Appeal No. 43 Of 2017 and Ia No.115 Of 2017 & Ia No.116 Of 2017. Case: Indian Oil Corporation Limited Vs Petroleum And Natural Gas Regulatory Board. APTEL (Appellate Tribunal for Electricity)

Case NumberAppeal No. 43 Of 2017 and Ia No.115 Of 2017 & Ia No.116 Of 2017
CounselFor Appellants: Mr. Tushar Mehta, Sr. Adv., Ms. Rimali Batra, Ms. Nikita Choukse, Ms. Shruti Sarma Hazarika and Ms. Bani Dikshit, Advs.and For Respondents: Mr. Prashant Bezboruah, Mr. Saurav Agarwal, Mr. Sumit Kishore,Ms. Ashta Gaur, Mr. Ramji Srinivasan, Sr. Adv., Mr. Atul Chitale, Sr. Adv., Mr. R. Sudhinder, Mr. Siladitya Chatterjee, Ms. ...
JudgesMrs. Ranjana P. Desai, Chairperson and Mr. B.N. Talukdar, Technical Member (P&NG)
IssueCivil Procedure Code - Order 47 Rule 1
Judgement DateJune 02, 2017
CourtAPTEL (Appellate Tribunal for Electricity)


Mrs. Ranjana P. Desai, Chairperson

1. In this appeal, Indian Oil Corporation Ltd. has challenged orders dated 15/07/2016 and 06/09/2016 passed by the Petroleum and Natural Gas Regulatory Board, the 1st Respondent herein ("the Board"). Respondent No.2 is H-Energy Private Ltd. Respondent No.3 is Ratnamani Metals & Tubes Limited and Respondent No.4 is Adani Ports and SEZ Limited.

2. The matter relates to cancellation of bid by the Board. The gist of facts leading to this appeal needs to be stated.

(a) On 28/10/2015, the Appellant participated in the bid invited by the Board for grant of authorization for laying building, operation and expanding of a 715 Kms long natural gas pipeline ("Pipeline Project") through States of West Bengal and Odisha.

(b) On 23/03/2016 the technical bids were opened and the Appellant, Respondent No.2-H-Energy Private Ltd.("H-Energy"), Respondent No.3 and Respondent No.4 were found to be technically qualified. On 12/05/2016 the financial bids were opened. H-Energy secured highest composite score as per bidding parameters and therefore H-energy was the lowest bidder (L-1). H-Energy was declared the successful bidder for the Pipeline Project.

(c) On 27/05/2016, the Appellant made a representation to the Board seeking its interference with the bid submitted by H-Energy for being an incomplete and a financially unviable bid which is liable to be rejected summarily and also for further consideration of granting the bid to the next lowest bidder.

(d) By the impugned order the Board annulled the entire bid process for the Pipeline Project inter alia on the ground that the tariff bid by H-Energy is found to leading to negative cash flows during the prescribed project life of 25 years and therefore the Pipeline Project is not found to be viable on standalone basis. While cancelling the bid, the Board also expressed as under:

"(iii) Based on the tariff quoted by HEPL and corresponding cash in-flows for the subject pipeline project against the capex and opex planned to be incurred, the subject pipeline project on its own is not economically viable. This is the first instance where the Board has received such type of bid in respect of natural gas pipeline. Since the current regulations have no checks to avoid such bid outcomes, necessary review of Regulation and bid document shall be undertaken to facilitate re-bidding of the pipeline so as to avoid recurrence of such type of bidding by the entities."

(e) The Appellant preferred a review petition to the Board requesting it to review the above order and grant authorization to the Appellant who is the next eligible bidder. By order dated 06/09/2016 the Board rejected the review petition on the ground that there was no provision in the relevant regulations to consider the other bidders for grant of authorization. The Board also held that the review petition does not satisfy the conditions laid down in Order 47 Rule 1 of the Civil Procedure Code.

3. Being aggrieved by order dated 15/07/2016 and order dated 06/09/2016, the Appellant has filed the present appeals.


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