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2019 (2) TMI 546 - SC - Indian LawsGas Distribution Network (GDN) - Projects under implementation - deemed authorisation under the new provision - Vires 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 - grant of authorisation of projects in Udaipur and Jaipur - laying down of Gas Network pipelines. 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? Held that:- The application of the appellant has been rejected primarily on the ground of noncompliance 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 noncompliance 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 noncompliance, 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. Besides depositing the sum of ₹ 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’. 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. 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 - Appeal allowed.
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