Petroleum and Natural Gas Regulatory Board

New Delhi
In the matter of:

Case No.: Legal/27/2021

GUJARAT GAS LIMITED ……Review Petitioner
Registered Office, Gujarat Gas CNG Station,
Sector 5/C, Gandhinagar, Gujarat– 382006

Counsel(s)/ Authorized Representatives Present For

Review Petitioner Ms. Meghna Sen Gupta (Adv.)

CORAM: Gajendra Singh A.K. Tiwari Ajit Kumar Pande

(Member-I) (Member-II) (Member Legal)

ORDER
02.08.2022
FOR PRONOUNCEMENT OF ORDER
The Review Petition filed under section 13(1)(h) of the PNGRB Act, 2006 is dismissed, vide
detailed order passed separately.

Sd/- Sd/- Sd/-

Gajendra Singh A. K. Tiwari Ajit Kumar Pande
Member-I Member-II Member (Legal)
 -1-

Petroleum and Natural Gas Regulatory Board

New Delhi
In the matter of:

Case No.: Legal/27/2021

GUJARAT GAS LIMITED ……Review Petitioner
Registered Office, Gujarat Gas CNG Station,
Sector 5/C, Gandhinagar, Gujarat– 382006

CORAM: Gajendra Singh A.K. Tiwari Ajit Kumar Pande

(Member-I) (Member-II) (Member Legal)

ORDER
02.08.2022

Original Review Petition

1. The present Review Petition has been filed on 06.10.2021 before the Petroleum and Natural
Gas Regulatory Board (‘hereinafter referred to as the Board/PNGRB’) by Gujarat Gas
Limited (‘hereinafter referred to as GGL or the Review Petitioner’) under section
13(1)(h) of the Petroleum and Natural Gas Regulatory Board Act, 2006 (‘hereinafter
referred to as the act’). The Review Petitioner through the instant review petition has
sought the review of the following:

(i) Public Notice and Guidelines dated 09.07.2021 for consideration of Force Majeure
(‘hereinafter referred to as FM’) in City or Local Gas Distribution Network
(‘hereinafter referred to as CGD Network) for the second COVID-19 wave;

(ii) Letter dated 24.11.2020 issued by the Board to Review Petitioner reiterating the
revised Monthly Work Program (‘hereinafter referred to as MWP’) as per public
notice dated 05.11.2020;

(iii) Extension dated 05.11.2020 of Exclusivity period and shifting of year-wise

Monthly Work Program (‘hereinafter referred to as MWP’) targets of a
cumulative work program on the account of FM i.e. Covid-19 pandemic for the
Geographical Areas (‘hereinafter referred to as GAs’) Authorized to various
CGD Entities;

(iv) Clarification dated 26.10.2020 to the guidelines for the consideration of Force
Majeure in CGD Network;

(v) The Guidelines dated 02.09.2020 for consideration of FM in CGD network.

2. The Review Petitioner by way of the instant Review Petition prayed the following:
 -2-

(i) Interim Relief

(a) In light of the prevailing Covid-19 pandemic force majeure circumstances and the
various Government Orders and grounds elaborated in the Review Petition, the
Hon’ble Board be pleased not to impose any penalties or damages in relation to
delays in performing the Minimum Work Plan till the final disposal of this review
petition;

(b) Set aside the Public Notices No. PNGRB/Auth/CGD (02)/2021 dated 13.09.2021 till
the final disposal of this review petition.

(ii) Final Relief

(a) In light of the impact of the Covid-19 pandemic on the implementation of the works
relating to the milestones submitted under the Catch-Up Plans, , the Hon’ble Board
be pleased to amend the ‘project milestones’ provided in authorisations for the
Geographical Areas of (i) Surat-Bharuch-Ankelshwar, (ii) Nadiad, (iii) Navsari, (iv)
Rajkot, (v) Surendranagar, (vi) Hazira, and (vii) Valsad by the milestones for the
respective GAs as stated in the Catch-Up Plans submitted vide letters dated
05.03.2018 and 21.03.2020;

(b) In light of the prevailing Covid-19 circumstances and its adverse impact on the
markets and considering the various Government Orders and grounds elaborated in
the Review Petition, the Hon’ble Board be pleased to suspend the Minimum Work
Plan (MWP) for Domestic Connections: (i) for Surat-Bharuch-Ankelshwar GA by a
period of 117 (one hundred and seventeen) months, (ii) for Nadiad GA by a period
of 93 (ninety three), (iii) for Navsari GA by a period of 69 (sixty nine) months, (iv)
for Rajkot GA by a period of 69 (sixty nine) months, (v) for Surendranagar GA by a
period of 93 (ninety three) months, (vi) for Hazira GA by a period of 84 (eighty four)
months, and (vii) for Valsad GA by a period of 54 months;

(c) In light of the prevailing Covid-19 circumstances and its adverse impact on the
markets and considering the various Government Orders and grounds elaborated in
the Review Petition, the Hon’ble Board be pleased to suspend the Minimum Work
Plan (MWP) targets for Laying of Steel Pipelines: (i) for Surat-BharuchAnkelshwar
GA by a period of 117 (one hundred and seventeen) months, (ii) for Nadiad GA by a
period of 93 (ninety three), (iii) for Navsari GA by a period of 69 (sixty nine) months,
(iv) for Rajkot GA by a period of 69 (sixty nine) months, (v) for Surendranagar GA
by a period of 93 (ninety three) months, (vi) for Hazira GA by a period of 84 (eighty
four) months, and (vii) for Valsad GA by a period of 54 months;
 -3-

(d) Grant an extension period of 117 (one hundred and seventeen) months with respect
to the exclusivity for laying, building and expansion of CGD infrastructure as
provided in Para 4(a) in the Authorisation for Surat-Bharuch-Ankelshwar GA;

(e) Grant an extension period of 93 (ninety three) months with respect to the exclusivity
for laying, building and expansion of CGD infrastructure as provided in Para 4(a)
in the Authorisation for Nadiad GA and Surendranagar GA;
(f) Grant an extension period of 69 (sixty nine) months with respect to the exclusivity for
laying, building and expansion of CGD infrastructure as provided in Para 4(a) in
the Authorisation for Navsari GA and Rajkot GA;

