Sunday, December 29, 2013

THE PETROLEUM AND NATURAL GAS REGULATORY BOARD ACT, 2006[PART I ]

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.
BE it enacted by Parliament in the Fifty-seventh Year of the Republic
of India as follows:-
CHAPTER I
PRELIMINARY
1. Short title, extent, commencement and application.-(1) This Act
may be called the Petroleum and Natural Gas Regulatory Board Act,
2006.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government
may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different
provisions of this Act and any reference in any such provision to the
commencement of this Act shall be construed as a reference to the
coming into force of that provision.
(4) It 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.
2. Definitions.-In this Act, unless the context otherwise requires,-
(a) “affiliate code of conduct” means the code of conduct governing
entities engaged in storage, transmission, distribution, marketing
and sale of natural gas under sub-section (1) of section 21;
(b) “Appellate Tribunal” means the Appellate Tribunal referred to in
section 30;
(c) “appointed day” means the date on which the Board is established
under sub-section (1) of section 3;
(d) “authorised entity” means an entity-
(A) registrered by the Board under section 15 -
(i) to market any notified petroleum, petroleum products or natural
gas, or
(ii) to establish and operate liquefied natural gas terminals, or
(B) authorised by the Board under section 16 -
(i) to lay, build, operate or expand a common carrier or contract
carrier, or
(ii) to lay, build, operate or expand a city or local natural gas
distribution network;
(e) “auto liquefied petroleum gas” means a mixture of certain light
hydrocarbons derived from petroleum, which are gaseous at normal
ambient temperature and atmospheric pressure but may be condensed to
the liquid state at normal ambient temperature by the application of
moderate pressure, and which conform to such specifications for use
as fuel in vehicles, as the Central Government may, in consultation
with the Bureau of Indian Standards, notify from time to time;
(f) Board” means the Petroleum and Natural Gas Regulatory Board
established under sub-section (1) of section 3;
(g) “Bureau of Indian Standards” means the Bureau of Indian Standards
established under section 3 of the Bureau of Indian Standards Act,
1986 (63 of 1986);
(h) “Chairperson” means the Chairperson of the Board appointed under
sub-section (1) of section 4;
(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.
Explanation.-For the purposes of this clause, the expressions “high
pressure” and “medium pressure” shall mean such pressure as the
Central Government may, by notification, specify to be high pressure
or, as the case may be, medium pressure;
(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 -
(i) such contract carrier has surplus capacity over and above the
firm contracts entered into; or
(ii) the firm contract period has expired.
(k) “CNG station” means filling station where one or more dispensing
units are provided for sale of compressed natural gas;
(l) “compressed natural gas or CNG” means natural gas used as fuel
for vehicles, typically compressed to the pressure ranging from 200
to 250 bars in the gaseous state;
(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;
(n) “dealer” means a person, association of persons, firm, company or
co-operative society, by whatsoever name called or referred to, and
appointed by an oil company to purchase, receive, store and sell
motor spirit, high speed diesel, superior kerosene oil, auto
liquefied petroleum gas or natural gas;
(o) “distributor” means a person, association of persons, firm,
company or co-operative society, by whatsoever name called or
referred to, and appointed by an oil company to purchase, receive,
store and sell to consumers liquefied petroleum gas in cylinders;
(p) “entity” means a person, association of persons, firm, company or
co-operative society, by whatsoever name called or referred to, other
than a dealer or distributor, and engaged or intending to be engaged
in refining, processing, storage, transportation, distribution,
marketing, import and export of petroleum, petroleum products and
natural gas including laying of pipelines for transportation of
petroleum, petroleum products and natural gas, or laying, building,
operating or expanding city or local natural gas distribution network
or establishing and operating a liquefied natural gas terminal;
(q) “exchange of products” shall mean giving and receiving of a
petroleum product in accordance with an agreement entered into by the
concerned entities;
(r) “high speed diesel” means any hydrocarbon oil (excluding mineral
colza oil and turpentine substitute), which conforms to such
specifications for use as fuel in compression ignition engines, as
the Central Government may, in consultation with the Bureau of Indian
Standards, notify from time to time;
(s) “kerosene or superior kerosene oil” means a middle distillate
mixture of hydrocarbons which conforms to such specifications, as the
Central Government may, in consultation with the Bureau of Indian
Standards, notify from time to time;
(t) “liquefied natural gas terminal” means the facilities and
infrastructure
required to-
(i) receive liquefied natural gas;
(ii) store liquefied natural gas;
