Case: ADANI GAS LIMITED  Vs. UNION OF INDIA

1. Leave granted. 2. The appellant company is registered under the Companies Act, 1956 and is involved in the business of setting up of Natural Gas Distribution Networks within India. The dispute in this petition is with regard to the Gas Distribution Network (for short ‘GDN?) in the cities of Udaipur and Jaipur in the State of Rajasthan. Challenging the order dated 18.05.2011 of the Government of Rajasthan whereby No Objection Certificate (for short ‘NOC?) for laying down of Gas Network pipelines granted in favour of the appellant had been withdrawn (including forfeiture of the commitment fees of Rs. 2 Crore deposited by the appellant), and also the order dated 19.05.2011 of the Board rejecting the application of the appellant for authorisation of its projects in Udaipur and Jaipur, as well as challenging the validity of the Regulation 18 of the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations, 2008 (for short ‘Regulations of 2008?), the appellant had filed Writ Petition No. 10028 of 2011 before the Rajasthan High Court, which has been dismissed on 29.04.2015. Aggrieved by the same, this Special Leave Petition has been filed.3. Brief facts of this case are that on 19.11.2005 the Government of Rajasthan invited parties to submit their bids for laying of Gas Distribution Network in certain cities of Rajasthan, including the said two cities of Udaipur and Jaipur. In response to the same, the appellant submitted its Expression of Interest for the cities of Udaipur and Jaipur. On 20.03.2006, the Government of Rajasthan informed the appellant that it intended to grant NOC to the appellant for undertaking Gas Distribution in the cities of Udaipur and Jaipur, which was to be subject to certain conditions as mentioned in the aforesaid communication dated 20.03.2006. Immediately thereafter on 22.03.2006, the appellant company informed that it agreed to all the terms and conditions laid down by the Government of Rajasthan in its communication dated 20.03.2006 whereby it intended to grant NOC to the appellant. Then, on 24.03.2006, the appellant deposited the commitment fees of Rs. 2 Crore. On 27.03.2006, the Government of Rajasthan granted the NOC to the appellant company for Gas Distribution in the cities of Udaipur and Jaipur. The appellant then started its work of laying down the City Gas Development Network in the said two cities.4. The Petroleum and Natural Gas Regulatory Board Regulations Act, 2006 (for short ‘Act of 2006) was notified on 03.04.2006, except for the provisions of Section 16 of the said Act relating to authorisation. On 21.07.2007, the appellant company made a request for authorisation of its City Gas Distribution Project under Act of 2006 to the Chairman of Petroleum and Natural Gas Regulatory Board (for short ‘the Board?). In the said communication, the appellant had also provided the details of its existing projects in the country, namely at Ahmedabad, Vadodara, Faridabad, Noida, Khurja, Lucknow, Udaipur and Jaipur. The appellant had also submitted that in terms of Sections 15 and 16 of Chapter IV of the Act of 2006, there was a provision of ‘deemed authorisation? of the existing City Gas Distribution Projects and in terms of the Act of 2006, a brief dealing of all the projects under its implementation was also enclosed.5. Then, on 24.07.2007, the appellant wrote to the Ministry of Petroleum and Natural Gas requesting for authorisation of its City Gas Distribution Projects under the Act of 2006 for all its gas projects, including the ones of Udaipur and Jaipur. The Act of 2006 was although notified on 03.04.2006, but came into force with effect from 01.10.2007, which was its appointed date. However, Section 16 of the said Act, relating to ‘Authorisation?, was brought into force only with effect from 15.07.2010.6. On 30.10.2007 the Petroleum and Natural Gas Regulatory Board issued a press note, calling upon all the concerned entities involved in or proposed to the laying, building, operating or expanding of a City or Local Gas Distribution Network prior to the appointed date, i.e. 01.10.2007, to furnish the particulars of such activities to the Board within six months from the appointed date. It was further provided that in cases where no authorisation was granted to the entities that initiated the specified activities before the appointed date, then such entities were to apply for authorisation under Section 17 of the Act of 2006. The Government of Rajasthan, then on 05.12.2007, intimated the appellant of the press note dated 30.10.2007 and required the appellant to submit the details, as were prescribed in terms of the said press note. Two days thereafter, on 07.12.2007, the appellant submitted the requisite details for the City Gas Distribution Projects of Udaipur and Jaipur. Then, on 11.12.2007, the Government of Rajasthan called upon the appellant to further submit the details to the Board in terms of the press note dated 30.10.2007. In response to the same, the appellant informed the Government of Rajasthan that the said details had already been furnished on 07.12.2007.7. On 19.03.2008, the Petroleum and Natural Gas Regulatory Board Regulations, 2008 were notified. Pursuant thereto, on 31.03.2008 the Board issued a notice to the appellant stating that the appellant did not have the requisite authorisation by the Central Government in terms of the proviso to Section 17(2) of the Act of 2006. The Regulation 18 of the Regulations of 2008 has been challenged by the appellant on the ground of being ultra vires the Act of 2006.8. The appellant, however, on 28.08.2008 filed an application under Regulation 18 of the Regulations of 2008 for grant of