M/s Shandar Petroleum etc VS FOP

JUDGMENT SHEET

ISLAMABAD HIGH COURT

ISLAMABAD

W*P.*N,o. 3,1 e$/20{ 1,

M/s Shandar Petroleum /CNG etc.

Vs Federation of Pakistan etc.

Petitioners by: Mr. Makhdoom Ali Khan, Advocate, Barrister Khttrram M. Hashmi,, Mr. Saad M. Hashmi, Mr. Sajid ur Rehman Mashwani, Mr. Umair A. Rishi, Mr. Hyder Ali Khan and Mr. Shazaib, Advocates (W.P. No. 3128,3171 &3172' 3236 of

2O11)

Syed Hassan Ali Raza, Advocate W.P. No.3144 of 2011) Ch. RUOuI Rehman Bajwa, Advocate W.P. l'lo'3160, 3177 & 3210 of 2011') Barrister Sajeel Shehryar W.P. No.3173 ot 2011) Syed lntikhab Hussain Shah, Advocate W'P' No.3191, 3254,3255,3258 & 3312of 2011) Mr. Muhammad llyas Sheikh & Rubina Shaheen, Advocates (W.P.No.3292 ol2011) Mr TAhir Afzal Abbasi, Advocate (W.P. No 3203 of 2011) Mr Muhammad lqbal, representative of petitioner (W.P. No 3204 of 2011) Syed lntikhab Hussain Shah advocate on behalf of Mr Ayyaz Shaukat, advocate W.P. No 3206 & 3156 of 20111 Sheikh Muhammad Suleman, advocate W.P. No 3145 of Mr Naveed Malik, Mr Yasir Raja & Qazi Hafeez, advocates (W.P. No 3161, 3260 & 3299 ol2011) Raja Amjad Mehmood, advocate (W.P. No.3311 of 2011) Agha Sikander, President, CNG Association' Mi. Noor ulAmin, Vice President, C.N.G' Association l.C.T.

Respondents by' Mirza Mehmood Ahmad, Advocate for M/O Petroleum. Mr. Asim Hafeez Advocate for S.N.G.P.L.

Mr. Muhammad Abid Raja, D.A.G.

Mr. Rizwan ul Haq, Principal Law Officer, OGRA Mr. Rehan Nawaz, General Manager, S'N.G.P.L. Misbah Gulnar Sharif, advocate for O.G.D.C.L. (W.P. No 3144 of Date of decision: 23-12-2011

Riaz Ahmad an J: This judgment is directed to dispose of w.p. No.3128/2011 as well as w.P. Nos. 3144,3t45,3156, 3160, 3161, 3t7L, 3L72, 3L73, 3L77, 3191, 3203, 3204, 3206, 32tO,

F No. 312

3236, 3254, 3255, 3258, 9260, 3292, 3299, 3311 and 3312 of }OLL, as common question of taw and facts is involved in these writ petitions.

2.Brief facts of the case are that petitioners in all the writ petitions own C.N.G. Stations, situated in Islamabad Capital Territory. According to the petitioners, initially respondent No'1 offered different incentives to them and in response to those incentives, petitioners invested huge amount in the C'N'G' business, which goes up to crores and accordingly, c.N.G.

Stations were established. The installation of C.N.G. requires land, purchase of c.N.G. compressors, machinery, equipments, tools, hiring of technical manpower and providing on the job training etc. and since the land situated at Islamabac is comparatively very expensive, So petitioners'investment, in comparison to other C.N.G. investors of the country, was much higher. Since most of the c.N.G. owners are not rich people, so most of them had obtained loans from different banks for investment in the business. The grievance of the petitioners is that the Government in September, 2OO5 introduced Natural Gas Allocation and Management Policy, 2005, in which the priority order for Gas supply was fixed.

3.According to the petitioners, the c.N.G. Sector was placed in categorY 4, domestic and commercial sector was given the first preference, fertilizer and industrial sector was given second preference and Independent Power Plants g'ven foutth

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W.P . No. 1 {1

given the first preference, whereas the c.N.G. should have been preference or at least should have been placed along with the

clomestic sector. Acting upon the said Policy, the Government which for all started gas load shedding for three days in a week, practicalpurposes,amountstoclosingthebusinessofthe petitioners. with the said load shedding, the petitioners' business

pay back their has been ruined and they are not in a position to installments or even to run their day-to-d3rr affairs' In the said

policy, it was also provided that in case of non-cooperation, the gas supply would be disconnected for at least 7 days at a stretch

along with other strict action. This notification was challenged

before this court in all above said writ petitions.

