.1/PNGRB has itself conceded that the Open House Discussion was on the application of Respondent No. 5/ Advatech Cera Tiles Ltd. only and none of the other Respondent Entities were present in the said Open House. The Impugned Order commits an error in interpreting the Open House discussion held on 13.11.2017 as a waiver of rights by Appellant and enabling the laying of pipelines by the Respondent Entities. Furthermore, Appellant had informed the Respondent Entities vide letter dated Page 8 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ 21.12.2018 that the pipeline of the Appellant is equipped to carry the gas to the Respondent Entities and that under CGD Authorisation Regulations, the Respondent Entities ought to offtake gas supply from the Appellant. However, despite Appellants readiness to supply gas to the Respondent Entities, the Respondent No. 1/PNGRB has not directed the Respondent Entities having a requirement of less than 50,000 SCMD to off-take gas from the Appellant. The proviso to Regulation 3(2)(a) CGD Authorisation Regulation that enables a customer to seek alternate source of supply of natural gas is not available once the authorised entity is ready with its pipeline network. Judgement dated 15.03.2023 of the Hon'ble High Court of Delhi in the case of AGP City Gas Pvt. Ltd. & Anr v. PNGRB & Ors (WPC 11645/2022) has been quoted to support this contention.
(e) The Impugned Order is in violation of Regulation 2(1)(f) of NGPL Authorisation Regulations under which a dedicated line laid to a customer for transporting natural gas to it for its end use is excluded from the scope of "natural gas pipeline", as well as Regulation 19 of NGPL Authorisation Regulations by stating that the pipelines laid by the Respondent Entities are in the nature of dedicated pipeline.
The pipeline laid by a customer itself to transport natural gas is not excluded from the scope of "natural gas pipelines" and necessarily required an authorisation of PNGRB under the NGPL Authorisation Regulations.
(f) The Impugned Order incorrectly permits the Respondent Entities to continue operations of pipeline that are not in compliance with the Page 9 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ safety standards. Even if Respondent Entities could have laid dedicated pipelines to their own premises, such a dedicated pipeline could only be laid in accordance with the procedure and approval from the Respondent No. 1/PNGRB in terms of Regulation 19 of the NGPL Authorizing Regulations, which was not complied with.
13. Respondent No. 1/PNGRB has challenged the above contentions by stating as follows:
(i) The Order impugned by the Appellant is in conformity with Section 8(4) read with Section 10 read with Section 13(3) of PNGRB Act read with the PNGRB Conduct of Business Regulations, 2007. In fact, no provision as such requires the Respondent No. 1 to communicate a signed copy of the Order to the parties appearing before it.
(ii) The contention of other Respondents on dismissal of complaint on account of non-joinder of necessary parties, i.e., MoPNG and ONGC was accepted to the limited extent that the prayer of the Appellant will result into breach of contractual agreement of Respondent with ONGC. However, it was observed that no claim or relief, whatsoever, was sought against ONGC or MoPNG, neither before the Respondent No. 1 nor before this Tribunal.
(iii) By virtue of Section 20(4) of the PNGRB Act, exclusivity is extended to a CGD entity, only for laying, building, operating or expanding a CGD network and not for all the pipelines laid Page 10 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ or to be laid in a Geographical Area. Neither the Act, nor the Respondent No 1 intends to create a sovereign monopoly of a CGD entity under the garb of infrastructure exclusivity, to lay, build, operate, expand all the pipelines within the authorized GA. Further, Regulation 5 of PNGRB (Exclusivity for City or Local Natural Gas Distribution Network) Regulations, 2008 stipulates that the infrastructure exclusivity is confined to CGD network. Thus, neither the Respondent No. 2-6 have laid an unauthorized CGD network, nor they have infringed the infrastructure exclusivity vested with the Appellant.
(iv) The averment made by Appellant regarding infringement of marketing exclusivity period is completely unfounded. The pipeline laid by Respondent No.2-6 are for their own consumption and not for resale. The Respondent No. 2-6 for requirement of natural gas have entered into GSAs with the authorized CGD entity for the GA, i.e., the Appellant. Hence, either they are procuring gas from the dedicated pipeline or from the Appellant, which depicts no breach of exclusivity.
(v) When an open house was conducted on applications of Advatech Cera Tiles and KEI-RSOS Petroleum and Energy Pvt. Ltd., an opportunity was granted to the Appellant for buying and transporting the off-spec gas, which was refused.
Thus, Appellant is bound by rule of estoppel and cannot change his stance. Further, if the Respondent No.2-6 are prohibited from operating their respective pipelines, it will Page 11 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ result into infructuous investment as the pipelines have been laid prior to the year 2017 and in operation for the past nearly six years, as submitted by the Appellant before this Tribunal on 17.05.2023.
(vi) There is no provision of the Act or Regulations that places a bar on dedicated pipeline. Consumer of natural gas, if intending to lay a pipeline is included within the definition of the term 'entity' defined under Section 2(p) of the Act. There is no stipulation under Regulation 19 that the 'entity', which is submitting the proposal for laying the dedicated pipeline, and the 'specific customer', to whom the gas is being transported, cannot be one and the same person or corporate personality.