(iii) enable regasification of liquefied natural gas; and
(iv) transport regasified liquefied natural gas till the outside
boundaries of the facility;
(u) “liquefied petroleum gas” means a mixture of light hydrocarbons
containing propane, isobutane, normal butane, butylenes, or such
other substance which is gaseous at normal ambient temperature and
atmospheric pressure but may be condensed to liquid state at normal
ambient temperature by the application of pressure and conforms to
such specifications, as the Central Government may, in consultation
with the Bureau of Indian Standards, notify from time to time;
(v) “local distribution entity” means an entity authorised by the
Board under section 20 to lay, build, operate or expand a city or
local natural gas distribution network;
(w) “marketing service obligations” means obligations-
(i) to set up marketing infrastructure and retail outlets in remote
areas in respect of notified petroleum and petroleum products;
(ii) to maintain minimum stock of notified petroleum and petroleum
products;
(iii) of a local distribution entity to supply natural gas to
consumers; and
(iv) such other obligations as may be specified by regulations;
(x) “maximum retail price” means the maximum price fixed by an entity
at which the petroleum, petroleum products and natural gas may be
sold to the retail consumers and includes all taxes, cess and levies,
local or otherwise and freight or commission payable to the dealers;
(y) “member” means a member of the Board appointed under sub-section
(1) of section 4 and includes the Member (Legal) and the Chairperson;
(z) “motor spirit” means any hydrocarbon oil (excluding crude mineral
oil) used as fuel in spark ignition engines which conforms to such
specifications, as the Central Government may, in consultation with
the Bureau of Indian Standards, notify from time to time;
(za) “natural gas” means gas obtained from bore-holes and consisting
primarily of hydrocarbons and includes-
(i) gas in liquid state, namely, liquefied natural gas and
regasified liquefied natural gas,
(ii) compressed natural gas,
(iii) gas imported through transnational pipe lines, including CNG or
liquefied natural gas,
(iv) gas recovered from gas hydrates as natural gas,
(v) methane obtained from coal seams, namely, coal bed methane,
but does not include helium occurring in association with such
hydrocarbons;
(zb) “notification” means a notification published in the Official
Gazette and the expression “notified” with its cognate meanings and
grammatical variations, shall be construed accordingly;
(zc) “notified petroleum, petroleum products and natural gas” means
such petroleum, petroleum products and natural gas as the Central
Government may notify from time to time, after being satisfied that
it is necessary or expedient so to do for maintaining or increasing
their supplies or for securing their equitable distribution or
ensuring adequate availability;
(zd) “oil company” means a company registered under the Companies
Act, 1956 and includes an association of persons, society or firm, by
whatsoever name called or referred to, for carrying out an activity
relating to petroleum, petroleum products and natural gas;
(ze) “petroleum” means any liquid hydrocarbon or mixture of
hydrocarbons, and any inflammable mixture (liquid, viscous or solid)
containing any liquid hydrocarbon, including crude oil and liquefied
petroleum gas, and the expression petroleum product shall mean any
product manufactured from petroleum;
(zf) “pipeline access code” means the code to establish a framework
for third party access to pipelines under sub-clause (i) of clause
(e) of section 11;
(zg) “prescribed” means prescribed by rules made by the Central
Government under this Act;
(zh) “regulations” means regulations made by the Board under this
Act;
(zi) “restrictive trade practice” means a trade practice which has,
or may have, the effect of preventing, distorting or restricting
competition in any manner and in particular,-
(i) which tends to obstruct the flow of capital or resources into the
stream of production, or
(ii) which tends to bring about manipulation of prices, or conditions
of delivery or to affect the flow of supplies in the market relating
to petroleum, petroleum products or natural gas or services in such
manner as to impose on the consumers unjustified costs or
restrictions;
(zj) “retail outlet” means filling station where one or more
dispensing pumps have been provided for sale of motor spirit, high
speed diesel, auto-liquefied petroleum gas or natural gas and
includes distributorship for liquefied petroleum gas or dealership
for superior kerosene oil or CNG stations;
(zk) “retail service obligations” means obligations of dealers and
distributors for maintaining supplies to consumers throughout the
specified working hours and of specified quality, quantity and
display of maximum retail price of notified petroleum, petroleum
products and natural gas including CNG and such other obligations, as
may be specified by regulations;
(zl) “rules” means rules made by the Central Government under this
Act;
(zm) “Secretary” means the Secretary of the Board;
(zn) “transportation rate”, in relation to common carrier or contract
carrier or a city or local natural gas distribution network, means
such rate for moving each unit of petroleum, petroleum products or
natural gas as may be fixed by regulations.

