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Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

 CIVIL APPEAL NO.4910 OF 2015

[Arising out of SLP (Civil) No. 22273 of 2012]

Petroleum and Natural Gas Regulatory Board … Appellant  

Vs.

Indraprastha Gas Limited & Ors. … Respondents

J U D G M E N T

Dipak Misra, J.

The present appeal, by special leave, calls in question the

legal defensibility and the tenability of the judgment and order

dated 01.06.2012 passed by the High Court of Delhi in W.P.(C)

No. 2034 of 2012 whereby the Division Bench has ruled that

Petroleum and Natural Gas Regulatory Board (for short, “the

Board”)  is  not  empowered  to  fix  or  regulate  the  maximum

retail  price  at  which  gas  is  to  be  sold  by  entities  such  as

Indraprastha Gas Ltd, to the consumers and further the Board

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is also not empowered to fix any component of network tariff

or  compression  charge  for  an  entity  having  its  own

distribution network.  On the aforesaid foundation, the High

Court has opined that the provisions of 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 (hereinafter referred to as

“the Regulations”)  as far  as it  is  construed to empower the

Board to fix the tariff is unsustainable and accordingly as a

sequitur the order dated 9.4.2012 to the extent of fixing the

maximum retail price or requiring the respondents to disclose

the entire tariff and the compression charges to its consumers,

is  not  in  consonance  with  the  Petroleum and  Natural  Gas

Regulatory  Board  Act,  2008  (for  brevity  “the  Act”),  and

accordingly quashed the same.

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2. The facts which are essential to be adumbrated are that

the respondent invoked the jurisdiction under Article 226 of

the Constitution assailing the order dated 9.4.2012 issued by

the  Board  under  Section  22  of  the  Act  determining  the

network tariff and compression charges for CNG in respect of

Delhi City Gas Distribution (CGD) network of the petitioner at

Rs.38.58 per MMBtu and Rs.2.75 per kg. respectively w.e.f.

01.04.2008 and directing the petitioner therein to recover the

said  network  tariff  and  compression  charges  for  CNG

separately  through  an  invoice,  without  any  premium  or

discount on a non-discriminatory basis and to appropriately

reduce the selling price of CNG from the date of issuance of

the order.  Be it noted, the Board left the modalities and time

frame  for  refund  of  differential  network  tariff  and  the

compression  charges  for  CNG  recovered  by  the  petitioner

therein  w.e.f.  1.4.2008 in  excess  from its  consumers  to  be

decided subsequently.  The said order was criticized on many

a ground.  The principal contention was that the Board does

not have the power to direct the writ petitioner, the respondent

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no.  1  herein,  while  charging  its  consumers,  to  disclose  the

network tariff and the compression charges and also to fix the

said network tariff and compression charges in any particular

manner.    

3. The said stand was resisted by the learned counsel for

the Board contending, inter alia, that Regulations 3 and 4 of

the Regulations apply to the entities like the writ petitioner;

that the Board has the power to ask the writ petitioner, the

respondent  herein,  to  submit  the  network  tariff  and

compression charges for CNG as per the Quality Regulations

for approval of the Board; that the entity having accepted the

said term as a condition for obtaining exclusivity is bound by

the contractual obligation with the Board and is now estopped

from challenging the power of the Board; that the objects and

reasons of the Act is to protect interests of the consumers and

regard being had to the statutory context when an action is

taken, no flaw could be found with the same; that Sections

2(i), (m) and (w) of the Act are all intended to ensure that the

consumer is not exploited; that Section 2(zn) of the Act defines

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the transportation rate and in the interpretative expanse, the

order passed by the Board is absolutely defensible; that as per

Section 11(e), the Board is empowered to regulate, inter alia,

the transportation rates; that Section 61(2), especially, clauses

(n),  (t),  (za)  empower  the  Board  to  make  regulations  qua

transportation tariff and any other matter which is required to

be  or  may be  specified  by  the  Regulations  or  in  respect  of

which provision is to be made by the Regulations; that keeping

in view the objective of  the Act,  the Regulations permit  the

Board to fix the network tariff and the compression charges

and the action of the Board so fixing the network tariff and the

compression charges cannot be interfered with; and that the

Regulations framed by the Board are consistent with the Act.

4. The  High  Court  observed  that  the  question  for

adjudication  was  basically  whether  the  Act  authorises  the

Board to pass such an order and whether the intention of the

legislature is to confer the power of price fixation on the Board.

The High Court referred to Section 11 of the Act and came to

hold that:-

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“We  thus  conclude  that  PNGRB  Act  does  not confer  any  power  on  the  Board  to  fix/regulate price of gas as has been done vide the impugned order dated 9th April, 2012.  Having held so, we do not deem it necessary to deal with the other Regulations  impugned  in  the  writ  petition  and suffice  it  is  to  state  that  any  provision therein having the effect of empowering the Board to fix the  price  or  the  network  tariff  or  compression charges for  CNG, as long as not transportation rate, is beyond the competence of the Board and ultra vires the PNGRB Act and of no avail.”

And again:-

“We thus allow this writ petition to the extent of holding  that  the  Petroleum  and  Natural  Gas Regulatory  Board  is  not  empowered  to  fix  or regulate the maximum retail price at which gas is to  be  sold  by  entities  as  the  petitioner,  to  the consumers.  We further hold that the Board is also  not  empowered  to  fix  any  component  of network tariff or compression charge for an entity such as the petitioner having its own distribution network.   The  provisions  of  the  Regulations (supra) in so far as construed by the Board to be so  empowering  it  are  held  to  be  bad/illegal. Accordingly, the order dated 9th April, 2012 to the extent  so  fixing  the  maximum  retail  price  or requiring the petitioner  to  disclose the network tariff and compression charges to its consumers is struck down/quashed.”

5. Criticizing the judgment and order passed by the High

Court,  Mr.  Arvind  Datar,  learned  senior  counsel  for  the

appellant, has raised the following submissions:-

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(a) There  is  a  presumption  of  validity  of

subordinate legislation, and as long as the parent

Act  enables  the  framing  of  regulations  they  are

valid.  When section 2(zn), 22(1), 61(2)(e), 61(2)(t) of

the Act empower the Board to frame regulations for

all  three  categories,  namely,  common  carrier,

contract  carrier  and  city  or  local  natural  gas

distribution network, the Regulations are valid.  The

High  Court  has  incorrectly  held  that  these

regulations  are  ultra  vires the  parent  Act  without

referring to any specific section or provision.  That

apart, on a reading of the provisions of the Act it is

also noticeable that there is no postulate that the

power  to  frame  the  transportation

rate/transportation tariff can only be exercised only

when the city network becomes a common carrier or

contract carrier.

(b) While the city networks get market exclusivity

for 3/5 years, they get infrastructure exclusivity for

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25 years with further extension of 10 years at a time

and  the  fixation  of  transportation  rate/

transportation tariff  has  to  be  determined for  the

network of pipelines irrespective of whether they are

common carriers, contract carriers or city networks.

The  Act  and  Regulations  contemplate  fixation  of

transportation rate/transportation tariff even at the

stage of city network.  It is quite clear that when the

city  network becomes a  common carrier  after  the

exclusivity  period,  the  said  transportation  rate

which is determined at the city network stage itself,

would apply for carrying the gas of other suppliers

under section 21(2).

(c) The High Court  has  erroneously  opined that

the transportation rate provided for is the rate to be

charged by one entity under the Act from another

for transporting/carrying/moving gas of the  other,

for such a conclusion  is completely contrary to the

definition  contained  in  section  2  (zn).   The

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transportation rate has to be determined even for

city  networks  under  sections  22(1),  61(2)(e)  and

61(2)(t)  and  that  is  the  rate  which  can  also  be

claimed from other gas suppliers but that does not

mean that no transportation rate can be determined

unless and until  the pipeline becomes a common

carrier. The  High  Court  has  flawed  in  holding

that  any  provision  therein  having  the  effect  of

empowering  the  Board  to  fix  the  price  or  the

Network  Tariff  or  the  Compression  Charges  for

CNG, as long as not transportation rate, is beyond

the  competence  of  the  Board  and  ultra  vires  the

Act, and it is because though the Board cannot fix

the  selling  price  or  monitor  the  selling  price  as

natural gas has not been notified, yet the Board has

the power, and indeed the duty, to fix the network

tariff and compression charges (which are nothing

but  the  transportation  rate/transportation  tariff)

under the Act.

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(d)  The High Court has committed gross illegality

in its analysis while stating that the Board is not

empowered to fix any component of Network Tariff

or Compression Charge for any entity such as the

respondent  herein  having  its  own  distribution

network.   It  has  also  faulted  in  opining  that  the

provisions of the Regulations insofar as construed

by  the  Board  to  be  so  empowering  it  are  illegal.

These findings recorded by the Division Bench are

contrary to the provisions of the Act, for the Board

can fix the transportation rate/transportation tariff

and the  fact  that  the  rate  will  become applicable

after  expiry  of  the  period  of  exclusivity  does  not

make the Regulations themselves bad or illegal and

it is absolutely clear that  source of  power comes

from the provisions engrafted under Sections 2(zn),

22(1), 61(2)(e) and 61(2)(t) of the Act as they confer

power  on  the  Board  to  frame  regulations  for  all

three categories.  