(vii) There is no requirement for obtaining authorisation of the Respondent No. 1 for laying of a dedicated Pipeline. The Respondent No. 1 only issues an acceptance after processing the application of an entity under Regulation 19 of the NGPL Authorisation Regulations. It has quoted the judgment of the Hon'ble Delhi High Court in IMC Ltd. V. Union of India & Ors. In W.P. (C) No. 15285 of 2023 in support of this contention.
(viii) The Respondent No. 1 has regulatory oversight over dedicated pipeline also for which it has enacted Regulation 19 of the NGPL Authorisation Regulations. There are several provisions in the PNGRB Act which allow respondents to regulate the technical standards and specifications including safety standards. In exercise of this power, the Respondent Page 12 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ No. 1 has notified several T4S Regulations. While Appellant is governed by T4S Regulations enacted for City or Local Natural Gas Distribution Network (CGD), the Respondent entities are governed by T4S Regulations enacted for Natural Gas Pipelines (NGPL). Both are distinct set of regulations, constantly monitored and undertaken by the Respondent No.
1. Compliance of the T4S regulatory function constantly undertaken by the Respondent No. 1. Further, other respondents have themselves conceded to be bound by the applicable NGPL T4S Regulations. Further, the Appellant should have raised the matter of T4S compliance in the original proceedings rather than the present appeal stage.
(ix) Effective April, 2022, the Respondent No. 1 has adopted a general practice akin to that of various Tribunals, i.e., retaining the originally signed copy of the order in its records. However, the Board has also notified an amendment in Conduct of Business Regulations for this effect.
(x) Respondent has also amended Regulation 3(2)(b)(ii) and 3(2)(c) of Regulations 3 of CGD Authorisation Regulations mentioning Natural Gas Pipelines authorised or accepted by the Board under the NGPL Authorisation Regulations not forming part of the CGD Network for supply of gas to customers having requirement of natural gas of more than 50000 SCMD. Further, if the CGD Authorization Regulations is read over NGPL Authorization Regulations, and not as a distinct concept (as Respondent No. 1 submits to be two Page 13 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ distinct concepts), then a customer will be bound to take care from either a CGD entity or NGPL common/contract carrier entity, depending upon the requirement, making Regulation 19 of NGPL Authorization Regulations as redundant and otiose. Further, due to CGD entity or common/contract carrier entity's inability to transport unprocessed off-spec gas through its pipeline, the above reading will result into flaring off the off-spec gas and massive wastage of national resources.
14. The main submissions of Respondent Nos. 2, 3, 5 and 6 are as follows:
(a) ONGC was a necessary and proper party to the complaint. If the complaint is allowed, it would result in breach of contractual agreement of the Respondents with ONGC. Further since the dispensation of crude oil and gas from various ONGC fields to various customers including the Respondents is being done through auction process pursuant to the policy of the Government of India, the Ministry of Petroleum & Natural Gas would be vitally interested in the outcome of the proceedings, and would be a party, though, no relief could be claimed against it. Thus, both the Government of India as well as ONGC whose interest are also likely to be affected by the outcome of the present complaint were necessary and proper parties to the present proceedings.
(b) In the Board's open house discussion held on 13.11.2017, the Appellant flatly refused to supply off-specification gas through their CGD network, which is also noted by the Board in the impugned Page 14 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ order.
(c) Notably, at no point has this categoric finding of the Board been disputed by the Appellant. Rather, the Appellant admits that it is not possible for it to supply off-spec gas through CGD network. It claims that it can purify the said gas, and then supply it through the CGD Network. However, apart from the severe economic consequences, i.e. increase of price of such gas, which will defeat the public interest, the contesting Respondents submit that off-specification gas is admittedly not part of supply through CGD Network, and therefore the question of sustaining the complaint does not arise. This, in itself, is sufficient to dismiss the appeal of the Appellant.
(d) The pipeline laid down by the Respondents are for their own dedicated requirements of business. Unlike the Common Carrier and Contract Carrier and the CGD Network, the pipeline laid down by the Respondent is a captive/dedicated pipeline for captive consumption and not for resale. Therefore, it satisfies the definition of dedicated pipeline as per Regulation 2(1)(f) (i) of the NGPL Authorization Regulations. Besides, there is no bar either under the Act or the regulations framed thereunder prohibiting the consumer from laying, building and operating dedicated pipeline for its captive consumption. The dedicated pipelines do not fall in the purview of either the definition of CGD Network (Section 2(i)), the Common Carrier (section 2(j)) or Contract Carrier (Section 2(m)) as defined under the Act. Rather the dedicated pipeline catering to the need of one customer is expressly excluded from the purview of the common carrier as provided under the Act.Page 15 of 38 Judgment in APL No. 515 of 2023
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(e) The Board also does not have jurisdiction over the dedicated pipelines laid for captive consumption. Therefore, the arrangement for disposal of off-specification gases and their sale-purchase and transportation are outside the purview of the PNGRB Act and Regulation made thereunder. In fact, the Petroleum and Natural Gas Regulatory Board (Protection of Consumer Interest in respect of dedicated pipelines for Natural Gas) Guidelines 2010 (hereinafter referred as "2010 Guidelines") recognizes the right of the consumers to lay, built and operate the dedicated natural gas pipelines, subject to conforming to the safety norms as set out in PNGRB (Technical Standards and Specifications including safety Standards for Natural Gas Pipelines) Regulation, 2009.
