REGISTERED NO. DL-33004/2002

The Gazette of India

EXTRAORDINARY

PART II —Section 2

PUBLISHED BY AUTHORITY

No. 19]

NEW DELHI, MONDAY, MAY 6, 2002 / VAISAKHA 16,1924

Separate paging is given to this Part in order that it may be filed as a separate compilation.

LOK SABHA

The following Bill was introduced in Lok Sabha on 6th May, 2002.

BILL No. 38 OF 2002

A Bill to provide for- the establishment of the Petroleum Regulatory Board to regulate the

refining, processing, storage, transportation, distribution, marketing and sale of

petroleum and petroleum products 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 and petroleum products, ensure uninterrupted and adequate supply

of petroleum and petroleum products in all parts of the country, promote competitive

markets and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:—

CHAPTERI

PRELIMINARY

1. (7) This Act may be called the Petroleum Regulatory Board Act, 2002.

(2) It extends to the whole of lndia.

(3) It shall come into force on such date as the Central Government may, by notification

in the Official Gazette, appoint.

(4) It applies to refining, processing, storage, transportation, distribution, marketing

and sale of petroleum and petroleum products excluding production of crude oil and

natural gas.

Short title,

extent,

commence-

ment and

application.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Definitions.

2. In this Act, unless the context otherwise requires,—

(a) "appointed day" means the date with effect from which the Board is estab-

lished under sub-section {1) of section 3;

(b) "authorised entity" means an entity authorised to market any notified

petroleum or petroleum products, or to establish and operate liquefied natural gas

terminals, or to lay, build, operate or expand a common carrier under section 19 or, as

the case may be, section 20.

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 tor use as fuel in vehicles, as the Central Government may, in consultation

with Bureau of Indian Standards, notify from time to time;

(d) "Board" means the Petroleum Regulatory Board established under

sub-section (/) of section 3;

(e) "bulk sale" means sale of petroleum products other than retail sale;

'(/) "Bureau of Indian Standard-"!" means the Bureau of Indian Standards set up

under section 3 of the Bureau of Indian Standards Act, 1986;

(g) "Chairperson" means the Chairperson of the Board appointed under

section 4;

{h) "common carrier" means such pipelines for transportation of petroleum

and petroleum products by more than one entity as the Board may declare or

authorise from time to time under sub-section (3) of section 20, but does not include

pipelines laid to supply—

(0 petroleum products to a specific consumer, or

(if) crude oil;

(/) ''compressed natural gas" means natural gas used as fuel for vehicles, typi-

cally compressed to the pressure of 200-250 bars in the gaseous state;

(/) "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, auto

liquefied petroleum gas or compressed natural gas;

(k) "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;

([) "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 in refining, processing, storage, transportation, distribution,

marketing, import and export of petroleum and petroleum products including laying

of pipelines for transportation of petroleum and petroleum products, or establishing

and operating a liquefied natural gas terminal;

(m) "exchange of products" shall mean giving and receiving of a petroleum

product in accordance with an agreement entered into by the concerned entities;

(ri) "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;

63 of 1986.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

1 of 1956.

(o) "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;

(p) ''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;

(q) "marketing service obligations" means obligations to set up marketing

infrastructure, retail outlets in remote areas, maintain minimum stock of notified

petroleum and petroleum products and such other obligations as may be provided

by regulations;

(r) "maximum retail price" means the maximum price fixed by an entity at

which the petroleum and petroleum products 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;

(s) "member" means a member of the Board appointed under section 4 and

includes the Chairperson;

(/) "motor spirit" means any hydrocarbon oi! (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;

(u) "natural gas" means gas consisting of methane, ethane, propane, butane,

pentane and other gas with similar characteristics produced from gas wells, gas

condensate wells or oil wells and includes —

(0 any residual gas which is obtained after processing such gas upon

removal of liquefied hydrocarbon and impurities therefrom ;

(ii) gas in liquid state, namely, liquefied natural gas ;

(iif) methane obtained from coal seams, namely, coal bed methane; and

(rv) compressed natural gas;

(v) "notification" means a notification published in the Official Gazette o d the

expression "notified" with its cognate meanings and grammatical variation, shall be

construed accordingiy;

(w) "notified petroleum and petroleum products" means such petroleum and

petroleum products as the Central Government may notify from time to time in the

Official Gazette, after being satisfied that it is necessary or expedient so to do for

maintaining or increasing their supplies or for securing their equitable distribution and

availability at fair .price;

(x) "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 and petroleum products;

(y) "petroleum" means any liquid hydrocarbon or mixture of hydrocarbons, and

any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon,

including crude oil, liquefied petroleum gas and natural gas, and the expression

'petroleum product' shall mean any product manufactured from petroleum;

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

(z) "prescribed" means prescribed by rules made by the Central Government under this

Act;

(za) "public distribution system" means the system of distribution, marketing or selling

of petroleum products, at the Government controlled or declared price through a distribution

system approved by the Central or State Government;

(zb) "regulations" means regulations made by the Board under this Act;

{zc) "retail outlet" means filling station where one or more dispensing pumps have

been provided for sale of motor spirit, high speed diescl, auto liquefied petroleum gas or

compressed natural gas, and includes distributorship for liquefied petroleum gas or dealership

for kerosene;

(rd) "retail sale" means sale of motor spirit, high speed diesel, auto liquefied petro-

leum gas and compressed natural gas from retail outlet;

(ze) "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 and

petroleum products as may be provided by regulations;

(z/) "rules" means rules made by the Central Government under this Act;

(zg) "Secretary" means the Secretary of the Board;

(zh) "transportation rate" in relation to common carrier means such rate for moving

each unit of petroleum or petroleum products as the authorised entity may fix in accordance

with the regulations made by the Board.

Establishment

and

incorporation

or the Board.

Qualifications

for

appointment

Chairperson

and oilier

members.

Term of offite,

conditions of

service, etc., ol

Chairperson

and other

members.

CHAPTER n

PETROLEUM JtEcut-vronv ROAM>

3. (7) With effect from such date as the Central Government may, by notification,

appoint there shall he established, for the purposes nf this Act, a Board to be called the

Petroleum 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 and other members not exceeding

fou r in number, to be appointed by the Central Government.

(4) The head office of the Board shall be at New Delhi.

4. The Central Government shall appoint the Chairperson and other members of the

Board from amongst persons of eminence in the fields of petroleum industry, management,

finance, law, administration or consumer affairs.

