The Supreme Court has ended the 14-year-old ad hoc gas sharing arrangement between Indraprastha Gas Limited (IGL), Haryana City Gas Limited and Adani Gas Ltd with immediate effect.
The Bench of Justice S.K. Kaul, Justice A.S. Oka and Justice Vikram Nath ordered the sunset clause of one year on Tuesday, telling the parties to make arrangements during the period.
This could spell trouble for CNG-fitted vehicles in Faridabad and Gurugram, as the verdict has ended the 14-year-old arrangement, through which IGL, which had the gas distribution approval from GAIL, was supplying CNG to distribution companies in Haryana.
The Court directed that the issue of which company has the licence to supply CNG to Haryana, needs to be resolved during this time.
The top court of the country noted that the dispute over the power of the state government and Centre to grant licence for gas supply between the companies over supply has been pending for 15 long years.
The Central government had given approval for Indraprastha Gas Ltd to supply CNG for vehicles in Delhi in 2004, taking in view the issue of air pollution in NCR.
Earlier, hearing a PIL over monitoring of air pollution in NCR, the Supreme court had directed the company to make similar arrangements for NCR cities such as Noida, Gurugram and Faridabad to reduce pollution.
The Union government, following the Apex Court orders, increased the gas allocation granted to the company, on the basis of expected demand from the NCR cities.
In 2005, IGL approached the court as the Haryana Government, instead of giving licence to IGL, gave approval to the Haryana City Gas Distribution Ltd (HCGDL) for supply of CNG in Gurgaon, while Adani Gas Ltd was given contract for Faridabad.
The Apex Court noted in 2008 that both the companies had laid down pipelines, but they did not have the approval from the Central government. The companies also did not approval of the Union government for allocation of gas supply.
An ad-hoc arrangement was made by the Apex Court in 2008 by way of interim orders, directing the IGL to supply gas to these two private companies, for distribution in Gurgaon and Faridabad.
Since 2005, the issue regarding the state government granted licences to gas companies without the approval of the Center has remained pending, with multiple applications from IGL, HCGDL and the state.
The Union government, in the meantime, created the Petroleum and Natural Gas Regulatory Board (PNGRB), a statutory mechanism, to look into the regulation of supply, allocation and disputes regarding petrol products, including gas supply.
The Counsel appearing for PNGRB submitted on Tuesday that the dispute over licensing and approval for CNG supply to NCR cities was a subject matter for decision by the board, and not the Court.
The Apex Court said the issue of whether the regulator should decide this or should there be a dissolution of the court order that has been in place for 15 years, has to be taken up.
It added that the case before the Court was related to air pollution, while the dispute on issue between two private companies and the Government, was outside the purview of PIL proceedings.
Stating that the issue had nothing to do with air pollution, the top court of the country directed the regulator to ‘take a call’.