The peculiar factual position is that the Act of 2006 had been notified on 03.04.2006 but came into force on 01.10.2007 and the NOC was issued on 27.03.2006, after the Government of Rajasthan had invited open bids on 19.11.2005 for laying of City Gas Distribution network in the cities of Udaipur and Jaipur, in which the appellant had been selected. Besides depositing the sum of Rs. 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’ = the decision of the State Government to revoke the NOC vide order dated 18.05.2011 was also highly unfair and unjust in as much as the reply of the petitioner dated 16.03.2011 in response to the notice dated 26.02.2011 has not been dealt with by the Government of Rajasthan while passing the said impugned order dated 18.05.2011. As such, the same does not stand to reason, which also deserves to be quashed.


Hon’ble Mr. Justice Arun Mishra

1
NON­REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 1261 OF 2019
[@ SPECIAL LEAVE PETITION [C] NO. 21986 OF 2015]
ADANI GAS LIMITED & ANR. …..APPELLANTS
VERSUS
UNION OF INDIA & ORS. ……RESPONDENTS
J U D G M E N T
Leave granted.

  1. The appellant company is registered under the Companies Act,
    1956 and is involved in the business of setting up of Natural Gas
    Distribution Networks within India. The dispute in this petition is with
    regard to the Gas Distribution Network (for short ‘GDN’) in the cities of
    Udaipur and Jaipur in the State of Rajasthan. Challenging the order
    dated 18.05.2011 of the Government of Rajasthan whereby No
    Objection Certificate (for short ‘NOC’) for laying down of Gas Network
    pipelines granted in favour of the appellant had been withdrawn
    (including forfeiture of the commitment fees of Rs. 2 Crore deposited
    by the appellant), and also the order dated 19.05.2011 of the Board
    2
    rejecting the application of the appellant for authorisation of its
    projects in Udaipur and Jaipur, as well as challenging the validity 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 (for short
    ‘Regulations of 2008’), the appellant had filed Writ Petition No. 10028
    of 2011 before the Rajasthan High Court, which has been dismissed
    on 29.04.2015. Aggrieved by the same, this Special Leave Petition has
    been filed.
  2. Brief facts of this case are that on 19.11.2005 the Government of
    Rajasthan invited parties to submit their bids for laying of Gas
    Distribution Network in certain cities of Rajasthan, including the said
    two cities of Udaipur and Jaipur. In response to the same, the
    appellant submitted its Expression of Interest for the cities of Udaipur
    and Jaipur. On 20.03.2006, the Government of Rajasthan informed
    the appellant that it intended to grant NOC to the appellant for
    undertaking Gas Distribution in the cities of Udaipur and Jaipur,
    which was to be subject to certain conditions as mentioned in the
    aforesaid communication dated 20.03.2006. Immediately thereafter
    on 22.03.2006, the appellant company informed that it agreed to all
    3
    the terms and conditions laid down by the Government of Rajasthan
    in its communication dated 20.03.2006 whereby it intended to grant
    NOC to the appellant. Then, on 24.03.2006, the appellant deposited
    the commitment fees of Rs. 2 Crore. On 27.03.2006, the Government
    of Rajasthan granted the NOC to the appellant company for Gas
    Distribution in the cities of Udaipur and Jaipur. The appellant then
    started its work of laying down the City Gas Development Network in
    the said two cities.
  3. The Petroleum and Natural Gas Regulatory Board Regulations
    Act, 2006 (for short ‘Act of 2006) was notified on 03.04.2006, except
    for the provisions of Section 16 of the said Act relating to
    authorisation. On 21.07.2007, the appellant company made a request
    for authorisation of its City Gas Distribution Project under Act of 2006
    to the Chairman of Petroleum and Natural Gas Regulatory Board (for
    short ‘the Board’). In the said communication, the appellant had also
    provided the details of its existing projects in the country, namely at
    Ahmedabad, Vadodara, Faridabad, Noida, Khurja, Lucknow, Udaipur
    and Jaipur. The appellant had also submitted that in terms of
    Sections 15 and 16 of Chapter IV of the Act of 2006, there was a
    provision of ‘deemed authorisation’ of the existing City Gas
    4
    Distribution Projects and in terms of the Act of 2006, a brief dealing of
    all the projects under its implementation was also enclosed.