5. (7) 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:

oEC.21

THE GAZETTE OF INDIA EXTRAORDINARY

Provided that the Chairperson and other members shall not be eligible for re-

appointment.

Explanation.— For the purpose of this section, appointment of a member as Chair-

person 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 shall resign or retire from such service before joining as the Chair

person or other member as the case may be.

(4) The salary 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 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 and also includes setting up practice either independently or as partner of a

firm or as an advisor or a consultant.

6. 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. The Central Government may remove from office the Chairperson or any

member, who

(a) has been adjudged as insolvent; or

(ft) has bocn convicted of an offence which, in the opinion yf Ihe 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 a person shall not be removed from his office as Chairperson or other

member under clause (d) or clause (e) unless he has been given a reasonable opportunity

of being heard in the matter.

8. (/) The Board shall meet at such times and places, and shall observe such

procedure in regard to the transaction of business at its meetings as may be provided by

regulations.

Powers

Chairperson.

Reniuval of

rhnirpfrjon

or any other

member from

office

Meetings of

the Board

THE GAZETTE OF INDIA EXTRAORDINARY

[PART IT—

Vacancies,

etc., not to

invalidate

proceedings of

the Board.

Officers and

other

employees of

the Board.

Ilwiiuilul

offices of the

Board.

Functions of

the Hoard.

(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. 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

(6) any defect in the appointment of a person acting as a member of the

Board; or

(<0 uny irregularity in the procedure of the Board not affecting the merits of

the case.

10. (/) The Board may appoint a Secretary to exercise and perform under the

control of the Chairperson, such powers and duties as may be specified by regulations:

Provided that the first Secretary to the Board shall be appointed by the Central

Government.

(2) The Board may, with the prior approval of the Central Government, deter-

mine the number, nature and categories of other officers and employees required to

assist the Board In the discharge of Its functions.

(3) The salary and allowances payable to and the other terms and conditions of

service of the Secretary, the others officers and employees of the Board shall be such as

may be prescribed.

(4) The Board may, in consultation with the Central Government, appoint consul-

tants required to assist in the discharge of Us functions on such terms and conditions as

may be determined by regulations.

11.(7) The Board may have regional offices at such places as it may think necessary

having regard to public interest and magnitude of the work.

(I) The regional offices of the Board shall perform such functions as may be provided

by regulations.

CHAPTER III

FuNCllUNS AND POWERS OF THE BOARD

12. The Board may—

(a) protect the interest of consumers by fostering fair trade and competition

amongst the entities;

(b) authorise entities to—

(0 market notified petroleum and petroleum products;

(») establish and operate liquefied natural gas terminals;

(Hi) lay, build, operate or expand a common carrier;

(d) regulate—

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

5 of 1908.

(0 access to common carrier by regulations so as to ensure fair trade and

competition amongst entities;

(H) transportation rates for common carrier by regulations;

(e) in respect of notified petroleum and petroleum products —

(/) ensure adequate availability;

(if) ensure display of information about the maximum retail prices fixed by

the entity for consumers at retail outlets;

(Hi) monitor prices and take corrective measures to prevent profiteering

by the entities;

(;v) secure equitable distribution;

(v) provide by regulations and enforce, retail service obligations for retail

outlets and marketing service obligations for entities;

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

(g) maintain a data bank of information on activities relating to petroleum and

petroleum products;

(h) perform such other functions as may be entrusted to it by the Central

Government to carry out the provisions of this Act.

13. (/) The Board shall have jurisdiction to ~

(a) 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 and petroleum products according to the

provisions of Chapter V;

(b) receive any complaint from any person regarding profiteering by an entity

or contravention of —

(0 retail service obligations;

(</•) marketing service obligations;

(Hi) display of maximum retail price at retail outlets;

(iv) terms and conditions subject to which a pipeline was declared as

common carrier, or authorisation was granted to an entity for laying, building,

operating or expanding a pipel ine as common carrier or for establishing a liquefied

natural gas terminal or for marketing notified petroleum and petroleum

products;

(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 (/), 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.

14. (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

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) requiring the discovery and production of documents;

Powers

regarding

complaints

and

resolution of

disputes by

the Board.

Procedure of

the Board.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART l i -

fe) 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;

(/) setting aside any order of dismissal of any application for default or any

order passed by it ex parte;

(g) granting interim relief; and

(h) 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 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.

(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

AUTHORISATIONS

45 of I860.

2 of 1974.

thorisations.

Authorisation.

Application

for authorise

lion.

15. (/) Vpr the purpose of this Act, a record called the register of authorisations shall

be kept at the office of the Board containing details of entities authorised for marketing

notified petroleum and petroleum products, or for establishing and operating liquefied natural

gas terminals, or for laying, building, operating or expanding a common carrier, 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.

(5) The register shall be open to public inspection at the 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, obtain a certified copy of any entry in the register.

16. No entity shall —

{a) market any notified petroleum or petroleum product;

(6) lay, build, operate or expand any pipeline as a common carrier; and

(t) establish or operate a liquefied natural gas terminal witho'.H obtaining

authorisation under this Act:

Provided that an entity marketing any notified petroleum and petroleum product, and

establishing or operating a liquefied natural gas terminal on the appointed day shall be

deemed to have such authorisation subject to the provisions of this Chapter.

17. (7) An entity which proposes to market any notified petroleum or petroleum

products, or to establish and operate a liquefied natural gas terminal shall apply in writing for

authorisation for operating such activity to the Board:

Provided that an entity marketing any notified petroleum or petroleum product, or

establishing or operating a liquefied natural gas terminal on the appointed date 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 pipeline as a common carrier shall apply in writing for obtaining

an authorisation under this Act.

SEC. 2]

THE GAZETTE OF INDIA EXTftAORDINARY

(3) Every application under sub-sections (7) and (2) shall be made in such form and

manner and accompanied with such fee as the Board may provide by regulations.

(4) Subject to the provisions of this Act, the Board may cither 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.

18. When an application for authorisation for marketing notified petroleum and

petroleum products, or for establishing and operating a liquefied natural gas terminal, or for

laying, building, operating or expanding a common carrier 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 the regulations.

19. The Board may, after hearing the parties interested, grant authorisation subject to

such terms and conditions as it may specify.

20. (7) If the Board is of the opinion that it is necessary or expedient, to declare a

pipeline for transportation of petroleum and petroleum products as a common carrier, or that

an entity be authorised to lay, build and operate or expand a pipeline as common carrier, 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 declaration,

or authorisation.