authorisation of city Gas Distribution Network at Udaipur and Jaipur. In response to the same, the Board issued a notice dated 19.11.2008 to the appellant for oral hearing on 05.12.2008 and in the same meeting, the appellant presented the status report as well as the investment made by the appellant, and expressed its commitment to the Board to develop the project and requested the Board to grant authorisation for the two cities of Udaipur and Jaipur. The appellant, in the meantime, continued its development work of laying down the gas pipelines. Then, on 12.07.2010, by a notification of the Government, Section 16 of the Act of 2006 was brought into force. After coming into force of Section 16, the Board, on 29.07.2010, issued notice to the appellant to once again appear before the Board on 04.08.2010 to show cause as to why the application under Regulation 18(1) of the Regulations of 2008 should not be rejected.9. In the meantime, though no formal orders were passed by the Board, on 28.02.2011, the Government of Rajasthan issued a notice to the appellant stating that the appellant has failed to fulfil the conditions laid down in the communications dated 20.03.2006 and 27.03.2006 issued by the Government of Rajasthan and thus the NOCs were liable to be withdrawn and the commitment amount also liable to be forfeited. To the said notice, the appellant submitted its reply to the Government of Rajasthan on 16.03.2011. Then, by an Order dated 18.05.2011, the Government of Rajasthan withdrew the NOCs granted to the appellant and forfeited the commitment fees of Rs. 2 Crore deposited by the appellant on 24.03.2006. On the very next date i.e. 19.05.2011, by two separate letters, the Board rejected the applications of the appellant for authorisation of projects at Udaipur and Jaipur, on the ground that the physical and financial progress achieved by the appellant did not satisfy the proviso of Regulation 18(2)(d) of the ‘Regulations of 2008? and even after instructions had been given by the Board vide press note dated 30.10.2007, the appellant had allegedly continued with laying of pipelines, in violation of such directions given by the Board in the said press note.10. The appellant, then on 01.07.2011, wrote to the Board to bring to its notice that the appellant has deemed authorisation in terms of proviso to Section 16 of the Act of 2006 and the letters of rejection dated 19.05.2011 of the Board to the appellant should be withdrawn. To the said communication, there was no response received by the appellant from the Board. Challenging the order dated 18.05.2011 issued by the Government of Rajasthan and the orders dated 19.05.2011 issued by the Board as well as the challenging the vires of Regulation 18 of the ‘Regulations of 2008?, the appellant had filed Writ Petition before the Rajasthan High Court, which was dismissed on 29.04.2015. The same is under challenge in this appeal. 11. For proper appreciation of the issues involved in this case the relevant provisions of the Act of 2006 and the Regulations of 2008 are reproduced hereunder: The Petroleum and Natural Gas Regulatory Board Act, 2006 "2. Definitions. – In this Act, unless the context otherwise requires, ¬(a)…………;(b)…………;(c)…………;(d) ?authorised entity? means an entity –(A) registered by the Board under Section 15—(i) to market any notified petroleum, petroleum products or natural gas, or(ii) to establish and operate liquefied natural gas terminals, or(B) authorised by the Board under section 16—(i) to lay, build, operate or expand a common carrier or contract carrier, or(ii) to lay, build, operate or expand a city or local natural gas distribution network;(e)…………;(f)………….;(g)…………;(h)…………;(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.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 authorisation 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, immediately before the appointed day shall be deemed to have such authorisation subject to the provisions of this Chapter, but any change in the purpose or usage shall require separate authorisation granted by the Board.17. Application for authorisation. –(1) An entity which is laying, building, operating or expanding, or which proposes to lay, build, operate or expand, a pipeline as a common carrier or contract carrier shall apply in writing to the Board for obtaining an authorisation under this Act: Provided that an entity laying, building, operating or expanding any pipeline as common carrier or contract carrier authorised by the Central Government at any time before the appointed day shall furnish the particulars of such activities to the Board within Six months from the appointed day.(2) An entity which is laying, building, operating or expanding, or which proposes to lay, build, operate or expand, a city or local natural gas distribution network shall apply in writing for obtaining an authorisation under this Act:Provided that an entity laying, building, operating or expanding any city or local natural gas distribution network authorised by the Central Government at any time before the appointed day shall furnish the particulars of such activities to the Board within six months from the appointed day.(3) Every application under sub¬section (1) or sub-section (2) shall be made in such form and in such manner and shall be accompanied with such fee as the Board may, by regulations, specify.(4) subject to the provisions of this Act and consistent with the norms and policy guidelines laid down by the Central Government, the Board may either reject or accept and application made to it, subject to such amendments or conditions, if any, as it may think fit.