  4. Then, on 24.07.2007, the appellant wrote to the Ministry of
    Petroleum and Natural Gas requesting for authorisation of its City Gas
    Distribution Projects under the Act of 2006 for all its gas projects,
    including the ones of Udaipur and Jaipur. The Act of 2006 was
    although notified on 03.04.2006, but came into force with effect from
    01.10.2007, which was its appointed date. However, Section 16 of the
    said Act, relating to ‘Authorisation’, was brought into force only with
    effect from 15.07.2010.
  5. On 30.10.2007 the Petroleum and Natural Gas Regulatory Board
    issued a press note, calling upon all the concerned entities involved in
    or proposed to the laying, building, operating or expanding of a City or
    Local Gas Distribution Network prior to the appointed date, i.e.
    01.10.2007, to furnish the particulars of such activities to the Board
    within six months from the appointed date. It was further provided
    that in cases where no authorisation was granted to the entities that
    initiated the specified activities before the appointed date, then such
    entities were to apply for authorisation under Section 17 of the Act of
    5
  6. The Government of Rajasthan, then on 05.12.2007, intimated
    the appellant of the press note dated 30.10.2007 and required the
    appellant to submit the details, as were prescribed in terms of the said
    press note. Two days thereafter, on 07.12.2007, the appellant
    submitted the requisite details for the City Gas Distribution Projects of
    Udaipur and Jaipur. Then, on 11.12.2007, the Government of
    Rajasthan called upon the appellant to further submit the details to
    the Board in terms of the press note dated 30.10.2007. In response to
    the same, the appellant informed the Government of Rajasthan that
    the said details had already been furnished on 07.12.2007.
  7. On 19.03.2008, the Petroleum and Natural Gas Regulatory Board
    Regulations, 2008 were notified. Pursuant thereto, on 31.03.2008 the
    Board issued a notice to the appellant stating that the appellant did
    not have the requisite authorisation by the Central Government in
    terms of the proviso to Section 17(2) of the Act of 2006. The
    Regulation 18 of the Regulations of 2008 has been challenged by the
    appellant on the ground of being ultra vires the Act of 2006.
  8. The appellant, however, on 28.08.2008 filed an application under
    Regulation 18 of the Regulations of 2008 for grant of authorisation of
    6
    city Gas Distribution Network at Udaipur and Jaipur. In response to
    the same, the Board issued a notice dated 19.11.2008 to the appellant
    for oral hearing on 05.12.2008 and in the same meeting, the appellant
    presented the status report as well as the investment made by the
    appellant, and expressed its commitment to the Board to develop the
    project and requested the Board to grant authorisation for the two
    cities of Udaipur and Jaipur. The appellant, in the meantime,
    continued its development work of laying down the gas pipelines.
    Then, on 12.07.2010, by a notification of the Government, Section 16
    of the Act of 2006 was brought into force. After coming into force of
    Section 16, the Board, on 29.07.2010, issued notice to the appellant
    to once again appear before the Board on 04.08.2010 to show cause
    as to why the application under Regulation 18(1) of the Regulations of
    2008 should not be rejected.