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(e) The omission of ‘city network’ in Section 11(e)

(ii) is only accidental, and if the provisions of the Act

are read as a whole, the power of the Board is clear

as  crystal  for  determining  the  transportation

rate/transportation tariff  for  all  categories.   If  the

contention  of  the  respondents  is  accepted,  it  will

amount to rewriting the provision as “transportation

rates after city network becomes a common carrier

or contract carrier”.

(f) The view expressed by the High Court to the

extent that the Board is not empowered to fix any

component of Network Tariff or Compression charge

for an entity such as the respondent that has its

own distribution network is fallacious, for the said

findings are not in accord with to the provisions of

the Act,  and if  the submissions are accepted, the

Regulations  will  become  applicable  only  after  the

period of exclusivity.  The Central Government had

supplied subsidized gas to the authorised entities to

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ensure that consumers do not have to pay a high

cost for both piped natural gas (used for domestic

purposes)  and  compressed  natural  gas  (used  for

transportation) and has made it mandatory for the

respondents to disclose the break up.  Quite apart

from that, Section 21(1) that stipulates right of first

use  after  the  exclusivity  period and Section 21(2)

which provides that other entities are liable to pay

minimum transportation rate for using the common

carrier, do not indicate that the Board has no power

to  fix  the  transportation  rate/  tariff  during  the

exclusivity period or that it would apply to only the

gas transported for other entities.  The respondent

company  is  obliged  to  indicate  the  transportation

rate/tariff as soon as it is determined.  Even if the

respondent’s contention is accepted, the rate/tariff

has to be indicated after the exclusivity period not

only for the gas of other entities but also for the gas

that  is  supplied  by  the  authorised  entity  itself.

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Section 20(4)  mandates the Board to fully  protect

consumer interest while granting exclusivity to the

city network and the consumer interest is protected

by the Board determining the transportation tariff

being applicable to and being indicated for all the

gas  transported  in  the  city  network,  whether  it

belongs to other entities or to the entity owning and

operating the city network.   

6. Mr.  Harish  Salve  and  Mr.  Parag  S.  Tripathi,  learned

senior  counsels,  resisting  the  submissions  raised  by  Mr.

Datar,  learned senior  counsel  for  the appellant-Board,  have

raised the following contentions.  

(A) As per the schematic  intendment of  the Act,

after  the  expiry  of  period  of  exclusivity   under

Section 20(4),  the Board, if  decides, in exercise of

the  statutory  powers  under  Section  20-22,  can

declare the network as a common/contract carrier,

and then alone, in respect of third party suppliers of

gas,  who  seek  to  use  the  excess  capacity  in  the

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pipeline  of  the  network,  the  Board  may  fix  the

transportation rate,  which the 1st respondent may

charge  from  such  a  third  party  supplier.   The

consumers  of  natural  gas,  whether  of  the  first

respondent,  or  of  the  third  party  supplier  of  gas,

does not enter into the scene at all and has no role

to play whatsoever. The transportation in question

whether  by  the  network  while  supplying  to  its

consumers  or  by  a  common/contract  carrier  in

respect  of  the  third  party  suppliers  are  the  rates

and  costs  of  transportation  relevant  only  to  the

owner/supplier of the gas and the said rate has no

meaning or relevance as far as the consumer, who

is the purchaser of such  gas, is concerned, other

than  the  fact  that  the  transportation  expenses

would  also  form  a  part  of  the  consolidated  final

price  which  would  be  raised  and  recovered  by

respondent  as  also  third  party  supplier  from the

respective consumers.

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(B). The definition of  Common Carrier  in Section

2(j) and Contract Carrier in Section 2(m) postulate

certain conditions and the definition of city or local

natural gas distribution network in Section 2(i) does

not contain the said crucial twin conditions.  That

apart,  Section11(a)  and  Section  11(e)  permit  the

issuance of regulations which determine access and

the  transportation  rate  for  Common  Carrier  or

Contract Carrier, and the said provision limits the

power  of  the  Board  to  issue  regulations  only  in

respect  of  access  to  the  network  and not  for  the

transportation rate for the network and, therefore,

the  stand  of  the  appellant  that  there  is  an

accidental  omission  is  unacceptable  because  the

intention of the legislature is absolutely clear and

unambiguous.  

(C). The power can only be exercised in respect of

common carrier/contract carrier if it is a network in

respect of which the power is sought to be exercised

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and then also as a first step the network must be

declared or  authorised as  a  common carrier  or  a

contract  carrier  within  the  meaning  of  Sections

20-22;  and,  therefore,  as  far  as  a  network  is

concerned,  there  is  no  right  to  determine

transportation  rate.   Such  power  is  specifically

limited in respect of common/contract carrier under

Section 11(e)(ii). The very concept of transportation

rate which is defined in Section 2(zn) makes it clear

that it is the rate for moving each unit of petroleum,

petroleum products or natural gas as may be fixed

by the Regulations and Section 21(2) which uses the

expression ‘transportation rate’, has three elements,

which makes it  clear  that  the  transportation rate

has relevance only in respect of the rates payable by

a  third  party  entity,  which is  utilizing  the  excess

capacity  in  the  existing  pipeline  of  a

common/contract  carrier  and the  Board does  not

have the power to determine the transport rate.

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(D). The  Board  has  been  empowered  by

Regulations  to  determine  the  exclusivity  period

under Section 20(4) of any pipeline.  The effect of

this declaration of exclusivity is that under Sections

20 – 22, during the period of exclusivity, the Board

is  disabled  from declaring  such  pipeline,  whether

existing  or  a  new  one,  as  a  common/contract

carrier;  and  once  a  pipeline  is  declared  to  be  a

common carrier/contract  carrier,  it  is  required  to

make available its excess capacity as a part of the

open access regime, to any third party supplier of

gas.  Such a third party may either be an importer

or  purchaser  or  a  producer  of  gas  seeking  to

transport  its  gas  using  the  pipeline  of  any  other

entity.  Therefore, critical scanning of Section 20 to

22 do not confer any power on the Board to fix the

transportation tariff.   Section 22(1) makes it  clear

that the right to fix transportation tariff is subject to

other conditions of the Act and when the provisions

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contained  in  Sections  2(j),  2(m),  2(i),  2(zn),  11(e),

11(f)(iii),  11(f)(vi)  and 22(2)  are  read in  a  conjoint

manner, it is graphically clear that the Board has

not  been conferred the power to fix  the transport

tariff by the legislature and, therefore, it cannot do

so by a regulation.  The reliance by the Board on

Section 61(2) (q) & (t) is misplaced, for Section 61(1)

of  the Act  permits the Board to make regulations

consistent with the Act and the Act which confers

power on the Board to frame the Regulations does

not empower it to do so.   That apart, Section 61

deals with the general regulation making power of

the Board in terms of the Sections specified in the

Act;  and  Section  61(2)(q)  and  (t)  relate  back  to

Section 22(1) which itself is “subject to” the other

provisions  of  the  Act  and,  hence,  even  if  Section

61(t)  is  read  with  Section  22(1),  it  would  not

override Section 11(e)  read with Section 2(zn) and

21(2) of the Act.

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7. In reply to the aforesaid submissions, Mr. Datar, learned

senior counsel has canvassed the following propositions:-

(I) The contentions urged by the respondent are

untenable,  for  the  transportation  rate  has  to  be

determined on the basis of voluminous data, which

has  to  be  collected,  collated  and  analyzed  and

unless  the  rate  is  fixed even during  the  five  year

period,  there  will  be  no  rate  available  for  the

common carrier at the end of the exclusivity period

and  it  will  be  absurd  to  suggest  that  the  entire

exercise  has  to  begin  only  after  the  city  network

becomes a common carrier.  The transportation rate

has  to  be  determined  for  a  network  of  pipelines

under  Section  2(zn)  and  is  not  a  separate

determination for city networks, common carrier or

contact carrier as the object of determining the rate

is also to determine the rate at which the cost of

transportation is permitted to be recovered and it

has  to  be  done  in  a  reasonable  manner  as

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mandated under Section 22(2)(b).  The omission of

“city  or  local  gas  distribution network”  in  Section

11(e)(ii) is clearly accidental because in the Act as

well as  Regulations, three categories viz. common

carrier,  contract  carrier  and  city  or  local  gas

distribution network have been used together, and

the  purpose  becomes  manifest  on  a  perusal  of

Section 61(2)(e) which specifically refers to Section

11(e).

(II) The Board as a regulator has the obligation to

ensure  that  the  consumers  are  not  exploited  and

under Section 20(4) the Board grants monopoly for

25 years with further extension of 10 years at a time

and  barring  unforeseen  circumstances,  such  a

network will have exclusive infrastructure monopoly

for  several  decades.   Therefore,  in  the  factual

matrix,  the  Board  has  a  duty  to  ensure  that

consumer interest is protected during the monopoly

period, as mandated under Section 20(4) and that

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can be done by ensuring the investment by the gas

company in the transportation infrastructure of the

city network is recovered in a reasonable manner for

all the gas transported in the city network over the

economic life of the network.  It is not the stand of

the  Board  that  it  does  not  have  the  power  to

monitor the Maximum Retail Price (MRP) however,

the  transportation rates/tariff  would  indicate  it  is

the price charged to the consumer so that it does

not result in excessive profiteering and under these

circumstances, it is the duty of the respondent to

reveal the transportation prices to the Board as well

as to the consumers.  