(2) For the purpose ufaub-scction (/"), llit; Board shuil provide an opportunity of

hearing to the entity owning, laying, building, operating or expanding the pipeline, as the

case may be, and fix the terms and conditions subject to which the pipeline may be declared

as a common carrier, or an entity may be authorised for laying, building, operating or

expanding a pipeline as a common 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, subject to the terms and conditions fixed under sub-section (2),

by notification —

(a) declare a pipeline as common carrier; or

(6) authorise an entity to lay, build, operate or expand a pipeline as a common

carrier.

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

promoting competition in marketing among entities, avoiding infructuous investment,

maintaining or increasing supplies or for securing equitable distribution and availability of

petroleum and petroleum products at fair price throughout the country and follow sucli

principles as the Board considers appropriate in carrying out its functions under this section

by regulations.

21. (7) The entity laying, building, operating or expanding a pipeline for transportation

of petroleum and petroleum products 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 needs of lair competition in marketing

and availability of petroleum and petroleum products throughout the country.

(I) An entity other than an entity authorised to operate shall pay transportation rate

for use of common carrier toihe entity operating it as an authorised entity.

(3) An entity authorised to lay, build, operate or expand a pipeline as common carrier

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, "the infringement of any right"

means doing of any act by any person which interferes with common carrier or causes

prejudice to the authorised entity.

Publicity of

applications.

Grant oT

authorisation.

Declaring,

laying,

building, etc.,

of common

carrier.

Right of first

use, etc.

THE GAZETTE OF INDIA EXTRAORDINARY

[PARTII—

Suspension or

cancellation

authorisation.

Board to settle

disputes.

Filing of

complaints.

22. The Board may, on application of an affected party or on its own motion, if it is

satisfied that the entity in favour of which authorisation has been granted under section 19

or under section 20 has failed to comply with any conditions of authorisation, after giving an

opportunity of hearing to such entity, suspend authorisation for such period as it 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

23. (/) 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 two 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 third member 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-seclion (/) shall exercise, on or from the ap-

pointed 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

and petroleum products by the entities;

(b) marketing and sale of petroleum and petroleum products including the quality

of service and security of supply to the consumers by the entities; and

(.^Notwithstanding anything contained in the Code of Civil Procedure, 1908 or Ihe

Monopolies and Restrictive Trade Practices Act, 1969, the Board shall have the power to

decide matters referred to in sub-section (2) and on or after the appointed date, neither the

Civil Court nor the Monopolies and Restrictive Trade Practices Commission shall have any

jurisdiction in the matter referred to in sub- section (2).

24,(1) A complaint may be filed before the Board by any person in respect of matters

relating to entitle oi between entities on matters arising out of the provisions of this Act:

Provided that the complaints of individual consumers maintainable before the con-

sumer dispute redressal forum¹? ""der the Consumer ProlecHnn Act. 1986 shall no! bi> taken

up by the Board but shall be heard and disposed of by the consumer forums only.

Explanation.~For the purposes of this sub-section, the expression "the consumer

dispute redressal forums" shall mean the district forum. State Commission and the National

Commission, as the case may be, constituted under the provisions ot the Consumer Protection

Act, 1986.

(2) Ever>' complaint made under sub-section (/) shall be filed within sixty day? from

the date on which any act or conduct constituting a contravention took place and shall be in

such form as may be provided by the regulations:

Provided thai 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 (/), if the Board is of the opinion that

there is aprimafacie case against an entity, it may either investigate on its own or refer the

5 ul" 1908.

54 of 1969.

68 of 1986

68 of 1986.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

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 report from him,

the Board may hear and dispose of the complaint as a dispute where it falls under sub-

section (2) of section 23 and in other case, it may pass such orders and issue such directions

as it deems fit.

25. (/) For the purposes of provisions of section 24, the Board shall, subject to the

provisions of sub-section (5), appoint by general or special order, an officer of the Board as

an Investigating Officer for holding an inquiry in the manner provided by the regulations.

(2) The Investigating Officer shall give the person referred to in sub-section (/) a

reasonable opportunity for making a representation in the matter.

(3) "No person shall be appointed as an Investigating Officer unless he possesses such

qualification and experience as may be determined by the Board by regulations.

(4) Where more than one investigating officer is appointed, the Board shall specify,

by order, the matters and local limits of jurisdiction with respect to which such officers shall

exercise their jurisdiction.

26. The Board shall, while deciding a dispute under this Chapter have due regard to

the provisions of this Act, and also 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 U> an enlity as a result ol the default;

27. 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 authorisation has been granted under section 19 or section 20 or the retail service

obligations or marketing service obligations, or does not furnish information, document,

return or report required by the Board 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 lakh rupees for each contravention and in case of a

continuing failure with additional penalty which may extend to six thousand rupees for per

every day during which the failure continues after contravention of the first such direction.

28. Any person aggrieved by any decision or order of the Board or its Bench consti-

tuted under sub-section (7) of section 23, may file an appeal to the High Court within thirty

days frcrr, the date of communication of the decision or order of the Board to Itirn.

Provided that the High Court may, if it is satisfied that the appellant was prevented by

sufficient cause from filing the appeal within the said period, allow it to be filed within a

further period nut exceeding sixty days.

29. Every order made by

(a) the Board under this Act; or

(b) the High Court in any appeal,

shall, on a certificate issued by an officer of the Board or the Registrar of the High Court, as

the case may be, shall be executable in the same manner as if it were a decree of the 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 decree under this section on the

expiry of the period allowed for preferring appeal against such order before the High Court.

Power to

investigate.

Factors to be

taken into

account by

the Board.

Penalty for

contravention

of directions

given by the

Board.

Appeals

Order passed

under the Act

deemed to be

a decree.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Grants by

Central

Government.

Fund.

Accounts and

audit.

Annual report

and Its laying

hpfnro

Parliament.

Power of

Central

Government

to issue

directions.

CHAPTER VI

FINANCE, ACCOUNTS AND AUDIT

30. The Centra] Government may, after due appropriation made by Parliament by law

in this behalf, make to the Board grants of such sums of money as are required to pay

salaries and allowances payable to the Chairperson and the other members and the

administrative expenses including the salaries, allowances and pensions payable to the

officers and employees of the Board.