  9. In the meantime, though no formal orders were passed by the
    Board, on 28.02.2011, the Government of Rajasthan issued a notice to
    the appellant stating that the appellant has failed to fulfil the
    conditions laid down in the communications dated 20.03.2006 and
    27.03.2006 issued by the Government of Rajasthan and thus the
    NOCs were liable to be withdrawn and the commitment amount also
    7
    liable to be forfeited. To the said notice, the appellant submitted its
    reply to the Government of Rajasthan on 16.03.2011. Then, by an
    Order dated 18.05.2011, the Government of Rajasthan withdrew the
    NOCs granted to the appellant and forfeited the commitment fees of
    Rs. 2 Crore deposited by the appellant on 24.03.2006. On the very
    next date i.e. 19.05.2011, by two separate letters, the Board rejected
    the applications of the appellant for authorisation of projects at
    Udaipur and Jaipur, on the ground that the physical and financial
    progress achieved by the appellant did not satisfy the proviso of
    Regulation 18(2)(d) of the ‘Regulations of 2008’ and even after
    instructions had been given by the Board vide press note dated
    30.10.2007, the appellant had allegedly continued with laying of
    pipelines, in violation of such directions given by the Board in the said
    press note.
  10. The appellant, then on 01.07.2011, wrote to the Board to bring to
    its notice that the appellant has deemed authorisation in terms of
    proviso to Section 16 of the Act of 2006 and the letters of rejection
    dated 19.05.2011 of the Board to the appellant should be withdrawn.
    To the said communication, there was no response received by the
    appellant from the Board. Challenging the order dated 18.05.2011
    8
    issued by the Government of Rajasthan and the orders dated
    19.05.2011 issued by the Board as well as the challenging the vires of
    Regulation 18 of the ‘Regulations of 2008’, the appellant had filed Writ
    Petition before the Rajasthan High Court, which was dismissed on
    29.04.2015. The same is under challenge in this appeal.
  11. For proper appreciation of the issues involved in this case the
    relevant provisions of the Act of 2006 and the Regulations of 2008 are
    reproduced hereunder:
    The Petroleum and Natural Gas Regulatory Board Act, 2006
  12. Definitions. – In this Act, unless the
    context otherwise requires, ­
    (a)…………;
    (b)…………;
    (c)…………;
    (d) “authorised entity” means an entity –
    (A) registered by the Board under Section
    15—
    (i) to market any notified petroleum,
    petroleum products or natural gas, or
    (ii) to establish and operate liquefied
    natural gas terminals, or
    (B) authorised by the Board under section
    16—
    (i) to lay, build, operate or expand a
    common carrier or contract carrier, or
    (ii) to lay, build, operate or expand a city or
    local natural gas distribution network;
    (e)…………;
    9
    (f)………….;
    (g)…………;
    (h)…………;
    (i) “city or local natural gas distribution
    network” means an inter­connected network
    of gas pipelines and the associated equipment
    used for transporting natural gas from a bulk
    supply high pressure transmission main to the
    medium pressure distribution grid and
    subsequently to the service pipes supplying
    natural gas to domestic, industrial or
    commercial premises and CNG stations
    situated in a specified geographical area.
  13. 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.
  14. Application for authorisation. –
    (1) An entity which is laying, building,
    operating or expanding, or which proposes to
    lay, build, operate or expand, a pipeline as a
    common carrier or contract carrier shall apply
    in writing to the Board for obtaining an
    10
    authorisation under this Act:
    Provided that an entity laying, building,
    operating or expanding any pipeline as
    common carrier or contract carrier authorised
    by the Central Government at any time before
    the appointed day shall furnish the
    particulars of such activities to the Board
    within Six months from the appointed day.
    (2) An entity which is laying, building,
    operating or expanding, or which proposes to
    lay, build, operate or expand, a city or local
    natural gas distribution network shall apply in
    writing for obtaining an authorisation under
    this Act:
    Provided that an entity laying, building,
    operating or expanding any city or local
    natural gas distribution network authorised by
    the Central Government at any time before the
    appointed day shall furnish the particulars of
    such activities to the Board within six months
    from the appointed day.
    (3) Every application under sub­section (1) or
    sub­section (2) shall be made in such form and
    in such manner and shall be accompanied
    with such fee as the Board may, by
    regulations, specify.