(g) Grant an extension period of 84 (eighty four) months with respect to the exclusivity
for laying, building and expansion of CGD infrastructure as provided in Para 4(a)
in the Authorisation for Hazira GA;

(h) Grant an extension period of 54 (fifty four) months with respect to the exclusivity for
laying, building and expansion of CGD infrastructure as provided in Para 4(a) in
the Authorisation for Valsad GA;

(i) Grant an extension period of 117 (one hundred and seventeen) months with respect
to the exemption from the purview of contract carrier or common carrier for the CGD
Network as provided in Para 4(b) in the Authorisation for Surat-BharuchAnkelshwar
GA;

(j) Grant an extension period of 93 (ninety three) months with respect to the exemption
from the purview of contract carrier or common carrier for the CGD Network as
provided in Para 4(b) in the Authorisation for Nadiad GA and Surendranagar GA;

(k) Grant an extension period of 69 (sixty nine) months with respect to the exemption
from the purview of contract carrier or common carrier for the CGD Network as
provided in Para 4(b) in the Authorisation for Navsari GA and Rajkot GA;

(l) Grant an extension period of 84 (eighty four) months with respect to the exemption
from the purview of contract carrier or common carrier for the CGD Network as
provided in Para 4(b) in the Authorisation for Hazira GA;

(m) Grant an extension period of 54 (fifty four) months with respect to the exemption
from the purview of contract carrier or common carrier for the CGD Network as
provided in Para 4(b) in the Authorisation for Valsad GA;

(n) In light of the prevailing Covid-19 circumstances and its adverse impact on the
market and considering the various Government Orders and grounds elaborated in
the Review Petition, the Hon’ble Board be pleased to not impose any penalties for a
period of upto: (i) additional 117 (one hundred and seventeen) months for
 -4-

SuratBharuch-Ankelshwar, (ii) additional 93 (ninety three) months for Nadiad GA,

(iii) additional 69 (sixty nine) months for Navsari GA, (iv) additional 69 (sixty
nine)months for Rajkot GA, (v) additional 93 (ninety three) months for
Surendranagar GA, (vi) additional 84 (eighty four) months for Hazira GA, and (vii)
additional 54 (fifty four) months for Valsad GA;

(o) Recall the 2021 FM Guidelines; and

(p) pass such order in favour of the Review Petitioner as it deems fit and necessary in
the interest of equity and justice.

Amended Review Petition

3. However, an Interlocutory Application No. 22 of 2022 has been filed on 20.06.2022 to

amend the Review Petition and sought the relief of the following:

(i) Interim Relief: In light of the prevailing COVID-19 circumstances and the various
Government Orders and grounds elaborated in the Review Petition, the Hon'ble
Board be pleased not to impose any penalties or damages in relation to delays in
performing the Minimum Work Plan till the final disposal of this review petition.

(ii) Final Relief:

(a) In light of the Hon'ble Board's decision to accept covid-19 pandemic as a force
majeure, the Hon'ble Board has already recognised the impact of the Covid-19
pandemic on the implementation of the works relating to the milestones submitted
under the Catch-Up Plan/future development plan, and be pleased to extend the
Catch Up Plan/ future development plan Period by the duration of the covid-19
pandemic and accordingly extend by two (2) years, the 'project milestones'
provided in authorisations for the Geographical Areas of (i) Nadiad, (ii) Navsari,
(iii) Rajkot, (iv) Surendranagar, by the milestones for the respective GAs as
stated in the Catch-Up Plan/future development plan submitted vide letters dated
05.03.2018 and 21.03.2020; and

(b) Pass such order in favour of the Review Petitioner as is deems fit and necessary
on the interest if equity and justice.

4. The Board vide order dated 05.07.2022 allowed the above-mentioned Interlocutory
Application No. 22/2022 and the prayer sought by the Review Petitioner in the said I.A.,
the relevant extract of the order is given herein below:

“By way of an Interlocutory Application, the Review Petitioner seeks liberty to

amend the original Review Petition withdraw the prayer(s) made in the original
petition to an extent of Surat-Bharuch-Ankleshwar District, Valsad District and
Hazira District GAs and confine the original petition and prayers in respect of GAs
 -5-

namely Nadiad District, Navsari District, Rajkot District and Surendranagar

District.
In view of the submission made by the Ld. Counsel, the Interlocutory Applications
are taken on record and the Board allows to amend the original Review Petition, as
prayed.”

Brief Facts of the Case

5. Since, the Review Petitioner by way of an Interlocutory Application No. 22 of 2022 has
confined its Review Petition to Nadiad, Navsari, Rajkot, and Surendranagar Geographical
Area(s) (‘collectively hereinafter referred to as Subject GA’) and, therefore, for the sake
of brevity the facts related to Surat-Bharuch-Ankleshwar District, Valsad District and
Hazira District Geographical Area are not stated herein.

6. The Board as per the provisions of the PNGRB Act as well as the provisions of Regulation
18(1) of the PNGRB (Authorizing Entities to Lay, Build, Operate or Expand City or Local
Natural Gas Distribution Networks) Regulations, 2008 (‘hereinafter referred to as CGD
Authorization Regulations’) granted the authorization in the favour of GSPC Gas Company
Limited (‘hereinafter referred to as GSPC’). The details of the GAs authorized under
Regulation 18 of the CGD Authorization Regulations along with its exclusivity is tabled
herein under:

GA Name Nadiad GA Navsari GA Rajkot GA

Surendranagar
GA
GA ID 98.04 98.05 98.06 98.07
Authorized Gujarat Gas Gujarat Gas Gujarat Gas Gujarat Gas
Entity Limited* Limited* Limited* Limited*
Date of 01.10.2013 01.10.2013 01.10.2013 01.10.2013
Authorization
Date of end of 30.09.2018 30.09.2018 30.09.2018 30.09.2018
the
exclusivity**
Authorization Authorized Authorized Authorized Authorized
under under under under
Regulation 18 of Regulation Regulation Regulation 18
18 of CGD 18 of CGD of CGD
CGD
Authorization Authorization Authorization
Authorization Regulations Regulations Regulations
Regulations