31. (/) There shall be constituted a Fund to be called the Petroleum Regulatory Board

Fund and there shall be credited thereto—

(0 all grants, fees, penalties and charges received by the Board under this

Act; and

(if) all sums received by the Board from such other sources as may be

approved by the Central Government

(2)The Fund shall be applied for making payments towards—

(0 the salaries and allowances payable to the Chairperson and other members

and the administrative expenses Including the salaries, allowances and pensions

payable to the officers and employees of the Board;

((/) the expenses incurred or to be incurred in carrying out the provisions of

this Act.

32. (7) The Board shall maintain proper accounts and other relevant records and

prepare an annual statement of accounts in such form as may be prescribed by the Central

Government in consultation with the Comptroller and Auditor-General of India.

(2) The accounts of the Board shall be audited by the Comptroller and Auditor-

General of India at such intervals as may be specified by him and any expenditure incurred

in connection with such audit shall be payable by the Board to the Comptroller and Audi-

tor-General of India.

(3) The Comptroller and Auditor-General of India or any other person appointed by

him in connection with the audit of the accounts of the Board shall have the same rights and

privileges and authority in connection with the audit of the Government accounts and, in

particular, shall have the right to demand the production of books, accounts, connected

•Vouchers and other documents and papers and inspection of offices of the Board.

(4) The accounts of the Board as certified by the Comptroller and Auditor-General of

India or any other person appointed by him in this behalf together with the audit report

thereon shall be forwarded annually to the Central Government and that Government shall

cause the same to be laid before each House of Parliament.

33. (7) The Board shall prepare once every year in such form and at such time as may

be prescribed, an annual report giving a summary oHis activities including information

relating Lo the pioceeJiJigs and policies during the previous years as may be prescribed.

Such report shall also contain statements of arinual accounts nf the Board.

(2) A copy of the report shall be forwarded to the Central Government and the Central

Government shall cause such report to be laid, as soon as may be after it is received before

each House of Parliament.

CHAPTER VII

POWKR at- CENTRAL GOVERNMENT

34. (/) The Central Government may, from time to time, by writing, issue to the Board

such directions as it may think necessary in the interest of the sovereignty and integrity of

India, the security of the State, friendly relations with foreign States or public order.

SEC. 21

THE GAZETTE OF INDIA EXTRAORDINARY

(2) Without prejudice to the foregoing provision, the Central Government may, if it

finds necessary or expedient so to do, for maintaining or increasing supplies of_ petroleum

or petroleum products or both or for securing their equitable distribution and availability

at fair price, issue policy directives to the Board in writing and such policy directives shall

be binding upon the Board:

Provided that the Board shall, as far as practicable, be given an opportunity of ex-

pressing its views before any directive is issued under this sub-section.

(3) The decision of the Central Government whether a question is one of policy or

not shall be final.

35. In the event of war, natural calamity, strike, industrial unrest, joint action by any

group leading to disruption of supply, and any other circumstance affecting public interest,

the Central Government may, with a view to ensuring continuous supply of petroleum or

petroleum products and their equitable distribution, by notification, for such limited period

as may be provided in the notification, in public interest, either take over the control and

management of any storage site, facilities and business premises of any entity and retail

outlets or suspend its operation or entrust to any agency of the Central or State Government

to manage it in the manner directed by the Central Government:

Provided that the affected entities shall be given an opportunity of hearing before

issuing orders to take over the control and management of retail outlets and other business

premises:

Provided further !h«r in cr.se of urgency cr in car-cr, v/ht-r; Ihe circumstances do not

permit serving of notice for want of sufficient time oi otherwise upon the entity against

whom the order is directed, the opportunity of hearing may be dispensed with in the public

interest in order to maintain the uninterrupted supply of petroleum or petroleum products for

a specified period.

CHAPTER Vm

OFFENCES AND PUNISHMENT

36. If a person violates directions of the Board, such person shall be punishable with

fine which may extend to one lakh rupees and in case of second and subsequent offence with

a fine which mny extend to two lakh rupeei and in case of continuing contravention with

additional fine which may extend to two lakh rupees for every day during which the default

continues.

37. If an entity markets any notified petroleum or petroleum products without a valid

authorisation, such entity shall be punishable with imprisonment which may extend to three

years or with fine which may extend to two lakh rupees, or with both, and, forthe second and

subsequent offence with an imprisonment which may extend to five years, or with fine which

may extend to five lakh rupees, or with bom.

3S. If a person establishes or operates a liquefied natural gas terminal without obtaining

authorisation required under section 16, such person shall be liable for punishment with an

imprisonment for a term which may extend to three years or penalty of rupees ten lakh or

both.

39. If a person lays, builds, operates or expands a common carrier without obtaining

authorisation required under section 16, such person shall he liable for punishment with an

imprisonment for a term which may extend to three years or penalty of rupees ten lakh or

both.

Taking over

control and

management

nf facilities

and business

premises of

any entity

and retail

outlets in

public

interest.

Punishment

for

contravention

nl" directions

ol the Hoard.

Punishment

for

unauthorised

activities.

Punishment

for estnhlisliinc

or operating a

liquefied

natural gas

terminal

without

authorisation.

Punishment

for laying,

building,

operating or

expanding a

common

carrier

without

authorisation.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Punishment

for wilfUl

damages to

common

carrier.

Offences by

companies.

40. Every person who wilfully removes, destroys or damages any pipeline or other

work of the common carrier for supplying petroleum and petroleum products shall for each

such offence be punishable with imprisonment which may extend to three years or with fine

which may extend to two lakh rupees or with both, and, for the second and subsequent

offence with imprisonment which may extend to five years, or with fine which may extend to

five lakh rupees, or with both.

41. (/) Where an offence under this Act has been committed by a company, every

person who at the time the offence was committed was in charge of, and was responsible to,

the company for the conduct of the business of the company, as well as the company, shall

be deemed to be guilty of the offence and shall be liable to be proceeded against and

punished accordingly:

Provided that nothing contained in this sub-section shall render any such person

liable to any punishment provided in this Act, if he proves that the offence was committed

without his knowledge or that he has exercised all due diligence to prevent the commission

of such offence.

(2)

Notwithstanding anything contained in sub-section (1), where an offence

under this Act has been committed by a company and it is proved that the offence has been

committed with the consent or connivance of, or is attributable to, any neglect on Lhc pai l wf

any director, manager, secretary or other officer of the company, such director, manager,

secretary or other officer shall also be deemed to be guilty of the offence and shall be liable

to be proceeded against and punished accordingly.

Explanation,-~For the purpose of this section,—

(a) "company" means any body corporate and includes a firm or other associa-

tion of individuals; and

(b) "director", in relation to a firm, means a partner in the firm.

