In a setback for Adani Gas, the Supreme Court on Tuesday dismissed his appeal to authorize the distribution of natural gas to commercial and industrial units in the Sanand, Bavla and Dholka areas of Gujarat’s Ahmedabad district.
With this ruling, the Supreme Court also upheld the Gujarat High Court ruling of September 2018, which paved the way for the state gas supplier Gujarat Gas to deliver natural gas as a clean and green fuel in the three areas of the region. outside of Ahmedabad. who complained to the regulatory authority and accused Adani of illegally expanding his gas distribution network in these places.
A bank composed of Judges UU Lalit, S. Ravindra Bhat and Hrishikesh Roy said that under article 73 of the Constitution, only the central government had the authority to grant such licenses or approvals, ensuring the objectives of the law and fairness in the market. .
According to the Supreme Court, the role of the State in granting NOCs under the central government policy of 2006 is only of support or collaboration and cannot confer a benefit to any entity that must be requested and granted special authorization under the Law of Credit to PNGRB for its application. .
The judges also ruled that the “recognized permission” clause under Section 16 of the PNGRB Act is subject to other provisions of Chapter IV, including Section 17, and that only entities that the central government has granted a permit are covered by it. Category. “As a result, it is determined that companies that had received approval from the states had to obtain approval under the PNGRB Act in the sense of Section 17 (2) and fulfill the conditions established in the CGD Regulations” , said.
The judgment dismissed Adani’s exception, resolving that Regulation 18 of PNGRB (Authorizing Entities to Install, Build, Operate or Expand Local or Urban Natural Gas Distribution Networks) of 2008 is not “neither arbitrary nor ultra vires”, Article 14, 19 (i) (g) of the Constitution of India and Section 16 of the PNGRB Act. “The objective on which Ordinance 18 is based is compatible with the general objectives of the PNGRB Law. Regulation 18 does not conflict with any particular provision of the law, ”said Judge Bhat, who wrote the sentence.
The company considered that Section 17 did not distinguish between the central government and other authorized bodies and simply required bodies that did not have central authorization to apply in writing for a permit within the meaning of the PNGRB provisions. Therefore, Section 16 of the PNGRB Act did not create an artificial distinction between entities authorized by the central government and other entities, he added.
While Adani imposes a cost of Rs 10 lakh, to be paid to the central government, the bank also found that Adani’s claim was excluded by the principle of fair reproof as he accepted the approval granted by PNGRB (including exclusion of areas controversial), provided the performance guarantee and even participated in the auction of the excluded areas and only then challenged the admission if its offer was not successful.
“This behavior clearly equates to approval and rejection. Adani’s arguments about his ignorance of his true rights … cannot be substantiated because he was familiar with the PNGRB law process and adhered to it … ”, the verdict reads.
Adani Gas had challenged PNGRB’s June 2016 decision to authorize Gujarat Gas to build infrastructure for the supply of PNG, CNG and natural gas to commercial and industrial units in the three areas of the Ahmedabad district. The Ahmedabad Auto Rickshaw Drivers Union and industrial consumers, led by Rajeshwari Metal Printers, had also backed Adani, saying the HC order left her practically in dire straits as “her interests in an uninterrupted gas supply and fluid are at risk. “
PNGRB had argued that Adani unequivocally agreed and acted by granting permission and exclusivity for the city of Ahmedabad and Dascroi in 2013 and denying permission for Sanand, Bavla and Dholka, and could not enjoy the fruits of the Order for the city of Ahmedabad , to question another part of the same provision, insofar as it limits entry to the aforementioned area.
Adani had claimed to have had an operational gas distribution network in Gujarat, particularly in the Ahmedabad district, since 2003, but had considerable investments of $ 356 billion, but PNGRB had excluded all three areas when it approved Adani in November 2013.