Learned counsel for the petitioners contended that sui

a different Northern Gas Pipelines Limited (S.N'G.P'L) had created zone at Islamabad, which included Islamabad as well as areas Jammu & from Jhelum to Attock, Rawalpindi to Murree and Azad has been Kashmir. In such a way, the Islamabad capital Territory made part of Punjab and the restrictions imposed in Punjab have

been imposed on Islamabad as i"rell. According to learned counsel and is for the petitioners, Islamabad is Federal capital Territory made part of not part of Punjab. Islamabad should not have been punjab, rather Islamabad capital Territory should have been equated with Khyber Pakhtunkhwa, where the said Load Management Policy had not been imposed' It was further

W.P " Ho. 1 {1

of Islamic Republic submitted that Article 158 0f the constitution of Pakistan, L973 provides as follows:- ..TheProvinceinwhichawell.headofnaturalgasis situatedshallhaveprecedenceoverotherpaftsof Pakistaninmeetingtherequirementsfromthatwell. head,subjecttothecommitmentsandobligationsas on the commencing daY"'

5.AfticleL72(3)oftheConstitutionoflslamicRepublic of Pakistan, !973 provides as under:- ..Subjecttotheexistingcommitmentsand obligations, mineral oil and natural gas within the province or the territorial waters adiacent thereto shallvestjointlyandequallyinthatProvinceandthe Federal Government."

6.InsuchaWay,thewell.headofgasavailableinK.P.K. was the ownership of that Province as well as the Federal of K'P'K' had Government and if under Article 158, the Province had the the precedence, then the Federal capital Territory also precedence, as because of ownership of Federal Government' preference to Federal capital Territory was to be given' Learned

counsel contended that it was provided in a letter written by that c'N'G' secretary, Ministry of Petroleum & Natural Resources having no alternate being the sole raw material and c.N.G. sector options to run their business, would not be treated at par with purpose of load other sectors having alternate means, for the shedding and would be given higher gas priority as compared to

other sectors.

!tld.t. No.3'!2812011

T.Itwasfurthersubmittedthatadmittedpositioninthe present case is that total consumption of c.N.G. in Islamabad is

MMCFD, which about t5 MMCFD, whereas total loss of gas is 45 is in league with means that the respondents sNGPL Department MMCFD gas is stolen' consumers for stealing the gas and daily 45 to for which no payment is made to the Government' According learned counsel, if the Government could bear the loss of 45 provided to c'N'G' MMCFD, then why 15 MMCFD could not be

stations. Learned counsel further submitted that oil and Gas

RegulatoryAuthority(oGRA)hadprovidedlicensestothe petitioners for establishing and running business of c'N'G' and

orders of the same could not be destroyed by unjust and unlawful since it has the respondents. Learned counsel also submittecj that petitioners have got been admitted by the respondents that the which is no other alternate business, as gas is the only material, being sold by the petitioners and if the same is not supplied that property without would amount to depriving petitioners of their payingthecompensation,thesameis,therefore,violativeof Republic of Articles 23 and 24 of the constitution of Islamic pakistan, Lg73.It was further contended that the Policy, which is of arbitrary in nature and violative of Articles of the constitution is liable Islamic Republic of Pakistan, cannot be implemented and to be struck down.

8 On the other hand, learned counsel for the the respondents contended that the petitioners had established

W.P . No. I 11

businessattheirown.TheGovernmentortherespondentshad made any representation to the petitioners for investing in never no promise was this business. No incentive was ever given and started the business ever made and therefore, the petitioners had that in the at their own risk and cost. It was further submitted N.o.cs. issued to the petitioners, it was clearly provided by

S.N.G.P.L.thattheCompanywouldprovidegasunderthisoffer, particular no gas purely on .as and when available' basis and in maybesuppliedduringthepeakwintermonthsofDecember- February each year. As far as, the Policy is concerned, 80o/o of the

petitioners had established their C.N.G' stations after the Policy of

2OO5 and they were aware of provisions of N.o.c' as well as Gas

Management Policy, but having all these factors in their mind' were well they invested in the said business. The petitioners challenge the aware of the risks involved and now they cannot same. Learned counsel further submitted that the total production

was I Billion of gas is 4.2 Billion cubic Feet, whereas the demand CubicFeet.Thegapbetweendemandandsupplywasaboutl.l cubic Feet. It was further submitted that in the winter Billion impossible for the season, the demand goes up and it becomes Government to supply gas in accordance with the demand' It was Policy was because of that compulsion, the said Load Management N'O'C' as well as in introduced in the year 2005. Although, in the prerogative of the contract, it was provided that it was the sole Government to stop the gas to c.N.G. stations in the month of acted upon December tO February, but the Government never