Maintenance

of data bank

and

Informalion.

Obligations of

entities.

CHAPTER DC

MISCELLANEOUS

42. (J) The Board shall maintain a data bank and information system relating to

activities of entities dealing with petroleum and petroleum products in such form and

manner as may be provided by regulations.

(2)

The Hoard shall have power to verify the data supplied by the entities and

appoint any person or persons for the purpose and take such measures as it may consider

necessary.

43. (J) Every entity shall—

(a) maintain such documentary records as may be specified by the Board by

regulation s;

(b) allow inspection of such facilities and documentary records, as may be

specified by the Board, by any person authorised by the Board;

(c) commence operation of activities for which authorisation has been granted

within such period as may be specified by the Board in the document of authorisa-

tion;

(d) register—

(/) agreements with the Board relating to use of pipelines for supply ot

petroleum and petroleum products; or

(it) any other document which the Board may determine by regulations;

(e) comply with marketing-service obligations and retail service obligations.

(2) The Board may call for any information from any entity including information

which is considered necessary for ensuring transparency or ascertaining true ownership of

the entity.

SEC. 21

THE GAZETTE OF INDIA EXTRAORDINARY

1 of 1956.

45 of 18bO

(5) The Board or any officer authorised by the Board shall have the power to inspect

and obtain information, wherever necessary, from the entities.

(4) For the effective enforcement of the terms and conditions of authorisation, the

Board or any officer authorised by it for that purpose, shall have all the powers of an

inspecting officer as provided under section 209 A of the Companies Act, 1956.

(5) It shall be the duty of every entity to carry out the directions of the Board given

under this section.

(6) The Board shall maintain confidentiality in respect of any information and record

received by it from the entities and shall not disclose information contained therein to any

person or authority except on the grounds of public interest.

44. The Board shall furnish to the Central Government at such time and in such form

and manner as may be prescribed or as the Central Government may direct, such returns and

statements and such particulars in regard to any matter in connection with proposed or

existing activities under this Act, as the Central Government may, from time to time, require.

45. The Chairperson, members, officers and other employees of the Board shall be

deemed, when actmg or purporting to act in pursuance of any of the provisions of this Act,

lo be public servants within the meaning of section 21 of the Indian Tcr.a¹. Code.

46. No suit, prosecution or other legal proceeding shall lie against ihc Central

Government, Board, or any officer of the Central Government or any member, officer or other

employee of the Board for anything which is in good faith done or intended to be done under

this Act or the rules or regulations made thereunder.

47. No civil court shall have jurisdiction to entertain any suit or proceeding in respect

of any matter which the Board is empowered by or under this Act to determine, and no

injunction shall be granted by any court or other authority in respect of any action taken or

to be taken in pursuance of any power conferred by or under this Act.

48. (7) No court shall take cognizance of any offence punishable under Chapter VIIT

save on a complaint made by the Board.

(2) No court inferior Jo that of a Chief Metropolitan Magistrate or of a Chief Judicial

Magistrate shall try any offence punishable under Chapter VIII.

(3) Every offence punishable under section 37, section 38, section 39 or section 40

shall be cognizable.

49. The Board may, by general or special order in writing, delegate to any member or

officer of the Board subject to such conditions, if any, as may be specified in the order, such

of its powers and functions under this Act (except the power to settle a dispute under

Chapter V and to make regulations under section 51), as it may deem necessary,

50. (7) The Central Government may, by notification, make rules for carrying out the

provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such

rules may provide for all or any of the following matters, namely:—

(a) the salary and allowances payable to and the other conditions of service of

the Chairperson and the other members under section 5;

(b) the salary and allowances payable to and the other conditions of service of

the Secretary, officers and other employees of the Board under

sub-section (3) of

section 10;

a civil court under clause (h) of sub section (1) of section 14;

Furnishing of

returns, etc.,

to Central

Government.

Chairperson,

members, etc,

to be public

servants.

Protection of

action taken

In good faith.

Civil courts

not to have

jurisdiction.

Cognizance

of certain

offences.

Delegation.

Power of

Central

Govern mcnL

to make

rules.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Powcr of the

Board to

make

regulations.

(a) the manner m which the accounts of the Board shall be maintained under

section 32;

(e) the time and manner in which the annual report of the Board shall be prepared

under section 33;

(f) the time and manner in which returns and statements are to be furnished by

the Board to the Central Government under section 44;

(g) any other matter which is to be, or may be, prescribed, or in respect of which

provision is to be made, by rules.

51. (7) The Board may, by notification, make regulations consistent with this Act and

the rules made thereunder to carry out the provisions of this Act.

(2) In particular, and without Lnejudice to the generality of the foregoing power, such

regulations may provide for all or any of the following matters, namely:—

(a) the time and places of meetings of the Board and the procedure to be

followed at such meetings under section 8, including quorum necessary for the trans-

action of business;

(b) the powers and duties ofthe Secretary under sub-section (/) of section 10;

of section 10;

(a) the functions and powers of regional office:, of the BOdid uncict section 11,

(e) regulating open access to and transportation rate for the common carrier

under clause (of) of section 12;

if) marketing service obligations for entities and retail service obligations for

retail outlets under sub-clause (v) of clause (c) of section 12;

(g) levy of fees and other charges under clause if) of section 12;

(h) the procedure to be followed by the Board including the places at which it

shall conduct its business under section 14;

(/) the manner of maintaining the register of authorisation under section 15;

(/) the form and manner of making application and the fee which shall accompany

such application, under sub-section (3) of section 17;

yk) ihe form arid manner of causing wide publicity of au application foi ddthuii-

sation under section 18;

build, operate or expand a common carrier under section 20;

0 0 the form in which a complaint may be made under sub-section (2) of

section 24;

(n) the manner of holding an inquiry by an Investigating Officer under sub-

section (/) of section 25;

O) the qualification and experience required for appointment of Investigating

Officer under sub-section (3) of section 25;

(p) the form and manner of maintaining data bank and information system by

the Board under sub-section (/) of section 42;

(q) maintenance of documentary records by an entity as specified under clause

(a) of sub-section (7) of section 43;

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

(r) any other type of documents which are to be registered with the Board under

clause (d) of sub-section (/) of section 43;

(s) any other matter which is required to be, or may be, specified by regulations

or in respect of which provision is to be or may be made by regulations.