(III) Section 20(4)  gives the right to the Board to

grant  exclusivity  to  the  city  or  local  natural  gas

distribution network for such period as the Board

may  decide  and  once  it  has  the  power  to  give

exclusivity to a city or local natural gas distribution

network owning entity so that only it can lay, build

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and operate  such network in  a  geographical  area

and under these circumstances it becomes the duty

of  the  Board  and  as  per  the  stipulations  under

Section  20(4)  it  has  to  be  done  in  a  transparent

manner  protecting  the  consumer  interest.   In

addition to it, the duty is cast on the Board under

Section  20(5)  to  be  guided  by  the  objectives  of

promoting competition among the entities, avoiding

infructuous investment,  maintaining  or  increasing

supplies  or  for  securing  equitable  distribution  or

ensuring  adequate  availability  of  natural  gas

throughout  the  country  and,  therefore,  the  Board

can determine the transportation rate/tariff.  If the

stand of the respondent is accepted, the consumers

would never know the transportation rate, since it is

possible that in many cases there may not be any

other  gas  supplier  who  is  using  the  network  of

pipelines after the exclusivity period.  

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8. Having enumerated the submissions in reply by the first

respondent,  we must  record the  submissions of  the  second

respondent,  that  is,  Union  of  India.   The  following

proponements have been urged by Ms. Pinky Anand, learned

ASG.

(i) There is no legislative intent for allowing the

Board to determine the pricing of gas, i.e. the price

which  the  entity  charges  from  the  ultimate

customers.  The Act, while protecting the interests

of the consumers, has not empowered the Board to

fix  the  price  at  which  the  entities  will  sell  the

petroleum  products  or  natural  gas  to  the

consumers, for the MRP is to be fixed by the entity.  

(ii) As regards the  applicability  of  transportation

tariff determined through the Regulations, it is clear

from  the  provisions  of  the  Act  that  such

transportation tariff is applicable only in respect of

an  outside  entity  that  is  willing  to  use  the  CGD

network  and  that  such  tariff  is  payable  by  that

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entity to CGD network operator.  The transportation

tariff notified through the Board Regulations is not

applicable for CGD entity when it transports its own

gas for supply to individual customers.   

(iii) The  Board  is  merely  authorised  to  monitor

prices  and  is  required  to  ensure  fair  competition

amongst entities that are supplying CNG or PNG to

the  end  consumers.  The  Act  provides  for  fair

competition by allowing entry  to a third party  for

supplying  gas  to  the  end  consumers  on  a

non-discriminatory  open  access  basis  and  in  the

said  process  the  third  party  is  required  to  pay

transportation  tariff  to  the  CGD  operator  at  the

rates  notified  by  the  Board.   The  purpose  of

notification of the said rate is to prevent the CGD

operator from putting up any kind of entry barrier

in the form of a higher transportation tariff for the

third party.

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(iv) Section 22 of the Act read with Section 20, 21

and  2(zn)  of  the  Act,  the  Board  is  empowered  to

regulate  the  transportation  rate  or  transportation

tariff  only  for  a  city  or  local  natural  distribution

network subject to the provisions as provided in the

Act.   When  such  city  or  local  natural  gas

distribution  network  is  declared  as  a  common

carrier or a contract carrier by the Board and it  is

used  by  any  other  entity  on  common  carrier  or

contract  carrier  basis,  then  only  as  per  the

provisions of the Act, the Board is only entitled to

fix,  by  regulations,  the  transportation  rate  or  the

transportation  tariff  which  the  entity  owning  and

operating as a city or local natural gas distribution

network would charge from other entities which use

its network on common carrier or contract carrier

basis for transporting their gas.  

(v) The Board is not empowered to fix the price at

which  entities  will  market  or  sell  the  notified

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petroleum products or natural gas.  The MRP is to

be fixed by the entity.  The Board shall only monitor

the prices and take corrective measures to prevent

restrictive  trade  practices  by  the  entities.   As

regards regulation of the activities of transmission

and distribution of petroleum products and natural

gas, the Board will oversee access to pipelines and

city  or  local  natural  gas distribution networks on

non-discriminatory,  common  carrier/contract

carrier principle for ensuring a level playing field for

all  entities.   That  apart,  the  concept  of  allowing

capacity in a city or local natural gas distribution

network  to  be  used  by  any  third  party  entity  on

non-discriminatory common carrier/contract carrier

principle shall incetivize emergence of independent

marketers  of  natural  gas.   Such  independent

marketers shall enter into transportation contracts

with  the  entity,  owning and operating  the  city  or

local  natural  gas  distribution  network  for

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transportation of their gas.  This, in turn, will foster

fair  trade  and  competition  in  marketing  amongst

entities

(vi) The Board is entitled to fix the transportation

rate  for  gas  transmission  and  distribution  in  all

cases where gas is transported on common carrier

or  contract  carrier  principle.   The  transportation

rate so fixed by regulator shall be paid by the third

party  entities  to  the  entity,  owning and operating

the city or local natural gas distribution network for

transporting their gas on common carrier/contract

carrier  principle.    Thus,  by  observing

non-discriminatory  open  access  to  pipelines  and

city  or  local  natural  gas distribution networks on

common carrier/  contract  carrier  principle  at  the

transportation  rates  fixed  by  regulations,  a  level

playing  field  shall  be  ensured  for  all  the  entities

engaged in marketing and sale of natural gas.  In

such  a  market  condition,  gas-on-gas  competition

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and  the  inter-fuel  competition  will  lead  to

emergence  of  fair  trade  and  competition  amongst

entities, which in turn, will  protect the interest of

consumers.  

9. Mr. K.K. Venugopal, learned senior counsel appearing for

the intervenor, Central U.P. Gas Ltd., has contended that the

Board does not have the power to fix MRP and the distribution

entity has a fundamental right to carry on the trade, subject to

restriction under Article 19(1)(g) of the Constitution and in the

case at hand, the  Act, does not confer any power on the Board

to fix the MRP, but on the other hand, it expressly provides for

the MRP to be fixed by the entity themselves as per Section

2(x) of the  Act.  Learned senior counsel would contend that

once the Board has no jurisdiction/ authority to fix the MRP,

it is not entitled to fix any element/ component of the MRP as

it would bring an anomalous situation.  The submission of the

Board that the distribution entity can charge the MRP, but it

has  the  power  to  regulate  the  component,  that  is,  the

transportation charges is a futile exercise, a brutum fulmen,

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for the simple reason that however low may be the component

of MRP determined by the Board, the authorised entity can

virtually ignore the same.  It is argued by him that the Board

is a creature of the Act and it can only exercise its functions in

accordance with and within the four corners of the said Act

and  it  cannot  prescribe  what  it  calls  network  tariff  and

compression  charge  under  the  Regulations,  because  the

statute  refers  to  fixation  of  “transportation  tariff/

transportation rate” but does not mention of ‘network tariff’ or

‘compression charges’.  In the absence of any power conferred

under  the  Act  to  frame  regulations  in  that  regard,  the

Regulations clearly transgress the enactment and hence, the

Regulations to that extent are ultra vires.  It is urged by him

that ‘network tariff’  is  not  the same as ‘transportation rate’

and the Board cannot assume such an authority by employing

a different analogy.  Placing reliance on Section 11(e)(ii), it is

argued by the learned senior counsel that the said provision

which provides for Board’s function and empowers the Board

to frame regulations, employs the words ‘transportation rates

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for common carrier or contract carrier’ and they remotely do

not  purport  to  fix  rates  for  ‘network  tariff’  or  ‘compression

charges’  for city gas distribution network.  In addition, it is

propounded by him that reliance on Sections 21(2) and 22(1)

and all other provisions are absolutely misconceived and the

assumption  that  the  Board  as  a  regulator  to  look  after

consumer interests, cannot travel beyond the statutory limit.  

10. Dr.  Jatin Thukral,  who has been allowed to intervene,

has  referred  to  the  background  of  the  Act  and  on  that

foundation  has  canvassed  that  “transportation  rate”  is

inseparably related to open access for every commercial gas

distribution  entities  to  either  common  carrier  or  contract

carrier or city or local natural  gas distribution regard being

had  to  the  manner  in  which  the  said  words  have  been

employed by the legislature in various provisions of the Act.  It

is his further submission that Section 61(2)(t) is controlled by

sub-section 22(1) which in turn is guided by Section 22(2) and

all  the  provisions  are  associated  with  common  or  contract

carriers only and by no stretch of imagination, it confers any

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power on the Board to fix  transportation rate,  as it  is  only

referable to the rate charged by one commercial entity from

any  commercial  entity  for  using  its  gas  transportation

networks.   In essence, his submission is  that the appeal  is

devoid of merit and deserves to be dismissed.  

11. Before we proceed to appreciate the rivalised contentions

raised at the Bar, it is seemly to state that in terms of Section

22 of the  Act, the Board has framed the Regulations.  Placing

reliance on the Regulations, the Board has issued the order

dated 9.4.2012, which deals with the Network Tariff for City or

Local  Natural  Gas  Distribution  Network  and  Compression

Charge  for  CNG  in  respect  of  the  Delhi  CGD  Network  of

Indraprastha  Gas  Limited  (IGL).   Clause  1  deals  with  the

Regulatory Framework.  Clause 1.1 reads as follows:-

“1.1 In terms of Sections 22 of the PNGRB Act, 2006,  the  Board  is  entrusted  with  the responsibility  to  lay  down  the  transportation tariff  for  city  or  local  natural  gas  distribution network.   As per  the relevant provisions of  the PNGRB  (Authorizing  Entities  to  Lay,  Build, Operate  or  Expand  City  or  Local  Natural  Gas Distribution  Networks)  Regulations,  2008  read with the said statutory provisions, the Board is empowered to determine the Network Tariff and

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Compression Charge for  CNG to be charged by the  entity  laying,  building,  operating  or expanding City or Local Natural Gas Distribution Network either before the appointed day or on a day subsequent thereto.”