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that and gas stations were facilitated up to maximum' It was also

added that at present, no gas is supplied to Fertilizer Industry and

the said Industry has almost comes to a standstill' g.Learnedcounselfurthersubmittedthatcreationof measure and certain Islamabad zone was only an administrative Territory could not areas had been added to it. Islamabad capital be equated with K.P.K. for the reason that the Province of K'P'K' produces' The remaining was consuming 45 to 50o/o of the gas it gas is given to Federal Government. The Province of sindh is

consumin g 610/o gas of what it produces. The maximum gas is being produced in Pakistan by the Province of sindh, where 72o/o that the of gas is produced. Learned counsel further submitted ProvinceofPunjabconsumess.2timesmorethanwhatit producesandpracticallynogasisproducedintheProvinceof Punjab,whereasconsumptionismuchhigher.Thesameisthe no gas is produced, case with Islamabad Capital Territory, where but the consumption is very high. It was because of this that Punjab and not the Islamabad was attached with the Province of other Provinces, ?s two areas had similarity in all respects' 158 0f the Learned counsel further submitted that Article provided that the Constitution of Islamic Republic of Pakistan province in which a well-head of natural gas is situated shall have precedence over other parts of Pakistan, but the word "parts"

does not means Provinces, so the argument of learned counsel for

according to the petitioner that the parts meant provinces and

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Pakistan, the Article 15g of the constitution of Islamic Republic of province of K.P.K. or other PrOvinces which were producing gases, had precedence over Province of Punjab, but not Islamabad, as

fufther Islamabad is not Province, is not correct' Learned counsel submitted that according to Article t72(3) no doubt that the Province as ownership of natural gas was given to the concerned well as to the Federal Government, but it did not mean that by

Federal Government the Islamabad capital Territory is meant'

t0.RegardingthePolicyof2OO5,learnedcounsel in view submitted that the said Policy was formulated by keeping placed many factors. According to Policy, the cement sector was first of at serial No. 6, which meant that in case of managemerrt, all supply to cement sector would be cutoff. It was decided that

the domestic and commercial consumers would get continuous gas supply, but commercial consumers meant small shopkeepers given to and not big industries. Thereafter, the priority was Fertilizer sector for the simple reason that gas is the only raw

material used for production of fertilizer and fertilizer by itself is

used for development of Agriculture sector, so being value added

priority commodity, the same was given preferences' The third was given to Independent Power Plants as well as wAPDA, as

given they were to produce electricity and then fourth priority was to c.N.G. It was also kept in mind that by curtailing the gas supply, how much gas can be saved and utilized by other sectors'

Even in the Industrial sector, it was kept in view that the gas

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earlier promise would be supplied to those Industries to which made, those had been made and where no such promise was industries consumers were separated. As such, it cannot be said

that the Policy was unreasonable or arbitrary' since the

provided in the respondents were not acting upon the provisions the supply N.o.c. as well as the contract by completely stopping so the of gas to the c.N.G. stations from December to FebrusrY, respondents in such a woY, were going out of the way to counsel for accommodate the petitioners. According tO learned the respondents, the consumption chart shows that the business

the higher ofc.N.G. stations in the previous months had gone on side and it cannot be said that loss has been caused to the

petitioners by the respondents. Learned counsel in support of his

contentions referred to pLD 2oo7 sc 642, L978 scMR SCMR680,PLDLg73Sc49,PLD2011Lahore120,PLD2002 Lahore 359, 1995 cLc 1687,2ot1 Sc 44, AIR t977 Sc 1496,

2010 MLD

A.I.R. 1990 Sc 1851, 2008 SCMR L7, 2oo7 PTD 1005,

229, 348 U.S.

