IMC LIMITED vs UNION OF INDIA AND ORS.

2024-02-08 Information

$~70
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 8th FEBRUARY, 2024
IN THE MATTER OF:
+ W.P.(C) 15285/2023
IMC LIMITED ….. Petitioner
Through: Mr. Ramji Srinivasan, Sr. Advocate with Mr. Saurav Agrawal, Mr. Trinath Tadakamalla, Ms. Anshuman Choudhary, Ms. Utsha Dasgupta, Mr. Kartik PAndey, Ms. Namrata Saraogi and Ms. Nisha Bhatia, Advocates.
versus

UNION OF INDIA AND ORS. ….. Respondents
Through: Ms. Sonali Malhotra, Ms. Harshita and Ms. Nidhi Narwal, Advocates for R-2.
Mr. Gopal Jain, Sr. Advocate with Mr. Prashant Bezboruah and Ms. Suvarna, Advocates for R-3.

CORAM:
HON’BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
CM APPL. 7081/2024
1. The Petitioner has approached this Court with the following prayers:-
a) Transfer to itself the Petition dated 07.11.2023 filed by the Petitioner under Section 24 and 25 of PNGRB Act, 2006 before the PNGRB Board/Respondent No. 2 and grant the following reliefs prayed therein:

(i) Direct IOCL to immediately stop the construction of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product for the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EPMPL authorized to the Petitioner by the Hon’ble Board. (ii) Prohibit IOCL from undertaking construction of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product for the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EPMPL authorized to the Petitioner by the Hon’ble Board .

(iii) Impose a penalty and take any other action as the this Hon’ble Court deems fit against IOCL for violating Section 16 of the PNGRB Act, by constructing the pipeline without authorization of the PNGRB Board.

(iv) Direct IOCL to compensate the Petitioner under Section 21(3) of the PNGRB Act for damages caused to the Petitioner by continuous infringement of the Petitioner’s rights by IOCL’s construction of Unauthorized Pipelines leading to financial and business losses to the Petitioner. OR, in the alternative

b) grant the following protective reliefs to the Petitioner till the PNGRB is duly constituted by the Respondent No. 1 and capable of constituting a bench and adjudicating the Petitioners Petition dated 07.11.2023 under Section 24 and 25 of the PNGRB Act:

iii) issue appropriate writ or directions to restrain the Respondent No. 2, PNGRB from granting any approval or authorization to Respondent No. 3 in respect of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product between for points the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EM Pipeline authorized to the Petitioner by the PNGRB.

iv) issue appropriate writ or directions to restrain (or direct Respondent No. 2 to restrain) IOCL from undertaking the construction of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product between for points the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EM Pipeline authorized to the Petitioner by the PNGRB.

c) issue appropriate writ or directions to Respondent No. 1 to immediately take steps for expeditious appointment of Member (Legal) on the PNGRB Board.

d) pass any other or further orders as this Hon’ble Court may deem fit and proper in the circumstances of the case in favour of the Petitioner.

2. Pending the writ petition, the Petitioner had filed CM APPLN. 61267/2024 for interim reliefs. Prayer (b) of the said application was for an ex-parte ad interim order restraining Respondent No.3/IOCL from undertaking the laying down of the petroleum products pipeline between the Ennore Port and Manali Industrial Area which according to the Petitioner is covered by the EM Pipeline authorized to the Petitioner by the Petroleum and Natural Gas Regulatory Board ( in short PNGRB).
3. Notice was issued on 28.11.2023. This Court did not grant an ex-parte stay on that day to await the replies of Respondent No.2/PNGRB and Respondent No.3/IOCL.
4. Replies have been filed by the Respondent No.2/PNGRB and Respondent No.3/IOCL.
5. The Petitioner has filed CM APPLN. 7081/2024 once again for an order restraining Respondent No.3/IOCL from undertaking further laying down of the pipeline and also for directing Respondent No.2/PNGRB to undertake a detailed investigation of the pipeline laid down by the IOCL and submit a report to this Court.
6. The case of the Petitioner in brief is that the Petitioner has been authorized by the PNGRB to lay, build and operate the Ennore Port-Manali Industrial Area Petroleum Products Pipeline. The authorization was granted to the Petitioner on 18.12.2015 pursuant to a bidding process. It is stated that Respondent No.3/IOCL also participated in the bid and was not successful. It is stated that pending the authorization, Respondent No.3 started constructing a pipeline along the very same route on which the Petitioner has been authorized to lay, build and operate the pipeline. The Petitioner has approached this Court by filing the instant application with the following prayers:-
a. Pass an interim order restraining the Respondent No. 3/IOCL from undertaking the construction of the Unauthorised Pipelines;

b. Pass an Order directing the Respondent No. 2/PNGRB to undertake a detailed investigation on the Unauthorised Pipelines being laid by IOCL and submit a report to this Hon’ble Court;

