GAIL (INDIA) LTD. versus PETROLEUM AND NATURAL GAS REGULATORY BOARD &  ORS.
[2016] 1 S.C.R. 525, Supreme Court of India, 2016
Outcome: Disposed off
Segment: Issues
[201.6] 1 S.C.R. 525 
GAIL (INDIA) LTD. 
v. 
PETROLEUM AND NATURAL GAS REGULATORY BOARD & 
ORS. 
(Civil Appeal No. 11450 OF 2014)
0 
JANUARY 13, 2016 
[KURIAN JOSEPH AND R.F. NARIMAN, JJ.] 
Petroleum and Natural Gas Regulatory Board Act, 2006 - ss. 
28, ll{a) rw s. 12(J)(b)(v)--' Restrictive Trade Practice- Petroleum 
and Natural Gas Regulatory Board (Guiding Principles for 
Declaring or Authorising Natural Gas Pipeline as Common Carrier 
or Contract Carrier) Regulations, 2009 - Petroleum and Natural 
Gas Regulatory Board (Affiliate Code of Conduct for Entities 
Engaged in Marketing of Natural Gas and Laying, Building, 
· Operating or Expanding Natural Gas Pipeline) Regulations, 2008 
- Denial of access to common carrier capacity on reasonable 
endeavor basis to the two pfpelines laid by the appellant to second 
respondent - Whether discriminatory and amounts to Restrictive 
Trade Practices - The Board as also the Appellate Authority held 
the said practice as discriminatory and amounts to Restrictive Trade 
Practice - On appeal, held: Issue as regards the applicability of 
the Petroleum and Natural Gas Regulatory Board (Affiliate Code 
of Conduct for Entities Engaged in Marketing of Natural Gas and 
Laying, Building, Operating or Expanding Natural Gas Pipeline) 
·Regulations, 2'008 to the complainant-second respondent not 
considered either by the Board or by the Appellate Authority- Unless 
.the said issue is addressed, the complaint filed by the second 
respondent before
the Board should not have been disposed of-
Said issue framed and matter remanded back to the Board - Order 
passed by the Appellate Authority as also by the Board set aside -
Petroleum and Natural Gas Regulatory Board (Authorising Entities 
to Lay, Build, Operate or Expand Natural Gas Pipeline) 
Regulations, 2008. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11450 
of2014. 
525 
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B 
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526 
SUPREME COURT REPORTS 
[2016] I S.C.R. 
A 
From the Judgment and Order dated 28.11.2014 of the Appellate 
B 
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F 
Tribunal for Electricity New Delhi in Appeal 52of2014. 
Mukul Rohtagi, A.G, Tushar Mehta. ASG, Yoginder Handoo, Rajat 
Nair, Darpan Sachdeva for the Appellant. 
Parag !'. Tripathi, Piyush Joshi, Uttara Babbar, Sumiti Yadava, 
Saurav Agrawal, Munawwar Naseem, Astha Gaur, Pradeep Kumar 
Bakshi for the Respondents. 
The Judgment of the Court was delivered by 
KURIAN, J. I. The main issue raised in this appeal is whether 
the denial of access to common carrier capacity on reasonable endeavor 
basis to the two pipelines laid by the appellant to the second respondent, 
is discriminatory and amounting to Restrictive Trade Practices or not. 
In the nature of the order we are required to pass in this case, it is 
unnecessary to go in detail to the factual matrix. 
2. The issue arises under the Petroleum and Natural Gas 
Regulatory Board (Authorising entities to lay, huild, operate or expand 
natural gas pipeline) Regulations, 2008 and Petroleum and Natural Gas 
Regulatory Board (Guiding Principles for Declaring or Authorising Natural 
Gas Pipeline as Common Carrier or Contract Carrier) Regulations, 2009. 
3. In terms of the Regulations, the appellant published the available 
common carrier capacity for the prospective contracting by any third 
party. 
4. On 19.11.2012, the appellant published an Expression oflnterest 
for booking capacity by intrested parties
mentioning therein that the 
common carrier capacity thus available is on Ship or Pay basis. 
5. Respondent No. 2, on 04.05.2013, expressed its desire to avail 
the common carrier capacity on reasonable endeavour basis. 
6. Failing to resolve the disputes between ship or pay and 
reasonable endeavour basis, Respondent No.2 filed a complaint· before 
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the Petroleum and Natural Gas Regulatory Board (in short, "the Board") 
on21.09.2013. 
7. The Board, after elaborate discussions, allowed the complaint. 
We shall extract the relevant portion as under :-
H
GAIL (INDIA) LTD. v. PETROLEUM AND NATURAL GAS 
REGULATORY BOARD & ORS. [KURIAN, J.) 
52. The respondents explanation does not deserve any 
acceptability or credibility at all because the common carrier 
capacity has to be non-discriminatory reserved 011 jirst-cu111-
first-serve' basis without making any specific classification 
for reservation of co1111non carrier capacity. 