After so stating, the Board has proceeded to provide the

methodology  for  determination  of  the  network  tariff  and

compression  charge  for  the  CGD  network  which  has  been

stipulated in the Regulation dated 19.3.2008.  The relevant

part of the order, we may profitably reproduce:-

“3.19 As  per  the  provisions  of  the PNGRB (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008 the actual performance with respect to the capital and operating costs  during the  previous review period against the identified parameters shall be monitored and the variations shall be adjusted in the  calculations  on  a  prospective  basis considering the remaining period of economic life of the CGD project.  

3.20 After  the  above  mentioned adjustments,  the  reconciliation  of  which  is provided in Annexure-2,  the  network tariff  and compression  charge  for  CNG  in  respect  of  the Delhi CGD network of IGL is given in the table below:

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Sl No. Particulars Network Tariff (Rs/MMBTU)

Compression Charge  for  CNG (Rs./Kg)

1 Submitted  by IGL

104.05 6.66

2 As determined by the  Board  after moderations  

38.58 2.75

4. Decision

4.1 While the PNGRB (Determination of Network Tariff for City or Local Natural Gas Distribution Networks  and  Compression  Charge  for  CNG) Regulations,  2008  were  notified  on  19th March 2008, for the purpose of ease in calculations, the applicable network tariff and compression charge for  CNG  determined  by  the  Board  shall  be applicable from 1st April, 2008.  Accordingly, the Network Tariff  and the Compression Charge for CNG in respect of the Delhi CGD Network of IGL shall  be Rs.38.58 per MMBTU and Rs.2.75 per KG respectively with effect from 1st April, 2008.

4.2 As  per  the  provisions  of  the  PNGRB (Authorizing  Entities  to  Lay,  Build  Operate  or Expand City  or  Local  Natural  Gas  Distribution Networks)  Regulations,  2008,  IGL  shall  recover the Network Tariff  and Compression Charge for CNG separately through an invoice without any premium  of  discount  on  a  non-discriminatory basis.  Further, in conformity with the decision conveyed vide letter dated 23.5.2011 mentioned in  para  2.3  above,  the  difference  between  the Network Tariff and Compression Charge for CNG submitted  by  IGL  and  that  determined  by  the Board  as  given  in  the  table  above  would  be reflected through appropriate reduction in selling

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prices from the date  of  issuance of  this  Order. The  modalities  and  time  frame  for  refund  of differential  Network Tariff  and the Compression Charge for CNG for the period from 01.4.2008 till the  date  of  issuance  of  this  Order  shall  be decided and advised by the Board subsequently.”

12. As the factual matrix uncurtains, the issuance of the said

order compelled the 1st respondent to approach the High Court

seeking its quashment principally on the ground that such a

power has not been conferred by the Act and the Board, by

framing the resolutions cannot arrogate such power to itself in

the absence of the source of power.  That was the substratum

of challenge before the High Court where the Board failed to

support  and  sustain  its  order  and  the  1st respondent

succeeded in its assail and the contentions raised before this

Court are fundamentally embedded on the said fulcrum.  Mr.

Datar, learned senior counsel, apart from many a provision,

has also commended us to the objects and reasons of the  Act

to highlight the role of the Board as a regulator.  In view of the

said submission, we think it apt to refer to the objects and

reasons of the Act. It reads as follows:-

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“An  Act  to  provide  for  the  establishment  of Petroleum and Natural Gas Regulatory Board to regulate  the  refining,  processing,  storage, transportation,  distribution,  marketing and sale of  petroleum,  petroleum  products  and  natural gas excluding production of crude oil and natural gas so as to protect the interests of consumers and  entities  engaged  in  specified  activities relating  to  petroleum,  petroleum  products  and natural  gas  and  to  ensure  uninterrupted  and adequate  supply  of  petroleum,  petroleum products  and  natural  gas  in  all  parts  of  the country and to promote competitive markets and for  matters  connected  therewith  or  incidental thereto.”

13. Bearing the purpose of the Act in mind, we shall refer to

the relevant provisions of the Act.  Section 1(4) provides that

the Act applies to refining, processing, storage, transportation,

distribution,  marketing  and  sale  of  petroleum,  petroleum

products and natural  gas excluding production of  crude oil

and natural gas.  Section 2(d) of the  Act defines authorised

entity to mean that any entity registered by the Board under

Section  15  to  market  any  notified  petroleum,  petroleum

products or natural gas, or to establish and operate liquefied

natural gas terminals.

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14. Section 2(i) of the Act on which emphasis has been laid

defines  “city  or  local  natural  gas  distribution  network”,

relevant part of it reads as under:-

“2(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.”

15. Section  2(j)  and  2(m)  define  ‘common  carrier’  and

‘contract carrier’ respectively.  They read as follows:-

“2(j) “common carrier” means such pipelines for transportation of petroleum, petroleum products and natural gas by more than one entity as the Board may declare or authorise from time to time on a nondiscriminatory open access basis under sub-section  (3)  of  section  20,  but  does  not include pipelines laid to supply-

(i) petroleum  products  or  natural  gas  to  a specific consumer; or

(ii) crude oil;

Explanation – For the purposes of this clause, a contract  carrier  shall  be  treated  as  a  common carrier, if –

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(a) such contract carrier has surplus capacity over  and above the firm contracts  entered into; or

(b) the firm contract period has expired.  

2(m) “contract carrier” means such pipelines for transportation of petroleum, petroleum products and  natural  gas  by  more  than  one  entity pursuant to firm contracts for at least one year as may be declared or authorised by the Board from time to time under sub-section (3) of section 20.”  

16. The aforesaid definitions basically deal with pipelines and

they  are  regulated  under  the   Act.   The  dictionary  clause

speaks  of  the  nature  of  activity.   There  is  a  noticeable

difference  between  common  carrier  pipeline  and  contract

carrier pipeline on one hand and “a city of local natural gas

distribution  network”  on  the  other.   On  a  perusal  of  the

definitions of  the common carrier  and contract carrier,  it  is

demonstrable that they refer to pipelines for transportation of

petroleum or  petroleum products  and  natural  gas  by  more

than one entity.  The definition “city or local gas distribution

network”  means an interconnected network of  gas pipelines

and the associated equipment used for transporting natural

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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.   It  deals  with  specified

geographical area.  It does not refer to a pipeline or transport

of  natural  gas.   It  is  specifically  a  pipeline  network  for

transport of natural gas to its own consumers.  This being the

position, as per the dictionary clause, it is pertinent to refer to

Section 20 that provides for declaring, laying, building, etc. of

common carrier or contract carrier and city or local natural

gas distribution network.  The said provision is as follows:-

“20  Declaring,  laying,  building,  etc.,  of common carrier or contract carrier and city or local natural gas distribution network:- (1) If  the  Board  is  of  the  opinion  that  it  is

necessary  or  expedient,  to  declare  an existing  pipeline  for  transportation  of petroleum, petroleum products and natural gas or an existing city or local natural gas distribution network, as a common carrier or  contract  carrier  or  to  regulate  or  allow access to such pipeline or network, it may give wide publicity of its intention to do so and invite objections and suggestions within a  specified  time  from  all  persons  and

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entitles  likely  to  be  affected  by  such decision.

(2) For  the  purposes  of  sub-section  (1),  the Board shall  provide the entity owning, the pipeline or network an opportunity of being heard  and  fix  the  terms  and  conditions subject  to  which  the  pipeline  or  network may  be  declared  as  a  common  carrier  or contract carrier and pass such orders as it deems  fit  having  regard  to  the  public interest,  competitive  transportation  rates and right of first use.

(3) The  Board  may,  after  following  the procedure as specified by regulations under section 19 and sub-sections (1) and (2), by notification,- (a) declare a pipeline or city or local natural

gas  distribution  network  as  a  common carrier or contract carrier; or  

(b) authorise an entity to lay, build, operate or  expand  a  pipeline  as  a  common carrier or contract carrier; or

(c) allow  access  to  common  carrier  or contract carrier  or  city  or  local  natural gas distribution network; or

(d) authorise an entity to lay, build, operate or  expand  a  city  or  local  natural  gas distribution network.

(4) The  Board  may  decide  on  the  period  of exclusivity to lay, build, operate or expand a city  or  local  natural  gas  distribution network for such number of years as it may by order, determine in accordance with the principles  laid  down  by  the  regulations made by it, in a transparent manner while fully protecting the consumer interests.

(5) For the purposes of this section, the Board shall  be  guided  by  the  objectives  of

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promoting  competition  among  entities, avoiding  in  fructuous  investment, maintaining  or  increasing  supplies  or  for securing equitable distribution or ensuring adequate  availability  of  petroleum, petroleum  products  and  natural  gas throughout  the  country  and  follow  such principles as the Board may, by regulations, determine  in  carrying  out  its  functions under this section.”     

