The Supreme Court on Thursday issued notices to the Petroleum and Natural Gas Regulatory Board (PNGRB) and Gujarat State Petronet (GSPL) on a petition filed by public sector gas utility GAIL against the former?s decision to award a pipeline contract worth R7,143 crore to the state PSU.
PNGRB, which authorises companies to lay, operate or expand natural gas pipelines, had on May 18 issued a letter of intent to GSPL, a subsidiary of Gujarat State Petroleum Corporation, for laying the Mehsana-Bhatinda pipeline.
Earlier, the state PSU had bid for three pipelines worth R17,721 crore, which included the R8,908-crore Mallavaram-Bhilwara (1,585 km), R1,873-crore Bhatinda-Kashmir (740 km) and R7,143-crore Mehsana-Bhatinda (1,670 km) pipelines. The decision on the the first two pipelines is still pending.
A vacation bench headed by Justice BS Chauhan sought a reply from the sectoral regulator on GAIL?s plea against the decision to authorise GSPL to lay the pipeline.
GSPL had bid for the pipelines in partnership with central public sector units Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum.
Seeking to quash the bidding process initiated by the board for the Mehsana-Bhatinda pipeline, GAIL contended that the board awarded the pipeline project in violation of the apex court?s interim order in the case pertaining to the regulator?s functioning.
The action is being challenged on the ground that it being a gross violation of the PNGRB Act and the apex court?s order dated May 12, which directed only a multi-member board to deal with all the pending and new applications from the companies and had also barred a member from participating in the deliberations. ?It is evident that neither BS Negi, the member (technical) who has been barred from participating in the board meetings nor the member (commercial), who demitted office in November 2010, could have participated in the meeting and hence the decision taken is liable to be struck down,? GAIL stated in its application.
Senior counsel Ranjit Kumar and advocate Ajit Pudussery argued that all the decisions of the board in the bidding process were vitiated as they were not taken by a multi-member board but by certain officers with the approval of the chairman.
They argued that no application could be decided till PNGRB was reconstituted after filling up of all vacancies. Besides, awarding of the pipeline project to GSPL was arbitrary and illegal as the same was done without deciding and disposing of the GoI-owned and controlled PSU?s objections and without giving any hearing to it, the application alleged.