*Initially authorized to GSPC Gas Company Limited then transferred to Gujarat

Gas Limited on 25.01.2016)

**(‘hereinafter referred to as exclusivity from the purview of declaring as a

common carrier or contract carrier)

7. It is an admitted fact that initially the GSPC had been granted the authorization of the
above-captioned GAs vide the authorization letter(s) dated 01.10.2013 and the terms and
conditions were duly accepted by GSPC on 04.10.2013 for the Subject GAs. Schedule D
 -6-

of the CGD Authorization Regulations, wherein the prescribed terms, and conditions on
which the authorization was granted to the Review Petitioner are extracted herein below:

“1. The Authorized Area for laying, building, operating or expanding the
proposed CGD Network shall cover an area of < > square kilometers and as
depicted in the enclosed drawing.

2. The activities of laying, building, operating or expansion of the CGD

Network to commence within a period of _____days from the date of this
authorization.

3. The activities permitted above shall have to be completed as per the

approved time schedule enclosed. Any failure on the part of the entity in
complying with the milestones prescribed in the time schedule shall lead to
consequences as specified under regulation 16 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.

4. The entity shall design and install an optimal size of the infrastructure in
terms of pipelines of various types including steel belting of the authorized
area, online compressors of adequate capacity for compressing of natural gas
into CNG, allied equipments and facilities in the CGD network as identified
in its DFR depending upon the potential demand for natural gas. The
infrastructure in the CGD network should be adequate to maintain
uninterrupted flow of natural gas in the pipelines and be also able to maintain
supplies at adequate pressure to online CNG stations.

5. The entity shall maintain an uninterrupted supply of natural gas to all

categories of customers in the CGD network. In the event of any disruption in
the supply of natural gas in the CGD Network, first priority shall be accorded
to restoration of supplies to domestic PNG customers. In case of disruption of
supply to domestic PNG customers for more 30 than twelve hours, the entity
shall compensate to the domestic customer on the following basis:- (a) the
normative volume of natural gas consumption for the first domestic PNG
connection for cooking requirements based on last three months weighted
average consumption per day to be applied for each day’s disruption and
multiplied by ten; (b) normative value of natural gas consumption shall be
based on last three months’ weighted average billing price of natural gas for
supplies to the first domestic PNG connection for cooking requirements; and
(c) the value of compensation shall be equal to normative volume of natural
gas consumption as per clause (a) multiplied by normative value as per clause
(b) and shall be adjusted by allowing a credit to the domestic PNG Customer
in the next billing cycle or in the next pre-paid smart card in case of smart
 -7-

card metering. In case the disruption of supplies is attributed to any fault of

the domestic PNG customer, no compensation shall be payable by the entity.

6. The entity is allowed an exclusivity period under the Petroleum and

Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas
Distribution Networks) Regulations, 2008, in respect of the following: (a)
_______months from the date of issue of this communication for laying,
building and expansion of the CGD network; and (b) _______months from
the date of issue of this communication in terms of an exemption from the
purview of common carrier or contract carrier for the CGD network:
Provided that the entity meets the obligations in line with the Petroleum and
Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas
Distribution Networks) Regulations, 2008: Provided further that the period of
exclusivity allowed under sub-clause (a) or sub-clause (b) may be terminated
before the expiry of the period mentioned above in line with the provisions
under Petroleum and Natural Gas Regulatory Board (Exclusivity for City or
Local Natural Gas Distribution Networks) Regulations, 2008.

7. The authorized entity shall be required to take prior approval from the
Board for creation of any lien, charge or hypothecation of the CGD network
to secure finances for the project and furnish details of utilization of funds.
However, in case of raising funds from any financial institution or bank, the
entity will be required to only inform the Board of the sanction of the funds
within a period of seven days.

8. The entity shall submit a detailed and clear financial closure report to the
Board within a period of one hundred and twenty days from the date of
authorization issued by the Board under regulation 10 of Petroleum and
Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate
or Expand City or Local Natural Gas Distribution Networks) Regulations,
2008.

9. The entity shall publish the approved network tariff for transportation of
natural gas as 31 well as the compression charge for CNG in the CGD
network in the authorized area.

10. The entity shall publish the applicable retail selling price of PNG for all
categories of customers and also for the purpose of invoicing in Rs./ MMBTU.

11. The entity shall publish and display the retail selling price of CNG for the
purpose of invoicing to CNG customers in Rs./ Kg at all CNG dispensing
stations.

12. The furnishing of performance bond of Rs. Million is a guarantee for

timely commissioning of the project as per the prescribed targets in the bid
 -8-

and for meeting the service obligations during the operating phase of the
project.

13. The entity shall abide by-

(a) the service obligations as specified under regulation 14. 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;

(b) the service obligations specified under the Petroleum and Natural Gas
Regulatory Board (Exclusivity for City or Local Natural Gas Distribution
Networks) Regulations, 2008;

(c) the service obligations specified in Schedule-J to the Petroleum and

Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate
or Expand City or Local Natural Gas Distribution Networks) Regulations,
2008;

(d) the quality of service standards as specified under regulation 15 of

Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay,
Build, Operate or Expand City or Local Natural Gas Distribution Networks)
Regulations, 2008.

14. In case the authorization of the entity is terminated, the Board may assign
the rights and obligations of the entity to any agency or another entity on such
terms and conditions, as it may deem fit. Further, the entity may be required,
as per the directions of the Board, to continue the operations of the CGD
network at the same level till another agency or entity appointed by the Board
takes over the full control of the CGD network.

15. The entity shall comply with the applicable provisions under the Petroleum
and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build,
Operate or Expand City or Local Natural Gas Distribution Networks)
Regulations, 2008, 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, Petroleum
and Natural Gas Regulatory Board (Exclusivity for City or Local Natural Gas
Distribution Networks) Regulations, 2008, relevant regulations for technical
standards and specifications, including safety standards, any other
regulations as may be applicable and the provisions of the Act.

