November 26, 2022


The Supreme Courtroom on Friday dismissed an attraction filed by Adani Gasoline Ltd searching for authorisation for metropolis gasoline distribution community in three areas of Ahmedabad District in Gujarat with a price of Rupees 10 lakhs.The Courtroom held the exclusion of Adani Gasoline Ltd from the disputed areas as “justified within the general info and circumstances”. “Having regard to the above findings and conclusions, the…

The Supreme Courtroom on Friday dismissed an attraction filed by Adani Gasoline Ltd searching for authorisation for metropolis gasoline distribution community in three areas of Ahmedabad District in Gujarat with a price of Rupees 10 lakhs.

The Courtroom held the exclusion of Adani Gasoline Ltd from the disputed areas as “justified within the general info and circumstances”.

“Having regard to the above findings and conclusions, the appeals fail and are dismissed. Within the circumstances, Adani shall bear the prices quantified @ ₹10 lakhs, payable to the Union of India”, the Courtroom ordered whereas concluding the judgment.

A 3 decide bench comprising Justices UU Lalit, S. Ravindra Bhat and Hrishikesh Roy additionally overruled a two decide bench judgment in Adani Gasoline Ltd. vs. Union of India (2019) 3 SCC 641, on the scope of the “deemed authorisation” clause below the proviso to Part 16 of the Petroleum and Pure Gasoline Regulatory Board Act, 2006.

Below the Petroleum and Pure Gasoline Regulatory Board Act, 2006 (PNGRB Act), authorization from the Petroleum and Pure Gasoline Regulatory Board is required to function a Metropolis or Native Pure Gasoline Distribution Community(CGD Community). The Petroleum and Pure Gasoline Regulatory Board denied authorization to AGL for working Metropolis Gasoline Community in several areas of Ahmadabad metropolis in Gujarat.

Feeling aggrieved by the exclusion, AGL filed a writ petition within the Gujarat Excessive Courtroom, difficult the varied Rules below the PNGRB Act and likewise the grant of authorization to a competitor Gujarat Gasoline, a state-entity. The Excessive Courtroom dismissed AGL’s petition in 2018.

Difficult the Excessive Courtroom’s dismissal, AGL approached the Supreme Courtroom.

One of many arguments raised on behalf of AGL was that the corporate had “deemed authorization” as per the proviso to Part 16 of the PNGRB Act, because the firm was concerned within the exercise earlier than the stated Part was introduced into drive . Adani Gasoline Ltd identified that the  preliminary proposal for setting-up of the gasoline pipeline was by the invitation of the Gujarat Authorities.  It was identified that earlier than the PNGRB Act got here into drive in 2006, the Gujarat authorities gave Adani Gasoline permission to produce gasoline in Ahmedabad district. In response to AGL, the Excessive Courtroom erred in decoding that the “deemed authorization” was accessible solely to entities which had the authorization from the Central Authorities.

In 2013, the corporate utilized for permission as per Regulation 18 of the Petroleum and Pure Gasoline Regulatory Board (Authorizing Entities to Lay, Construct, Function or Develop Metropolis or Native Pure Gasoline Distribution Networks) Rules, 2008 for gasoline distribution in whole Ahmedabad district. The Board granted a partial authorization excluding the Sanand, Bavla and Dholka areas of the district.

The Supreme Courtroom thought-about the next factors:

(i) The scope of the “deemed authorisation” clause below the proviso to Part 16 of the PNGRB Act;

(ii) Validity of Regulation 18; and

(iii) Whether or not the exclusion of the disputed areas from the authorisation granted to Adani was justified.

Answering the primary level, the Courtroom noticed as hereunder :

  1. The “deemed authorization” clause below proviso to Part 16 is topic to different provisions of Chapter IV, together with Part 17 and, additional, that solely entities granted authorization by the Central Authorities, fell in that class. As a sequitur, it’s held that entities which had obtained authorization from States, needed to search authorization below the PNGRB Act, by way of Part 17(2), and in compliance with the circumstances spelt out below the CGD Rules.
  2. The function of the State in granting NOC is just supportive or collaborative, by way of the Central Authorities’s coverage, of 2006, and can’t confer any benefit to any entity, which has to hunt and be granted particular authorization by way of the PNGRB Act on the deserves of its software. 

Adani had additionally challenged the validity of Regulation 18 of the Petroleum and Pure Gasoline Regulatory Board (Authorizing Entities to Lay, Construct, Function or Develop Metropolis or Native Pure Gasoline Distribution Networks) Rules, 2008 (hereafter referred to as the “CGD Rules”) as violative of Articles 14 and 19(1)(g) of the Structure of India, and extremely vires Part 16 of the Petroleum and Pure Gasoline Regulatory Board Act, 2006

The target underlying Regulation 18, is appropriate with the general targets of the PNGRB Act. Regulation 18 just isn’t contraindicated by any particular provision of the Act. Additional, as a sectoral regulator, PNGRB is entrusted with the facility to border applicable rules to make sure the targets of the Act, the courtroom held.

The courtroom additionally held that Adani’s declare is precluded by the precept of approbate-reprobate, because it accepted authorization granted by PNGRB (together with exclusion of disputed areas), furnished the efficiency bond and even participated within the public sale for the excluded areas, and solely thereafter challenged authorization when its bid was unsuccessful.

“In view of the factual dialogue, in regards to the background resulting in the grant of authorization to Adani, and its acceptance of that authorization, furnishing of efficiency bond, and continuing to behave upon it, even taking part within the public sale for the excluded areas there could be no method of doubt that it acquiesced to the motion of the PNGRB, and after having unsuccessfully entered its bid, sought to problem the authorization. Clearly, this conduct quantities to approbating and reprobating. Adani’s arguments about its lack of expertise about its true rights, within the opinion of this Courtroom, can’t be countenanced, as a result of it knew and conformed to the process below the PNGRB Act, particularly, the necessities of the rules, and Regulation 18, when it utilized and obtained authorization in different areas within the nation”, the judgment authored by Justice Bhat said.

The Courtroom additionally famous that varied points raised by Adani have been factual which should have been agitated in a statutory attraction.

It additionally termed that problem raised by Adani to Regulation 18 as “speculative”, which has led to avoidable delay (and the consequential escalation of price) of the event of the community, in query.

The Courtroom opined that Adani’s arguments about its lack of expertise about its true rights can’t be countenanced, as a result of it knew and conformed to the process below the PNGRB Act, particularly, the necessities of the rules, and Regulation 18, when it utilized and obtained authorization in different areas within the nation.

Quotation : LL 2021 SC 511

Case: Adani Gasoline Ltd. vs. Union of India

Case no. | Date : SLP (C) No(s). 28192-28193 OF 2018 | 28 September 2021

Coram: Justices UU Lalit, S. Ravindra Bhat and Hrishikesh Roy

Counsel: Sr. Adv Harish Salve(for Adani Gasoline Ltd), Sr. Adv Dhruv Mehta(for Adani Gasoline Ltd), Sr. Adv Dr. A.M. Singhvi(for intervenor Haryana Gasoline), Sr. Adv Paras Kuhad(for PNGRB), Sr Adv PS Narasimha (for Gujarat Gasoline), Lawyer Common for India KK Venugopal

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