CHAPTER II
PETROLEUM AND NATURAL GAS REGULATORY BOARD
3. Establishment and incorporation of the Board.-(1) With effect from
such date as the Central Government may, by notification, appoint,
there shall be established, for the purposes of this Act, a Board to
be called the Petroleum and Natural Gas Regulatory Board.
(2) The Board shall be a body corporate by the name aforesaid, having
perpetual succession and a common seal, with power, subject to the
provisions of this Act, to acquire, hold and dispose of property,
both movable and immovable, and to contract, and shall, by the said
name, sue or be sued.
(3) The Board shall consist of a Chairperson, a Member (Legal) and
three other members to be appointed by the Central Government.
(4) The head office of the Board shall be at New Delhi and regional
offices at such places as the Board may deem necessary having regard
to public interest and magnitude of the work.
4.
Qualifications for appointment of Chairperson and other members.
4. Qualifications for appointment of Chairperson and other members.-
(1) The Central Government shall appoint the Chairperson and other
members of the Board from amongst persons of eminence in the fields
of petroleum and natural gas industry, management, finance, law,
administration or consumer affairs:
Provided that no person shall be appointed as Member (Legal) unless
he-
(a) is qualified to be a Judge of a High Court; or
(b) has been a member of the Indian Legal Service and has held a post
in
Grade I of that Service for at least three years.
(2) The Central Government shall, for the purposes of selecting the
Chairperson and after members of the Board and for preparing a panel
of persons to be considered for appointment as the Technical Member
(Petroleum and Natural Gas) of the Appellate Tribunal, constitute a
Search Committee consisting of-
(i) Member, Planning Commission in charge of the energy sector -
Chairperson;
(ii) Secretary to the Government of India, Ministry of Petroleum and
Natural
Gas – Member;
(iii) Secretary to the Government of India, Ministry of Finance,
Department of Economic Affairs – Member;
(iv) Secretary to the Government of India in charge of Commerce,
Ministry of Commerce and Industry – Member; and
(v) Secretary to the Government of India, Department of Legal
Affairs, Ministry of Law and Justice – Member.
5.
Term of office, conditions of service, etc. of Chairperson and other
members.
5. Term of office, conditions of service, etc. of Chairperson and
other members.-(1) Before appointing any person as the Chairperson or
other member, the Central Government shall satisfy itself that such
person does not have any financial or other interest which is likely
to affect prejudicially his functions as Chairperson or such other
member.
(2) The Chairperson and other members shall hold office for a term of
five years from the date on which they enter upon their offices or
until they attain the age of sixty-five years, whichever is earlier:
Provided that the Chairperson and other members shall not be eligible
for re-appointment.
Explanation.-For the purposes of this section, appointment of a
member as Chairperson shall not be deemed to be re-appointment.