The entity shall comply with any other term or condition which may be notified
by the Board in public interest from time to time.
 -9-

You are requested to confirm your acceptance by filling-in the acceptance of

the grant of authorization provided below and return the same in original.”

8. As per the contents of the Review Petition, the Review Petitioner submits the following:

(i) On request of the authorized entity, the Board vide letter dated 25.01.2016
transferred the authorization of the aforesaid GAs in the favor of the Review
Petitioner on the same terms and conditions of the above-captioned authorizations
letter(s).

(ii) In order to monitor the post-authorization activities, the Board called a progress
review meeting (‘hereinafter referred to as PRM’) and asked the Review
Petitioner to appear before the Board on 27.10.2016 to present the latest status of
the project and tentative schedule to achieve the specified targets of the Rajkot,
Surendranagar and Nadiad GA. The Board during the meeting held on 27.10.2016
observed that the Review Petitioner had been making steady progress and expected
that the initiatives taken/planned to be taken by the Review Petitioner should be
executed with diligence and care so that the targets fixed are met within the
stipulated period of five years.

(iii) Subsequently, another progress review meeting (‘hereinafter referred to as

PRM’) was held on 23.12.2018 with respect to the Subject GAs wherein the
Review Petitioner informed that the MWP Targets of the subject GAs are on the
higher side, as assigned by the Board and the Review Petitioner will make all
possible efforts to achieve the assigned targets.

(iv) Thereafter, the Board vide 04.03.2020 had sought reasons from the Review
Petitioner, for the shortfall in achievement of the targets along with the information
and details of likely achievement up to 31.03.2020 against the MWP targets of
Nadiad and Surendranagar GAs. It was specifically mentioned in the letter dated
04.03.2022 that submission of the Catch-Up Plan does not lead to revision/
extension of MWP Targets assigned as per authorization and the Board reserves its
right to take action for non-achievement of targets.

(v) The Review Petitioner in response to the Board’s letter dated 04.03.2020, vide its
letter dated 06.03.2020 had requested to grant a time extension till 20.03.2020 for
submission of the requisite information considering the quantum of update.

(vi) In pursuance of the letter dated 06.03.2020 of the Review Petitioner vide letter
dated 21.03.2020 submitted to the Board the details of various events that resulted
in delays in achieving the MWP targets, originally stipulated under the terms and
conditions of authorizations, for the Nadiad and Surendranagar GAs, along with the
 - 10 -

Catch-Up Plans submitted w.r.t. likely achievement of work programme up to

31.03.2020, for the due consideration of the Board.

9. Thereafter, the Review Petitioner vide two separate letters dated 12.06.2020 requested the
Board to consider the following, on account of the COVID-19 pandemic:

i. Declaration of COVID-19 pandemic as Force Majeure event under the PNGRB

CGD Authorization Regulations, 2008
ii. An extension of 18 months w.r.t. the milestones under the respective CGD
Authorizations;
iii. Change in law having an adverse impact on the implementation of CGD projects in
the GAs awarded under Regulation 18 of the PNGRB CGD Authorization
Regulations;
iv. The various orders issued by the Government of India, the State Governments, and
the various District Administrations in pursuance of the restriction imposed due to
the National Lockdown.

10. It is essential to highlight that from 22.03.2020 the pandemic of COVID-19 emerged and
the Government of India issued several notifications as a preventive measure, the Ministry
of Home Affairs (MHA), Government of India took initiative to scale down the menace of
COVID vide its several orders, which are tabled under:

Lockdown Duration of restrictions Days MHA Orders

Phases
Janta Curfew 22.03.2020 1 Press Release and
Government
Announcement
Phase-I 25.03.2020 to 14.04.2020 21 MHA Order No. 40-
3/2020-DM-I(A) dated
24.03.2020
Phase –II 15.04.2020 to 03.05.2020 19 MHA Order No. 40-
3/2020-DM-I(A) dated
14.04.2020
Phase-III 04.05.2020 to 17.05.2020 14 MHA Order No. 40-
3/2020-DM-I(A) dated
01.05.2020
Phase-IV 18.05.2020 to 31.05.2020 14 MHA Order No. 40-
3/2020-DM-I(A) dated
17.05.2020
Total 22.03.2020 and 69 -
25.03.2020 to 31.05.2020

11. The Board, only after taking cognizance of the various guidelines/orders issued by the
Ministry of Home Affairs, Government of India, as mentioned in Table-IV above, wherein
imposing restrictions to curb the spread of COVID-19, thus issued the following guidelines
by way of the Public Notice Ref: PNGRB/Monitoring/7/Misc-FM/(3)/2020 (P-810) dated
 - 11 -

02.09.2020, “Guidelines for the consideration of FM in CGD Networks. The relevant

extract of the guidelines are given below:

“3.0 Procedure to be followed by CGD Entities facing Force Majeure

When an entity authorized in respect of a CGD network is unable to perform its

work program due to a force majeure event, as defined in regulation 2(1)(ga), it
shall take the following steps and the following procedure shall be adopted by
the Board:

3.1 Within 15 days from the date of occurrence of the Force Majeure event, the
entity shall inform the Board giving full particulars of the force majeure event,
the date of beginning of the event, the area covered by the event in terms of a
district, tehsil or any other administrative unit, or part thereof comprised in the
Geographical Area authorised to him, along with supporting documents such as
news-reports/ clippings, any notifications, resolutions, orders, circulars issued
by the central Government, state Government, local authority or any other
Government agency, other evidences duly certified by statutory authorities and
any other information which the entity considers to be relevant in this regard.

3.2 Within 15 days of the date on which the event of Force Majeure ends either
in whole of the area where the Force Majeure had occurred or part thereof, the
entity shall inform the Board the date of termination of the event of Force
Majeure, details of the area in which the event has terminated in terms of a
district, tehsil or any other administrative unit, or part thereof, along with
supporting documents such as news-reports/ clippings, notifications, resolutions,
orders, circulars issued by the central Government, state Government, local
authority or any other Government agency, other evidences duly certified by
statutory authorities, details of the activities affected due to the event in the
implementation of the CGD network and any other information which the entity
considers to be relevant in this regard.

