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The Supreme Court today heard a plea against the Delhi High Court order which stayed the e-auction by ONGC for sale of 2.0 MMSCMD of natural gas from Kakinada (Andhra Pradesh).

A Division Bench of Justice Vineet Saran and Justice BR Gavai, while hearing the matter, allowed ONGC to withdraw and approach the High Court for expeditious disposal.

“There is hardly any urgency Mr. Mehta. Had there been any urgency Union would have filed counter between May 3 to May 19”, said the Court responding to the argument on urgency.

Submissions were made by SGI, Mr. Mehta appearing on behalf of ONGC

The stay order was passed by the Delhi High Court division bench comprising Chief Justice DN Patel and Justice Jyoti Singh on May 19^th on an application by GMR seeking stay on any new allocation /allotment pursuant to the MoPNG Notification dated 21.03.2016 (Annexure P-1) issued by Ministry of Petroleum and Natural Gas including the Notice Inviting Offer floated by Oil and Natural Gas Corporation Limited dated 12.04.2021, inviting offers along with Request for Proposal (RFP) for e-auction and Model Gas Supply Agreement with respect to 2.0 MMSCMD natural gas from KG-DWN-98/2 Block, EOA Kakinada (Andhra Pradesh).

The Court was informed that the e-auction for the initial Price Bid opening and determination of gas for said auction, which was earlier scheduled on 25.05.2021 had been preponed to 20.05.2021.

The petitioners had argued that the respondents had failed to deliver the assured allocation of the natural gas to them. Moreover, since there is a stress faced by the Power Sector, the result of the e-auction would be that the natural gas will be supplied to the other Sectors at a higher price. Additionally, the auction was in complete variance with the statutory framework for allocation of coal for coal-based power projects. The Notification dated 21.03.2016 provides for forward auction i.e. gas would be allocated to the highest bidder and this would be discriminatory to the Petitioner being a gas based power plant in as much as the coal based plants procure coal through reverse bidding.

After having examined the documents and the fact that the petitioners had invested more than Rupees one thousand crores, the bench was of the view that a prima facie case was made out in favor of the petitioners. Moreover, balance of convenience was also in favour of the petitioners and if the bidding process is finalized, it would cause irreparable loss to the petitioners. Hence the Court adjourned the e auction till the next date of hearing i.e. June 4, 2021.

Case Title: ONGC v. GMR VEMAGIRI POWER GENERATION LIMITED AND ORS.