(3) A person in the service of the Central Government, a State
Government or an undertaking, corporation or company owned or
controlled by the Central Government or a State Government or from
any other non-Governmental or corporate body shall resign or retire
from such service before joining as the Chairperson or other member,
as the case may be.
(4) The salaries and allowances payable to and the other terms and
conditions of service of the Chairperson and the other members shall
be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms
and conditions of service of the Chairperson or any other member
shall be varied to his disadvantage after appointment.
(5) The Chairperson or other member may resign his office by giving
notice thereof in writing to the Central Government and on such
resignation being accepted, the Chairperson or such other member
shall be deemed to have vacated his office.
(6) The Chairperson or any other member, upon ceasing to hold office
as such, shall-
(a) be ineligible for further employment under the Central Government
or any State Government; and
(b) not accept any commercial employment for a period of two years
from the date he ceases to hold such office.
Explanation.-For the purposes of this section, “commercial
employment” means employment in any capacity under, or agency of, a
person engaged in trading, commercial, industrial or financial
business in any field and includes also a director of a company or
partner of a firm or setting up practice either independently or as
partner of a firm or as an advisor or a consultant.
6.
Powers of Chairperson.
6. Powers of Chairperson.-The Chairperson shall have the powers of
general superintendence and directions in the conduct of the affairs
of the Board and shall, in addition to presiding over the meetings of
the Board, exercise and discharge such other powers and functions of
the Board, as may be assigned to him by the Board.
7.
Removal of Chairperson or any other member from office.
7. Removal of Chairperson or any other member from office.-The
Central Government may remove from office the Chairperson or any
other member, who-
(a) has been adjudged as insolvent; or
(b) has been convicted of an offence which, in the opinion of the
Central Government, involves moral turpitude; or
(c) has become physically or mentally incapable of acting as a
member; or
(d) has acquired such financial or other interest as is likely to
affect prejudicially his functions as a member; or
(e) has so abused his position as to render his continuance in office
prejudicial to the public interest:
Provided that no Chairperson or other member shall be removed from
office under clause (d) or clause (e) unless the Central Government,
after holding an inquiry by any person appointed or authority
constituted for the purpose and in accordance with such procedure as
may be prescribed in this behalf, is satisfied that such person ought
on such ground or grounds to be removed.
8.
Meetings of the Board.
8. Meetings of the Board.-(1) The Board shall meet at such times and
places, and shall observe such procedure in regard to the transaction
of business at its meetings (including the quorum at such meetings)
as may be provided by regulations.
(2) The Chairperson or, if he is unable to attend a meeting of the
Board, the senior-most member present, reckoned from the date of
appointment to the Board, shall preside at the meeting:
Provided that in case of common date of appointment of members, the
member senior in age shall be considered as senior to the other
members.
(3) All questions which come up before any meeting of the Board shall
be decided by a majority of the members present and voting, and in
the event of an equality of votes, the Chairperson or in his absence,
the person presiding shall have a second or casting vote.
(4) All orders and decisions of the Board shall be authenticated by
the Secretary or any other officer of the Board duly authorised by
the Chairperson in this behalf.
9.
Vacancies, etc., not to invalidate proceedings of the Board.
9. Vacancies, etc., not to invalidate proceedings of the Board.-No
act or proceeding of the Board shall be invalid merely by reason of-
(a) any vacancy in, or any defect in the constitution of, the Board;
or
(b) any defect in the appointment of a person acting as a member of
the Board; or
(c) any irregularity in the procedure of the Board not affecting the
merits of the case.
10.
Officers and other employees of the Board.
10. Officers and other employees of the Board.-(1) The Central
Government may, in consultation with the Board, appoint a Secretary
to exercise and perform such powers and duties, under the control of
the Chairperson as may be specified by regulations:
Provided that no such consultation shall be necessary for appointment
of the first Secretary of the Board.
(2) The Board may, with the approval of the Central Government,
determine the number, nature and categories of other officers and
employees required to assist the Board in the efficient discharge of
its functions.
