Gujarat Petronet battles PNGRB in High Court

Vol 19, PW 15 (07 Apr 16) Midstream & Downstream

Wasting no time Gujarat State Petronet has mounted a swift legal challenge against the PNGRB's decision to encash 25% ($2m) of a Rs55.2cr ($8.3m) performance bank guarantee as penalty for its failure to execute three cross-country pipelines awarded in 2014.

Later today (April 7) a twin-bench of Justices Hima Kohli and Sunil Gaur are scheduled to hold their fifth hearing in the case filed by lawyers for an aggrieved Gujarat Petronet on March 10 - a day after the PNGRB ordered the BSE-listed GSPC subsidiary to top-up the bank guarantee to the mandatory 100% by March 24 or face the consequences. During the fourth hearing on March 29 Justices Kohli and Gaur directed the PNGRB to delay any further "coercive action" against Gujarat Petronet until the pipeline company could prove its ability to complete the three pipelines - with milestones - from Mallavaram to Vijaipur (1881-km), Mehsana to Bhatinda (1670-km) and Bhatinda to Srinagar (750-km) by the new PNGRB-sanctioned December 2017 deadline.

During the third hearing on March 14 the PNGRB questioned the legal basis of Gujarat Petronet's challenge, saying it should have approached the Appellate Tribunal set up under the Petroleum & Natural Gas Board Regulatory Act, 2006 that was expressly designed to hear appeals of this nature. "Without availing of this remedy," said the PNGRB, "Gujarat Petronet has rushed to the High Court."

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