690, A.I.R. 1991 Sc 14, A.I.R. Delhi 445,2006 YLR 483 (19s5) and L74 U.s.96 (1899)'

11.Learned counsel for respondent No.3 submitted that the petitioners do not have absolute right, as they are only licensee and licensee cannot claim protection under article 24 of counsel the Constitution of Islamic Republic of Pakistan' Learned in support of his contentions referred to 2otL YLR

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have t2. I have heard learned counsel for the parties and also Perused the record'

C'N'G' stations

13.The requirements for establishment of are as follows:-

T,Formationofacompanyanditsregistrationasjoint stock/private timited /partnership or p ro Pri eto rsh i P entitY'

2,selectaconsultantforproiedassistantifrequired, g. Registration of CNG Company with Oil and Gas Regu I atory AuthoritY (OG RA)

4.Setection of location for suitabte sfte for CNG Station;

In close vicinity to naturat gas pipeline eccess'-ii ietrol vehictes in reasonable numbers,

5.Selection of CNG Station equipment' 6, Comptetion of legal formalities for estabtishment of mentioned departmentst CNG Statiin-witi under

District AuthoritY for Civit construction approval.

of in ExOlogi-ve the Ministry of Industries -' fo, location -Depaftment of CNG equiPment

Approval -a,-nZ for utitities, natural ga? / electricity water from relevant authorities'

7, Award of contrad for:

Civil Construction purcniiJ;iauc station & vehicte conversion equiPment

8.Hiring of technical man1ower and providing on the CNG entity / HDIP iob training at some established g, Installation of CNG Station equipment 70, Purchase of tools for CNG Kit installation

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77.Staft-up of cNG station and installation of cNG kits in vehicles.

L4. These requirements also include obtaining the license from o.G.R.A. and executing contract with s.N.G.P.L. The S.N.G.P.L. earlier had old contracts, which included clauses regarding interruption in supplies and one clause regarding company's right to reduce/interrupt/suspend supplies, which reads as follows:-

INTERRUPTION IN SUPPLIES

19.The company shall have the right to close or interrupt gas supply to the Consumer's premises for short periods for carrying out necessary extension, repair and I or alteration, work in the company's pipelines, equipments and devices.

efiM PTGI{T PFDIICE PPIIPT/

SUSPEND SUPPLIES

20,. As the production of gas from wells, Purification Plants and conveyance of it over long distances or subiect to accidents, interruption and failure and the lines to breaking, freezing and closing which cannot be foreseen or prevented by any reasonable care or expenditure and the supply of gas and transportation facilities, therefore are limited, the Company does not by this contract undertake to furnish to the Consumer full uninterrupted supply of gas but only to furnish such supply and for such length of time as it reasonably Gan; and it is expressly agreed by the Consumer that the Company shall not be liable for any loss, damage, or inlury that may result either directly or indirectly riue to interruption in the supply of 9?sr or in the discontinuance thereof from any cause whatsoever.

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io12 W.P. !-tlo.3128/2011

The Company shall in its sote iudgment have the right to reduce or interrupt or completely suspend gas supply due to any of the aforesaid reasons to its Consumers and shall be sole Judge with' regard to such conditions.

CURTAILMENT OF SUPPLIES

2L. The Company shall have the right to curtail deliveriesofgastoConsumerscontractingto purchase in excess of ITOOO,OOO Gu'ft' per month or its equivalent in metric measure whenever and to the extent necessary in its sole iudgment the protectionofservicetoitsotherConsumersmay require. The Company shall be the sote iudge with regard to such conditions and curtailment of deliveries.

15.The new contract, which has also been executed with reads as many of the petitioners, includes clause-14, which follows:-

CURTAIL SUPPLIES

(i)As the Production of natural gas from wells, purification plants and conveyanGe of it over long distances are subject to accidents, interruPtions and

failures and the lines and equipment to malfunctioning, braking, freezing, failures and closing which cannot be

foreseen or Prevented bY any reasonable care or expenditure and as the suPPlY of natural gas and transpoltation facilities are limited, the Company does not bythisContractundertaketofurnishtotheConsumera full and uninterrupted supply of natural gas but only to furnish such supply and for such length of time as it reasonably can; and it is expressly agreed to by the consumer that the company shall not be liable for any

W.P. No.3128/20{{ /o 13

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loss, damage, or injury that may result either directly or indirectly from shoftages or interruptions in the supply of natural gas, or from discontinuance thereof due to said reasons or as a result of labour strikes, lockouts, riots, civil commotions, hostilities, wars, epidemics, calamities, natural disasters or causes beyond the ordinary reasonable control of the Company. The Company shall in its sole judgment have the right to reduce or interrupt or completely suspend natural gas supply due to any other aforesaid reasons to the Consumer and shall be the sole judge with, regard to such conditions.