3.3 PNGRB may ask the entity to submit any further information deemed
necessary by it in order to verify the claim of the entity. The Board may, after
considering the information submitted by the Entity or otherwise available with
it, by order, allow whole or a part of the period claimed by the entity to be
covered by the event of Force Majeure, the whole or a part of the area claimed
by the entity to be covered by the event of Force Majeure and the whole or a part
of the CGD activities claimed by the entity to be affected by the event of force
majeure, as covered by the event of the Force Majeure. The Board may also
allow, a period deemed reasonable by it as restoration period after the
termination of the event of Force Majeure for restoration of the activities after
 - 12 -

termination of Force Majeure event. The decision of the Board in this regard
shall be final and binding on the entity.

3.4 No request for allowing Force Majeure shall be considered for events/
occurrences that are not covered in the definition of “Force Majeure” under
relevant bid document or regulation 2(1)(ga) of CGD Authorisation Regulations.
It also needs to be clarified that securing permissions from statutory/ local/ other
authorities of any Government or Government agencies is the prime
responsibility of the CGD Entities. Hence, delays on this account cannot qualify
as “Force Majeure”.”

12. Despite, clearly specifying in para 3.4 of the Guidelines dated 02.09.2020 that the time
period for securing requisite permissions for the development of the CGD Network, from
any statutory/local/other authorities of the Central Government or any State Government,
would not be considered as an event of Force Majeure and no entity shall be given the
benefit of such event, still the certain entities were approaching PNGRB for suspension of
the service obligation towards MWP Targets and extension of exclusivity on an account of
non-achievement of requisite permission from the authorities of Central/State Government.

13. The Board in furtherance of the Public Notice issued on 02.09.2020 in order to clarify the
events to be considered as a Force Majeure, vide Public Notice Ref:
PNGRB/Monitoring/7/Misc-FM/(3)/2020 (P-810) dated 26.10.2020 issued “Clarification
related to consideration of requests of CGD Entities for time extension under ‘Force
Majeure’ clause”. Wherein, PNGRB stated that securing permissions from statutory/ local/
or other authorities of Central/States is the prime responsibility of the CGD Entities. Hence,
delays if any, on this account do not qualify as ‘Force Majeure’.

14. The Board vide Public Notice Ref: PNGRB/Monitoring/1/CGD-COVID-19/2020/Vol-II

(P-1804) dated 05.11.2020, issued “Extension of exclusivity period and shifting of year-
wise MWP targets of Cumulative Work Program on account of ‘Force Majeure’ i.e.
COVID-19 pandemic for the Geographical Areas (GAs) authorized to various CGD
Entities”, and granted an extension to 41 CGD Entities in respect of 185 GAs that had been
considered eligible for Force Majeure extension on account of COVID-19 pandemic.

The relevant extract of the public notice dated 05.11.2020 is given below:

“4. After careful consideration, the Board in its 102nd Meeting held on 4th
October 2020 has approved the extension considering the National Lockdown by
Government of India (69 days), additional lockdown/restrictions imposed by
State Governments or by District Authorities and a restoration period of 60 days.
The Board has granted such extension to 41 CGD Entities in respect of 185 GAs
 - 13 -

that have been considered eligible for Force Majeure extension on account of
COVID-19”

15. The Review Petitioner vide letter dated 30.07.2021 sought the suspension of the service
obligation towards MWP Targets and extension of exclusivity on account of ‘Force
Majeure’ due to a rise in COVID-19 cases since March 2021. Since the GAs in question
were not found eligible for granting the benefit of the advent of the Force Majeure, GGL
preferred the instant review petition.

16. The Review Petitioner aggrieved by the time period considered for suspension of the
service obligation towards MWP Targets and extension of exclusivity on account of ‘Force
Majeure’ due to a rise in COVID-19, had filed the instant Review Petition.

17. The Board in view to take a holistic view regarding the suspension of MWP Targets and
extension of Exclusivity from the purview of being declared as a common carrier or
contract carrier, for the entire COVID period (including all of the three waves), called up
a meeting with the stakeholders on 08.04.2022.

18. In furtherance of the meeting dated 08.04.2022, the Board in its 112th (Emergency) Meeting
held on 11.05.2022 took a decision for the suspension of the relative obligations of the
entities towards their work program along with an extension for exemption from the
purview of the common carrier/contract carrier for a period of 24 months w.e.f. 24.03.2020,
for 179 GAs.

19. The Board has taken up the Review Petition for hearing, on 11.04.2022 wherein the Board
heard the Ld. Counsel of the Review Petitioner and reschedule the matter.

20. Subsequently, the Board vide public notice dated 27.05.2022 withdrawn the Impugned
Public Notice No. PNGRB/Monitoring/1/CGD-COVID19/2020/Vol-II (P-1804) dated
05.11.2020.

21. The Review Petitioner during the hearing held on 31.05.2022 sought time to file an
amended Review Petition. Accordingly, the amended Review Petition has been filed on
20.06.2022 and the same was allowed during the hearing held on 05.07.2022.

22. In view of the amended review petition, the Board is constrained to adjudicate upon the
following relief:

“In light of the Hon'ble Board's decision to accept covid-19 pandemic as a force
majeure, the Hon'ble Board has already recognised the impact of the Covid-19
pandemic on the implementation of the works relating to the milestones submitted
under the Catch-Up Plan/future development plan, and be pleased to extend the
Catch Up Plan/ future development plan Period by the duration of the covid-19
pandemic and accordingly extend by two (2) years, the 'project milestones' provided
 - 14 -

in authorisations for the Geographical Areas of (i) Nadiad, (ii) Navsari, (iii) Rajkot,
(iv) Surendranagar, by the milestones for the respective GAs as stated in the Catch-
Up Plan/future development plan submitted vide letters dated 05.03.2018 and
21.03.2020”

Submissions of the Review Petitioner

23. The main contentions made by the Ld. Counsel of the Review Petitioner are as under:

(i) The Ld. Counsel draws attention to Regulation 16(1) of CGD Authorization
Regulations, as applicable at the time of authorization granted under Regulation 18 of
the CGD Authorization Regulations. Regulation 16(1) states that "An authorized
entity shall abide by all the terms and conditions specified in these regulations and
any failure in doing so, except for force majeure ... ". Therefore, the authorized
entities were assured that any delay or inability to implement the terms and conditions
of the authorization on account of "force majeure", will be an exception to the
obligations to implement the said terms and conditions.