On a reading of the aforesaid provision, it is clear as day

that the Board has been conferred with the power to declare

an existing pipeline for transportation of petroleum, petroleum

products and natural gas or an existing city or local natural

gas  distribution  network  as  a  common  carrier  or  contract

carrier  and  regulate  or  allow  access  to  such  pipeline  or

network.  Sub-Section (1) prescribes for giving wide publicity

of the Board’s intention.  Sub-Section (2) stipulates affording

of opportunity of hearing to the pipeline or network for fixing

terms and conditions subject to which pipeline or network be

declared as common carrier or  contract carrier.   The Board

has  been  authorised,  after  following  due  procedure  as

specified  by  Regulations  under  Section  19  and  under

sub-Sections (1) and (2) by notification to declare a pipeline or

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city or  local  natural  gas distribution network as a common

carrier or contract carrier and do certain acts.  Sub-Section (4)

enables the Board to decide on the period of exclusivity to lay,

build, operate or expand a city or local natural gas distribution

network for such number of years.  The objectives by which

the Board is to be guided are promoting competition among

entities,  avoiding  infructuous  investment,  maintaining  or

increasing  supplies  or  securing  equitable  distribution  or

ensuring adequate availability of petroleum, etc.   

17. Section 21 deals with right of  first  use,  etc.   The said

provision reads as follows:-

“21. Right of first use, etc.:-

(1) The  entity  laying,  building,  operating  or expanding  a  pipeline  for  transportation  of petroleum  and  petroleum  products  or laying,  building,  operating  or  expanding  a city  or  local  natural  gas  distribution network shall have right of first use for its own  requirement  and  the  remaining capacity shall be used amongst entities as the Board may, after issuing a declaration under section 20, determine having regard to the needs of fair competition in marketing and availability of petroleum and petroleum products throughout the country: Provided that  in  case  of  an entity  engaged  in  both

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marketing  of  natural  gas  and  laying, building, operating or expanding a pipeline for transportation of natural gas on common carrier or contract carrier basis, the Board shall  require  such entities  to  comply  with the  affiliate  code  of  conduct  as  may  be specified  by  regulations  and  may  require such  entity  to  separate  the  activities  of marketing  of  natural  gas  and  the transportation  including  ownership  of  the pipeline  within  such  period  as  may  be allowed by the Board and only  within the said period, such entity shall have right of first use.

(2) An entity other than an entity authorised to operate shall pay transportation rate for use of common carrier or contract to the entity operating it as an authorised entity.

(3) An entity authorised to lay, build, operate or expand a pipeline as contract carrier or to lay, build, operate or expand a city or local natural  gas  distribution  network  shall  be entitled to institute proceedings before the Board to prevent, or to recover damages for, the  infringement  of  any  right  relating  to authorization.

Explanation:-  For  the  purposes  of  this sub-section,  “infringement  of  any  right”  means doing of any act by any person which interferes with common carrier or contract carrier or causes prejudice to the authorised entity.”   

The aforesaid provision stipulates the right of  first use

and also prescribes certain conditions.

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18. Section 22 on which reliance has been placed deals with

transportation tariff.  The said provision is reproduced below:-

“22. Transportation tariff:-

(1) Subject  to  the  provisions  of  this  Act,  the Board  shall  lay  down,  by  regulations,  the transportation tariffs for common carriers or contract carriers or city or local natural gas distribution  network  and  the  manner  of determining such tariffs.

(2) For  the  purposes  of  sub-section  (1),  the Board  shall  be  guided  by  the  following, namely:- (a) the  factors  which  may  encourage

competition, efficiency, economic use of the  resources,  good  performance  and optimum investments;

(b) safeguard the consumer interest and at the  same  time  recovery  of  cost  of transportation in a reasonable manner;

(c) the  principles  rewarding  efficiency  in performance;

(d) the  connected  infrastructure  such  as compressors,  pumps,  metering  units, storage and the like connected to the common carriers or contract carriers;

(e) benchmarking against a reference tariff calculated  based  on  cost  of  service, internal  rate  of  return,  net  present value or alternate mode of transport;

(f) policy  of  the  Central  Government applicable to common carrier, contract carrier  and  city  or  local  distribution natural gas network.”

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On a plain reading of the aforesaid, it is manifest that the

Board  has  the  power  to  provide  by  Regulations  the

transportation tariff for common carrier or contract carrier or

city or local natural gas distribution network and the manner

of distribution of such tariffs.  

19. The  question  that  arises  for  consideration  is  whether

reading of the aforesaid provisions namely, Sections 20 to 22

of the  Act, it can be construed that they confer any power on

the  Board  to  fix  the  transportation  tariff  of  a  consumer  of

natural  gas.   We  have  also  referred  to  sub-Section  (4)  of

Section 20 which confers the power on the Board to decide the

period of exclusivity and the network of a common/contract

carrier.  Section 21, as indicated earlier, deals with the right of

first  use.   The  transportation  tariff,  which  finds  place  in

Section  22(1),  commences  with  the  words  “subject  to  the

provisions of this Act”.  The said provision confers power on

the Board to lay down, by regulation, the transportation tariff

for  common  carriers  or  contract  carriers  or  city  or  local

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45

natural  gas  distribution  network  and  the  manner  of

determination of such tariffs.   

20. At this stage, it is necessary to appositely understand the

said  expression.   In  The  Commissioner  of  Wealth  Tax,

Andhra Pradesh, Hyderabad v. Trustees of H.E.H. Nizam’s

Family (Remainder Wealth Trust), Hyderabad1 this Court

was dealing with the expression “subject to” in the context of

the Wealth Tax Act, 1957.  Section 3 of the said Act imposed

the charge of wealth tax subject to other provisions of the Act.

In that  context,  the Court  opined that  Section 3 has  to  be

made expressly subject to Section 21 and it must yield to that

Section  insofar  as  the  latter  makes  a  special  provision  for

assessment of a trustee of a trust.  In Ashok Leyland Ltd. v.

State of T.N. and Another2, it has been held that “subject to”

is an expression whereby limitation is expressed.  In K.R.C.S.

Balakrishna  Chetty  and  Sons  &  Co.  v.  The  State  of

1

(1977) 3 SCC 362 2

(2004) 3 SCC 1

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46

Madras3, this Court was interpreting Section 5 of the Madras

General  Sales  Tax  Act,  1939  wherein  the  Legislature  had

appended the expression “subject to”  and while interpreting

the  said  words,  the  Court  ruled  that  they  are  meant  to

effectuate the intention of law and the correct meaning of the

expression is “conditional one”.   

21. In  South  India  Corporation  (P)  Ltd.  v.  Secretary,

Board  of  Revenue,  Trivandrum  and  another4,  the

Constitution Bench has ruled that the expression “subject to”

in the context convey the idea of a provision yielding place to

another  provision  or  other  provision  to  which  it  was  made

subject to.  In  B.S. Vadera and another v. Union of India

and others5, this Court while dealing with the expression “any

rule so made shall have effect, subject to provisions of any Act

occurring in the proviso to Article 309” ruled that:-

3

AIR 1961 SC 1152 4

 AIR 1964 SC 207 5

AIR 1969 SC 118

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47

“24. It is also significant to note that the proviso to Article 309, clearly lays down that ‘any rules so  made  shall  have  effect,  subject  to  the provisions  of  any  such  Act'.  The  clear  and unambiguous  expressions,  used  in  the Constitution,  must  be  given  their  full  and unrestricted meaning, unless hedged-in, by any limitations. The rules, which have to be ‘subject to the provisions of the Constitution, shall have effect, ‘subject to the provisions of any such Act'. That is, if the appropriate legislature has passed an  Act,  under  Article  309,  the  rules,  framed under the proviso, will have effect,-subject to that Act;  but,  in  the  absence  of  any  Act,  of  the appropriate  legislature,  on  the  matter,  ‘in  our opinion, the rules, made by the President, or by such person as he may direct,  are to have full effect,  both  prospectively,  and,  retrospectively. Apart  from  the  limitations,  pointed  out  above, there is  none other,  imposed by the proviso to Article 309, regarding the ambit of the operation of such-rules.”

22. Regard being had to the aforesaid interpretation, we have

to  scan  the  anatomy  of  Section  11  of  the  Act,  for  it  has

immense  signification.   The  said  provision  deals  with  the

functions  and  powers  of  the  Board.   The  said  provision  is

extracted below:-  

“11 Functions and powers of the Board The Board shall- (a) protect the interest of consumers by fostering

fair  trade  and  competition  amongst  the entities;

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48

(b) register entities to- (i) market  notified  petroleum  and  petroleum

products  and,  subject  to  the  contractual obligations  of  the  Central  Government, natural gas;

(ii) establish and operate liquefied natural gas terminals;

(iii) establish  storage  facilities  for  petroleum, petroleum  products  or  natural  gas exceeding such capacity as may be specified by regulations;

(c) authorise entities to- (i) lay,  build,  operate  or  expand  a  common

carrier or contract carrier; (ii) lay,  build,  operate  or  expand city  or  local

natural gas distribution network;

(d) declare  pipelines  as  common  carrier  or contract carrier;

(e) regulate, by regulations,- (i) access to common carrier or contract carrier

so as to ensure fair trade and competition amongst  entities  and  for  that  purpose specify pipeline access code;

(ii) transportation rates for common carrier or contract carrier;

(iii) access  to  city  or  local  natural  gas distribution  network  so  as  to  ensure  fair trade and competition amongst  entities  as per pipeline access code;

(f) in  respect  of  notified  petroleum,  petroleum products and natural gas-

(i) ensure adequate availability;

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49

(ii) ensure  display  of  information  about  the maximum retail prices fixed by the entity for consumers at retail outlets;

(iii) monitor prices and take corrective measures to prevent restrictive trade practice by the entities;

(iv) secure equitable distribution for petroleum and petroleum products;

(v) provide,  by regulations,  and enforce,  retail service  obligations  for  retail  outlets  and marketing service obligations for entities;

(vi) monitor  transportation  rates  and  take corrective action to prevent restrictive trade practice by the entities;

(g) levy fees and other charges as determined by regulations;

(h) maintain  a  data  bank  of  information  on activities  relating  to  petroleum,  petroleum products and natural gas;

(i) lay  down,  by  regulations,  the  technical standards and specifications including safety standards in activities relating to petroleum, petroleum  products  and  natural  gas, including  the  construction  and  operation  of pipeline and infrastructure projects related to downstream  petroleum  and  natural  gas sector;

(j) perform  such  other  functions  as  may  be entrusted to it by the Central Government to carry out the provisions of this Act.”   

