Adani gets SC nod to supply natural gas to three areas in Ahmedabad

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New Delhi | November 13, 2018 3:35 AM

The Supreme Court on Monday allowed Adani Gas to supply natural gas to commercial and industrial units in the areas of Sanand, Bavla and Dholka of Ahmedabad district of Gujarat till further orders.

In its ruling on September 28, the HC had paved the way for supply of natural gas as a clean and green fuel in the three areas by Gujarat Gas, which had complained to the regulator accusing Adani of unauthorised expansion of its gas distribution network in these locations.

The Supreme Court on Monday allowed Adani Gas to supply natural gas to commercial and industrial units in the areas of Sanand, Bavla and Dholka of Ahmedabad district of Gujarat till further orders.
However, it refused to allow Gujarat Gas to go ahead with the work of laying pipelines for the three areas till the next date of hearing next month.
A bench led by Justice Arun Mishra also issued notice to the Ministry of Petroleum & Natural Gas, the Petroleum & Natural Gas Regulatory Board (PNGRB), Gujarat Gas, and others on the Adani’s appeal challenging the Gujarat High Court’s September decision that upheld Gujarat Gas’ right to develop infrastructure for supply of PNG, CNG and natural gas to commercial and industrial units in the three areas of the Ahmedabad district.

It also issued notice on the two other appeals filed by Ahmedabad Auto Rikshaw Drivers Union and industrial consumers led by Rajeshwari Metal Printers in the case relating to unauthorised development of City Gas Distribution network. Supporting Adani’s appeal, they have stated that the impugned order had virtually left in dire state as “their interests vis-à-vis uninterrupted and smooth gas supply has been jeopardised.”
In its ruling on September 28, the HC had paved the way for supply of natural gas as a clean and green fuel in the three areas by Gujarat Gas, which had complained to the regulator accusing Adani of unauthorised expansion of its gas distribution network in these locations.

Adani Gas has challenged the PNGRB’s June 2016 decision to grant authorisation to Gujarat Gas on the grounds that Regulation 18 of the Petroleum and Natural Gas Regulatory Board (Authorising Entities To Lay, Build, Operate or Expand City or Local Natural gas Distribution Networks) Regulations, 2008 is ultra vires Article 14, 19 (i)(g) of the Constitution of India and Section 16 of the PNGRB Act. It has further sought a direction to the Board to declare it as a deemed authorised entity under Section 16 for its entire Ahmedabad CGD Network and wanted stay of the bidding/selection process in respect of the three areas of Ahmedabad.
The apex court on Monday continued the stay granted by the HC which had dismissed the petition of Adani Gas which had lost in the bidding process and had obtained a stay.

Adani Gas claimed that it has been carrying operating gas distribution network in Gujarat, particularly in the Ahmedabad District, since 2003 and has made a substantial investment to the tune of Rs 356 crore in laying down city gas distribution network. However, the PNGRB had excluded the three areas while granting authorisation to Adani in November 2013. The HC failed to understand that the arbitrary distinction between entities with authorization from the Central government and those of state governments is violative of Article 19(1)(g) as it does not provide a level playing field by adding additional eligibility criteria which has been held by numerous judgments of this court is impermissible, it said.

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