(ii) During the hearing, the Ld. Counsel pointed out that as per the framework of
Regulation 16 of the CGD Authorization Regulations, the scope of force majeure was
not limited by any defined term, and consequently, the concept of force majeure as
applicable under general law is applicable to the said authorizations granted under
Regulation 18 of the CGD Authorization Regulations.

(iii) It was highlighted by the Ld. Counsel that the Catch Up Plan submitted by the Review
Petitioner was as per the Regulation 16(1)(a) CGD Authorisation Regulations and the
same was accepted as providing the reasonable time to fulfil the obligations under the
circumstances being faced by the authorised entity and each of the Catch Up Plans that
had been submitted by the Review Petitioner had clearly provided the force majeure
events which had prevented the achievement of the MWP and had submitted the revised
schedule for the achievement of the relevant MWP and no specific amendment to the
MWP was required in the event force majeure had prevented the implementation of the
terms and conditions of the authorization.

(iv) Further as per Regulation 16(1)(b) of the CGD Authorisation Regulations, it is

mandated that, "no further action shall be taken in case remedial action is taken by the
entity within the specified period to the satisfaction of the Board” and the Hon'ble
Board has been monitoring the implementation of the Catch Up Plan, and is aware that
the authorised entity has been undertaking the remedial action stipulated thereunder.

(v) It was submitted that the Hon'ble Board had not rejected the Catch Up Plans and in
fact, the Review Petitioner had been submitting updates on the progress made in
relation to the Catch Up Plans being implemented. The Hon'ble Board is therefore
estopped from now determining that the authorizations under Regulation 18 of the
 - 15 -

CGD Authorization Regulations would not be eligible for the relief in respect of the
covid-19 pandemic force majeure, particularly since the stated objective criteria for
grant of covid-19 pandemic relief is the "GAs whose MWP targets fell within the period
of FM'. Accordingly, the Review Petitioner had acted upon, and invested capital to
implement Catch-Up Plans after identifying various circumstances that had been
outside the control of the Review Petitioner that had prevented the implementation of
the MWP. The Catch Up Plans so submitted and implemented provided the time period
by which the relevant MWP would be achieved.

Issues for deliberation

24. On the basis of pleadings and arguments advanced by the Counsel of the Review Petitioner,
the following issues are required to be determined:

(a) Whether the Subject GAs authorized to the Review Petitioner entitled to be benefited
from the suspension of the service obligation towards MWP Targets and extension of
exclusivity from the purview of being declared CGD Network as a common carrier or
contract carrier on the account of restrictions of work due to COVID- 19 under Force
Majeure, If Yes, to what extent?

(b) Whether the ‘Catch-up Plan’ submitted by the Review Petitioner during the various
PRMs, would affect the suspension of relative obligations towards MWP and
extension of exclusivity from the purview of being declared CGD Network as a
common carrier or contract carrier as stipulated under the terms and conditions of the
authorization?

Decision

For the sake of convenience, both the issues are decided together.

25. In furtherance of the objectives of the establishment of the Board and to ensure the supply
of natural gas in all parts of the country in compliance with the mandate of the PNGRB
Act and provisions of the CGD Authorization Regulations, the Board, either through
acceptance of the Central Government Authorizations under Regulation 17 of the CGD
Authorization Regulations, granted in favor of entities before the appointed day or grant of
Authorization under Regulation 18 of the CGD Authorization Regulations, after processing
of applications submitted by the entities or through bidding process held in various bidding
rounds, has authorized under Regulation 5 of the CGD Authorization Regulations
authorized the various entities, to lay, build, operate and expand the CGD Networks in
various Geographical Areas across the country.

26. In accordance with the provisions of the PNGRB Act and the Regulations framed
thereunder, the authorized CGD Networks envisaged a certain exclusivity period, as
determined by the Board under the Regulations, and during such period, the CGD Network
 - 16 -

enjoys immunity from the purview of being declared as a Common Carrier or a Contract
Carrier and only the authorized entity may use the CGD Network for supplying the gas
during such period, within its authorized Geographical Area (GA). Apart from this,
infrastructural exclusivity is also granted to the authorized entity for a longer period [for
the economic life of the CGD network which is usually 25 years (further extendable at the
discretion of the Board)], conferring upon it exclusive rights to lay, build, operate or expand
the CGD Network

27. In order to monitor the entrusted task of dealing with the infrastructure of the country to
develop general Employment & Economy and the Orders issued by the Central
Government and respective State Governments, the PNGRB as a regulator after due
deliberation came to the conclusion that all the concerned 41 CGD Entities for 185 GAs
are being found eligible for an extension on the account of the Force Majeure i.e. pandemic
of COVID-19 and shall be granted extension based on the duration of complete lockdown
period i.e. 69 days (i.e. National Lockdown by Government of India) along with additional
lockdown period in the States/Districts and 60 days as common restoration period, for
meeting their obligations of MWP targets and exclusivity for their respective CGD
Networks, on account of Force Majeure due to COVID-19. Furthermore, in order to take
a holistic view, the Board has considered the entire COVID period as en-bloc and, in
pursuance of, the 112th Emergent Board Meeting the Board for 179 GAs, suspended the
relative obligations of the entities towards their work program along with the extension of
exclusivity exemption from the purview of a common carrier or contract carrier for a period
of 24 months w.e.f 24.03.2020.

28. It is essential to point out that the Subject GAs authorized to the Review Petitioner was not
covered under the benefit granted on account of the Force Majeure as the time period to
achieve MWP Targets and the exclusivity period from being declared as a common carrier
or contract carrier of the Subject GAs had expired much before the advent of Force
Majeure i.e COVID-19.