(ii)The Company shall have the right to close or interrupt natural gas supply to the Consumer's premises for short periods for carrying out necessary extension / repair and I or alteration, work in the Company's pipeline, equipment and devices with the prior notice to the Consumer.

(iii)The Company shall have the right to cuftail and / or to discontinue deliveries of natural gas to the Consumer whenever and to the extend necessary in its sole judgment for the protection of service to its other Consumers it may require. The Company shall be the sole judge with regard to such conditions and cuftailment of deliveries.

(iv)The gas shall be supplied as per the Natural Gas Allocation Policy or any other relevant policy issued by the Government or any other Authority from time to time.

16.There is no denial of the fact that the petitioners are signatories of either of these contracts and they have also fulfilled the aforementioned requirements provided in the procedure for establishment of C.N.G. stations.

t7. Since the gas supply is reduced in winter because of gap in demand and supply, so most of the people get affected

lo 14 W.P. No. 3t 28/201{

with the shortage of gas supply. According to the respondents'

and supply' It is there is a gap of 1.1 Billion cubic Feet in demand pertinenttomentionthatmostofthegasisproducedinthe Province of sindh, however, overall situation is that the Province

produces' similarly, the of K.P.K. consumes about 50o/o of what it Province of sindh consumes 610lo of what it produces, whereas

the Province of Punjab including Islamabad and Rawalpindi consumes 8.2o/o more than what it produces. The figures produced, however, it regarding Province of Baluchistan were not was much was stated at bar that the consumption in Baluchistan surplus gas less than its production of gas. In such a way, the produced in all the three Provinces goes to the Federal purposes Government. The sui-Gas Authorities for administrative have extended the area of Islamabad including area from Jhelum

to Attock, Rawalpindi to Murree and Azad Jammu & Kashmir' ls.Itwasbecauseofabovesaidsituationthatinthe Province of Punjab, the necessity of introduction of Natural Gas

Allocation and Management Policy, 2OO5 arose. The present

Policy has categorized different consumers with the object that in

would be case of shortage, the consumer placed at the lowest stopped or cuftailed supply of gas and if even then the shortage

remains, then the second from the bottom would be stopped

supplyofgasandsoon.Thesaidlistisasfollows:- Hority Sr.No. CategorY of Consumers Order Domesti c a n d Co m m e rcia Sectors First Fe rti tzer S ector a n d Second

2 I

' W.P. No.3t28/2011 Pls y@

ii)Industrial Sector to the extent of their process qas 3 Independent Power Plants as well as Third WAPDA and KESC's Power Plants having firm oas suoolv commitment under GSAs.

4.General Industrial and CNG Sectors Fourth 5 i) WAPDA's and KESC Power Plants other Fifth than those listed against Sr.No.3 above.

ii)Caotive Power Sector

6.Cement Sector Sixth

19.The present position is that domestic consumers in Punjab including Islamabad are getting 687 Million Metric Cubic Feet per Day (MMCFD) and Commercia! Sector is getting 70 MMCFD. Fertilizer Sector is getting zero percent gas and supply of gas has been completely stopped to them. The same is the case with the Industrial Sector, which is getting 2/3 MMCFD. The Independent Power Plants with whom the supply was guaranteed in the contract, are getting 299 MMCFD. The General Industrial consumers are getting 370 MMCFD. It is, however, to be noted that only in Islamabad the consumption of CNG Stations is 200 MMCFD, but this figure is for the whole of Punjab, whereas only in Islamabad Capital Territory, the consumption of CNG is from 15 to 40 MMCFD, as it varies from season to season as well as day to day. Both the pafties, however, admitted that the consumption is 15 MMCFD in Islamabad. WAPDA and KESC Power Plants are getting zero. Similarly, the Captive Power Sector and Cement Sector have completely been stopped supply of gas. As such, in Islamabad the CNG Sector is getting 200 MMCFD against the demand of 230 MMCFD. The figures regarding Islamabad were disputed by the Iearned counse! for the petitioners for the reason