Sub-section (e) of Section 11 of the  Act is pertinent to

appreciate the controversy.  It empowers the Board to regulate,

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50

by regulations, in respect of certain aspects.  Section 11(e) (ii)

confers power on the Board to determine transport rates for

common carrier or contract carrier.  Sub-section (f) of Section

11  allows  the  Board  to  regulate  in  respect  of  notified

petroleum,  petroleum  products  and  natural  gas  and

sub-section  (e)  (iii)  of  Section  11  empowers  the  Board  to

regulate,  by  regulations,  access  to  city  or  local  natural  gas

distribution network so as to ensure fair trade and competition

amongst entities as per pipeline access code. It is relevant to

note here that the High Court, while appreciating the language

employed in the said provision has held that:-

“We are of the opinion that none of the aforesaid clauses  can  be  construed  as  prescribing  price control/regulation  as  a  function  of  the  Board. Clause (a)  supra while prescribing protection of interest  of  consumers  limits  the  same  to,  by fostering  fair  trade  and  competition  amongst entities  engaged  in  distributing,  dealing, transporting, marketing gas.  The function of the Board  thereunder  is  of  regulating  the  inter  se relationship of entities under the Act and not to regulate/control  the  relationship  between  the entities  under  the  Act  and  the  consumers. Similarly, Clause (f) while prescribing function of monitoring  prices  limits  the  same  to  taking corrective  measures  to  prevent  restrictive  trade practices by the entities.  Thus only if the Board

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51

finds  that  the  marketers  of  gas  in  a  particular area have formed a cartel or are indulging in any other  restrictive  trade  practices,  is  the  Board empowered to monitor prices.   Such is not the case of the Board in the present instance.  The petitioner  even  though  till  date  the  exclusive marketer of gas in Delhi, has not been accused of any  restrictive  trade  practice  and  the  power exercised also is not in the name of monitoring price.  Another sub-clause of clause (f) of Section 11  confers  function  on  the  Board  to  ensure display  of  information  about  Maximum  Retail Price.   Again,  had  the  intent  of  the  legislature been to confer the power on the Board to fix the Maximum  Retail  Price,  nothing  prevented  the legislature from providing so expressly.  Instead, functions  of  enforcing  retail  service  obligations and marketing service obligations only have been conferred  by  the  legislature.   The  definition  of retail  service  obligations  and  marketing  service obligations in Sections 2(zk) and (w) also do not include obligation to sell at the prices fixed by the Board.”

23. The aforesaid analysis of the High Court is in consonance

with the provision and the expression “subject to” as used in

Section 22 for  the said provision makes it  graphically  clear

that Section 22 has to yield to Section 11 of the Act which

deals with the powers and functions of the Board.  Section 11

(e) only uses the words “common carrier” or “contract carrier”.

Even  if  one  applies  the  concept  of  “subject  matter”,  in

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essentiality  it  is  the  “common  carrier”  and  the  “contract

carrier”.  The dictionary clause of the said expression conveys

a different meaning and it does not include an entity which

utilizes the pipelines for its own use.  The submission of Mr.

Datar is that after exclusivity period is over, the Board has the

power also cannot be treated to be correct, for such a power

has not been conferred on the Board under Section 11.  As is

perceptible the provision deals with the entity when it engages

itself as a part of its pipeline as a common carrier or contract

carrier and not the consumers.  It is submitted by the learned

senior  counsel  appearing  for  the  respondent  that  a  person

owning his own carrier, after the exclusivity period may have

the potentiality to enter into business of the “common carrier”

or  “contract  carrier”  and  at  that  juncture  to  maintain  the

competitive  prospects,  regard  being  had  to  the  consumer

interest, the Board may determine the price of the same, but a

significant one, that does not clothe the Board with the power

to command the  entity to put/reflect it as a part of the bill to

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53

the consumer.  It is urged that the Board does not have the

power to fix the tariff charges in that regard.   

24. Mr.  Datar,  learned  senior  counsel  would  submit  that

when the Board is established under a statute and has the

power to regulate solely because there is no mention of entity

that  owns its  own pipeline,  it  is  inapposite  to  say  that  the

Board  cannot  determine  the  price  and  indicate  the  cost

incurred in this regard in the bill given to the consumer.  It is

his further submission that the consumer has a right to know.

Learned senior counsel would go to the extent of saying that it

is a  casus omissus and, therefore, the court must adopt the

principle of purposive interpretation and it can do so filling up

the gap to have the necessitous fruitful  interpretation.  Mr.

Salve  and  Mr.  Tripathi,  per  contra,  would  submit  that  the

legislature has deliberately not done it and, in any case, the

Court  should  not  read  such  a  concept  into  it.   Ms.  Pinky

Anand, learned ASG relying on the affidavit filed by the Union

of India, would submit that the legislature has not given the

said power to the Board.  It is seemly to state that even if a

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stand  is  taken  by  the  Union  of  India,  in  respect  of  an

interpretation  of  a  statutory  provision,  that  does  not  mean

that the same is the correct interpretation because it is well

settled  in  law  that  no  one  can  speak  on  behalf  of  the

legislature.   It  is  the  court  which  is  the  final  interpreter.

Keeping that in view, we have to scrutinize whether in such a

situation this Court can implant words in the provision,  as

canvassed by Mr. Datar.  

25. In  this  regard  we  may,  with  profit,  refer  to  certain

authorities in the field.  In CST v. Parson Tools and Plants6,

the  Court  has  held  that  if  the  legislature  wilfully  omits  to

incorporate something of  an analogous law in a subsequent

statute, or even if there is a  casus omissus in a statute, the

language of which is otherwise plain and unambiguous, the

court is not competent to supply the omission by engrafting on

it  or  introducing in it,  under the guise of  interpretation,  by

analogy  or  implication,  something  what  it  thinks  to  be  a

general  principle  of  justice  and  equity.  To  do  so  ‘would  be

6

 (1975) 4 SCC 22

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55

entrenching upon the preserves of legislature’.  In  Board of

Muslim Wakfs v. Radha Kishan, it has been observed that:-  

“While it is true that under the guise of judicial interpretation  the  court  cannot  supply  casus omissus,  it  is  equally  true  that  the  courts  in construing an Act of Parliament must always try to give effect to the intention of the legislature. In Crawford v.  Spooner7 the  Judicial  Committee said:

“We  cannot  aid  the  legislature’s  defective phrasing  of  an  Act,  we  cannot  add  and mend  and  by  construction,  make  up deficiencies which are left there.”

To do so would be to usurp the function of the legislation.  At  the  same  time,  it  is  well  settled that in construing the provisions of  statute the courts  should  be  slow to  adopt  a  construction which  tends  to  make  any  part  of  the  statute meaningless  or  ineffective.  Thus,  an  attempt must  always  be  made to  reconcile  the  relevant provisions so as to advance the remedy intended by the statute.”

26. In this context, we may usefully refer to the authority in

CIT v. National Taj Traders8 wherein it has been clearly laid

down that two principles of  construction i.e.  one relating to

7

(1846) 6 Moore PC 1 : 13 ER 562

8

 (1980) 1 SCC 370

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56

casus  omissus  and  the  other  in  regard  to  reading  of  the

statute  as  a  whole  have  been well  settled.   The  Court  has

reproduced  few  passages  from Maxwell  on  Interpretation  of

Statutes at pages 33 and 47, as has been stated in  Canada

Sugar  Refining  Co.  Ltd.  v.  R.,  by  Lord  Davey9 and

proceeded to state thus:-

“In other words, under the first principle a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all  the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on  a  particular  provision  makes  a  consistent enactment  of  the  whole  statute.  This  would be more  so  if  literal  construction  of  a  particular clause leads to manifestly absurd or anomalous results which could not have been intended by the  Legislature.  “An  intention  to  produce  an unreasonable  result”,  said  Danckwerts,  L.J.,  in Artemiou v. Procopiou (1966 1 QB 878), “is not to be  imputed to  a  statute  if  there  is  some other construction  available”.  Where  to  apply  words literally would “defeat the obvious intention of the legislation  and  produce  a  wholly  unreasonable result” we must “do some violence to the words”

9

 1898 AC 735

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57

and  so  achieve  that  obvious  intention  and produce a rational construction. [Per Lord Reid in Luke v.  IRC (1966 AC 557) where at p. 577 he also observed: “this is not a new problem, though our  standard  of  drafting  is  such  that  it  rarely emerges”.] In the light of these principles we will have to construe sub-section (2)(b) with reference to the context and other clauses of Section 33-B.”