(3) The salaries and allowances payable to and the other terms and
conditions of service of the Secretary, the other officers and
employees of the Board shall be such as may be prescribed.
(4) The Board may appoint consultants required to assist in the
discharge of its functions on such terms and conditions as may be
determined by regulations.
CHAPTER III
FUNCTIONS AND POWERS OF THE BOARD
11. Functions of the Board.-The Board shall-
(a) protect the interest of consumers by fostering fair trade and
competition amongst the entities;
(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;
(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.
12.
Powers regarding complaints and resolutions of disputes by the Board.
12. Powers regarding complaints and resolutions of disputes by the
Board.-(1) The Board shall have jurisdiction to-
(a) adjudicate upon and decide any dispute or matter arising amongst
entities or between an entity and any other person on issues relating
to refining, processing, storage, transportation, distribution,
marketing and sale of petroleum, petroleum products and natural gas
according to the provisions of Chapter V, unless the parties have
agreed for arbitration;
(b) receive any complaint from any person and conduct any inquiry and
investigation connected with the activities relating to petroleum,
petroleum products and natural gas on contravention of-
(i) retail service obligations;
(ii) marketing service obligations;
(iii) display of retail price at retail outlets;
(iv) terms and conditions subject to which a pipeline has been
declared as common carrier or contract carrier or access for other
entities was allowed to a city or local natural gas distribution
network, or authorisation has been granted to an entity for laying,
building, expanding or operating a pipeline as common carrier or
contract carrier or authorisation has been granted to an entity for
laying, building, expanding or operating a city or local natural gas
distribution network;
(v) any other provision of this Act or the rules or the regulations
or orders made thereunder.
(2) While deciding a complaint under sub-section (1), the Board may
pass such orders and issue such directions as it deems fit or refer
the matter for investigation according to the provisions of Chapter
V.
13.
Procedure of the Board.
13. Procedure of the Board.-(1) The Board shall have, for the
purposes of discharging its functions under this Act, the same powers
as are vested in a civil court under the Code of Civil Procedure,
1908 (5 of 1908), while trying a suit, in respect of the following
matters, namely:-
(a) summoning and enforcing the attendance of any person and
examining him on oath;
(b) subject to the provisions of sections 123 and 124 of the Indian
Evidence Act, 1872 (1 of 1872), requisitioning any public record or
document or a copy of such record or document, from any office and
production of such documents;
(c) receiving evidence on affidavits;
(d) issuing commissions for the examination of witnesses or
documents;
(e) dismissing an application for default or deciding it, ex parte;
(f) setting aside any order of dismissal of any application for
default or any order passed by it, ex parte;
(g) granting interim relief;
(h) reviewing its decision; and
(i) any other matter which may be prescribed.
(2) Every proceeding before the Board shall be deemed to be a
judicial proceeding within the meaning of sections 193 and 228, and
for the purposes of section 196, of the Indian Penal Code (45 of
1860) and the Board shall be deemed to be a civil court for the
purposes of section 195 and Chapter XXVI of the Code of Criminal
Procedure, 1973 (2 of 1974).
(3) The Board shall be guided by the principles of natural justice
and subject to other provisions of this Act and of any rules made
thereunder, shall have powers to regulate its own procedure including
the places at which it shall conduct its business.
CHAPTER IV
REGISTRATION AND AUTHORISATION
14. Register.-(1) For the purposes of this Act, a register to be
called the Petroleum and Natural Gas Register shall be kept at the
head office of the Board containing such details of entities-
(a) registered for-
(i) marketing notified petroleum, petroleum products or natural gas,
or
(ii) establishing and operating liquefied natural gas terminals, or
(iii) establishing storage facilities for petroleum, petroleum
products or natural gas exceeding such capacity as may be specified
by regulations, or
(b) authorised for -
(i) laying, building, operating or expanding a common carrier, or
(ii) laying, building, operating or expanding a city or local natural
gas distribution network, as may be provided by the Board by
regulations.