(f) Since the authorization for Appellant's CGD network was issued on 16.07.2008, the marketing exclusivity arising from it ended on 16.07.2014 i.e. expiry of five years under Regulation 2(k) of PNGRB (Guiding Principles for Declaring City or Local Natural Gas Distribution Networks as Common Carrier or Contract Carrier) Regulations, 2019 r/w Regulation 6 of PNGRB (Exclusivity for City or Local Natural Gas Distribution Network) Regulations, 2008. The Appellant cannot seek to rely upon its exclusivity especially the Marketing Exclusivity in the Geographical Area for a period beyond 5 years from the date of authorization to insist that the Respondent is bound to take gas from Appellant and no one else. The Appellant has laid down a separate pipeline not forming part of its CGD Network and proposes to supply natural gas through these pipelines to the Respondents. However, the Appellant is an Page 16 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ authorized entity, only for CGD Network under CGD Authorization Regulation, 2008 vide authorization letter dated 16.07.2008.
However, it is not authorized to lay, build or operate a "Natural Gas Pipeline" under the PNGRB NGPL Authorization Regulation 2008.
(g) The provisions of Section 16 to 21 of the PNGRB Act as regards authorization and permission are applicable only to those which are authorized entities [defined under section 2(d)], for laying building, operating or expanding those pipelines, which are Common Carrier [defined under section 2(j)], Contract Carrier [defined under section 2(m)] or the City Gas Distribution Network [defined under section 2(i)]. Unlike Common Carrier, Contract Carrier and the CGD Network, the pipelines laid down by the answering Respondents are a captive/dedicated pipelines for captive consumption, and not for resale.
(h) The answering Respondents not being entities under the Act are not covered by these Regulations, and consequently, the authorisation process under it.
(i) Despite this, the answering Respondents wrote to the PNGRB intimating the status and details of its pipelines. PNGRB did not respond to the intimation and as per prevailing practice the dedicated pipeline was deemed to have been authorized.
(j) Respondents are complying with all the necessary safety standards as set out in the PNGRB safety regulation and submit the periodical compliance report from time to time. They have also taken necessary precaution and safety measures in laying building and operating these pipelines.
Page 17 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________
(k) Further, and in any event, any requirements to comply with the regulatory requirements set out by PNGRB regarding safety are solely an inter se issue between the answering Respondents and the Board, and SGL has no locus to interfere in it.
15. Respondent No. 4 has made similar contentions as regard to its pipeline being a dedicated pipeline, inapplicability of the Section 16 to 21 of the Act to the pipeline and inapplicability of CGD Authorization Regulations and proviso to Regulation 3(2)(a) relied on by the Appellant. It has also contended that Appellant's infrastructure is not ready to transport wet gas through its network. It has also contended that Appellant has not been granted any infrastructure exclusivity for the economic life of the CGD project in terms of Regulations 5(1) of the CGD Exclusivity Regulations.
16. Respondent No. 7 has not filed the reply to the appeal or any written submissions.
17. There are two preliminary grounds raised by Appellant in respect of the impugned order: first, it being invalid due to its not having been duly signed by the Members that heard the SGL's complaint and, second, whether the impugned order heard in law in holding that ONGC and Ministry of Petroleum and Natural Gas are necessary parties to the proceedings.
18. Section 8(4) of the PNGRB Act states that:
"8. Meetings of the Board....
(4) All orders and decisions of the Board shall be authenticated by the Secretary or any other officer of the Board duly authorised Page 18 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ by the Chairperson in this behalf."
19. Further, Regulation 29 (2) of PNGRB (Conduct of Business, Receiving and Investigation of Complaints) Regulations, 2007 states as follows:
"(1) All orders and decisions issued or communicated by the Board shall be certified by the signature of the Secretary or any other officer of the Board empowered in this behalf by the Chairperson and bear the official seal of the Board. (2) All final orders of the Board shall be communicated to the parties to the proceedings under the signature of the Secretary or any officer of the Board empowered in this behalf by the Chairperson."
Provided that every such order or decision communicated to the parties or web-hosted on the website of the Board or communicated to the public, will bear the phrase "Sd/-" instead of signatures of the coram. However, the originals will bear signature of the coram and shall be kept in the safe custody of the Board"
(proviso added vide amendment dated 24th March 2025)
20. It is noted that the impugned order was made and pronounced by the three Members of Respondent 1. While the copy of impugned order enclosed with the appeal mentions "sd/-" for all the three Members, the certified copy of the impugned order carries the signature and stamp of the Secretary of the Board. It is a normal practice for the certified copy to be issued as such. It cannot be inferred from this that the impugned order in original was not signed by the three Members when it was made and pronounced. Respondent No. 1 has clearly mentioned that the order is in conformity with Section 8(4) read with Regulation 29 of PNGRB Conduct of Business Regulations, 2007. It has also submitted that no provision requires the Board Page 19 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ to communicate the signed copy to the parties before it. In the given circumstances, this ground on which the appeal has been challenged, is not substantiated.