7. It is the contention of the Petitioner that Respondent No.3/IOCL could not have started construction of the pipeline without prior approval of Respondent No.2/PNGRB. It is stated that the laying down of the pipeline by Respondent No.3 without permission of the PNGRB is contrary to law. It is stated that if the pipeline is constructed and if Respondent No.3 transports its petroleum products from Ennore Port to Manali Industrial Area, it will result in financial loss to the Petitioner as the Petitioner is investing substantial amount of money in the construction for the authorized pipeline and being successful in a bid to lay down the pipeline between Ennore Port to Manali Industrial Area.
8. Respondent No.2/PNGRB has filed its reply stating that it has authorized only the Petitioner for constructing the Ennore Port-Manali Industrial Area Petroleum Products Pipeline under the PNGRB Act and the Regulations. The categorical stand of Respondent No.2 is that Respondent No.3 is in the process of laying the petroleum product pipeline without obtaining necessary authorization from Respondent No.2/PNGRB.
9. Respondent No.3/IOCL has also filed its reply contending that the process of laying down the pipeline was initiated way back in August, 2023 and the Petitioner has approached this Court only on 24.11.2023. It is further stated that the Respondent No.3 has already laid 9 kms. of pipeline and that granting any interim order at this juncture will have a cascading effect against Respondent No.3.
10. It is also stated that the existing regulations, no permission is required from the PNGRB to lay down a pipeline if it is for captive use.
11. It is stated that since the pipeline which is being laid down by the Respondent No.3/IOCL is a captive pipeline where only products of IOCL will be transported, no prejudice will be caused to the Petitioner. It is also stated that even though the Petitioner was granted permission in the year 2015, the authorized pipeline for the Ennore Port-Manali Industrial Area Petroleum Products Pipeline project has not been laid down.
12. Heard learned Counsel for the parties and perused the material on record.
13. Mr. Ramji Srinivasan, learned Senior Counsel for the Petitioner, contends that the pipeline is being laid down by Respondent No.3 in complete contravention to Section 16 of the Petroleum and Natural Gas Regulatory Board Act. He further states that permitting Respondent No.3 to lay down the pipeline would result in Respondent No.3 in transporting its petroleum product on the pipeline from Ennore Port to Manali Industrial Area, to the detriment of the Petitioner, which alone is authorized to lay, build and operate the pipeline for transporting petroleum products in terms of the authorization granted by the Respondent No.2/PNGRB. It is also stated that the prima facie case and balance of convenience lies in favour the Petitioner and Respondent No.3/IOCL should be restrained from further laying down the unauthorized pipeline.
14. Ms. Sonali Malhotra, learned Counsel for Respondent No.2/PNGRB, draws the attention of this Court to a letter dated 13.12.2023 written by Respondent No.2 to Respondent No.3/IOCL whereby Respondent No.3 has been directed to stop the laying down of the pipeline with immediate effect and approach the PNGRB for authorizations as per the PNGRB Act and Regulations. It is stated that despite the specific direction passed by the Board to Respondent No.3 to stop the construction of the pipeline, Respondent No.3 is has continued with the laying down of the unauthorized pipeline.
15. Mr. Gopal Jain, learned Senior Counsel appearing for Respondent No.3, contends that the Respondent No.3 has already laid down 9 kms of pipeline and has invested substantial amount of money. He states that the authorization from the Respondent No.2/PNGRB is required only for laying down the pipeline which will act either as a common carrier or contract carrier, and no permission is required if pipeline is being laid for self consumption. He further states that the Petitioner has approached this Court only on 24.11.2023 by which time the Respondent No.3 had already made substantial progress in laying down the pipeline, and therefore, the Petitioner is not entitled to any ex-parte stay. He contends that in any event the laying down of pipeline would be subject to the final outcome of the writ petition, and therefore, no Interim Order needs to be passed at this juncture.
16. Section 16 of the Petroleum and Natural Gas Regulatory Board Act, 2006, reads as under:-
Section 16. Authorisation.

No entity shall

(a) lay, build, operate or expand any pipeline as a common carrier or contract carrier,

(b) lay, build, operate or expand any city or local natural gas distribution network, without obtaining authorisation under this Act:

Provided that an entity,–

(i) laying, building, operating or expanding any pipeline as common carrier or contract carrier; or

(ii) laying, building, operating or expanding any city or local natural gas distribution network,

immediately before the appointed day shall be deemed to have such authorisation subject to the provisions of this Chapter, but any change in the purpose or usage shall require separate authorisation granted by the Board.

17. A perusal of Section 16 of the PNGRB Act shows that no entity can lay, build or operate or expand any pipeline as a common carrier or contract carrier without the authorization by the Board. The authorization to lay, build and operate the pipeline from Ennore Port to Manali Industrial Area has been given to the Petitioner. Respondent No.3/IOCL was an unsuccessful bidder in the tendering process.
18. At this juncture, it is pertinent to mention that Respondent No.3/IOCL had sought permission from the PNGRB in 2017 for laying down a self-use pipeline between Dahej and Koyali Refinery and Respondent No.3 was granted permission to lay down such pipeline. No such permission has been sought by Respondent No.3/IOCL for laying down the pipeline in question.
19. Material on record and particularly the letter dated 02.12.2017 sent by the Respondent No.3/IOCL to the Secretary, PNGRB shows that Respondent No.3 for their requirement of capacity augmentation of Koyali refinery and had approached the PNGRB for laying down the Dahej-Koyali Refinery Captive Natural Gas Pipeline. The action of Respondent No.3 to proceed ahead to lay down the pipeline from Ennore Port to Manali Industrial Area, therefore, is prima facie contrary to their own understanding of the scheme of the PNGRB Act.
20. In view of the categorical stand taken by the PNGRB that only the Petitioner has been authorized to lay down the pipeline and that an irreparable loss will be caused to the Petitioner if the pipeline is laid down by Respondent No.3, this Court is inclined to grant a stay as prayed for by the Petitioner in the instant application being CM APPLN.7081/2024 and is inclined to pass an order restraining Respondent No.3/IOCL from proceeding further with the laying down of the pipeline from Ennore Port to Manali Industrial Area during the pendency of the writ petition.
21. The application is disposed of.

SUBRAMONIUM PRASAD, J
FEBRUARY 08, 2024
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W.P.(C) 15285/2023 Page 1 of 9