52. Every rule and regulation made under this Act shall be laid, as soon as may be after

it is made, before each House of Parliament, while it is in session, for a total period of thirty

days which may be comprised in one session or in two or more successive sessions, and if,

before the expiry of the session immediately following the session or the successive sessions

aforesaid, both Houses agree in making any modification in the rule or regulation or both

Houses agree that the rule or regulation should not be made, the rule or regulation shall

thereafter have effect only in such modified form or be of no effect, as the case may be; so,

however, that any such modification or annulment shall be without prejudice to the validity

of anything previously done under that rule or regulation.

53. (/) Where, before the commencement of this Act, an agreement or agreements

have been entered into between one oil company and another for the purpose of sharing of

petroleum products or the sharing of infrastructure facilities among the oil companies and

such agreements have been approved by the Central Government, the Board may monitor

the implementation of such agreements for the transition period.

(2) The Board shall monitor setting up of dealerships and distributorships of motor

spirit, high speed diesel, superior kerosene oil and liquefied petroleum gas by the entities

without affecting in any manner whatsoever on the retail network of the existing entities.

Explanation I.—For the purposes of this action the expression "transition period"

shall mean a period of two years commencing from 1st day of April, 2002 and, where the

Central Government thinks fit so to do, it may extend the period of two years by a further

period of one year having regard to availability of petroleum and petroleum products at fair

price throughout the country.

Explanation //.--For the purposes ofthis section, "infrastructure facilities" shall

mean facilities at ports, refineries, terminals, depots and aviation fuelling stations including

hydrant lines and shall include loading and unloading facilities.

54. (/) If any difficulty arises in giving effect to the provisions ofthis Act, the Central

Government may, by order, published in the Official Gazette, make such provisions not

inconsistent with the provisions of this Act as it may deem necessary for removing the

difficulty:

Provided that no order shall be made under this section after the expiry of two years

from the date of commencement ofthis Act.

(2) Every order made under this section shall be laid, as soon as may be after it is

made, before each House of Parliament.

Rules and

regulations to

be laid before

Parliament

Transitional

arrangements.

Power to

remove

difficulties.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

STATEMENT OF OBJECTS AND REASONS

Consequent upon the Government decision for phased dismantling of Administered

Pricing Mechanism and full deregulation of petroleum sector from April 2002, marketing

and pricing of all petroleum products except Public Distribution System (PDS) Kerosene

and LPG (Domestic) have been decontrolled with effect from 1st April, 2002. One of the

basic objectives of this Bill is to provide for a regulatory mechanism which would facilitate

uninterrupted and adequate supply of petroleum and petroleum products in all parts of the

country including remote areas at fair price, promote competitive markets and access to

monopolistic infrastructure in the nature of common carrier on non-discriminatory basis

by all entities. With respect to such petroleum and petroleum products as may be notified

by the Government from time to time, the Bill also entails provision of retail service

obligations for retail outlets and marketing service obligations for entities. To prevent

exploitation of consumers in the deregulated scenario, the Regulatory Board shall ensure

that each marketing entity displays for the information of customers the maximum retail

prices for the notified petroleum and petroleum products, and take steps in accordance

with regulations, to prevent profiteering by the entities. Provisions have been made in this

Bill to ensure redressal of grievances and protection of consumer interest as also resolution

of disputes among entities or between an entity and any other person.

2. These objectives are intended to be achieved by:—

(a) setting up of a Petroleum Regulatory Board to oversee and regulate the

refining, processing, storage, transportation, distribution, marketing and sale of

petroleum and petroleum products. The Board would operate at an arm's lengths from

the Central Government;

(b) giving power to the Central Government to broadly lay down policy frame-

work;

versely affecting public interest in certain exigencies;

(d) maintaining a data bank of information on activities relating to petroleum

and petroleum products to enable planning and development thereof.

3. The Bill seeks to achieve the above objects.

RAMNAlK.

NEW DELHI;

The 24th April, 2002.

PRESIDENTS RECOMMENDATION UNDER ARTICLE 117 OF THE

CONSTITUTION OF INDIA

[Copy of letter No. P-45011/32/97-Mkt. (Dist), dated the 28th April, 2002 from Shri

Ram Naik, Minister of Petroleum and Natural Gas to the Secretary-General, Lok Sabha]

The President, having been informed of the subject matter of the Petroleum Regulatory

Board Bill, 2002 recommends the introduction and consideration of the Petroleum Regu-

latory Board Bill, 2002 in the House under article 117(1) and (3) of the Constitution of

India.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

Notes on clauses

Clause 1.—This clause provides for the short title, application of the proposed

legislation to the entire country in the areas of refining, processing, storage, transportation,

distribution, marketing and sale of petroleum and petroleum products excluding production

of crude oil and natural gas, and empowers the Central Government to appoint the dale of

commencement of the proposed legislation by notification in the Official Gazette.

Clause 2.—This clause defines the various expressions occurring in the proposed

legislation.

Clause 3.—This clause provides for the composition, establishment and incorpora-

tion of the Petroleum Regulatory Board with its head office in New Delhi. The Board will be

a body corporate having perpetual succession, a common seal and shall by the said name

sue and be sued. The Board shall consist of a Chairperson and not more than four other

members.

Clause 4.—This clause lays down the qualifications of the Chairperson and other

members of the Board. It provides that the Central Government shall appoint the

Chairperson and other members of the Board from amongst persons of eminence in the fields

of petroleum industry, management, finance, law, administration or consumer affairs.

Clause 5.—This clause provides that the Chairperson and the other members shall

hold office for a term of five years from the date on which he enters upon his office or until he

attains the age of 65 years, whichever is earlier and that he will not be eligible for reappoint-

ment. Further, it provides for the fixation of soiary and allowances payable to and the other

terms and conditions of service of the Chairperson and other members. It also deals with the

procedure of resignation by the Chairperson or other members of the Board. This clause also

states that the Chairperson or the other members ceasing to hold office in the Board shall be

ineligible for further employment under the Central Government, State Government and will

not accept any commercial employment for a period of two years from the date he ceases to

hold such office.

Clause 6.—This clause lays down the powers of the Chairperson with regard to

functioning of the Board in addition to presiding over the meetings of the Board.

Clause 7.—This clause deals with the circumstances under which the Chairperson

and other members of the Board may be removed from office and the procedure to be

followed in such removal.

Clause 8.—This clause empowers the Board to determine the procedure for the trans-

action of business in its meetings including times and places of such meetings.

Clause 9,—This clause enumerates the circumstances under which the acts or pro-

ceedings of the Board shall not be invalidated.