21. The Appellant in his complaint before Respondent Board had not impleaded either ONGC or Ministry of Petroleum and Natural Gas (MoPNG). However, the Respondents represented before the Board that the complaint should be dismissed as ONGC and Ministry of Petroleum and Natural Gas were necessary parties in the matter. The Appellant countered that the Board does not have jurisdiction over upstream activities by entities like GAIL in upstream activities like ONGC nor does it have jurisdiction over the Government of India as Ministry of Petroleum and Natural Gas. It is a fact that the Respondent entities have entered into separate contracts with ONGC for procurement of off-spec natural gas. If the appeal were to be accepted, and an order issued for the Respondent entities to procure the gas from the Appellant itself, it would certainly result in reneging of the said contracts, impacting ONGC, making it a necessary party. It is important to note that Respondent No. 1 did not dismiss the complaint of the Appellant simply on the ground of non-joinder of ONGC and MoPNG. It went into the substantive grounds as well in the impugned order, and the order appears to have been made considering all of them together. Even if the contention of the Respondents challenging the non-joinder of ONGC and MoPNG was decided in the negative, the complaint would still have been decided against the Appellant. However, the decision in the impugned order that the Ministry should also have been impleaded as a necessary or proper party in the complaint is not in order. The Ministry establishes the broader policy under Page 20 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ which the Board regulates the petroleum and natural gas sector. If the Ministry were to be impleaded in every complaint, like in the present matter, there would hardly be any proceedings where it can be left out. Its presence would also not have altered the decision made in the impugned order.
22. The substantive issues to be decided are as follows:
1) Whether the gas requirement of each of the Respondent entities is less than 50000 SCMD?
2) Whether dedicated pipelines require any authorization from the Respondent Board and are required to comply safety standards laid down by the PNGRB Board?
3) Whether the pipelines laid by the Respondent entities are dedicated pipelines and, whether the prescribed procedure has been followed for their laying?
4) Whether the pipelines of Respondent entities are violating Regulation 3(2)(a) of CGD Authorisation Regulations?
23. Each of the issues is discussed below.
Issue No. 1:
24. The Appellant has contended that each of the Respondent Nos. 2 to 7 have a gas requirement of less than 50000 SCMD. This has not been contested by any of the Respondent Entities, except Respondent No. 2, who has simply stated without providing any proof, that it has a requirement of Page 21 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ more than 50000 SCMD. Hence, is held that each of the Respondent entities have a requirement of less than 50000 SCMD.
Issues No. 2 and 3:
25. Natural Gas is defined under Section 2(za) of the PNGRB Act as follows:
"2. (za) "natural gas" means gas obtained from bore-holes and consisting primarily of hydrocarbons and includes-
(i) gas in liquid state, namely, liquefied natural gas and degasified liquefied natural gas,
(ii) compressed natural gas,
(iii) gas imported through transnational pipe lines, including CNG or liquefied natural gas,
(iv) gas recovered from gas hydrates as natural gas,
(v) methane obtained from coal seams, namely, coal bed methane, but does not include helium occurring in association with such hydrocarbons.
26. Regulation 2(1)(f) of NGPL Authorisation Regulations, 2008 defines natural gas pipeline as under:
"(f) "natural gas pipeline" means any pipeline including spur lines for transport of natural gas and includes all connected equipments and facilities, such as, compressors, storage facilities, metering units, etc. but excludes-
(i) dedicated pipeline laid to transport natural gas to a specific customer to meet his requirement and not for resale;
(ii) pipelines in a city or local natural gas distribution network which are regulated by the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008.Page 22 of 38 Judgment in APL No. 515 of 2023
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27. Section 2(i) of the PNGRB Act defines City or Local Gas Distribution Network as follows:
(i) "city or local natural gas distribution network" means an inter connected network of gas pipelines and the associated equipment used for transporting natural gas from a bulk supply high pressure transmission main to the medium pressure distribution grid and subsequently to the service pipes supplying natural gas to domestic, industrial or commercial premises and CNG stations situated in a specified geographical area.
Explanation:- For the purposes of this clause, the expressions "high pressure" and "medium pressure" shall mean such pressure as the Central Government may, by notification, specify to be high pressure or, as the case may be, medium pressure;"
28. The Appellant claims that its CGD Network is equipped to carry the gas required by the Respondent entities to them. However, it is undisputed that the gas being procured by the Respondent entities is wet in nature which implies that has a moisture content, and has many other impurities.