(5) In the case of refusal or conditional acceptance of an application, the Board shall record in writing the grounds for such rejection or conditional acceptance, as the case may be."The Petroleum and Natural Gas Regulatory Board Regulations, 2008:?18. Entity not authorized by the Central Government for laying, building, operating or expanding CGD network before the appointed day. –(1) An entity laying, building, operating or expanding a CGD network at any time before the appointed day but not duly authorized to do so by the Central Government shall apply immediately for obtaining an authorization in the form as at Schedule I.(2) The Board may take into consideration the following criteria while considering the application for grant of authorization, namely :¬(a) the entity meets the minimum eligibility criteria as 16[***] specified in clauses (a) to (e) and (i) of sub¬regulation (6) of regulation 5 before the appointed date and is possessing all necessary statutory clearances, permissions, no objection certificates from the Central and State Governments and other statutory authorities:(b) an entity which is not registered under the Companies Act, 1956 at the time of submitting the application for grant of authorization shall undertake to become a company registered under the Companies Act, 1956: Provided that the Board may exempt an entity to register under the Companies Act, 1956 on such conditions as it may deem appropriate;(c) a satisfactory assessment of the actual physical progress made and the financial commitment thereof till immediately before the appointed day in comparison with the entity?s DFR appraised by the financial institution funding the project. In case the project has not been funded by any financial institution, the Board may appraise the DFR. The DFR of the entity should clearly indicate the specified geographical area of the project and also specify the coverage proposed for CNG and PNG. In case upon scrutiny area, customer segments, infrastructure requirements, etc. proposed by the entity, the DFR is found to be sub-optimal and unacceptable, the Board may not consider the case of the entity for issuing the authorization;(d) in respect of the actual physical progress made and the financial commitment thereof referred to in clause (c), a physical progress of at least twenty five percent and a financial commitment of at least twenty five percent of the capital expenditure identified for the CGD project as per the DFR immediately before the appointed day may be considered as adequate;(e) the entity should have arranged, by way of acquisition or lease, land for CGS and procured the necessary equipment for erecting the CGS before the appointed day;(f) the Board reserves the right to get the actual physical progress and the financial commitment certified and depending upon the progress achieved, the Board may consider authorizing the entity for the authorized area—(i) as per the geographical area in its DFR,(ii) as per the geographical area actually covered under implementation till the appointed day; or(iii) the geographical area as specified by the Board;(g) in relation to laying, building, operating or expanding the CGD network, it is for the entity to satisfy the Board on the adequacy of its ability to meet the applicable technical standards, specification and safety standards as specified in the relevant regulations for technical standards and specifications, including safety standards and the quality of service standards as specified in regulation 15:(h) assessment of the financial position of the entity in timely and adequately meeting the financial commitments in developing the CGD network project as appraised by a financial institution and an examination of the audited books of accounts of the entity;(i) firm arrangement for supply of natural gas to meet the demand in the authorized area to be covered by the CGD network;(j) any other criteria considered as relevant by the Board based on the examination of the application.(3) The evaluation of the application in terms of the clauses (a) to (j) shall be done in totality considering the composite nature and the inter¬ linkages of the criteria.(4) The Board, after examining the application in terms of the criteria under sub¬regulation (2) and also taking into account the requirements in other regulations may form a prima¬facie view as to whether the case should be considered for authorization.(5) In case of prima-facie consideration, the Board shall issue a public notice in one national and one vernacular daily newspaper (including webhosting) giving brief details of the project and seek comments and objections, if any, within thirty days from any person on the proposal.(6) The Board, after examining the comments and objections, if any under sub¬regulation (5), may either consider or reject the case for grant of authorization for the CGD network.(7) In case it is decided to grant authorization, the same shall be in the form at Schedule D;(8) In case of rejection of the application, the Board shall pass a speaking order after giving a reasonable opportunity to the concerned party to explain its case and proceed to select an appropriate entity for the project in terms of regulation 6.(9) In case the entity is selected for grant of authorization for CGD network, ¬¬(a) the network tariff and the compression charge for CNG shall be determined under the 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;(b) the Board may consider grant of exclusivity on such terms and conditions as specified in the Petroleum and Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas Distribution Networks) Regulations, 2008;(c) the entity shall abide by the technical standards, specifications including safety standards as specified under relevant regulations for technical standards and specifications, including safety standards;(d) the provisions under regulations 9, 13, 14, 58 [***] and 16 shall apply to the entity.?