(2) A copy of any entry in the register purporting to be maintained
by the Board and certified as such by an officer authorised by the
Board, shall be admitted in evidence in all courts and in all
proceedings without further proof or production of the original.
(3) The register shall be open to public inspection at the head
office of the Board.
(4) Any person may, on application to the Board, and on payment of
such fee as may be determined by the Board, by regulations, obtain a
certified copy of any entry in the register.
15.
Registration of entities.
15. Registration of entities.-(1) Every entity desirous of-
(a) marketing any notified petroleum or petroleum products or natural
gas; or
(b) establishing or operating a liquefied natural gas terminal; or
(c) establishing storage facilities for petroleum, petroleum products
or natural gas exceeding such capacity as may be specified by
regulations,
and fulfilling the eligibility conditions as may be prescribed shall
make an application to the Board for its registration under this Act:
Provided that no registration under this Act shall be required for
any entity carrying on any activity referred to in clause (a) or
clause (b) or clause (c) immediately before the appointed day but
shall inform the Board about such activity within six months from the
appointed day.
(2) Every application for registration under sub-section (1) shall be
made in such form and in such manner and shall be accompanied by such
fee as may be determined by the Board by regulations.
(3) The Board may, after making such enquiry and subject to such
terms and conditions as it may specify, grant a certificate of
registration to the entity allowing to commence and carry on the
activity referred to in clause (a) or clause (b) or clause (c), as
the case may be, of sub-section (1).
(4) The Board may, by order, suspend or cancel a certificate of
registration granted under sub-section (3) in such manner as may be
determined by regulations:
Provided that no order under this sub-section shall be made unless
the entity concerned has been given a reasonable opportunity of being
heard.
16.
Authorisation.
16. Authorisation.-No entity shall-
(a) lay, build, operate or expand any pipeline as a common carrier or
contract carrier,
(b) lay, build, operate or expand any city or local natural gas
distribution network,
without obtaining authorisation under this Act:
Provided that an entity,-
(i) laying, building, operating or expanding any pipeline as common
carrier or contract carrier; or
(ii) laying, building, operating or expanding any city or local
natural gas distribution network,
immediately before the appointed day shall be deemed to have such
authorisation subject to the provisions of this Chapter, but any
change in the purpose or usage shall require separate authorisation
granted by the Board.
17.
Application for authorisation.
17. Application for authorisation.-(1) An entity which is laying,
building, operating or expanding, or which proposes to lay, build,
operate or expand, a pipeline as a common carrier or contract carrier
shall apply in writing to the Board for obtaining an authorisation
under this Act:
Provided that an entity laying, building, operating or expanding any
pipeline as common carrier or contract carrier authorised by the
Central Government at any time before the appointed day shall furnish
the particulars of such activities to the Board within six months
from the appointed day.
(2) An entity which is laying, building, operating or expanding, or
which proposes to lay, build, operate or expand, a city or local
natural gas distribution network shall apply in writing for obtaining
an authorisation under this Act:
Provided that an entity laying, building, operating or expanding any
city or local natural gas distribution network authorised by the
Central Government at any time before the appointed day shall furnish
the particulars of such activities to the Board within six months
from the appointed day.
(3) Every application under sub-section (1) or sub-section (2) shall
be made in such form and in such manner and shall be accompanied with
such fee as the Board may, by regulations, specify.
(4) Subject to the provisions of this Act and consistent with the
norms and policy guidelines laid down by the Central Government, the
Board may either reject or accept an application made to it, subject
to such amendments or conditions, if any, as it may think fit.
(5) In the case of refusal or conditional acceptance of an
application, the Board shall record in writing the grounds for such
rejection or conditional acceptance, as the case may be.
18.
Publicity of applications.
18. Publicity of applications.-When an application for registration
for marketing notified petroleum, petroleum products and natural gas,
or for establishing and operating a liquefied natural gas terminal,
or for establishing storage facilities for petroleum, petroleum
products or natural gas exceeding such capacity as may be specified
by regulations, is accepted whether absolutely or subject to
conditions or limitations, the Board shall, as soon as may be, cause
such acceptance to be known to the public in such form and manner as
may be provided by regulations.