29. Threshold limits for gas parameters for a CGD network have been specified in Schedule VI of the Petroleum and Natural Gas Regulatory Board (Access Code for Common Carrier or Contract Carrier Petroleum and Petroleum Products Pipelines) Regulations, 2016. In case any natural gas fails to comply with such parameters, it cannot be connected to a CGD network and is termed as off-specification gas or off-spec gas. In the present matter in dispute, the gas being procured by the respondent entities from ONGC is off-spec gas and cannot be connected to the CGD network as the moisture content will result in corrosion of the CGD pipeline network. Hence, Page 23 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ the only way it can be accepted into the CGD Network is by purifying it to meet the threshold standards laid down by the PNGRB. Such purification of gas is likely to result in increase in its cost of delivery to the Respondent entities due to the extra process involved. The Appellant has also nowhere stated that supply of the same gas to the Respondent Entities would not result in increase in the price of gas that will be incurred by the entities.
30. In the alternative, the Respondent Entities can be supplied the off-spec gas through a separate independent pipeline. In view of the definition of CGD network enunciated above, such a pipeline, being not inter-connected with any pipeline of the CGD network, cannot be considered a part of the "CGD network" for which the Appellant has been authorised by the Respondent No.
1. Essentially, such an independent pipeline falls outside the "CGD Network"
of any CGD authorised entity. Even if the Appellant wants to set up such an independent pipeline, it would need specific authorisation of the Respondent No. 1 to do so. There is nothing on record to indicate that the Appellant has obtained such a specific authorisation or is intending to do so.
31. Hence, the pipelines laid from the ONGC oil fields to the respective premises of the Respondent entities would be categorised as "Natural Gas Pipeline" under Regulation 2(1)(f) of NGPL Authorisation Regulations unless they fall within exclusion mentioned under the sub-clause (i) and (ii) of the said Regulation.
32. Clause 2(i)(f) is repeated here for immediate reference:
"(f) "natural gas pipeline" means any pipeline including spur lines for Page 24 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ transport of natural gas and includes all connected equipment's and facilities, such as, compressors, storage facilities, metering units, etc. but excludes-
(i) dedicated pipeline laid to transport natural gas to a specific customer to meet his requirement and not for resale;
(ii) pipelines in a city or local natural gas distribution network which are regulated by the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008.
33. We have already examined and concluded above that these pipelines do not form part of the CGD Network, and therefore do not meet the criteria mentioned in (ii) above. Whether these are "dedicated pipelines" in terms of sub-clause (i) above can now be examined.
34. The provisions related to establishment of Dedicated Pipelines are given under Regulation 19 of the NGPL Authorisation Regulations which is enunciated below:
"19. Provisions relating to dedicated pipelines for transport of natural gas.
(1) In respect of dedicated pipelines existing before the appointed day, the following provisions shall apply, namely:-
(a) entity having dedicated pipeline to transport natural gas to a specific customer before the appointed day shall submit details of the pipeline length, route, capacity and customers served along with the DFR of the project to the Board within thirty days of notification of these regulations;
(b) Board may web-host details of dedicated pipeline seeking comments of general public with a view to ascertain whether such pipeline needs to be converted into natural gas pipeline in public interest;Page 25 of 38 Judgment in APL No. 515 of 2023
____________________________________________________________________________
(c) The Board may, based on the examination of the comments received, direct the entity to convert such pipeline into natural gas pipeline in overall public interest:
Provided that the entity shall be given an opportunity to present its case;
(d) The entity may also submit its proposal to convert its dedicated pipeline into natural gas pipeline to the Board alongwith complete details and justifications and the Board may web-host details of dedicated pipeline seeking comments of general public with a view to ascertain whether such pipeline needs to be converted into natural gas pipeline in public interest and the Board may, based on the examination of the comments received and in overall public interest, issue grant of authorization to the entity for conversion into a natural gas pipeline.
(2) In respect of dedicated pipelines proposed to be laid, built, operated or expanded after the appointed day, following provisions shall apply, namely:-
(a) the entity proposing to lay, build, operate or expand a dedicated pipeline to transport natural gas to a specific customer after the appointed day shall submit details on pipeline length, route, capacity and details of the customers served along with the DFR of the project to the Board at least thirty days before the proposed commencement of laying and building of the dedicated pipeline;
(b) Board may web-host details of the proposed dedicated pipeline seeking comments of general public with a view to ascertain whether, instead of a dedicated pipeline, the public interest would be better served if a natural gas pipeline is laid, built, operated or expanded;
(c) in case, based on the examination of the comments received, the Board is of the view that instead of a dedicated pipeline natural gas pipeline would better serve the public purpose it may advise the entity appropriately within thirty days of the receipt of the information from the entity;
(d) in case, despite receiving the advice from the Board under clause Page 26 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________
(c), the entity still wishes to lay, build, operate or expand a dedicated pipeline, it may do so:
Provided that simultaneous to the entity building a dedicated pipeline, the Board may, on suo-motu basis, decide to issue an expression of interest for laying, building, operating or expanding a natural gas pipeline:
Provided further that the entity shall not be allowed to apply to the Board for conversion of its dedicated pipeline into a natural gas pipeline for a period of five years from the date of the commissioning of its dedicated pipeline;
(e) any entity laying, building, operating or expanding a dedicated pipeline for which no advice has been issued by Board under clause (c) may apply to the Board at any time for converting it into natural gas pipeline and the Board may decide to authorize the entity for such conversion in line with the procedure under clause
(d) of sub-regulation (1) and the moratorium period restriction of five years specified under clause (d) shall not be applicable in such case;
(f) the Board may, in respect of a dedicated pipeline laid, built, operated or expanded after the appointed day, direct the entity to convert dedicated pipeline into natural gas pipeline as per the following procedure, namely:-
(i) the Board may web-host details of dedicated pipeline seeking comments of general public with a view to ascertain whether such pipeline needs to be converted into natural gas pipeline in public interest;
(ii) the Board may, based on the examination of the comments received, direct the entity to convert such pipeline into natural gas pipeline in overall public interest:
Provided that the entity shall be given an opportunity to present its case.
