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(II) The Board as a regulator has the obligation to ensure that the consumers are not exploited and under Section 20(4) the Board grants monopoly for 25 years with further extension of 10 years at a time and barring unforeseen circumstances, such a network will have exclusive infrastructure monopoly for several decades. Therefore, in the factual matrix, the Board has a duty to ensure that consumer interest is protected during the monopoly period, as mandated under Section 20(4) and that can be done by ensuring the investment by the gas company in the transportation infrastructure of the city network is recovered in a reasonable manner for all the gas transported in the city network over the economic life of the network. It is not the stand of the Board that it does not have the power to monitor the Maximum Retail Price (MRP) however, the transportation rates/tariff would indicate it is the price charged to the consumer so that it does not result in excessive profiteering and under these circumstances, it is the duty of the respondent to reveal the transportation prices to the Board as well as to the consumers.

8. Having enumerated the submissions in reply by the first respondent, we must record the submissions of the second respondent, that is, Union of India. The following proponements have been urged by Ms. Pinky Anand, learned ASG.

(i) There is no legislative intent for allowing the Board to determine the pricing of gas, i.e. the price which the entity charges from the ultimate customers. The Act, while protecting the interests of the consumers, has not empowered the Board to fix the price at which the entities will sell the petroleum products or natural gas to the consumers, for the MRP is to be fixed by the entity.

(v) The Board is not empowered to fix the price at which entities will market or sell the notified petroleum products or natural gas. The MRP is to be fixed by the entity. The Board shall only monitor the prices and take corrective measures to prevent restrictive trade practices by the entities. As regards regulation of the activities of transmission and distribution of petroleum products and natural gas, the Board will oversee access to pipelines and city or local natural gas distribution networks on non-discriminatory, common carrier/contract carrier principle for ensuring a level playing field for all entities. That apart, the concept of allowing capacity in a city or local natural gas distribution network to be used by any third party entity on non-discriminatory common carrier/contract carrier principle shall incetivize emergence of independent marketers of natural gas. Such independent marketers shall enter into transportation contracts with the entity, owning and operating the city or local natural gas distribution network for transportation of their gas. This, in turn, will foster fair trade and competition in marketing amongst entities

9. Mr. K.K. Venugopal, learned senior counsel appearing for the intervenor, Central U.P. Gas Ltd., has contended that the Board does not have the power to fix MRP and the distribution entity has a fundamental right to carry on the trade, subject to restriction under Article 19(1)(g) of the Constitution and in the case at hand, the Act, does not confer any power on the Board to fix the MRP, but on the other hand, it expressly provides for the MRP to be fixed by the entity themselves as per Section 2(x) of the Act. Learned senior counsel would contend that once the Board has no jurisdiction/ authority to fix the MRP, it is not entitled to fix any element/ component of the MRP as it would bring an anomalous situation. The submission of the Board that the distribution entity can charge the MRP, but it has the power to regulate the component, that is, the transportation charges is a futile exercise, a brutum fulmen, for the simple reason that however low may be the component of MRP determined by the Board, the authorised entity can virtually ignore the same. It is argued by him that the Board is a creature of the Act and it can only exercise its functions in accordance with and within the four corners of the said Act and it cannot prescribe what it calls network tariff and compression charge under the Regulations, because the statute refers to fixation of “transportation tariff/ transportation rate” but does not mention of ‘network tariff’ or ‘compression charges’. In the absence of any power conferred under the Act to frame regulations in that regard, the Regulations clearly transgress the enactment and hence, the Regulations to that extent are ultra vires. It is urged by him that ‘network tariff’ is not the same as ‘transportation rate’ and the Board cannot assume such an authority by employing a different analogy. Placing reliance on Section 11(e)(ii), it is argued by the learned senior counsel that the said provision which provides for Board’s function and empowers the Board to frame regulations, employs the words ‘transportation rates for common carrier or contract carrier’ and they remotely do not purport to fix rates for ‘network tariff’ or ‘compression charges’ for city gas distribution network. In addition, it is propounded by him that reliance on Sections 21(2) and 22(1) and all other provisions are absolutely misconceived and the assumption that the Board as a regulator to look after consumer interests, cannot travel beyond the statutory limit.