    (4) subject to the provisions of this Act and
    consistent with the norms and policy
    guidelines laid down by the Central
    Government, the Board may either reject or
    accept and application made to it, subject to
    such amendments or conditions, if any, as it
    may think fit.
    (5) In the case of refusal or conditional
    acceptance of an application, the Board shall
    11
    record in writing the grounds for such rejection
    or conditional acceptance, as the case may be.
    The Petroleum and Natural Gas Regulatory Board Regulations,
    2008:
    “18. Entity not authorized by the Central
    Government for laying, building, operating or
    expanding CGD network before the appointed
    day. –
    (1) An entity laying, building, operating or
    expanding a CGD network at any time before
    the appointed day but not duly authorized to
    do so by the Central Government shall apply
    immediately for obtaining an authorization in
    the form as at Schedule I.
    (2) The Board may take into consideration the
    following criteria while considering the
    application for grant of authorization, namely :­
    (a) the entity meets the minimum eligibility
    criteria as 16[] specified in clauses (a) to (e) and (i) of sub­regulation (6) of regulation 5 before the appointed date and is possessing all necessary statutory clearances, permissions, no objection certificates from the Central and State Governments and other statutory authorities: (b) an entity which is not registered under the Companies Act, 1956 at the time of submitting the application for grant of authorization shall undertake to become a company registered under the Companies Act, 1956: Provided that the Board may exempt an entity to register under the Companies Act, 1956 on such conditions as it may deem appropriate; (c) a satisfactory assessment of the actual 12 physical progress made and the financial commitment thereof till immediately before the appointed day in comparison with the entity’s DFR appraised by the financial institution funding the project. In case the project has not been funded by any financial institution, the Board may appraise the DFR. The DFR of the entity should clearly indicate the specified geographical area of the project and also specify the coverage proposed for CNG and PNG. In case upon scrutiny area, customer segments, infrastructure requirements, etc. proposed by the entity, the DFR is found to be sub­optimal and unacceptable, the Board may not consider the case of the entity for issuing the authorization; (d) in respect of the actual physical progress made and the financial commitment thereof referred to in clause (c), a physical progress of at least twenty five percent and a financial commitment of at least twenty five percent of the capital expenditure identified for the CGD project as per the DFR immediately before the appointed day may be considered as adequate; (e) the entity should have arranged, by way of acquisition or lease, land for CGS and procured the necessary equipment for erecting the CGS before the appointed day; (f) the Board reserves the right to get the actual physical progress and the financial commitment certified and depending upon the progress achieved, the Board may consider authorizing the entity for the authorized area— (i) as per the geographical area in its DFR, (ii) as per the geographical area actually covered under implementation till the appointed day; or (iii) the geographical area as specified by the Board; 13 (g) in relation to laying, building, operating or expanding the CGD network, it is for the entity to satisfy the Board on the adequacy of its ability to meet the applicable technical standards, specification and safety standards as specified in the relevant regulations for technical standards and specifications, including safety standards and the quality of service standards as specified in regulation 15: (h) assessment of the financial position of the entity in timely and adequately meeting the financial commitments in developing the CGD network project as appraised by a financial institution and an examination of the audited books of accounts of the entity; (i) firm arrangement for supply of natural gas to meet the demand in the authorized area to be covered by the CGD network; (j) any other criteria considered as relevant by the Board based on the examination of the application. (3) The evaluation of the application in terms of the clauses (a) to (j) shall be done in totality considering the composite nature and the interlinkages of the criteria. (4) The Board, after examining the application in terms of the criteria under sub­regulation (2) and also taking into account the requirements in other regulations may form a prima­facie view as to whether the case should be considered for authorization. (5) In case of prima­facie consideration, the Board shall issue a public notice in one national and one vernacular daily newspaper (including webhosting) giving brief details of the project and seek comments and objections, 14 if any, within thirty days from any person on the proposal. (6) The Board, after examining the comments and objections, if any under sub­regulation (5), may either consider or reject the case for grant of authorization for the CGD network. (7) In case it is decided to grant authorization, the same shall be in the form at Schedule D; (8) In case of rejection of the application, the Board shall pass a speaking order after giving a reasonable opportunity to the concerned party to explain its case and proceed to select an appropriate entity for the project in terms of regulation 6. (9) In case the entity is selected for grant of authorization for CGD network, ­­ (a) the network tariff and the compression charge for CNG shall be determined under the Petroleum and Natural Gas Regulatory Board (Determination of Network Tariff for city or Local Natural Gas Distribution Networks and Compression Charge for CNG), Regulations 2008; (b) the Board may consider grant of exclusivity on such terms and conditions as specified in the Petroleum and Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas Distribution Networks) Regulations, 2008; (c) the entity shall abide by the technical standards, specifications including safety standards as specified under relevant regulations for technical standards and specifications, including safety standards; (d) the provisions under regulations 9, 13, 14, 58 [] and 16 shall apply to the entity.”