(3) In case a dedicated pipeline is converted into a natural gas pipeline under sub-regulations (1) or (2), the provisions under the sub-
regulation (9) of regulation 18 shall apply to such pipeline.
Page 27 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________
35. The pipelines laid by the Respondent entities carry natural gas and are meeting their individual requirements. The gas is not being resold. It is the Appellant's case that in order for a pipeline to be classified as a dedicated pipeline, it cannot be laid by the customer and has to be established by any other entity. On the other hand, the Respondent No. 1 has stated that there is no provision of the Act or the Regulation which plays a bar on a consumer to lay a dedicated pipeline. The Respondent No. 1 has stated that the term "entity" used in Regulation 19 has a wide import, which inter-alia includes within its ambit any person, association of persons, firm, company or cooperative engaged or intending to be engaged in transportation or petroleum, petroleum products and natural gas, including laying of the pipelines for the said purpose. It is the also the case of Respondent No. 1 that a consumer of natural gas if intending to lay a pipeline is also an "entity" and can submit a proposal for laying a dedicated pipeline under Regulation
19. It has also stated that there is no stipulation or mandate under Regulation 19 that the 'entity', which is submitting the proposal for laying the dedicated pipeline, and the 'specific customer', to whom the gas is being transported, cannot be one and the same person or corporate personality.
36. On the other hand, the Respondents 2 to 6 have submitted that they are not "entities" and, therefore, are not required to obtain any authorization from Respondent No. 1.
37. The term "entity" is defined in Section 2(p) of the PNGRB Act as follows:
Page 28 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________ ""entity" means a person, association of persons, firm, company or cooperative society, by whatsoever name called or referred to, other than a dealer or distributor, and engaged or intending to be engaged in refining, processing, storage, transportation, distribution, marketing, import and export of petroleum, petroleum products and natural gas including laying of pipelines for transportation of petroleum, petroleum products and natural gas, or laying, building, operating or expanding city or local natural gas distribution network or establishing and operating a liquefied natural gas terminal;"
38. From the above definition, it appears that there is nothing to prevent a "customer" as envisaged in Regulation 2(1)(f)(i) of the NGPL Authorisation Regulations to act as an "entity" under Regulation 19 of the said Regulations for laying a dedicated pipeline, and then acting as a consumer to receive and consume the gas that flows through the pipeline.
39. The Appellant has contended that the dedicated pipelines can only be laid in accordance with procedure and approval from Respondent No. 1 in terms of the Regulation 19 of NGPL Authorisation Regulations. Appellant has stated that this procedure has not been complied with and therefore the pipeline cannot be termed as a dedicated pipeline in terms of Regulation 19.
40. Respondent No. 1 in its submission has stated that only the entities intending to lay, build, operate, or expand a pipeline as a common carrier or contract carrier, or any city or local natural gas distribution network (CGD) are mandated to obtain prior authorization from the Respondent Board. It has further stated that holistic reading of Section 16 with Section 2(j) of the Act indicates that there is no requirement for obtaining authorization from the Board for laying of a dedicated pipeline. The Respondent No.1 only issues an Page 29 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ acceptance after processing the application under Regulation 19 of NGPL Authorisation Regulations.
41. Section 2(j) of the PNGRB Act defines common carrier as follows:
"common carrier" means such pipelines for transportation of petroleum, petroleum products and natural gas by more than one entity as the Board may declare or authorize from time to time on an non- discriminatory open access basis under sub-section (3) of section 20, but does not include pipelines laid to supply -
(i) petroleum products or natural gas to a specific consumer; or
(ii) crude oil;
Explanation - For the purposes of this clause, a contract carrier shall be treated as a common carrier, if-
(i) such contract carrier has surplus capacity over and above the firm contracts entered into; or
(ii) the firm contract period has expired.
42. Section 16 of the PGRB Act reads as follows:
"16. Authorisation.-No entity shall -
(a) lay, build, operate or expand any pipeline as a common carrier or contract carrier,
(b) lay, build, operate or expand any city or local natural gas distribution network, without obtaining authorization under this Act;
Provided that an entity. -
(i) laying, building, operating or expanding any pipeline as common carrier or contract carrier; or
(ii) laying, building, operating or expanding any city or local natural gas distribution network, Page 30 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ immediately before the appointed day shall be deemed to have such authorization subject to the provisions of this Chapter, but any change in the purpose or usage shall require separate authorization granted by the Board.