(emphasis supplied) 12. We have heard the learned Counsel for the parties and have perused the material on record. 13. The main issue for consideration in this appeal is whether the Board was justified in rejecting the application filed by the appellant under Section 17 of the Act of 2006 read with Regulation 18 of the Regulations of 2008, after the provisions contained in Section 16 of the Act of 2006 came into force on 12.07.2010 granting deemed authorisation to those entities which had inter alia started laying and building local Natural Gas Distribution Network prior to the appointed date, i.e. 01.10.2007. 14. It is not disputed that in pursuance to the Government of Rajasthan having, on 19.11.2005, invited bids for laying of Gas Distribution Network, the appellant had applied for the two cities of Udaipur and Jaipur and after acceptance of its application, the appellant was granted NOC by the Government of Rajasthan on 27.03.2006. It is also not disputed that pursuant thereto, the appellant has laid approximately 75 kms of pipeline in both the cities of Udaipur and Jaipur, and in the process, spent a huge amount of money relying on the NOC granted in its favour for such purpose. The appellant asserts that is has completed the following activities in the two projects of Udaipur and Jaipur: "Udaipur:a) Received permission to cut roads vide letter dated 4.6.2007, made payment of Rs.14,28,900 towards road cutting bill and provided Bank Guarantee to the Municipal Council of Udaipur in this respect;b) Purchase of material and services for the project, amounting to Rs.452.99 lacs;c) The Petitioners appointed M/s. International Certification Services (Asia) Pvt. Ltd., for the independent verification, inspection, certification of the work done of the gas distribution pipeline. This agency was subsequently also authorised by the Board vide communication dated 6.4.2010.d) The Petitioner had achieved mechanical completion on various phases of the project and accordingly has received Mechanical Completion Certificated in this respect.e) The Petitioner has successfully laid 30093 mtrs. of gas distribution pipeline in Udaipur.?Jaipur?:a) The Petitioner has received provisional permission vide letter dated 7.3.2008 from RIICO for laying 41.1 KM of the gas distribution pipeline in Jaipur;b) Towards the provisional permission received from RIICO the Petitioner has deposited Rs.54,95,500.00 with RIICO; andc) Purchase of material and services for the project, amounting to Rs.393.22 lacs:d) The Petitioner has successfully laid 22610 mtrs. of gas distribution pipeline in Jaipur.? 15. Section 17 of the Act of 2006, which Act was notified on 03.04.2006 (except Section 16) and came into force on 01.04.2007, provides that an entity which is laying, building, operating or expanding City or Local Natural Gas Distribution Network, or which proposes to do so, has to apply in writing to the Board for obtaining an authorisation under the Act of 2006. However, the entity authorised by the Central Government for such activities would be required to furnish the particulars of such activities to the Board within 6 months from the appointed date. Sub Section 4 of Section 17 empowers the Board either to reject or accept such application, which power has to be exercised consistent with the norms and policy guidelines. Sub Section 5 provides that in case of refusal or conditional acceptance of an application, the Board shall record reasons in writing for such rejection or conditional acceptance. 16. Section 16 of the Act of 2006, which came into force on 12.07.2010, relates to ‘Authorisation?. It puts an embargo to lay, build, operate or expand in City or Local Natural Gas Distribution Network without obtaining authorisation under the Act. The Proviso (ii) of the said section 16 provides for ‘deemed authorisation? in case an entity had been laying, building, operating or expanding any City or Local Gas Distribution Network, immediately before the appointed date, which shall be deemed to have such authorisation. In the present case, the appointed date is 01.10.2007 when the Act of 2006 was brought into force, except the provision contained in the Section 16 of the Act of 2006, which came into force on 12.07.2010. 17. The Regulations of 2008 were framed before Section 16 of the Act of 2006 came into force. Regulation 18 of the Regulations of 2008 provides that an entity, not authorised by the Central Government for laying, building, operating or expanding CGD network before the appointed date, shall apply for obtaining an authorisation in the form as in Schedule I and the Board may take into consideration the criteria for considering the application for grant of authorisation in terms specified in clauses (a) to (j) of Regulation 18(2). 