    (emphasis supplied)
    15
  15. We have heard the learned Counsel for the parties and have
    perused the material on record.
  16. The main issue for consideration in this appeal is 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.
  17. It is not disputed that in pursuance to the Government of
    Rajasthan having, on 19.11.2005, invited bids for laying of Gas
    Distribution Network, the appellant had applied for the two cities of
    Udaipur and Jaipur and after acceptance of its application, the
    appellant was granted NOC by the Government of Rajasthan on
    27.03.2006. It is also not disputed that pursuant thereto, the
    appellant has laid approximately 75 kms of pipeline in both the cities
    16
    of Udaipur and Jaipur, and in the process, spent a huge amount of
    money relying on the NOC granted in its favour for such purpose. The
    appellant asserts that is has completed the following activities in the
    two projects of Udaipur and Jaipur:
    “Udaipur:
    a) Received permission to cut roads vide letter
    dated 4.6.2007, made payment of
    Rs.14,28,900 towards road cutting bill and
    provided Bank Guarantee to the Municipal
    Council of Udaipur in this respect;
    b) Purchase of material and services for the
    project, amounting to Rs.452.99 lacs;
    c) The Petitioners appointed M/s. International
    Certification Services (Asia) Pvt. Ltd., for the
    independent verification, inspection,
    certification of the work done of the gas
    distribution pipeline. This agency was
    subsequently also authorised by the Board
    vide communication dated 6.4.2010.
    d) The Petitioner had achieved mechanical
    completion on various phases of the project
    and accordingly has received Mechanical
    Completion Certificated in this respect.
    e) The Petitioner has successfully laid 30093
    mtrs. of gas distribution pipeline in Udaipur.
    “Jaipur”:
    a) The Petitioner has received provisional
    permission vide letter dated 7.3.2008 from
    RIICO for laying 41.1 KM of the gas
    distribution pipeline in Jaipur;
    b) Towards the provisional permission received
    from RIICO the Petitioner has deposited
    Rs.54,95,500.00 with RIICO; and
    c) Purchase of material and services for the
    17
    project, amounting to Rs.393.22 lacs:
    d) The Petitioner has successfully laid 22610
    mtrs. of gas distribution pipeline in Jaipur.”
  18. Section 17 of the Act of 2006, which Act was notified on
    03.04.2006 (except Section 16) and came into force on 01.04.2007,
    provides that an entity which is laying, building, operating or
    expanding City or Local Natural Gas Distribution Network, or which
    proposes to do so, has to apply in writing to the Board for obtaining an
    authorisation under the Act of 2006. However, the entity authorised
    by the Central Government for such activities would be required to
    furnish the particulars of such activities to the Board within 6 months
    from the appointed date. Sub Section 4 of Section 17 empowers the
    Board either to reject or accept such application, which power has to
    be exercised consistent with the norms and policy guidelines. Sub
    Section 5 provides that in case of refusal or conditional acceptance of
    an application, the Board shall record reasons in writing for such
    rejection or conditional acceptance.