43. Further, Section 11 of the Act defines the functions of the PNGRB/Respondent No. 1. Under its provisions, the Board has to authorize entities to
(i) lay, build, operate or expand a common carrier or contract carrier;
(ii) lay, build, operate or expand city or local natural gas distribution network;
44. A conjoint reading of the Sections 2(j), 11, and 16 of the PNGRB Act along with the NGPL Authorisation Regulations indicate that the Respondent No. 1 is not required to issue authorization for other than laying, building, operating or expanding a common carrier or contract carrier or city or local natural gas distribution network. However, to ensure that every natural gas pipeline complies with technical standards and specifications including safety standards, it has devised a procedure for laying, building, operating or expanding a dedicated pipeline under Regulation 19 of NGPL Authorisation Regulations as enunciated above. Regulation 19(2)(d) of the said Regulation makes it clear that an entity can lay, build, operate or expand a dedicated pipeline at its discretion even if the Board has advised that a public interest would be better served if a natural gas pipeline is laid, built, operated or expanded instead of a dedicated pipeline. The only adverse consequence of an entity ignoring the advice of the Board is that the Board can simultaneously start the process for laying a natural gas pipeline and Page 31 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ also not allow the entity to apply for conversion of its dedicated pipeline into a natural gas pipeline for a period of five years. From this examination, it is apparent that neither does the Act provide for an authorization of a dedicated pipeline by Respondent No. 1 nor do the NGPL Authorisation Regulations have a mandatory provision of such authorisation.
45. As regards, whether the dedicated pipelines laid by the Respondent entities have been "accepted" by Respondent No. 1 in terms of Regulation 19, the Respondent No. 1 has submitted that the Board had not issued acceptance of the application by the Respondent entities since the applications were pending on account of use of PE pipes that were earlier not allowed as natural gas pipelines. However, vide amendment dated 17.07.2020, PE pipes were allowed to transport off-spec natural gas from marginal/isolated fields. Respondent No. 1 has submitted it has already designated the pipelines except of Heavy Metals and Fuels (Respondent No.
7) as dedicated pipelines and consequently, the Respondent entities were instructed to carry out T4S audits in compliance with the concerned PNGRB Regulations.
46. It can, therefore, be concluded that the pipelines laid by Respondent entities are dedicated pipelines in terms of Regulation 19 of NGPL Authorisation Regulations, and no specific authorization is required for these pipelines from Respondent No. 1. The applications/intimations of pipelines laid by Respondent Nos 2 to 6 have already been accepted by Respondent No 1 in terms of the provisions of NGPL Authorisation Regulations. These Page 32 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ pipelines are also under the framework of T4S regulations, though the extent of compliance varies.
Issue No. 4:
47. Prior to the amendment of the CGD authorization Regulations vide notification dated 26.12.2024, Regulation 3(2) of the CGD Authorisation Regulations read as follows:
"(2 ) A CGD network shall be designed to operate at a pressure as specified in the relevant regulations for technical standards and specifications, including safety standards for maintaining the volumes of supply of natural gas on a sustained basis to meet the following requirements, namely:-
(a) customers having requirement of natural gas upto 50,000 SCMD shall be supplied through the CGD network;
Provided that until CGD Network is ready to supply natural gas to a customer (other than domestic PNG and CNG), such customers shall have right to get the supply of natural gas from any other alternate source or supplier, with prior permission of the Board, and, if once CGD Network is ready to supply natural gas to such customer, then, such customer shall cease to get supply of natural gas from such alternate source or supplier after 30 days of receipt of notice of readiness from the CGD network.
(b) customers having requirement of natural gas more than 50,000 SCMD and upto 100,000 SCMD shall be supplied, at the discretion of customer-
(i) through the CGD network; or
(ii) through a pipeline not forming part of the CGD network;
(b) customers having requirement of natural gas more than 100,000 SCMD shall be supplied through a pipeline not forming part of the CGD network."
Page 33 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________
48. Clause (b) and Clause (c) of Regulation 3(2) have been amended by the aforesaid notification. The amended Regulation 3(2) now reads as follows:-
"(2 ) A CGD network shall be designed to operate at a pressure as specified in the relevant regulations for technical standards and specifications, including safety standards for maintaining the volumes of supply of natural gas on a sustained basis to meet the following requirements, namely:-
(a) customers having requirement of natural gas upto 50,000 SCMD shall be supplied through the CGD network;
Provided that until CGD Network is ready to supply natural gas to a customer (other than domestic PNG and CNG), such customers shall have right to get the supply of natural gas from any other alternate source or supplier, with prior permission of the Board, and, if once CGD Network is ready to supply natural gas to such customer, then, such customer shall cease to get supply of natural gas from such alternate source or supplier after 30 days of receipt of notice of readiness from the CGD network.