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thatrespondentshadattachedthedatauptooctober2010with written statement and data thereafter was not available' the Learned counsel for the petitioners contended that since the

documents have not been produced, though the petitioners had

madeaproperdemandforthat,sothepresumptionwouldbe version of the that those documents would have favoured the have not petitioners and that is the reason that those documents been produced. since it is admitted that the total demand for

supplyofgastothecNGstationsisnotbeingmet,therefore, there is no need to step into that controversy' It is admitted that gas holiday and this the petitioners want that there should be no view of the above said demand is denied by the respondents. In Policy, three days ban in a week has been imposed upon the CNG

Stationsregardingsupplyofgas.Itwasalsoproposedatbarthat gas consecutively for the respondents are ready to stop supply of three hours in two days and then three hours in the morning and theeveningonalternatedays,whichasawhole'wouldmake stoppageof supply for three days in a week' but the said petitioners' arrangement was not accepted by the

20.Thegrievancesofthepetitionersisthattheprocedure earlier, puts for establishment of c.N.G. Stations, as provided petitioners and if they are certain obligations on the part of the The said not fulfilled, cNG Station could not be established' Policy,wheretherequirementshavebeengiven'providedthe provided priority of the natural gas connection to cNG. It was also

,o 17 W.P. No. 312812011 w that the Federal Government would provide a package of incentives and recommendation for replacement of diesel oil with cNG, so this Policy alongwith procedure for establishment has to be taken as incentive provided by the Government to invite the general public to invest in cNG sector. Learned counsel advancing this argument submitted that once an incentive was provided, then the petitioners could not be denied the supply of gas.

2L. I do not agree with the contention of learned counsel for the petitioners, as the procedure for establishment of CNG Stations cannot be considered as an incentive. Similarly, anything mentioned in the Policy regarding use of cNG, cannot be taken as a promise or an incentive on the part of the Government' There is no doubt that the Government had been trying to minimize the use of petrol and diesel and for that purpose conversion to gas

was required and it was in that perspective that the Policy was introduced but that cannot be taken as a promise with any person who wanted to establish cNG station. As such, it cannot be said that the petitioners acting upon the promise, made by the Government or respondents, established C.N.G. Stations'

22.Learned counsel for the petitioners also submitted that the S.N.G.P.L. by making an administrative unit of Punjab included Federal Territory of Islamabad in that unit and in that wdy, the Federal Territory of Islamabad was categorized with Punjab, which resulted in denial of constitutional rights to the petitioners. Advancing this argument, learned counsel submitted

o 18 W.P. No.3128/2011 x)

thattheCapitalTerritoryshouldbeclubbedwithK.P.K.andas thereisnoGasManagementPolicyinK.P.K.,Sointhesame and placed outside manner Islamabad should also be exempted theambitofanyPolicy.ThefactisthatAfticlel5Softhe provided priority of constitution of Islamic Republic of Pakistan requirementsofnaturalgas.Forthesakeofconvenience,the same is reProduced hereunder:- ..TheProvinceinwhichawell-headofnaturalgasis situatedshallhaveprecedenceoverotherpartsof Pakistaninmeetingtherequirementsfromthatwell.head, subjecttothecommitmentsandobligationsasonthe commencing daY"'

23.ThisarticlewasthereinConstitutionfromthevery L72 was also provided, beginning. Alongwith Article 158, Article which reads as follows:

owner shall' 1t72 (1) Any property which has no rightful if located in a Province, vest in the Government in the of that Province, and in every other case, Federal Government'

(2)all lands, minerals and other things of value the within the continental shelf or underlying ocean (beyond) the territorial waters of Pakistan shall vest in the Federal Government' gas was

24.In other words, previously the ownership of priority was given to the with the Federal Government, but still province where the well-head of the natural gas is situated' It

means that if well-head of the gas is situated in a pafticular particular Province is to be Province, then the requirement of that j;

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aJv.P. Itt".g128/20{1 )

the ownership of met first. This matter has nothing to do with resources' Under the Federal GOvernment regarding the natural Sub-Article 3 was l8th Amendment, Article t72 was amended and added to it, which provides as follows:- ..Subiect to the existing commitments and obligations, mineraloilandnaturatgaswithintheProvinceorthe and territorial waters adiacent thereto shall vest iointly equallyinthatProvinceandtheFederalGovernment.,, :25.ByadditionofSub.Article3,theownershipofmineral as well as the oil and natural gas has been given to the Province amended in the Federal Government, but Article 158 was not no priority was given to any other Province or even same way and the same.

to the Federal Government. The old priority remained 26.Tosaythat,sincetheFederalGovernmentalongwith therefore' the Provincial Government is owner of natural 9?s, again is neither Article 158 would apply to the Federal Territory, correctnorappealstoaprudentmind.TheConstitutionhas same priority provided the priority in a specific manner and the pronouncement or by cannot be extended by way of judicial pronouncement is only for the amending the constitution. Judicial through judicial interpretation of constitutional provisions, but or even pronouncement, nothing can be added to the constitution in any other laws.

