Supreme Court quashes government orders, directs reconsideration. Appellant granted fresh submission opportunity.

The Supreme Court quashed the orders dated 18.05.2011 by the Government of Rajasthan and 19.05.2011 by the PNGRB. The Court directed the PNGRB to reconsider the appellant's application within four weeks, considering the "deemed authorization" provision and other relevant factors, after providing an opportunity for a hearing. The appellant was permitted to submit fresh written submissions within ten days. No costs were awarded.

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Issues Involved:
1. Validity of the withdrawal of the No Objection Certificate (NOC) by the Government of Rajasthan.
2. Rejection of the appellant's application for authorization by the Petroleum and Natural Gas Regulatory Board (PNGRB).
3. Challenge to the validity of Regulation 18 of the Petroleum and Natural Gas Regulatory Board Regulations, 2008.

Issue-Wise Detailed Analysis:

1. Validity of the Withdrawal of the No Objection Certificate (NOC) by the Government of Rajasthan:
The appellant company, engaged in setting up Natural Gas Distribution Networks, was granted an NOC by the Government of Rajasthan on 27.03.2006 for the cities of Udaipur and Jaipur. The appellant had complied with the conditions, deposited Rs. 2 Crore as commitment fees, and commenced work on the project. However, on 18.05.2011, the Government of Rajasthan withdrew the NOC and forfeited the commitment fees, citing non-fulfillment of conditions. The Supreme Court found that the Government's decision was "highly unfair and unjust" as the appellant's reply to the notice was not considered. Thus, the order dated 18.05.2011 was quashed.

2. Rejection of the Appellant's Application for Authorization by the PNGRB:
The appellant applied for authorization under the Act of 2006, which came into force on 01.10.2007, with Section 16 (relating to authorization) effective from 12.07.2010. The PNGRB rejected the application on 19.05.2011, stating non-compliance with Regulation 18(2)(d) of the Regulations of 2008, which required 25% physical and financial progress before the appointed date. The Supreme Court noted that Regulation 18(2) uses the term "may take into consideration," implying the criteria are not mandatory but relevant. The Board failed to consider other significant factors and the peculiar factual position, including the appellant's substantial investment and the "deemed authorization" provision under Section 16. The rejection was deemed illegal, and the order was quashed.

3. Challenge to the Validity of Regulation 18 of the Petroleum and Natural Gas Regulatory Board Regulations, 2008:
The appellant challenged Regulation 18 as ultra vires the Act of 2006. The Supreme Court did not explicitly rule on the validity of Regulation 18 but emphasized that the Board should consider all relevant factors and the "deemed authorization" provision. The Board's decision should not solely rely on Regulation 18(2)(d) but also account for the appellant's compliance with other criteria and the substantial progress made before the press note dated 30.10.2007, which halted incremental activities.

Conclusion:
The Supreme Court quashed the orders dated 18.05.2011 by the Government of Rajasthan and 19.05.2011 by the PNGRB. The Board was directed to reconsider the appellant's application within four weeks, taking into account the "deemed authorization" provision and other relevant factors, after providing an opportunity for a hearing. The appellant was allowed to submit fresh written submissions within ten days. No orders as to costs were made.

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