  19. Section 16 of the Act of 2006, which came into force on
    12.07.2010, relates to ‘Authorisation’. It puts an embargo to lay, build,
    operate or expand in City or Local Natural Gas Distribution Network
    18
    without obtaining authorisation under the Act. The Proviso (ii) of the
    said section 16 provides for ‘deemed authorisation’ in case an entity
    had been laying, building, operating or expanding any City or Local
    Gas Distribution Network, immediately before the appointed date,
    which shall be deemed to have such authorisation. In the present
    case, the appointed date is 01.10.2007 when the Act of 2006 was
    brought into force, except the provision contained in the Section 16 of
    the Act of 2006, which came into force on 12.07.2010.
  20. The Regulations of 2008 were framed before Section 16 of the Act
    of 2006 came into force. Regulation 18 of the Regulations of 2008
    provides that an entity, not authorised by the Central Government for
    laying, building, operating or expanding CGD network before the
    appointed date, shall apply for obtaining an authorisation in the form
    as in Schedule I and the Board may take into consideration the
    criteria for considering the application for grant of authorisation in
    terms specified in clauses (a) to (j) of Regulation 18(2).
  21. Regulation 18(2)(a) requires the entity to meet the minimum
    eligibility criteria and other necessary clearances, as well as the
    requisite NOCs. Clause (b) provides that the entity, if not registered
    19
    under Companies Act, 1956, shall undertake to become a company
    registered under the Companies Act, 1956. The other factors in
    clauses (c) and (d) as enumerated, relate to actual physical progress
    made and the financial commitment thereon, and requires a physical
    progress of at least 25 percent of capital expenditure before the
    appointed date, which may be considered as adequate. Clauses (e)
    and (f) provide that the entity should have arranged and procured the
    necessary equipment for erecting the City Gas Distribution network
    before the appointed date. Clause (g) provides for the entity to satisfy
    the Board on the adequacy of its ability to meet the applicable
    technical standards, specifications and safety standards as specified
    in the relevant Regulations. Clause (h) provides for assessment of
    financial position of the entity and Clause (i) provides for supply of
    natural gas to meet the demand in the authorised area to be covered
    by City Gas Distribution network. The last clause (j) provides for the
    Board to consider any other relevant criteria based on the examination
    of the application. All the aforesaid clauses are relevant factors and
    the one which is put for consideration in the present case is Clause
    (d), on which ground, the Central Government has primarily rejected
    the application of the appellant.
    20
  22. It is noteworthy that the language used in Regulation 18(2) is
    that “the Board may take into consideration…………”. As such, the
    language in which the Regulation has been couched does not make
    the consideration in the said clauses, including Clause (d), to be
    mandatory, but no doubt the same would be relevant considerations.
    On a careful perusal of the order passed by the Board, we find that the
    application of the appellant has been rejected for reasons mentioned
    in para 5 of the impugned order dated 19.05.2011, which are
    extracted hereunder:
    “5. The committee found that you do not
    satisfy the conditions laid down under the
    Regulation 18(1) 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 on account of the following:
    a) Physical and financial progress achieved
    by M/s. Adani Gas Limited before the
    appointed day in the GA of Jaipur does
    not satisfy the proviso 18(2)(d) of the
    Regulation 18(1) of Petroleum and Natural
    Gas Regulatory Board (Authorizing
    Entities to Lay, Build, Operate or Expand
    City or Local Natural Gas Distribution
    Networks) Regulations 2008;
    b) Even After clear instructions of PNGRB
    vide Press Note Dated 30th October, 2007
    to stop all incremental activity M/s. Adani
    energy Limited had continued with laying
    21
    of MDPE Pipeline and thus violating the
    directions of the Board.”