Issue No. 1

29. It is the case of the Review Petitioner that on the account of the Force Majeure, the MWP
Targets as per the authorization, may be suspended. For examining the issue at hand, it is
also essential to look into Regulation 7(1)(c) of the CGD Authorization Regulations.

The Regulation 7(1)(c) of the CGD Authorization Regulations is enumerated hereinafter:

“7(1)(c) Minimum Work Programme for infrastructure for PNG domestic

connections and inch-kilometer of pipeline to be laid by the successful bidder
Infrastructure for PNG domestic connections. –
 - 17 -

The Board shall work out the target for infrastructure for PNG domestic
connections as five per cent of the households of the respective geographical area
to be achieved by the successful bidder during the first five years from the date
of grant of authorisation in Schedule D as under, namely:---

(i) the successful bidder shall achieve fifteen per cent, fifty per cent, seventy
per cent. and one hundred per cent of this target by the end of second
year, third year, fourth year and fifth year respectively; and

(ii) the Board may consider carry forward of the target from one year to
another within the period of five years.

Inch-kilometer of pipeline. – The Board shall work out the target for inch
kilometer of pipeline, for which both steel pipeline and MDPE pipeline shall be
considered, as per the following, namely:-

(i) for geographical areas having an area of less than or equal to 1,000 square
kilometers, product of 0.65 and the area in square kilometers of the respective
geographical area;

(ii) for geographical areas having an area of more than 1,000 square kilometers
and less than or equal to 5,000 square kilometres, product of 0.36 and the area
in square kilometres of the respective geographical area subject to a minimum
of 650 inch-kilometer of pipeline;

(iii) for geographical areas having an area of more than 5,000 square kilometres,
product of 0.07 and the area in square kilometres of the respective geographical
area subject to a minimum of 1,800 inch kilometer of pipeline.

The target for inch-kilometer of pipeline worked out as per the above shall be
achieved by the successful bidder during the first five years from the date of grant
of authorization in Schedule D as under, namely:-

(i) the successful bidder shall achieve twenty per cent., fifty per cent, eighty per
cen., ninety per cent and one hundred per cent of this target by the end of first
year, second year, third year, fourth year and fifth year respectively covering all
the charge areas; and

(ii) the Board may consider carry forward of the target from one year to another
within the period of five years.”
 - 18 -

It can be seen from the aforesaid provisions that the authorized entity has to achieve the
Minimum Work Programme for the infrastructure of the PNG Domestic connections and
Inch-Km Pipeline within five years from the date of grant of authorization, which states as
follows:

 The infrastructure of PNG Domestic Connections: The successful bidder shall

achieve fifteen percent, fifty percent, seventy percent, and one hundred percent of
this target by the end of the second year, the third year, fourth year, and fifth-year
respectively; and

 The Inch-Kilometre of Pipeline: The successful bidder shall achieve twenty

percent, fifty percent, eighty percent, ninety percent, and one hundred percent of
this target by the end of the first year, second year, third year, fourth year, and fifth-
year respectively covering all the charge areas.

30. It is admitted fact that the time period to achieve MWP Targets and the exclusivity period
from being declared as a common carrier or contract carrier of the Subject GAs had expired
much before the advent of Force Majeure i.e COVID-19. At this stage, it is essential to
look into the achievement of the MWP Targets by the Review Petitioner, the details of the
same is tabled below.

S. No. Name of GA  Nadiad GA

(i) Date of Authorization 01.10.2013
(ii) End of Exclusivity period from the
purview of being declared as a 30.09.2018
common carrier or contract carrier
(iii) Time period to achieve MWP 30.09.2018
Targets
(iv) Parameters/ PNG-D Inch-KM Steel CNG
Duration (Quarters) Connections Pipeline Stations
(v) Total MWP Target 1,29,737 668 NA
(vi) Achieved as on 30.09.2018 59,273 343 17
(vii) Achieved as on 31.05.2022 68,155 505.41 39

S. No. Name of GA  Navsari GA

(i) Date of Authorization 01.10.2013
(ii) End of Exclusivity period from the
purview of being declared as a 30.09.2018
common carrier or contract carrier
(iii) Time period to achieve MWP 30.09.2018
Targets
(iv) Parameters/ PNG-D Inch-KM Steel CNG
Duration (Quarters) Connections Pipeline Stations
(v) Total MWP Target 1,15,093 593 NA
(vi) Achieved as on 30.09.2018 95,024 505 18
(vii) Achieved as on 31.05.2022 1,11,283 588 26
 - 19 -

S. No. Name of GA  Rajkot GA

(i) Date of Authorization 01.10.2013
(ii) End of Exclusivity period from the
purview of being declared as a 30.09.2018
common carrier or contract carrier
(iii) Time period to achieve MWP 30.09.2018
Targets
(iv) Parameters/ PNG-D Inch-KM Steel CNG
Duration (Quarters) Connections Pipeline Stations
(v) Total MWP Target 4,09,105 2,105 NA
(vi) Achieved as on 30.09.2018 2,02,127 2,576 38
(vii) Achieved as on 31.05.2022 2,92,119 3,838 84

S. No. Name of GA  Surendranagar GA

(i) Date of Authorization 01.10.2013
(ii) End of Exclusivity period from the
purview of being declared as a 30.09.2018
common carrier or contract carrier
(iii) Time period to achieve MWP 30.09.2018
Targets
(iv) Parameters/ PNG-D Inch-KM Steel CNG
Duration (Quarters) Connections Pipeline Stations
(v) Total MWP Target 1,12,728 580 NA
(vi) Achieved as on 30.09.2018 22,982 609 14
(vii) Achieved as on 31.05.2022 26,911 651.91 28

31. From the above-mentioned table(s), it is evident that the time period of achieving stipulated
MWP Targets was 30.09.2018 for the Subject GAs, and the Review Petitioner as on the
30.09.2018 as well as on 31.05.2022, was under default for non-achievement of the
stipulated MWP Targets. It is also evident that the exclusivity period of the Subject GAs
also expired on 30.09.2018.