27. In  S.P.  Gupta  v.  Union  of  India10,  after  referring  to

various authorities, it has been held:-  

“Thus,  on a  full  and complete  consideration of the  decisions  classified  under  the  various categories, the propositions that emerge from the decided  cases  of  this  Court  and  other  foreign courts are as follows:

“Where the language of a statute is clear and unambiguous,  there  is  no  room  for  the application  either  of  the  doctrine  of  casus omissus or  of  pressing into service external aids, for in such a case the words used by the Constitution  or  the  statute  speak  for themselves and it is not the function of the court to add words or expressions merely to suit  what the courts think is  the supposed intention of the legislature. …””

28. In  Bharat  Aluminium  Co.  v.  Kaiser  Aluminium

Technical Services Inc.11 it has been opined thus:

10

 (1981) Supp. SCC 87 11

 (2012) 9 SCC 552

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“......  that it  is  not the function of the court to supply the supposed omission, which can only be done  by  Parliament.  In  our  opinion,  legislative surgery  is  not  a  judicial  option,  nor  a compulsion,  whilst  interpreting  an  Act  or  a provision in the Act.  The observations made by this Court in Nalinakhya Bysack12 would tend to support the aforesaid views, wherein it has been observed as follows:  

“9.  … It must always be borne in mind, as said by Lord Halsbury in  Commissioners for Special  Purposes  of  Income Tax v.  Pemsel13, that  it  is  not  competent  to  any  court  to proceed  upon  the  assumption  that  the legislature  has  made  a  mistake.  The  court must  proceed  on  the  footing  that  the legislature intended what it has said. Even if there is some defect in the phraseology used by  the  legislature  the  Court  cannot,  as pointed out in Crawford v. Spooner14, aid the legislature’s  defective  phrasing of  an Act  or add and amend or, by construction, make up deficiencies  which are  left  in  the  Act.  Even where there is a casus omissus, it is, as said by Lord Russell of Killowen in Hansraj Gupta v. Official Liquidators of Dehra Dun-Mussoorie Electric  Tramway Co.  Ltd.15,  for  others than the courts to remedy the defect.””

12

AIR 1953 SC 148 13

1891 AC 531, at p. 549 (HL) 14

(1846-49) 6 Moo PC 1 : 13 ER 582 : 4 MIA 179 : 18 ER 667 15

(1932-33) 60 IA 13 : AIR 1933 PC 63

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After  so  stating  the  Court  has  referred  to  the

observations made by Lord Diplock in Duport Steels

Ltd.16 wherein it has been ruled thus:

“…  the  role  of  the  judiciary  is  confined  to ascertaining from the words that Parliament has approved  as  expressing  its  intention  what  that intention was, and to giving effect to it. Where the meaning  of  the  statutory  words  is  plain  and unambiguous  it  is  not  for  the  Judges  to  invent fancied ambiguities as an excuse for failing to give effect  to  its  plain  meaning  because  they themselves  consider  that  the  consequences  of doing so would be inexpedient, or even unjust or immoral.  In  controversial  matters  such  as  are involved in industrial relations there is room for differences  of  opinion  as  to  what  is  expedient, what  is  just  and  what  is  morally  justifiable. Under our Constitution it is Parliament’s opinion on these matters that is paramount.”

(emphasis supplied)

29. Recently,  in  Sarah  Mathew  v.  Institute  of  Cardio

Vascular Diseases17, while interpreting Section 468 CrPC, the

Court has opined:-   

“It  is  argued  that  a  legislative  casus  omissus cannot be supplied by judicial interpretation. It is submitted that to read Section 468 CrPC to mean

16

(1980) 1 WLR 142 : (1980) 1 All ER 529 (HL) 17

 (2014) 2 SCC 62

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60

that  the  period  of  limitation  as  period  within which  a  complaint/charge-sheet  is  to  be  filed, would amount to adding words to Sections 467 and  468.  It  is  further  submitted  that  if  the legislature has left a lacuna, it is not open to the court to fill it on some presumed intention of the legislature.  Reliance  is  placed  on  Shiv  Shakti Coop. Housing Society18,  Bharat Aluminium19 and several  other  judgments  of  this  Court  where doctrine  of  casus omissus  is  discussed.  In  our opinion,  there  is  no  scope  for  application  of doctrine of casus omissus to this case. It is not possible to hold that the legislature has omitted to  incorporate  something  which  this  Court  is trying  to  supply.  The  primary  purpose  of construction  of  the  statute  is  to  ascertain  the intention of the legislature and then give effect to that  intention.  After  ascertaining  the  legislative intention as reflected in the Forty-second Report of  the  Law  Commission  and  the  Report  of  the JPC, this Court is only harmoniously construing the provisions of Chapter XXXVI along with other relevant  provisions  of  the  Criminal  Procedure Code to give effect to the legislative intent and to ensure that its interpretation does not lead to any absurdity.  It  is  not  possible  to  say  that  the legislature has kept a lacuna which we are trying to fill up by judicial interpretative process so as to encroach upon the domain of the legislature. The  authorities  cited  on  doctrine  of  casus omissus  are,  therefore,  not  relevant  for  the present case.”

18

(2003) 6 SCC 659 19

(2012) 9 SCC 552

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30. We  have  referred  to  the  aforesaid  passage  as  the

Constitution Bench has given emphasis on primary purpose of

construction  of  statute  to  ascertain  the  intention  of  the

legislature, harmonious construction of the various provisions

of the CrPC and for ensuring that the interpretation does not

lead  to  any  absurdity.   That  apart,  the  Court  has  also

categorically observed that it is not a case where it can be said

that legislature has kept a lacuna which the Court is trying to

fill up by judicial interpretative process so as to encroach upon

the domain of the legislature.   In the case at hand, in the

schematic context of the Act and upon reading the legislative

intention  and  applying  the  principle  of  harmonious

construction,  we  do  not  perceive  inclusion  of  the  entities

which are not “common carriers” or “contract carriers” would

be  permissible.   They  have  deliberately  not  been  included

under Section 11 of the Act by the legislature and the said

non-inclusion does not lead to any absurdity and, therefore,

there is no necessity to think of any adventure.

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31. We must take note of certain situations where the Court

in order to reconcile the relevant provision has supplied words

and  the  exercise  has  been  done  to  advance  the  remedy

intended by the statute.  In Surjit Singh Kalra v. Union of

India20, a three-Judge Bench perceiving the anomaly, held:-

“True  it  is  not  permissible  to  read  words  in  a statute  which  are  not  there,  but  “where  the alternative  lies  between  either  supplying  by implication  words  which  appear  to  have  been accidentally omitted, or adopting a construction which  deprives  certain  existing  words  of  all meaning, it  is permissible to supply the words” (Craies Statute Law, 7th edn., p. 109). Similar are the observations in Hameedia Hardware Stores v. B. Mohan Lal Sowcar21 where it was observed that the court construing a provision should not easily read into it words which have not been expressly enacted but having regard to the context in which a provision appears and the object of the statute in which the said provision is enacted the court should construe it in a harmonious way to make it meaningful. An attempt must always be made so  to  reconcile  the  relevant  provisions  as  to advance  the  remedy  intended  by  the  statute. (See:  Sirajul Haq Khan v.  Sunni Central Board of Waqf22.)”

20

(1991) 2 SCC 87 21

(1988) 2 SCC 513, 524-25 22

1959 SCR 1287  :  AIR 1959 SC 198

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32. We have referred to the aforesaid authority as Mr. Datar

has  respectfully  urged  that  omission  in  Section  11  is

accidental.  The test that has been laid down in Surjit Singh

Kalra (supra) and other decisions of this Court, we are afraid,

do not  really  support  the submission of  Mr.  Datar.   By no

stretch of imagination, we can conceive that non-conferment of

power on the Board, in particular regard, is accidental.  The

legislative intention is absolutely clear and simple and, in fact,

does not call for adoption of any other construction to confer

any meaning to the existing words.  Thus, the said submission

leaves us unimpressed.

33. Having dealt with this facet, it is appropriate to refer to

Section 61, which deals with the power of the Board to make

Regulations.  Sub-section (1) of Section 61 stipulates that the

Board may, by notification, make regulations consistent with

the  Act  and  the  Rules  made  thereunder  to  carry  out  the

provisions of the Act.  Sub-section (2) of Section 61 stipulates

that without prejudice to the generality of the foregoing power,

such Regulations may provide for all or any of the following

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matters  and  the  matters  have  been  enumerated  thereafter.

Mr. Datar has emphasised on Section 61(2)(t), which reads as

follows:-

“(t)  the  transportations  tariffs  for  common carriers  or  contract  carriers  or  city  or  local natural gas distribution network and the manner of determining such tariffs under sub-section (1) of section 22.”

34. On a scrutiny of   the said provision, we notice that it

deals  with  transportation  tariff  for  “common  carrier”  and

“contract  carrier”  or  “city  or  local  natural  gas  distribution

network”  and  the  determination  has  to  be  done  as  per

sub-section (1) of Section 22.  Be it noted, in pursuance of the

said  provision,  regulations,  namely,  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  which  we  have  already

referred to as “the Regulations” have been framed.  Emphasis

has  been  laid  on  Regulation  2(e)  and  2(g),  which  read  as

follows:-

“(e)  “compression  charge  for  CNG”  means  a charge (excluding statutory taxes and levies)  in

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Rs./Kg for online compression of natural gas into compressed  natural  gas  (hereinafter  referred  to as CNG) for subsequent dispensing to consumers in a CNG station.  