  23. From the above, it is clear 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.
    22
  24. The peculiar factual position is that the Act of 2006 had been
    notified on 03.04.2006 but came into force on 01.10.2007 and the
    NOC was issued on 27.03.2006, after the Government of Rajasthan
    had invited open bids on 19.11.2005 for laying of City Gas
    Distribution network in the cities of Udaipur and Jaipur, in which the
    appellant had been selected. Besides depositing the sum of Rs. 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’.
  25. We are of the firm view that 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
    23
    the Act, if any, required. Besides this, detailed replies had been
    submitted by the appellant before the Board, which also ought to have
    been considered. Further, the requirement under the Act/Regulations
    is for grant of personal hearing to the appellant before deciding its
    application and if personal hearing was given, to have discussed the
    same in the order, which aspect has also been ignored by the Board.
  26. In view of the aforesaid discussion, we are of the opinion that
    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. We also hold that in the
    aforesaid factual background, the decision of the State Government to
    revoke the NOC vide order dated 18.05.2011 was also highly unfair
    and unjust in as much as the reply of the petitioner dated 16.03.2011
    in response to the notice dated 26.02.2011 has not been dealt with by
    the Government of Rajasthan while passing the said impugned order
    dated 18.05.2011. As such, the same does not stand to reason, which
    also deserves to be quashed.
  27. Accordingly, we allow this appeal to the extent that the order
    dated 18.05.2011 passed by the Government of Rajasthan and the
    24
    order dated 19.05.2011 passed by the Board are quashed. The Board
    is directed to take a fresh decision in the matter within 4 weeks from
    today, in the light of the provision of ‘deemed authorisation’ and other
    observations made hereinabove, after giving opportunity of hearing to
    the appellant. The appellant is given liberty to file fresh written
    submissions before the Board within 10 days from today.
    No orders as to cost.
    ………………………..J.
    [ARUN MISHRA]
    ………………….…….J.
    [VINEET SARAN]
    New Delhi
    29th January, 2019
    25
    ITEM NO.1501 COURT NO.5 SECTION XV
    S U P R E M E C O U R T O F I N D I A
    RECORD OF PROCEEDINGS
    Petition for Special Leave to Appeal (C) No. 21986 of 2015
    ADANI GAS LIMITED & ANR. Appellant(s)
    VERSUS
    UNION OF INDIA & ORS. Respondent(s)
    Date : 29-01-2019 This matter was called on for Judgment today.
    Counsel for the
    parties Mr. Gaurav Juneja, Adv.
    Mr. Divyansu, Adv.
    Mr. Aayush Jain, Adv.
    for Khaitan & Co.
    Mr. Munawwar Naseem, Adv.
    Mr. Palak Mishra, Adv.
    Mr. Utsav Trivedi, Adv.
    for M/S. Karanjawala & Co.
    Mr. Amit Sharma, Adv.
    Mr. Ankit Raj, Adv.
    Ms. Ruchi Kohli, Adv.
    Ms. Iti Agarwal, Adv.
    Ms. Nikita Choukse, Adv.
    Ms. Rinali Batra, Adv.
    for DSK Legal
    Ms. Ruchi Kohli, AOR
    Mr. Senthil Jagadeesan, AOR
    Mrs. Anil Katiyar, AOR

Hon’ble Mr. Justice Vineet Saran pronounced the non-reportable
Judgment of the Bench comprising Hon’ble Mr. Justice Arun Mishra
and His Lordship.
Leave granted.
The application(s) for intervention is/are dismissed.
26
The appeal is allowed to the extent indicated in the signed
non-reportable Judgment.
Pending interlocutory application(s), if any, is/are disposed
of.
(JAYANT KUMAR ARORA) (JAGDISH CHANDER)
COURT MASTER BRANCH OFFICER
(Signed non-reportable Judgment is placed on the file)