18. Regulation 18(2)(a) requires the entity to meet the minimum eligibility criteria and other necessary clearances, as well as the requisite NOCs. Clause (b) provides that the entity, if not registered under Companies Act, 1956, shall undertake to become a company registered under the Companies Act, 1956. The other factors in clauses (c) and (d) as enumerated, relate to actual physical progress made and the financial commitment thereon, and requires a physical progress of at least 25 percent of capital expenditure before the appointed date, which may be considered as adequate. Clauses (e) and (f) provide that the entity should have arranged and procured the necessary equipment for erecting the City Gas Distribution network before the appointed date. Clause (g) provides for the entity to satisfy the Board on the adequacy of its ability to meet the applicable technical standards, specifications and safety standards as specified in the relevant Regulations. Clause (h) provides for assessment of financial position of the entity and Clause (i) provides for supply of natural gas to meet the demand in the authorised area to be covered by City Gas Distribution network. The last clause (j) provides for the Board to consider any other relevant criteria based on the examination of the application. All the aforesaid clauses are relevant factors and the one which is put for consideration in the present case is Clause (d), on which ground, the Central Government has primarily rejected the application of the appellant. 19. It is noteworthy that the language used in Regulation 18(2) is that ?the Board may take into consideration…………?. As such, the language in which the Regulation has been couched does not make the consideration in the said clauses, including Clause (d), to be mandatory, but no doubt the same would be relevant considerations. On a careful perusal of the order passed by the Board, we find that the application of the appellant has been rejected for reasons mentioned in para 5 of the impugned order dated 19.05.2011, which are extracted hereunder: ?5. The committee found that you do not satisfy the conditions laid down under the Regulation 18(1) of the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations 2008 on account of the following:a) Physical and financial progress achieved by M/s. Adani Gas Limited before the appointed day in the GA of Jaipur does not satisfy the proviso 18(2)(d) of the Regulation 18(1) of Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution Networks) Regulations 2008;b) Even After clear instructions of PNGRB vide Press Note Dated 30 th October, 2007 to stop all incremental activity M/s. Adani energy Limited had continued with laying of MDPE Pipeline and thus violating the directions of the Board.? 20. From the above, it is clear that the application of the appellant has been rejected primarily on the ground of non¬compliance of clause (d) of Regulation 18(2) of the Regulations of 2008. It was incumbent on the Board to take into consideration various factors as specified in clauses (a) to (j) of Regulation 18(2) of the Regulations of 2008, and the same has to be considered in the back drop of the fact that the press note was issued on 30.10.2007 to stop all incremental activities and as such it was necessary to consider whether the appellant could have been faulted for non-compliance of clause (d) of Regulation 18(2), and whether it was a mandatory requirement or merely one of the factors to be considered along with all the other factors. Other relevant aspects as contained in the other clauses have not been adverted to by the Board while deciding the application of the appellant, which were also equally significant. It was necessary to consider whether the appellant is compliant of various other factors as provided in clauses (a) to (j) of Regulation 18(2) of the Regulations of 2008. The non¬ compliance, if any, of clause (d) ought to have been considered in the light of the press note dated 30.10.2007 which required stopping of all incremental activities. 21. The peculiar factual position is that the Act of 2006 had been notified on 03.04.2006 but came into force on 01.10.2007 and the NOC was issued on 27.03.2006, after the Government of Rajasthan had invited open bids on 19.11.2005 for laying of City Gas Distribution network in the cities of Udaipur and Jaipur, in which the appellant had been selected. Besides depositing the sum of Rs. 2 Crores immediately towards commitment fee, the appellant had thereafter incurred mammoth expenditure after it was successful in the bids, which aspect has not been considered by the Board while deciding the application of the appellant. In our considered view, the same should not have normally been over looked. Besides the same, in the factual circumstances of the present case, the provision of ‘deemed authorisation? contained in Proviso (ii) to Section 16 had also been enforced on 12.07.2010 and it was necessary for the Board to have considered whether it was a case where only certain safeguards were required to be observed in view of the ‘deemed authorisation?.22. We are of the firm view that it was also necessary for the Board to have considered all these aspects and thereafter to have decided the application relating to authorisation/conditions to be imposed under the Act, if any, required. Besides this, detailed replies had been submitted by the appellant before the Board, which also ought to have been considered. Further, the requirement under the Act/Regulations is for grant of personal hearing to the appellant before deciding its application and if personal hearing was given, to have discussed the same in the order, which aspect has also been ignored by the Board.23. In view of the aforesaid discussion, we are of the opinion that there was illegality committed by the Board in deciding the application of the appellant while passing the order dated 19.05.2011, and as such the same deserves to be quashed. We also hold that in the aforesaid factual background, the decision of the State Government to revoke the NOC vide order dated 18.05.2011 was also highly unfair and unjust in as much as the reply of the petitioner dated 16.03.2011 in response to the notice dated 26.02.2011 has not been dealt with by the Government of Rajasthan while passing the said impugned order dated 18.05.2011. As such, the same does not stand to reason, which also deserves to be quashed.