19.
Grant of authorisation.
19. Grant of authorisation.-(1) When, either on the basis of an
application for authorisation for laying, building, operating or
expanding a common carrier or contract carrier or for laying,
building, operating or expanding a city or local natural gas
distribution network is received or on suo motu basis, the Board
forms an opinion that it is necessary or expedient to lay, build,
operate or expand a common carrier or contract carrier between two
specified points, or to lay, build, operate or expand a city or local
natural gas distribution network in a specified geographic area, the
Board may give wide publicity of its intention to do so and may
invite applications from interested parties to lay, build, operate or
expand such pipelines or city or local natural gas distribution
network.
(2) The Board may select an entity in an objective and transparent
manner as specified by regulations for such activities.
20.
Declaring, laying, building, etc., of common carrier or contract
carrier and city or local natural gas distribution network.
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 entities 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 promoting competition among entities, avoiding
infructuous 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.
21.
Right of first use, etc.
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 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 carrier to
the entity operating it as an authorised entity.
(3) An entity authorised to lay, build, operate or expand a pipeline
as common carrier or 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
authorisation.
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.
22.
Transportation tariff.
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.
23.
Suspension or cancellation of authorisation.
23. Suspension or cancellation of authorisation.-If the Board, on an
application of an affected party or on its own motion, is satisfied
that the entity in favour of which authorisation has been granted
under section 19 has failed to comply with any conditions of
authorisation, it may, after giving an opportunity to such entity of
being heard, either suspend the authorisation for such period as the
Board may think fit or cancel the authorisation:
Provided that where the Board is of the opinion that an authorised
entity persistently acts in a manner prejudicial to the interests of
consumers, it may take action for the suspension of the authorisation
immediately subject to the opportunity of hearing being given
subsequently, after which action so taken may be confirmed or
revoked.
CHAPTER V
SETTLEMENT OF DISPUTES
24. Board to settle disputes.-(1) Save as otherwise provided for
arbitration in the relevant agreements between entities or between an
entity or any other person, as the case may be, if any dispute
arises, in respect of matters referred to in sub-section (2) among
entities or between an entity and any other person, such dispute
shall be decided by a Bench consisting of the Member (Legal) and one
or more members nominated by the Chairperson:
Provided that if the members of the Bench differ on any point or
points, they shall state the point or points on which they differ and
refer the same to a member other than a member of the Bench for
hearing on such point or points and such point or points shall be
decided according to the opinion of that member.
(2) The Bench constituted under sub-section (1) shall exercise, on
and from the appointed day, all such jurisdiction, powers and
authority as were exercisable by a civil court on any matter relating
to -
(a) refining, processing, storage, transportation and distribution of
petroleum, petroleum products and natural gas by the entities;
(b) marketing and sale of petroleum, petroleum products and natural
gas including the quality of service and security of supply to the
consumers by the entities; and
(c) registration or authorisation issued by the Board under section
15 or section 19.
(3) Notwithstanding anything contained in the Code of Civil
Procedure, 1908 (5 of 1908), the Board shall have the power to decide
matters referred to in sub-section (2) on or after the appointed day.
25.
Filing of complaints.
25. Filing of complaints.-(1) A complaint may be filed before the
Board by any person in respect of matters relating to entities or
between entities on any matter arising out of the provisions of this
Act:
Provided that the complaints of individual consumers maintainable
before a consumer disputes redressal forum under the Consumer
Protection Act, 1986 (68 of 1986) shall not be taken up by the Board
but shall be heard and disposed of by such forum.
Explanation.-For the purposes of this sub-section, the expression
“consumer disputes redressal forum” shall mean the district forum,
State Commission or, the National Commission, as the case may be,
constituted under the provisions of the Consumer Protection Act, 1986
(68 of 1986).