(b) customers having requirement of natural gas more than 50,000 SCMD and upto 100,000 SCMD shall be supplied, at the discretion of customer
(i) through the CGD network; or
(ii) Through, a natural gas pipeline, authorized or accepted by the Board under the Petroleum and Natural Gas Regulatory Board (Authorizing entities to Lay, Build, Operate or Expand Natural Gas Pipelines) Regulations, 2008, not forming part of the CGD Network;"
(c) Customers having requirement of natural gas to an extent of more than 100,000 SCMD, shall be supplied through a natural gas pipeline, authorized or accepted by the Board under the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand Natural Gas Pipelines) Regulations, 2008, not forming part of the CGD network" (emphasis added) Page 34 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________
49. As concluded in para 24, the Respondent entities have a requirement of natural gas up to 50000 SCMD and, therefore, the provision contained in Clause (a) of Regulation 3(2)(a) is applicable. The amendment, though quoted by the Respondent No. 1, is not applicable to the Respondent entities. Hence, the Respondent entities would be required to obtain their natural gas requirement from the Appellant unless the proviso to clause (a) applies to them.
50. The Respondent Nos. 2-6 have stated that gas supply from the ONGC field is crude wet gas with a lot of impurities as well as crude oil and cannot be transported through the existing CGD network and a separate pipeline to transport the gas not being part of the CGD network is required for the gas. They have also stated that in the open house discussion held on 13.11.2017 organised by Respondent No. 1, Appellant conceded that the gas cannot be transported through existing CGD Network. They have said that the Appellant has taken separate allocation from ONGC field for a separate pipeline that is not a part of the CGD Network.
51. Respondent No. 1 in its reply to the appeal, mentioned that an open house discussion was held on 13.11.2017, in pursuance to applications of Advatech Cera Tiles and KEI-RSOS Petroleum and Energy Private Limited for laying of dedicated pipelines, wherein an opportunity was granted to the Appellant for buying and transporting the off-spec gas, to the Respondents of the instant appeal. However, the Appellant refused to supply the off-spec gas as they were only willing to supply the gas which meets the quality Page 35 of 38 Judgment in APL No. 515 of 2023 ____________________________________________________________________________ standards/specifications. The relevant extract from the minutes of the discussion are reproduced hereunder:
"5. ONGC while expressing their views informed the house that both Banaskandi and Linch fields of ONGC are having very less potential of gas production with shorter lifespan. The gas supply will be on 'fall back' and 'as is where is' basis for five years. These gases are wet in nature and may not meet the quality norms as specified for any CGD network. ONGC does not process these gases due to very less quantity as the same may become techno-economically unviable if brought under the specified quality norms to suite the common carrier or CGD Network...... Therefore, PNGRB is requested to allow them for laying dedicated pipelines as there is no bar in the Regulations to lay a dedicated pipelines in any CGD Network....
7. ... In reply to the question that whether SGL is able to accept the gas of ONGC in their network and can supply to Advatech Cera Tiles Limited, Sabarmati Gas Limited agreed to supply the gas through their network subject to the condition that the gas should meet the quality standard as specified for the CGD network. ONGC replied that it is not economically viable for them to sell gas in dry condition or quality as desired for such a small quantity of 5000 SCMD"
52. The Appellant has countered this by stating that the Respondent entities were informed vide letter dated 21.12.2018 that the pipeline of the Appellant is equipped to carry the gas to them. The Respondent Nos. 2-6 have, however, stated that the Appellant would need to purify the off-spec gas before it can be transported through the CGD Network and this purification would multiply the cost of a gas for them and make it unviable.
Page 36 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________
53. It appears that the off-spec gas can be carried through the CGD network and then transported to the premises of the Respondent entities only if it is purified. However, it would be either economically unviable to ONGC (if such purification is to carried out by it) or for the Respondent entities.
54. Further, it was concluded in para 46 that the pipelines laid by the Respondent entities are dedicated pipelines in terms of Regulation 19 of the NGPL Authorisation Regulations. We are of the view that the provisions of CGD Authorisation Regulations must be interpreted in harmony with the provisions of NGPL Authorisation Regulations. If we were to conclude that despite the pipelines laid by Respondent entities being in the nature of dedicated pipelines, they would still need to procure the natural gas from the Appellant in terms of Regulation 3(2)(a) of CGD Authorisation Regulations, it would make one Authorisation Regulation subservient to the other, which does not seem the intent of law in the absence of any specific provision to that effect. We agree with the submission of Respondent No. 1 that such an interpretation would also make Regulation 19 of the NGPL Authorisation Regulations redundant. This makes us conclude that the Respondent entities are not violating Regulation 3(2)(a) of the CGD Authorisation Regulations as their pipelines are covered under the framework of NGPL Authorisation Regulations.
55. In view of the analysis and findings above, we do not find force in the grounds on which the impugned order has been challenged by the Appellant through the appeal. Accordingly, the appeal is dismissed.
Page 37 of 38 Judgment in APL No. 515 of 2023____________________________________________________________________________
56. No order as to costs.
Pronounced in the open court on this 02nd day of December, 2025.
(Bhupinder Singh Bhalla) (Virender Bhat)
Technical Member (P&NG) Judicial Member
REPORTABLE / NON-REPORTABLE
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