53. The practice adopted by the respondent on the one hand 
reveals discrimination towards the custo111er like complainant 
and on the other hand, results in additional burden for the 
shippers who are not the regular and long standing customers 
of the re>pondent and such practices also discourage fair 
co111petition in the market. 
54. In view of above, it would not be appropriate for us to 
direct the respondent for booking common carrier capacity 
on reasonable endeavour basis but we hold that the practice 
being adopted by the respondent, while booking common 
carrier capacity, is not only discriminatory, it also amounts 
to restrictive trade practice and must follow the consequence 
under Section 28 in the light of the provision of Section 11 
(a) read ll'ith Section 12(/)(bJ(v) of the Petroleum & Natural 
Gas Regulatory Board Act. 
55. On giving careful consideration to all the facts and 
circumstances, we hereby direct the respondent to i111mediately 
cease its restrictive trade practice of preventing the shippers 
like complainant, the access of common carrier capacity in 
its common carrier
pipeline and also impose civil penalty of 
Rs. 1.00 lac under Section 28 of the PNGRB Act, 2006. to be 
deposited within a month from today. " 
8. Aggrieved, the appellanttook up the matter before the Appellate 
Tribunal for Electricity (in short, "Appellate Authority"), leading to the 
impugned order dated 28.11.2014, by which the Appellate Authority 
dismissed the appeal in the following terms :-
"On giving carefitl consideration to the facts and 
circumstances of the Appeal, including the pleadings and 
submissions made by the parties, we are of the opinion that it 
has been established that the Appellant, in the instant case, 
while booking common carrier caracity in its pipeline, has 
acted in a discriminatory manner leading to restrictive trade 
527 
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B 
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D 
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528 
SUPREME COURT REPORTS 
(2016] I S.C.R. 
A 
practices and as such, the Appellant is liable to pay the penalty 
of Rs. 1 /akh to the Board Thus, the h11pugned Order is upheld 
Consequently, the Appeal is hereby dismissed" 
B 
c 
9. Feeling aggrieved by the impugned order passed by the 
Appellate Authority, the appellant has preferred this appeal before us. 
IO. Though the parties have taken elaborate contentions both 
before the Board as well as before the Appellate Authority, having 
extensively heard Mr.Tushar Mehta, learned Addit.ional Solicitor General 
appearing forthe appellant and Mr. Parag Tripathi, learned senior counsel 
appearing for the second respondent, we find that the following crucial 
aspect has not been considered either by the Board or by the Appellate 
Authority. The main arguments of the learned counsel for the respondents 
rests on the application of the Petroleum and Natural Gas Regulatory 
Board (Affiliate Code of Conduct for Entities Engaged in M,arketing of 
Natural Gas and Laying, Building, Operating or Expanding Natural Gas 
Pipeline) Reglations, 2008 and without addressing this issue, the dispute 
D 
as raised in the complaint cannot be resolved. 
11. In the facts and circumstances of the case, we are of the 
view that unless the issue, which is formulated below, is addressed, the 
complaint filed by the second respondent before the Board should not 
have been disposed of. Therefore, we propose to frame the following 
E 
issue and send the
matter back to the Board :-
F 
Issue - To what extent, the Petroleum and Natural Gas Regulatory Board 
(Affiliate Code of Conduct for Entities Engaged in Marketing ofNatural 
Gas and Laying, Building, Operating or Expanding Natural Gas Pipeline)' 
Regulations, 2008 are applicable to the complainant. 
12. While addressing this issue, the interplay between the scheme 
as per the Act and the regulations will also be addressed. 
13. We find that the pleadings by both the parties have not been 
satisfactory before the original authority. Therefore, as requested by 
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the learned senior counsel appearing for both the sides, we permit both 
sides to file additional pleadings before the Board. The complainant may 
file its additi.onal pleadings within two weeks frqm today and the appellant 
will file its reply within two weeks thereafter. Based on the additional 
pleadjngs, we make it clear, it will be open to the Board to raise additional 
is.sues, ifrequired. 
H
GAIL (INDIA) LTD. v. PETROLEUM AND NATURAL GAS 
REGULATORY BOARD & ORS. [KURIAN, J.] 
14. Having regard to the factthat the original complaint was filed 
in the year 2013, we direct the Board to dispose of the complaint within 
six months from today. We also grant liberty to the complainant, if so 
required, to make an application before the Board for an appropriate 
interim order after completion of the pleadings and in which case, the 
Board may dispose of the application within three months. 
IS. In that view of the matter, we set aside the impugned order 
passed by the Appellate Authority dated 28.11.2014 in Appeal No. 52 of 
2014 .as also the original order passed by the Board dated 26.12.2013 in 
Case No. 68 of2013. 
529 
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16. We make it clear that we have not expressed any opinion on c 
the merits of the case and it will be open to both the parties to raise all 
available contentions before the Board at any stage. 
17. With the above observations and directions, the Civil Appeal 
is disposed of with no order as to costs. 
NidhiJain 
Appeal disposed of. 
D