UNIVERSITY OF PETROLEUM & ENERGY STUDIES

SCHOOL OF LAW

BA.LL.B. (HONS.)
SEMESTER-VIII

ACADEMIC YEAR: 2019-20SESSION: JAN – MAY 2019

SYNOPIS OF SPEAKING ORDER Soumya DMS Infratech Limited & Soumya

Mining Private Limited (Entity) for violation of terms and conditions of
authorization granted for Mathura GA 20.04.2018

Under the Supervision of MS. SHUSHMITA HALDAR

Name: DHIRAJ SINGH, GURPINDER SINGH , HIMANG LEDWANI

Roll no. : R450215037,46,48

SAP ID: 500047975

Before the Petroleum and Natural Gas Regulatory Board

Hearing dated 20.04.2018 of Soumya DMS Infratech Limited & Soumya

Mining Private Limited (Entity) for violation of terms and conditions of
authorization granted for Mathura GA 20.04.2018

SPEAKING ORDER dated 23.08.2018

Quorum: Mr. D. K. Sarraf, Chairperson, Mr. Satpal Garg, Member (C&M), Dr.
S. S. Chahar, Member (Legal) & Shri S. Rath, Member (I&T)

Facts of the case:

1. PNGRB has granted authorization of Mathura Geographical Area (GA) to

Joint Venture of DSM Infratech Private Limited and Soumya Mining Private
Limited (hereafter referred as DSMS/Entity) for development of City or Local
Natural Gas Distribution Network (CGD) under Regulation 5 of (Authorizing
Entities to Lay, Build, Operate or Expand City or Local Natural Gas Distribution
Network) Regulation, 2008 on 11.06.2009 under 1St Bidding Round conducted by
PNGRB. As per authorization terms and conditions and extant Regulations, the
achievement of PNG Domestic Connections, Steel Pipeline (Inch-KM), City Gate
Stations (CGS) & Online CNG stations were to be submitted to PNGRB
periodically.
2. The verification exercise was undertaken by PNGRB for submission of
incomplete and inaccurate data by the JV of DSM Infratech Private Limited and
Soumya Mining Private Limited, the Board in the meeting held on 09th May 2013
decided that the issues of imposition of penalty on DSMS with regard to submission
of incomplete and inaccurate data. The entity was called for hearing on 31.05.2013
for submission on the matter. However, the entity vide its mail dated 27.05.2013 and
letter dated 28.05.2013 informed that their Directors were out of station and reply to
PNGRB's letter dated 21.05.2013 would be sent by senior officials within 1-2 days.
Hence, the meeting was rescheduled to 03.07.2013 and the entity was accordingly
communicated for the same through email and letter..

3.Referring to the stay granted against encashment of PBG for non-achievement

of targets by the Hon'ble High Court of Delhi, the entity vide letter dated 25.06.2013
requested PNGRB for postponement of hearing scheduled on 03.07.2013 until the
final order of Hon'ble Delhi High Court is delivered. The Board however did not
accept the request of the entity. Subsequent request was made by the entity vide

Setter dated 28.06.2013, however, the Board on 02.07.2013, advised the entity that the
hearing would be held as scheduled and in case the entity is not present, the matter
will be considered ex-parte based on available facts.

4.Subsequent to ex-parte hearing of the entity held on 03.07.2013, a detailed order

was passed on by Board dated 03.07.2013. The entity approached Hon'ble High Court
of Delhi in the said matter, and the Court passed orders dated 17.07.2013 and
08.04.2015, directing the entity to provide security in the form of an FDR for the sum
of Rs. 25 Lakh to the Registrar General of the Court. The FDR is in the name of the
entity (Petitioner). It was further indicated by the Court, that the FDR would not be
dissolved without its permission. Later on, the High Court disposed of the case and
stated that the appellate tribunal (APTEL) will consider the plea of the Appellant.

5.APTEL vide judgment dated 03.02.2017 disposed of the appeal and directed the
Board to issue notice to the Appellant (entity) to appear before the Board on the date
convenient to it, with the necessary material in its defense. It was further stated that
the Board shall pass appropriate Order in connection to the Show Cause notice dated
21.05.2013 independently in accordance with the law after hearing the appellant
(entity) within 4 weeks from the date of hearing. As regards FDR for a sum of Rs. 25
Lakh, APTEL further stated that the FDR deposited with the Delhi High Court shall
abide by the final order that may be passed by the Board. However, the FDR shall not
be realized for a period of four weeks from the date of the final order passed by the
Board.

6.PNGRB vide letter (No. Legal/138/2015) dated 28.02.2017 referring to the

judgment passed by Hon'ble APTEL informed the entity that the meeting of the Board
could not be scheduled due to lack of quorum, as provided in the Regulation 7 of the
PNGRB (Meeting of the Board) Regulations, 2007 and that the proposal based on the
Order of the Hon'ble APTEL shall be placed before the Board for directions as and
when the conditions given in Regulation 7 of the above Regulation are fulfilled.

7. In December, 2017, when the Chairperson and other two members of the Board
were appointed by the Central Government, the proposal based on Hon'ble APTEL
was put up to the Board and it was decided to call the entity for hearing under Section
28 of PNGRB Act, 2006. The hearing of the entity was held on 20.04.2018 for
violation of terms and conditions of authorization granted for Mathura GA under
Section 28 of PNGRB Act, 2006.

8.Based on hearing of the entity held on 20.04.2018, the entity vide letter dated
20.04.2018 (on the day of hearing) has submitted their response and requested
wavier of the imposed penalty. They further conveyed vide letter dated 08.05.2018
that they have made genuine efforts and are honest in implementation of CGD
Network in Mathura GA. The entity has also requested the Board to take a lenient
view in the matter and absolve them from earlier orders.

Deliberations
9.The Board examined the matter and are of the view that, the entity had
indulged in submission of incorrect and misleading data regarding provision of
domestic PNG connections by reporting infrastructure laid for domestic
connections instead of reporting the number of domestic customers connected with
PNG supplies. However, the information on PNG connections was disclosed as a
note.
10. The progress made by the entity in terms of Minimum Work Program with
regard to PNG-Domestic connections and online CNG stations are not meeting the
targets as on date. However, entity has achieved the MWP targets for laying of
pipeline infrastructure.
 Order
On giving careful consideration of all the facts and circumstances of the matter, the
Board finds that the decision taken by the predecessor Board in July 2013
imposing a penalty of rupees twenty-five lakh on the entity is in order but little
harsh. In order to achieve larger objective of infrastructure development and
considering the fact that number of PNG domestic connections was disclosed in
the note, the Board has decided to take a lenient view and reduce the penalty to
rupees five lakh in place of the earlier rupees twenty-five lakh.
The amount of rupees five lakh out of rupees twenty-five lakh in the form of FDR
deposited with the Registrar General of Delhi High Court be released to PNGRB
and balance Rupees Twenty-Lakh be returned to the entity.