2T.Thecontentionoflearnedcounselforthepetitioners|s Federal Territory of that the Federal Government being owner, the

!tU.P. No.3128/2011 lo 20

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Islamabad is to be equated with KPK, is not correct for the simple reason that the Federal Government does not mean Federa!

Territory of Islamabad. Learned counsel for the petitioners, in this respect, submitted that Section 2 of the Islamabad Capital Territory (Administration) Order, 1980 provided that the executive authority of the Federation in respect of Islamabad Capital Territory shall be exercised by the President, So by viftue of this Article Islamabad is to be considered as territory of Federal Government and therefore, entitled to the Same concession as prevailing in KPK. In fact by viftue of the above said Order of 1980, it can be said that the Islamabad Capita! Territory is an entity which is not part of Province of Punjab and the only difference is that the executive authority exists in the President, but no such inference can be drawn that Islamabad Capital Territory is the only Territory belonging to the Federal Government.

28.Learned counsel for the petitioners also submitted that in Article 158, wherein it is provided that the Province in which the well-head of natural gas is situated, shall have precedence over other parts of Pakistan, the parts in this Afticle would be Provinces and since Islamabad is not a Province, therefore, it would not be under Article 158 of the Constitution that Islamabad is to be given preference, rather it would be on the basis of Article L72 that Islamabad Capita! Territory would have the equal status like the Province of K.P.K., because under

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ArticleLTz(3)oftheConstitution,theFederalGovernmentaswell aStheGovernmentofK.P.K.aretheowners,therefore,the FederalGovernmentbeingowner,IslamabadCapitalTerritorywill alsohavepriorityintherequirementofnaturalgas'This as valid for the simple reason that argument cannot be considered

howunderArticlel5S,theword..part,,istobeconsideredas 3 in Article province and secondly, how by addition of sub-Article tTZ,IslamabadCapitalTerritoryistobegivenpreferenceover otherpartsofthecountry.Forthatpurpose,anewArticleistobe since Islamabad capital Territory added in the constitution; that

isanentityandtheexecutiveauthorityofthesamevestsinthe therefore, Islamabad capital rerritory will Federal Government,

havethepriorityoverotherpartsofthecountry.Itistorewrite theConstitution,butbynostretchofimaginationitcanbe consideredasinterpretationofConstitution.Thesimple the constitution' priority of proposition is that under Article 158 of requirementhasbeenprovidedtotheProvincewheregasis producedandsincethereisnosuchArticleintheConstitution, whichprovidessimilarprioritytoCapitalTerritoryoflslamabad, same facility cannot be provided to Federal capital Territory of so

Islamabad.

the Gas Zg. As far as Policy of 2OO5 regarding Managementisconcerned,thecaseofthepetitioneristhatthe and violative of Articles 23 same is arbitrary, unfair, unreasonable and24oftheConstitution.Admittedly,itisprerogativeofthe

W.P. No.3128/20{1 lo

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Government to introduce any Policy for achieving certain objects.

The Courts have no right to give Policy or to substitute the Policy of the Government by introducing a new Policy. If the Policy is arbitrary, unreasonable or if the object of the Poticy is against some law or violative of any Article of Constitution, then the Courts have the authority to interfere and scrutinize the Policy on the touchstone of arbitrariness, unreasonableness or violation of law. If no such infirmity is found in the Policy, then the same can neither be struck down nor altered. In this respect, I have sought guidance from PLD 2007 SC 642, 1998 SCMR 327 and 1986 SCMR

30.In the present case, admitted position is that there is gas shoftage in the Province of Punjab including the Federal Capital Territory of Islamabad. In order to create the balance between demand and supply some Policy was required to be introduced. As such, the object of the impugned Policy cannot be questioned.

