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2015 (7) TMI 1130 - SC - Indian LawsPower of Petroleum and Natural Gas Regulatory Board to fix or regulate the maximum retail price at which gas is to be sold by entities such as Indraprastha Gas Ltd, to the consumers - power of Board to fix any component of network tariff or compression charge for an entity having its own distribution network - Petroleum and Natural Gas Regulatory Board (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008 - invocation of the jurisdiction under Article 226 of the Constitution - Section 22 of the Act - network tariff and compression charges for CNG - Delhi City Gas Distribution (CGD) network - Sub-section (e) of Section 11 of the Act - Sub-section (2) of Section 61 - whether reading of provisions namely, Sections 20 to 22 of the Act, it can be construed that they confer any power on the Board to fix the transportation tariff of a consumer of natural gas? Held that - the Board has not been conferred such a power as per Section 11 of the Act. That is the legislative intent. Section 61 enables the Board to frame Regulations to carry out the purposes of the Act and certain specific aspects have been mentioned therein. Section 61 has to be read in the context of the statutory scheme. The regulatory provisions, needless to say, are to be read and applied keeping in view the nature and textual context of the enactment as that is the source of power. On a scanning of the entire Act and applying various principles, it is concluded that the Act does not confer any such power on the Board and the expression subject to used in Section 22 makes it a conditional one. It has to yield to other provisions of the Act. The power to fix the tariff has not been given to the Board. In view of that the Board cannot frame a Regulation which will cover the area pertaining to determination of network tariff for city or local gas distribution network and compression charge for CNG - appeal dismissed - decided against appellant.
Issues Involved:
1. Whether the Petroleum and Natural Gas Regulatory Board (PNGRB) has the power to fix or regulate the maximum retail price (MRP) of gas sold by entities. 2. Whether the PNGRB is empowered to fix any component of network tariff or compression charge for entities with their own distribution networks. 3. The validity of the PNGRB (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008. 4. Interpretation of the powers conferred by the Petroleum and Natural Gas Regulatory Board Act, 2008 (the Act) on the PNGRB. Detailed Analysis: 1. Power to Fix or Regulate Maximum Retail Price (MRP): The High Court ruled that the PNGRB does not have the authority to fix or regulate the maximum retail price at which gas is sold by entities to consumers. It concluded that the PNGRB Act does not confer such power on the Board. The Supreme Court upheld this view, stating that the legislative intent and the provisions of the Act do not empower the Board to fix the MRP. The Court emphasized that Section 11 of the Act, which outlines the functions and powers of the Board, does not include the authority to fix prices. The Board's role is limited to ensuring fair trade and competition among entities, not regulating the relationship between entities and consumers. 2. Power to Fix Network Tariff or Compression Charge: The High Court also held that the PNGRB is not empowered to fix any component of network tariff or compression charge for an entity having its own distribution network. The Supreme Court agreed, noting that Section 11(e)(ii) of the Act specifically mentions the Board's power to determine transportation rates for common carriers or contract carriers, but not for entities with their own distribution networks. The Court found that the omission of such power in the Act is deliberate and not accidental, and thus, the Board cannot assume this authority. 3. Validity of the 2008 Regulations: The High Court declared the PNGRB (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008, as ultra vires the Act. The Supreme Court upheld this decision, stating that the Regulations overstep the powers conferred by the Act. The Court emphasized that the Board cannot frame regulations that go beyond the scope of the enabling Act. Since the Act does not confer the power to fix network tariffs or compression charges for entities with their own distribution networks, the Regulations are invalid. 4. Interpretation of the Act: The Supreme Court provided a detailed interpretation of the Act, particularly Sections 11, 20, 21, and 22. It highlighted the following points: - Section 11 outlines the functions and powers of the Board, focusing on fostering fair trade and competition among entities, but not on regulating prices. - Section 20 allows the Board to declare pipelines as common carriers or contract carriers and to regulate access to such pipelines, but does not extend this power to entities with their own distribution networks. - Section 21 deals with the right of first use and the payment of transportation rates by entities other than the authorized entity. - Section 22 allows the Board to lay down transportation tariffs for common carriers, contract carriers, or city or local natural gas distribution networks, but this power is subject to the provisions of the Act, particularly Section 11. The Court concluded that the Act does not empower the Board to fix transportation tariffs for entities with their own distribution networks or to regulate the MRP. The legislative intent is clear, and the Board's regulatory powers are limited to ensuring fair competition and preventing restrictive trade practices, not price control. Conclusion: The Supreme Court dismissed the appeal, affirming the High Court's decision that the PNGRB does not have the power to fix or regulate the MRP or any component of network tariff or compression charge for entities with their own distribution networks. The 2008 Regulations were declared ultra vires the Act, and the Board's authority is limited to the powers explicitly conferred by the Act.
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