(g)  “Network tariff”  means the weighted average unit rate of tariff (excluding statutory taxes and levies)  in  rupees  per  million  British  Thermal Units  (Rs./MMBTU  for  all  the  categories  of consumers of natural gas in a CGD Network.”  

35. Regulation 4 reads as follows:-

“4.  Determination of network tariff and compression charge for CNG. The network tariff  and compression charge for  CNG in respect  of  an entity  covered clause (a)  or  clause  (b)  of sub-regulation (1) of regulation 3 shall be determined as per the procedure at Schedule A.”

In addition to the aforesaid there are various Regulations

dealing  with  the  procedure  of  determination.   Mr.  Datar,

learned senior counsel, would submit that Section 61 of the

Act has to be read in consonance with the objects and reasons

of  the  Act  and  when  the  Board  has  the  power  to  frame

regulations to carry out the purposes of the Act, it has framed

the  Regulations  in  accordance  with  the  legislation  and  the

High Court has totally flawed in declaring it as ultra vires.  

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36. We have  already dealt  with the purport  of  Section 11,

adverted to the facet how the words “subject to” have to be

interpreted, functions of the Board, and provisions relating to

exclusivity, definitions of “common carrier” and the “contract

carrier”.  Section 61 is a provision that enables the Board to

frame Regulations.   If  on reading of  the statute in entirety,

such  a  power  does  not  flow,  a  delegated  authority  cannot

frame a regulation as that would not be in accord with the

statutory provisions nor would it be for the purpose of carrying

on the provisions of the Act. In  St.  Johns  Teachers

Training  Institute  v.  National  Council  for  Teacher

Education23 it has been observed that:-  

“A regulation is a rule or order prescribed by a superior  for  the management  of  some business and implies a rule for general course of  action. Rules  and  regulations  are  all  comprised  in delegated  legislations.   The  power  to  make subordinate  legislation  is  derived  from  the enabling  Act  and  it  is  fundamental  that  the delegate on whom such a power is conferred has to act within the limits of authority conferred by the Act.  Rules cannot be made to supplant the provisions or the enabling Act but to supplement

23

(2003) 3 SCC 321

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it.   What  is  permitted  is  the  delegation  of ancillary or subordinate legislative functions, or, what  is  fictionally  called,  a  power  to  fill  up details.”

37.  In  Kunj Behari Lal Butail v.  State of H.P.24 it  has

been ruled that it is very common for the legislature to provide

far a general rule-making power to carry out the purpose of

the Act.  When such a power is given, it may be permissible to

find out the object of the enactment and then see if the rules

framed satisfy  the  test  of  having  been so  framed as  to  fall

within  the  scope  of  such  general  power  confirmed.   If

rule-making power is not expressed in such a usual general

form  then  it  shall  have  to  be  seen  if  the  rules  made  are

protected by the limits prescribed by the parent Act.  In State

of  Karnataka v.  H.  Ganesh Kamath25 it  has  been stated

that it is a well-settled principle of interpretation of statutes

that the conferment of rule-making power by an Act does not

enable the rule-making authority to make a rule which travels

24

(2000) 3 SCC 40 25

(1983) 2 SCC 402

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beyond the scope of the enabling Act or which is inconsistent

therewith or repugnant thereto.”

38. In  Sukhdev  Singh  v.  Bhagatram  Sardar  Singh

Raghuvanshi26   

“....statutory  bodies  cannot  use  the  power  to make rules and regulations to enlarge the powers beyond  the  scope  intended  by  the  legislature. Rules  and  regulations  made  by  reason  of  the specific power conferred by the stature to make rules  and  regulations  establish  the  pattern  of conduct to be followed”.   

39. In  General Officer Commanding-in-Chief v. Subhash

Yadav27, it has been held as follows:-  

“.....before  a  rule  can  have  the  effect  of  a statutory  provision,  two  conditions  must  be fulfilled,  namely,  (1)  it  must  conform  to  the provisions  of  the  statute  under  which  it  is framed;  and  (2)  it  must  also  come  within  the scope and purview of the rule-making power of the authority framing the rule.  If either of these two conditions is not fulfilled, the rule so framed would be void.”

26

(1975) 1 SCC 421 27

(1988) 2 SCC 351

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40. Similar view has been expressed in  State of T.N. v. P.

Krishnamurthy28 and  in  Union  of  India  v.  Srinivasan29

wherein it has been held that:-

“...If  a  rule  goes  beyond  the  rule-making  power conferred by the statue, the same has to be declared ultra  vires.   If  a  rule  supplants  any provision for which  power  has  not  been  conferred,  it  becomes ultra  vires.   The  basic  test  is  to  determine  and consider the source of power which is relatable to the rule.  Similarly, a rule must be in accord with the parent statute as it cannot travel beyond it.”

41. In  Dr. Indramani Pyarelal Gupta v. W.R. Natu30, the

Court has held that one of the tests to determine whether a

statutory  body  is  vested  with  a  particular  power  is  to  see

whether  exercise  of  such  power  is  contra-indicated  by  any

specific  provision  of  the  enactment  bringing  such  statutory

body into existence.  In  Tata  Power  Company  Limited  v.

Reliance Energy Limited31, it has been ruled that save and

28

(2006) 4 SCC 517 29

(2012) 7 SCC 683 30

 AIR 1963 SC 274 31

 (2009) 16 SCC659

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except for the exercise of regulatory power which is specifically

recognized by the statute, it is not open to the regulatory body

to exercise a power which is not incorporated in the statute.

42. In this context, it is fruitful to refer to the authority in

Academy  of  Nutrition  Improvement  v.  Union  of  India32.

The  two-Judge  Bench  was  dealing  with  the  issue  of

constitutional  validity  of  Prevention  of  Food  Adulteration

(Eighth Amendment) Rules, 2005.  After discussing at length

from various angles, the Court held that:-

“Statutes  delegating  the  power  to  make  rules follow a  standard  pattern.  The  relevant  section would  first  contain  a  provision  granting  the power to make rules to the delegate  in general terms,  by  using  the  words  “to  carry  out  the provisions  of  this  Act”  or  “to  carry  out  the purposes of this Act”. This is usually followed by another  sub-section  enumerating  the matters/areas in regard to which specific power is delegated by using the words “in particular and without  prejudice  to  the  generality  of  the foregoing power, such rules may provide for all or any of the following matters”.  Interpreting such provisions, this Court in a number of decisions has held that where power is conferred to make subordinate  legislation  in  general  terms,  the subsequent  particularisation  of  the

32

(2011) 8 SCC 274

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matters/topics  has  to  be  construed  as  merely illustrative  and  not  limiting  the  scope  of  the general power. Consequently, even if the specific enumerated  topics  in  Section  23(1-A)  may  not empower  the  Central  Government  to  make  the impugned rule (Rule 44-I), making of the rule can be justified with reference to the general power conferred  on  the  Central  Government  under Section 23(1),  provided the rule does not travel beyond the scope of the Act.

“But  even a general  power to  make rules  or regulations for carrying out or giving effect to the  Act,  is  strictly  ancillary  in  nature  and cannot  enable  the  authority  on  whom  the power  is  conferred  to  extend  the  scope  of general operation of the Act. Therefore, such a power ‘will not support attempts to widen the purposes of the Act, to add new and different means to carrying them out, to depart from or vary its terms’.”

Rule 44-I  is not a rule made or required to be made  to  carry  out  the  provisions  of  the  Act, having  regard to  its  object  and scheme.  It  has nothing to do with curbing of food adulteration or to suppress any social or economic mischief.”

On the basis of the aforesaid analysis, the Court opined

that:-

“We have already noticed that as at present there is  no  material  to  show  that  universal  salt iodisation will be injurious to public health (that is to the majority of populace who do not suffer from iodine deficiency). But we are constrained to

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hold  that  Rule  44-I  is  ultra  vires  the  Act  and therefore, not valid.”

43. In the case at hand, the Board has not been conferred

such  a  power  as  per  Section  11  of  the  Act.   That  is  the

legislative  intent.   Section  61  enables  the  Board  to  frame

Regulations to carry out the purposes of the Act and certain

specific aspects have been mentioned therein.  Section 61 has

to  be  read  in  the  context  of  the  statutory  scheme.   The

regulatory  provisions,  needless  to  say,  are  to  be  read  and

applied keeping in view the nature and textual context of the

enactment as that is the source of power.  On a scanning of

the entire Act and applying various principles, we find that the

Act  does not  confer  any such power on the Board and the

expression  “subject  to”  used  in  Section  22  makes  it  a

conditional one.  It has to yield to other provisions of the Act.

The power to fix the tariff has not been given to the Board.  In

view of that the Board cannot frame a Regulation which will

cover the area pertaining to determination of network tariff for

city or local gas distribution network and compression charge

for CNG.  As the entire Regulation centres around the said

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subject,  the  said  Regulation  deserves  to  be  declared  ultra

vires, and we do so.   

44. Ex consequenti, we find no substance in this appeal and

accordingly the same stands dismissed without any order as

to costs.  

.................................J. [Dipak Misra]

..................................J.                          [Uday Umesh Lalit]

New Delhi July 1, 2015