Clause 10.—This clause makes provisions for the appointment of Secretary, other

officers and employees of the Board and for the determination of the salaries and allowances

and the other terms and conditions of service of the Secretary, other officers and employees

of the Board. It also provides for appointment of consultants as may be required to assist the

Board.

Clause 11 .—This clause provides for the establishment of regional offices of

the Board. The functions of the regional offices shall be determined by the Board by

regulations.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART II—

Clause 12.—This clause lays down the powers and functions of the Board. The

functions of the Board, inter alia, shall be to—

(a) protect the interest of consumers by fostering fair trade and competition

amongst the entities;

(b) authorise entities to market notified petroleum and petroleum products, or

to establish and operate liquefied natural gas terminals, or to lay, build, operate or

expand a common carrier;

(c) declare pipelines as common carrier;

(a) regulate access to common carrier and transportation rates for common

carrier;

(e) ensure adequate availability and display of information about the maximum

retail prices fixed by the entity of such petroleum and petroleum products as may be

notified by the Central Government;

(/) monitor prices of notified petroleum and petroleum products and take correc-

tive measures to prevent profiteering by the entities;

(g) lay down and enforce retail service obligations for retail outlets and market-

ing service obligations for entities;

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

(/) maintain a data bank of information on activities relating to petroleum and

petroleum products;

(/) perform such other functions as may be entrusted to it by the Central Govern-

ment to carry out the provisions of this Bill.

Clause 13.—This clause seeks, inter alia, to empower the Board to settle 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 and petroleum products. The Board shall also receive any complaint from any

person regarding contravention of certain provisions of the proposed legislation and pass

suitable orders to decide the complaint.

Clause 14.—This clause contains the procedures and powers of the Board in the

discharge of its functions under the proposed legislation.

Clause 15.—This clause provides for maintenance of records including a register of

authorisation containing details of entities authorised by the Board to undertake any activ-

ity requiring authorisation under the proposed legislation.

Clause 16.—This clause provides that no entity shall market any notified petroleum or

petroleum product, or lay, build, operate or expand any pipeline as a common carrier, or

establish or operate a liquefied natural gas terminal, without obtaining authorisation under

this Bill. However, an entity marketing any notified petroleum and petroleum product, and

establishing or operating a liquefied natural gas terminal on the appointed day shall be

deemed to have such authorisation.

Clause 17.—This clause contains provisions relating to filing an application by an

entity for grant of authorisation by the Board.

Clause 18.—This clause provides for causing due publicity by the Board of an

application for grant of authorisation.

Clause 19.—This clause seeks to empower the Board to grant authorisation subject to

such terms and conditions as it may specify, after hearing the interested parties.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

Clause 20.—This clause contains the procedure for declaring, laying, building, op-

erating or expanding a pipeline as common carrier by the Board.

Clause 21.—This clause makes, inter alia, provision for giving the right of first use

for own requirement of the owner of a pipeline. It also provides for payment of transportation

rates for use of common carrier to the authorised entity.

Clause 22.-—This clause seeks to empower the Board to suspend or cancel the

authorisation granted by it on failure to comply with any condition of authorisation.

Clause 23.—This clause makes detailed provisions for settlement of disputes among

entities or between an entity and any other person. This clause, inter alia, provides that

such disputes shall be decided by a Bench consisting of two members nominated by the

Chairperson. This clause also provides that neither the civil court nor the Monopolies and

Restricted Trade Practices Commission shall have any jurisdiction in the matters which the

Board is empowered to decide.

Clause 24.—This clause contains detailed provisions for filing of complaint before

the Board by any person in respect of matters relating to entities or between entities on

matters arising out of the provisions of this Bill. The provisions of this clause shall not be

applied in respect of complaint of an individual consumer maintainable before a consumer

dispute redressal forum or a Consumer Disputes Redressal Commission or the National

Consumer Redressal Commission. U further provides for investigation of such a complaint

by the Board or an Investigating Officer of the Board and procedure for passing order

thereon by the Board.

Clause 25.-- This clause seeks to provide for appointment of Investigating Officer

by the Board. It further states that in case oi more than one Investigating Officer, the Board

shall specify the matters and local limits of their jurisdiction.

Clause 26.—This clause provides for the factors that need to be taken into account

by the Board to decide a dispute.

Clause 27,—This clause seeks to empower the Board to impose civil penalty for

contravention of its direction.

Clause 28.— This clause contains provisions for filing an appeal to the High Court

by any person aggrieved by any decision or order of the Board.

Clause 29.—This clause states that every order made by the Board or the High Court

shall be executable in the same manner as a decree of the civil court.

Clause 30.—This clause contains provisions for grants of such sum of money as the

Central Government may, after due appropriation made by Parliament by law in this behalf,

make to the Board to pay salaries and allowances payable to the Chairperson and the mem-

bers and the administrative expenses including the salaries, allowances and pensions pay-

able to the officers and employees of the Board.

Clause 31.—This clause provides for constitution of a Fund called the Petroleum

Regulatory Board Fund. It also provides for grants, fees, penalties and charges to be

credited thereto and all payments should be made therefrom.

Clause 32.—This clause provides for usual provisions regarding maintenance of proper

accounts and other relevant records by the Board as may be prescribed by the Central

Government. The accounts of the Board should be audited and certified by the Comptroller

and Auditor-General of India which would be laid before Parliament by the Central Govern-

ment.

Clause 33.—This clause provides for furnishing of annual report by the Board to the

Central Government. A copy of the annual report is required to be laid, as soon as may be

after it is received, before each House of Parliament.

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[PART II—

Clause 34.—-This clause empowers the Central Government to issue directions in

writing to the Board from time to time.

Clause 35.—This clause confers power on the Central Government to take over con-

trol and management of facilities and business premises of any entity and retail outlets in

public interest after affording an opportunity of hearing to the affected entities.

Clause 36,—This clause provides for punishment for contravention of directions of

the Board.

Clause 37.—This clause provides for punishment for marketing any notified petro-

leum or petroleum products without a valid authorisation.

Clause 38.—This clause provides for punishment for establishing or operating a liq-

uefied natural gas terminal without authorisation.

Clause 39—This clause provides for punishment for laying, building, operating or

expanding a common carrier without authorisation.

Clause 40.—This clause provides for punishment for wilful damages to common

carrier.

Clause 41.—This clause provides that any offence committed by a company and

punishable under the Bill would cover the person in charge of the company.