31.Since O.G.R.A. or S.N.G.P.L. or the Government had never made any promise with the petitioners, so respondents were not under any obligation to provide the gas as promised, because there was no such promise. The available gas is to be distributed among different consumers, which has also been admitted by the learned counsel for the petitioners. In this respect, the grievance of the petitioners is that they should have been placed at serial No.1 of the category of consumers or should

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have been clubbed alongwith domestic consumers, which means that if gas supply is to be stopped or curtailed, the cNG owners should be the last in the that list, whereas presently they have been placed at serial No.4. The reason put forward by the petitioners are that they have invested a huge amount, the gas is the only product, which the petitioners have to sell and if the same is not supplied to them, their whole business would be ruined and it would mean that they have been deprived of their property without any compensation. It was further submitted that the commercial consumers have been placed at serial No'1, whereas petitioners are also involved in commercial activity, so they could not be discriminated against other people similarly placed. The argument of the learned counsel for the petitioner was rebutted by the respondents in the following manner:- o The Policy of 2oo5 was introduced in the wake of extraordinary situation arisen and envisaged due to widening gap between the demand and supply of Natural Gas and depletion of resources' a The categorization of various sectors was based upon rational and reasonable classification. cement sector though commercially viable sector but placed in the least imPortant category.

o Likewise other sectors were categorized according to their impoftance in terms of value addition contribution to the economy and requirement needs. Feftilizer plants are one such instance, which manufactures feftilizers for use for agriculture growth.

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o The placing of CNG at No.4 in the policy has a complete rational basis for various factors including the following:-

(a)Since the CNG station owners were never guaranteed steady and consistent supply of Gas.

(b)InCNGsectorGasisnotarawmaterialto produce any produce but infact, they buy gas and sell gas.

(c)No value addition to the economy takes place therefore, the contribution to the economy is of lower level.

(d)Alternative fuel for consumers of CNG in the shape of petrol/diesel is readily available' (e) CNG stations as in many case is being done' may also engage in the dealership and sale of petroUdiesel.

(f)cNGsectorconsumes2ooMMCFDtherefore,its logical that its load management would contribute in controlling demand supply gap rather than commercial which is only 70 MMCFD including hostels, schools, small shops and tandoors etc.

(g)CNG by the nature of their business uses Gompressorsandsucknaturalgaswhichcould be available for other consumers therefore, its managementismorecontributingtowardsload management than other sectors' (h)TheobjectiveofthePolicyistoregulateand manage the natural gas in a manner as to achieve maximum Public good'

32.Keepinginviewthereasonsputforwardbythe respondents, it cannot be said that the Policy is arbitrary or unreasonable. There is no doubt that Article 24 0f the constitution

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W.P. No.3128/2011 ..9,

provides that no person shall be deprived of his property save in

petitioners are accordance with law, but in the instant case, the Afticle 23 not being deprived of anything illegally. Similarly, under dispose of every citizen shall have the right to acquire, hold and propertyinanypartofPakistan,buttheSameissubjectto public interest' In reasonable restrictions imposed by law in the but the present case, the impugned Policy imposes a restriction, the same is in the larger public interest, as the object of the

grievance of policy is to benefit all the consumers. Infact the real the petitioners is that in comparison to the petitioners, all other

should be ignored, which is neither fair nor just' consumers

33.Theargumentthatthepetitionersarebeingdeprived not correct, of their property without payment of compensation is because the contract which was executed between the petitioners

and the SNGPL clearly provided that the petitioners were never

promisedregardinguninterruptedsupplyofgasforthewhole year. It was provided in the contract that the supply of gas can basis of be stopped from December to FebrU?IY, so even on the contractual obligations, the respondents were not bound to

provide uninterrupted supply of gas throughout the year to the petitioners petitioners. In this respect, the learned counsel for the provided contended that there is not doubt that the contract clauses by virtue of which the supply of gas could be stopped, but

it was an authority with the government and the respondents are bound to exercise this discretion fairly, justly and not in arbitrary

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,fl P manner. I agree with the contention of the learned counsel, however, the existence of aforementioned clause in the contract proves the fact that the petitioners have no absolute right of continuous supply of gas and the supply can be stopped by the respondents. In case of stoppage of supply of gas, it would be for the consumers or the petitioners in the present case to prove that the supply of gas has been stopped in arbitrary manner and with some ulterior motives, but in absence of any evidence to that effect simply on the basis of presumption, it can not be said that the supply of gas has been stopped arbitrarily.

34.For what has been discussed above, these writ petitions are devoid of merits and are hereby dismissed.

(Riaz Judge

Approved for reportino.

Wryl

Uploaded By : Engr. Umer Rasheed Dar