Decision:
1[ds]14. It is not disputed that in pursuance to the Government of Rajasthan having, on 19.11.2005, invited bids for laying of Gas Distribution Network, the appellant had applied for the two cities of Udaipur and Jaipur and after acceptance of its application, the appellant was granted NOC by the Government of Rajasthan on 27.03.2006. It is also not disputed that pursuant thereto, the appellant has laid approximately 75 kms of pipeline in both the cities of Udaipur and Jaipur, and in the process, spent a huge amount of money relying on the NOC granted in its favour for such purpose.From the above, it is clear that the application of the appellant has been rejected primarily on the ground of non¬compliance of clause (d) of Regulation 18(2) of the Regulations of 2008. It was incumbent on the Board to take into consideration various factors as specified in clauses (a) to (j) of Regulation 18(2) of the Regulations of 2008, and the same has to be considered in the back drop of the fact that the press note was issued on 30.10.2007 to stop all incremental activities and as such it was necessary to consider whether the appellant could have been faulted for non-compliance of clause (d) of Regulation 18(2), and whether it was a mandatory requirement or merely one of the factors to be considered along with all the other factors. Other relevant aspects as contained in the other clauses have not been adverted to by the Board while deciding the application of the appellant, which were also equally significant. It was necessary to consider whether the appellant is compliant of various other factors as provided in clauses (a) to (j) of Regulation 18(2) of the Regulations of 2008. The non¬ compliance, if any, of clause (d) ought to have been considered in the light of the press note dated 30.10.2007 which required stopping of all incremental. The peculiar factual position is that the Act of 2006 had been notified on 03.04.2006 but came into force on 01.10.2007 and the NOC was issued on 27.03.2006, after the Government of Rajasthan had invited open bids on 19.11.2005 for laying of City Gas Distribution network in the cities of Udaipur and Jaipur, in which the appellant had been selected. Besides depositing the sum of Rs. 2 Crores immediately towards commitment fee, the appellant had thereafter incurred mammoth expenditure after it was successful in the bids, which aspect has not been considered by the Board while deciding the application of the appellant. In our considered view, the same should not have normally been over looked. Besides the same, in the factual circumstances of the present case, the provision of ‘deemed authorisation? contained in Proviso (ii) to Section 16 had also been enforced on 12.07.2010 and it was necessary for the Board to have considered whether it was a case where only certain safeguards were required to be observed in view of the ‘deemed authorisation?.22. We are of the firm view that it was also necessary for the Board to have considered all these aspects and thereafter to have decided the application relating to authorisation/conditions to be imposed under the Act, if any, required. Besides this, detailed replies had been submitted by the appellant before the Board, which also ought to have been considered. Further, the requirement under the Act/Regulations is for grant of personal hearing to the appellant before deciding its application and if personal hearing was given, to have discussed the same in the order, which aspect has also been ignored by the Board.23. In view of the aforesaid discussion, we are of the opinion that there was illegality committed by the Board in deciding the application of the appellant while passing the order dated 19.05.2011, and as such the same deserves to be quashed. We also hold that in the aforesaid factual background, the decision of the State Government to revoke the NOC vide order dated 18.05.2011 was also highly unfair and unjust in as much as the reply of the petitioner dated 16.03.2011 in response to the notice dated 26.02.2011 has not been dealt with by the Government of Rajasthan while passing the said impugned order dated 18.05.2011. As such, the same does not stand to reason, which also deserves to be quashed.