32. Looking into the figures at S. No. VI of the above-mentioned table, it can be seen that the
performance of the Review Petitioner was much below the par and the Review Petitioner
is unable to disclose the substantiate reason for the lack of progress quo the targets for
Nadiad, Rajkot, and Surendranagar GAs. In view thereof, the Board is not inclined to
accept the contentions that as per the framework of Regulation 16 of the CGD
Authorization Regulations, the scope of force majeure was not limited by any defined term,
and consequently, the concept of force majeure as applicable under general law is
applicable to the said authorizations granted pursuant to the 3rd CGD Bid Round.

33. After due deliberation on the aspect of suspension of the relative obligation, it is essential
to point out that PNGRB while granting the extension on the account of Force Majeure has
taken into consideration the GAs whose period of achievement of MWP Targets (as per
the terms and conditions of the authorization) had not expired before the advent of COVID-
19.
 - 20 -

34. At this stage, it is essential to point out that the Subject GAs authorized to the Review
Petitioner was not given the benefit of advent of COVID-19 as the time period to achieve
MWP Targets and the exclusivity period from being declared as a common carrier or
contract carrier of the Subject GAs had expired much before the advent of Force Majeure
i.e COVID-19.

35. In view of the above, the Board is of view that the case of the Review Petitioner is devoid
of merits and is not eligible for consideration of the suspension of the relative obligations
i.e. the extension of MWP Targets and Exclusivity on the account of Force Majeure i.e.
COVID-19. Hence, this issue is decided in negative.

Issue No. 2

36. It is the case of the Review Petitioner that the Catch Up Plans were submitted under the
framework of the applicable Regulation 16(1)(a) CGD Authorisation Regulations by the
Review Petitioner and the same was accepted as providing the reasonable time to fulfil the
obligations under the circumstances being faced by the authorised entity.

37. At this stage, it is essential to look into Regulation 13(3) of the CGD Authorization
Regulations, the provision is enumerated as under:

“13. Post-authorization monitoring of activities (pre-commissioning).

(3) The Board shall monitor the progress of the entity in achieving various targets
with respect to the CGD network project, and in case of any deviations or
shortfall, advise remedial action to the entity”

It is evident from the aforesaid provision that as per Regulation 13(3) of CGD
Authorization Regulations the Board is empowered with monitoring the post-authorization
activities. In pursuance to monitor the progress of the authorized entity w.r.t. the CGD
Network Project, the Board calls upon the PRMs, and in case of shortfall in achieving
MWP Targets, the authorized entities are being asked to submit Catch-Up Plans.

38. During the course of the hearing, the Ld. Counsel relied upon the Catch-Up Plan submitted
in the various PRMs and submitted that the submission of the Catch-Up Plan entitles the
entity for the suspension of the relative obligations i.e. extension of the MWP Targets. On
inquiry from the Board, it was admitted by the Ld. Counsel that the Catch-Up Plan was
never accepted by PNGRB during the PRMs nor did the Board suspend the service
obligation towards MWP Targets and extension of exclusivity of the Review Petitioner.
However, the Ld. Counsel took the stand that it has also not even been rejected by the
Board.

39. The Board is not inclined to accept the submissions it has submitted the Catch-Up Plan to
achieve the short-fall Target and the achievement of MWP Targets till March 2020, had
 - 21 -

been implicated by the event of Force Majeure i.e. pandemic of COVID-19, therefore, the
MWP shall be extended for another 2 years.

40. It is the case of the Review Petitioner that the submission of the Catch-Up Plan means the
revisions of the MWP Targets, which is a complete misinterpretation of the spirit of action
taken for monitoring the post-authorization activities of the authorization granted by the
Board. However, the Board as per the mandate asked the authorized entity to submit its
Catch-Up Plan, with the intent to monitor the progress of the authorized entity and to ensure
that in near-by future the authorized entity achieves its stipulated targets, as per the terms
and conditions of an authorization, so that the consumers shall not be deprived with the
adequate supply of the natural gas, through the authorized CGD Network.

41. It is essential to point out that the relative obligations including completion of the MWP
Targets are governed by the terms and conditions of the authorization, which are sacrosanct
in nature and the submission of the Catch-Up Plan does not revise the stipulated MWP
Targets. Further, neither the PNGRB Act nor the extant regulations framed thereunder
stipulate the definition/meaning of the ‘Catch Up Plan’.

42. In view thereof, it is concluded that the submission of the Catch-Up Plan neither amends
the terms and conditions of the authorization nor revises the time period for completion of
MWP Targets. Hence, this issue is decided in negative.

Summarizing Conclusions

43. The instant Review Petition in hand is concluded by stating that as per the relevant
provisions of the Act and CGD Authorization Regulations, the terms and conditions of the
authorization are sacrosanct in nature, and, the service obligation of the authorized entity
including MWP Targets is a part of authorization letter, which cannot be amended unless
specifically extension granted by the Board. In addition to the above, the Catch-Up Plan
submitted by the defaulting entities is merely a future plan in order to ascertain the time
period for achieving the shortfall MWP Targets however, the submission of Catch-Up Plan
nowhere amends the time period for achieving the stipulated MWP Targets.

44. It will not be out of place to mention that the Subject GAs i.e. Nadiad, Navsari, Rajkot and
Surendranagar GAs authorized of the Review Petitioner does not found to be eligible for
granting the benefit of COVID-19 on an account of Force Majeure, as the time period to
achieve MWP Targets as well the exclusivity period from the purview of being declared as
a common carrier or contract carrier, had already been expired much before the advent of
COVID-19.
 - 22 -

ORDER

In view of the above facts and circumstances, we are inclined to hold that the Review Petition is
devoid of merit and accordingly dismissed.

No order as to cost.

PRONOUNCED IN OPEN COURT ON 2nd DAY OF AUGUST, 2022

Sd/- Sd/- Sd/-

Gajendra Singh A. K. Tiwari Ajit Kumar Pande
Member-I Member-II Member (Legal)