Clause 42.—This clause provides for maintenance of data bank and information by

the Board relating to activities of entities dealing with petroleum and petroleum products.

Further, the Board shall have power to verify the data supplied by the entities.

Clause 43.—This clause provides for obligations of entities which, inter alia, include

commencement of activities for which authorisation has been granted within time specified

by the Board, maintenance of documentary records as specified by the Board, and allow

inspection of such facilities and documentary records by any person authorised by the

Board. The entity shall also register documents as may be specified by the Board. The

Board may call for any information from an entity and shall also have the power to inspect

and obtain information from any authorised entity.

Clause 44.—This clause provides for furnishing of returns and statements and other

particulars by the Board to the Central Government.

Clause 45.—This clause specifies that the Chairperson, members, officers and other

employees of the Board shall be deemed to be public servants.

Clause 46.—This clause contains the usual provisions relating to the protection of

action taken in good faith.

Clause 47.—This clause specifies that no civil court shall have jurisdiction in respect

of any matter which the Board is empowered by or under this Bill to determine.

Clause 48.—This clause lays down that a court shall take cognizance of any offence

punishable under the provisions of this Bill only on a complaint made by the Board. This

clause further states that no court inferior to that of a Chief Metropolitan Magistrate or a

Chief Judicial Magistrate shall try any offence punishable under the Bill. Every offence

punishable under the proposed legislation shall be cognizable.

Clause 49.—This clause provides for delegation of certain powers of the Board.

Clause 50.—This clause confers on the Central Government the power to make rules

for carrying out the provisions of the Bill.

Clause 51. —This clause empowers the Board to make regulations in respect of certain

matters consistent with the proposed legislation and the rules made thereunder.

SEC. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

Clause 52.—This clause lays down that the rules and regulations made under the Bill

would be laid before Parliament

Clause 53.—This clause seeks to empower the Board to monitor the implementation of

agreements entered into between one oil company and another for sharing of petroleum

products or infrastructure facilities as approved by the Central Government for the transition

period. The Board shall also monitor setting up of dealerships and distributorships by the

entities without affecting the retail network of the existing entities during the transition

period. The expression "transition period" shall mean a period of two years commencing

from 1.4.2002 and, where the Central Government thinks fit so to do, it may extend the period

of two years by a further period of one year.

Clause 54.—This clause seeks to empower the Central Government to remove difficul-

ties which may arise in giving effect to the provisions of this Bill.

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[PART II—

FINANCIAL MEMORANDUM

The Bill provides for the establishment of a Petroleum Regulatory Board to regulate

the petroleum sector activities and for that purpose to levy fee and other charges.

2. Sub-clause (7) of clause (5) of clause 3 of the Bill provides for the establishment of

the Board. Sub-clause (5) of clause 3 provides for the composition of the Board. Clause

4 provides for the appointment by the Central Government of the Chairperson and other

members of the Board. Sub-clause (4) of clause 5 provides that the salary and other

conditions of service of the Chairperson and members shall be such as may be prescribed.

Sub-clause (/) of clause 10 provides for the appointment by the Board of the¹ Secretary to

the Board provided that the first Secretary to the Board shall be appointed by the Central

Government; Sub-clause (2) thereof clause 10 provides for appointment by the Board of

other officers and employees against posts created with the approval of Central Government

while Sub-clause (3) provides that the salary and other conditions of service of Secretary,

officers and employees of the Board shall be such as may be prescribed. Sub-clause (4) of

the said clause 10 provides for the appointment by the Board, in consultation with Central

Government, of consultants. Sub-clause (/) of clause 11 provides for establisment of re-

gional offices of the Board at such locations as may be found necessary.

3. The aforementioned provisions of the Bill will involve expenditure towards meeting

the salaries, allowances and other remuneration of Chairperson, members, officers, consult-

ants and other employees of the Board, etc. Clause 30 of the Bill provides that the Central

Government may, after due appropriation made by Parliament by law in this behalf, make

to the Board giants of such sums of money as are required to pay salary and allowances

payable to the Chairperson and the other members and the administrative expenses. This

expenditure has to be met by the Board from out of the Petroleum Regulatory Board Fund

constituted under clause 31 of the Bill which will mainly consist of grants, etc. made to the

Board by the Central Government, after due appropriation by Parliament.

4. It is not possible to give an exact estimate of this expenditure at this stage as the

exact structure of the Board would emerge later in consultation with the Board once it is

established, So far as the expenditure on salaries and allowances of Chairperson, other

members, officers, other employees and of consultants, and other administrative expenses is

concerned, it is estimated that the same would involve an expenditure of Rs. 7 crore during

the first year of functioning of the Board. With the expansion of the activities of the Board,

this expenditure which is of a recurring nature, may increase by a modest amount. It is not

possible to estimate at this stage the extent to which this expenditure would increase. In

addition to the aforementioned recurring expenditure, it is estimated that there would be a

non-recurring expenditure of Rs. 3 crore towards the establishment of the office of the Board,

etc.

Snc. 2]

THE GAZETTE OF INDIA EXTRAORDINARY

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 50 of the Bill empowers the Central Government to make rules to carry out the

provisions of the Bill. The matters in respect of which rules may be made relate, among

others, to the salary and other conditions of service of the Chairperson, members, Secretary,

officers and other employees of the Board, the form and manner in which accounts of the

Board shall be maintained and returns and statements are to be made to the Central

Government and other matters of a procedural or administrative nature. The matters in

respect of which provisions may be made in the rules are generally matters of procedure or

detail.

2. Clause 51 of the Bill empowers the Board to make regulations to carry out the

provisions of the Bill. The matters in respect of which regulations may be made relate, among

others, to the procedure to be followed at meetings of the Board, terms and conditions of

consultants appointed by the Board, marketing service obligations for entities and retail

service obligations for retail outlets, regulating open access to and transportation tariffs for

the common carrier, the guiding principles for declaring or authorising to lay, build, operate

or expand a common carrier. The form in which a complaint may be made, the manner of

holding an inquiry by an Investigating Officer, etc. The matters in respect of which provi-

sions may be made in the regulations are generally matters of procedure or detail to carry out

the purposes of the Bill.

The delegation of legislative power is, therefore, of a normal nature.

G.C.MALHOTRA,

Secretary-General.

PRINTED BY THE MANAGER, GOVERNMENT OF INDIA PRESS (PLU), MINTO ROAD, NEW DELHI

AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI, 2002.

MGIP(PLU)MRND—929GI—03-06-2002.