President seeks SC opinion on Centre-State powers

By Our Legal Correspondent

NEW DELHI, OCT. 29. In an important `reference' concerning the powers of the Centre vis-a-vis the States, the President, Mr. K.R. Narayanan, has sought the opinion of the Supreme Court on the question whether the Centre or the State Governments have legislative competence to enact laws on the subject of `natural gas'.

A five-Judge Constitution Bench comprising Mr. Justice S.P. Bharucha, Mr. Justice G.B. Pattanaik, Mr. Justice S. Rajendra Babu, Mr. Justice S.S.M. Quadri and Mr. Justice N. Santosh Hegde after perusing the reference `mentioned' by the Attorney General, Mr. Soli Sorabjee, today issued notices to all the States and Union Territories and posted it for further hearing on December 10.

The Bench also issued notice to the Oil and Natural Gas Corporation, the Gas Authority of India Limited and the Association of Natural Gas Consumer Associations, which had filed a writ petition in the Gujarat High Court on the fixation of gas prices for consumers.

The three questions raised in the Presidential reference under Article 143 (1) of the Constitution are: 1. ``Whether natural gas in whatever physical form including Liquefied Natural Gas (LNG) is a Union subject (covered by Entry 53 of the List 1) and the Union has exclusive legislative competence to enact laws on natural gas.''

2. ``Whether States have legislative competence to make laws on the subject of natural gas and LNG under Entry 25 of List II of the Seventh Schedule of the Constitution''; and

3. ``Whether the State of Gujarat had legislative competence to enact the Gujarat Gas (Regulation of Transmission, Supply and Distribution) Act, 2001'' (GGRTSDA).

In his reference the President has stated that from time to time, the Union of India had legislated on the subject of petroleum and natural gas for ensuring free and smooth flow of trade, commerce and industry throughout the length and breadth of the country.

The stand of the Union was that LNG fell under and was covered by the expression `petroleum' which was a Union subject by virtue of Entry 53 of List 1. However, as per Entry 25 of List II of the Seventh Schedule, `gas and gas works' was a State subject.

The reference has noted that the State of Gujarat has enacted the GGRTSD Act to provide for regulation of transmission, supply and distribution of gas to promote gas industry in the State and for establishment of the Gujarat Gas Regulatory Authority with powers to decide as to who would lay pipelines and further providing that the existing companies having pipelines would require the permission of the Regulatory Authority for taking up expansion or utilisation of excess capacity.

The above regulation affects all the existing and future pipelines for transportation of natural gas and regassified LNG and the stipulations of the Act have the potential of affecting inter-State movement of natural gas and regassified LNG and create constitutional and legal impediments.

Doubts and differences have arisen as to whether natural gas is a Union subject or a State subject and whether the State of Gujarat and the other States have legislative competence to make laws on the subject of natural gas and it is in public interest that said doubts and differences are resolved, the reference states.

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