(2) Every complaint made under sub-section (1) shall be filed within
sixty days from the date on which any act or conduct constituting a
contravention took place and shall be in such form and shall be
accompanied by such fee as may be provided by regulations:
Provided that the Board may entertain a complaint after the expiry of
the said period if it is satisfied that there was sufficient cause
for not filing the complaint within that period.
(3) On receipt of a complaint under sub-section (1), the Board shall
decide within thirty days whether there is a prima facie case against
the entity or entities concerned and may either conduct enquiry on
its own or refer the matter for investigation under this Chapter, to
an Investigating Officer having jurisdiction; and, where the matter
is referred to such Investigating Officer, on receipt of a report
from such Investigating Officer, the Board may, hear and dispose of
the complaint as a dispute if it falls under sub-section (2) of
section 27 and in any other case, it may pass such orders and issue
such directions as it deems fit.
(4) Where the Central Government considers that a matter arising out
of the provisions of this Act is required to be investigated, it
shall make a reference to the Board and the provisions of this Act
shall apply as if such reference were a complaint made to the Board.
26.
Power to investigate.
26. Power to investigate.-(1) For the purposes of provisions of
section 25, the Board shall, subject to the provisions of sub-section
(3), appoint by general or special order, an officer of the Board as
an Investigating Officer for holding an investigation in the manner
provided by regulations:
Provided that where the Board considers it necessary that the matter
should be investigated by any investigating agency of the State or
Central Government including the special police force constituted
under section 2 of the Delhi Special Police Establishment Act, 1946,
the Board may request the concerned Government for directing or
authorising such agency to investigate and the agency so directed or
authorised shall, then, be competent to exercise the powers and to
discharge the duties of an Investigating Officer under this Act.
(2) No person shall be appointed as an Investigating Officer unless
he possesses such qualifications and experience as may be determined
by the Board by regulations.
(3) Where more than one Investigating Officer is appointed, the Board
shall specify, by order, the matters and the local limits of
jurisdiction with respect to which each such officer shall exercise
his jurisdiction.
27.
Factors to be taken into account by the Board.
27. Factors to be taken into account by the Board.-The Board shall,
while deciding a dispute under this Chapter, have due regard to the
provisions of this Act and to the following factors, namely:-
(a) the amount of disproportionate gain made or unfair advantage
derived, wherever quantifiable, as a result of the default;
(b) the amount of loss caused to an entity as a result of the
default;
(c) the repetitive nature of the default.
28.
Civil penalty for contravention of directions given by the Board.
28. Civil penalty for contravention of directions given by the
Board.-In case any complaint is filed before the Board by any person
or if the Board is satisfied that any person has contravened a
direction issued by the Board under this Act to provide access to, or
to adhere to the transportation rate in respect of a common carrier,
or to display maximum retail price at retail outlets, or violates the
terms and conditions subject to which registration or authorisation
has been granted under section 15 or section 19 or the retail service
obligations or marketing service obligations, or does not furnish
information, document, return of report required by the Board, it
may, after giving such person an opportunity of being heard in the
matter, by order in writing, direct that, without prejudice to any
other penalty to which he may be liable under this Act, such person
shall pay, by way of civil penalty an amount which shall not exceed
one crore rupees for each contravention and in case of a continuing
failure with additional penalty which may extend to ten lakh rupees
for every day during which the failure continues after contravention
of the first such direction:
Provided that in the case of a complaint on restrictive trade
practice, the amount of civil penalty may extend to five times the
unfair gains made by the entity or ten crore rupees, whichever is
higher.
29.
Orders passed by Board deemed to be decrees.
29. Orders passed by Board deemed to be decrees.-Every order made by
the Board under this Act shall, on a certificate issued by an officer
of the Board, shall be executable in the same manner as if it were a
decree of a civil court:
Provided that where an appeal lies against an order of the Board and
no appeal is preferred then the order of the Board shall be deemed to
be a final decree under this section on the expiry of the period
allowed for preferring an appeal against such order before the
Appellate Tribunal.

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