MULTAN: The Sui Northern Gas Pipelines Limited (SNGPL) has yet to recover about Rs400 million late payment charges from a private food company in a case of massive gas theft in 2012.

On Sept 19, 2012, a team of SNGPL conducted a raid and disconnected supply by removing six connections of SM Food Makers over charges of gas theft and issued a detection bill worth Rs384m.

The company filed a petition with the Lahore High Court (LHC) and the court on Oct 10, 2012 directed to restore the supply subject to the depositing of Rs20m. Earlier, the company submitted an application to the SNGPL general manager terming the allegations baseless; however the company again was asked to submit the dues till Nov 1, 2012 against which the firm filed another petition and on Nov 5, 2012 the court set aside the detection bill and referred the matter to Oil and Gas Regulatory Authority.

The Ogra was directed to reevaluate the [gas pilfering] charges after hearing both the parties within three weeks while the company was directed to deposit Rs12m as an aggregate price for the prospective consumption of the gas for next three weeks.

Higher courts, Ogra, GUC hearing gas theft case since 2012

The SNGPL challenged the decision and got suspended the order to the extent of setting aside the detection bill while in final verdict on the request of the both parties the court stated that the order of detection bill will be construed as suspended instead of set aside.

The Ogra’s designated officer (DO) directed the SNGPL to reassess/recalculate volume of pilfered gas into account of working hours for eight hours against four connections and 16 hours against two connections instead of 24 hours as was done earlier.

The SNGPL challenged the decision with the Ogra’s appellant authority while the company filed petition with the LHC which was dismissed.

On June 6, 2013, the appellate authority reversed order of DO with the direction to reassess the volume on 24 hours. Soon after this decision the SNGPL disconnected the supply on June 9, 2013.

The company challenged the order with the LHC and the court on June 28, 2013 directed to constitute a six-member committee on the recommendation of both parties to reassess the gas consumed during the pilferage period besides issuing direction to SNGPL to restore the connections over the first out of three installments for the payment of Rs70.6m as Rs83m has already been paid while remaining 40 per cent (Rs156.6m) will be paid till the determination of final liability.

The SNGPL moved to the Supreme Court against the decision and the court on Sep 26, 2013 maintained the decision regarding payment of outstanding amount while setting aside the order of the constitution of committee. The petition was converted into appeal and sent back to the LHC.

The LHC on Feb 8, 2017, set aside the decision of the appellate authority to recalculate the volume on 24 hours over lack of quorum and directed to transmit the case to Gas Utility Court (GUC) while observing that the matter is not within the purview of Ogra and the same has to be decided by the GUC. Ogra challenged the decision though ICA No329/17 while requesting the court to set aside the order to transmit the case to GUC as not the utility court but Ogra was the competent authority to decide the matter which was dismissed by the court on March 5, 2019 over being time barred by saying that the judgment was passed on Feb 8, 2017 and the appeal was filed on Sept 5, 2017.

The court also stated that as per law only one appeal could be filed against original order of any court/tribunal/authority and in this particular case one plea was already availed (by moving to single bench). The Ogra challenged the decision with the Supreme Court which is still pending.

Meanwhile on July 5, 2017, the company filed a suit of declaration with the GUC while later on an application for the issuance of current bills by the company was also submitted. The company was asked to pay Rs524m (with late payment charge). On July 8, GUC directed the company to make the payment against which the company moved to LHC and the court set aside the GUC’s order of payment. The court also directed the SNGPL to restore the connections over the payment of current utility bills on the same day as the Ogra has yet to refer the matter to GUC.

The SNGPL filed a civil miscellaneous (CM) application against the order and the court on Sept 28, 2018 expressed its surprise over the challenging of GUC order by the company while stating that nobody objected to the decision of Feb 8, 2017 and the company surrendered to the jurisdiction of GUC which amazingly is being challenged by the company itself. The court recalled the order of July 8 by accepting the CM plea and dismissed the main petition.

The SNGPL again severed all the connections the same day. On Dec 8, 2018, the company withdrew its suit of declaration in GUC. On Dec 18, 2018 the SNGPL issued fresh notices for the payment of Rs618m with the warning that the complete meter stations will be removed (if not already removed), bank/cash guarantee will be encashed/adjusted (if any) and for balance amount (if any) legal proceedings will be initiated.

The company filed another petition against the notices and disconnection of gas supply. The LHC on Feb 25, 2019 directed the SNGPL to restore the connections within seven days over payment of the remaining amount of the first detection bill of Rs384m (previously offered by the company but withdrawn) out of which Rs160m were already paid.

The company filed an intra court appeal with the LHC while demanding the modification in the decision of Feb 25, 2019; however on March 21, 2019 it withdrew the appeal while saying that it is ready to make the requisite payment as directed by the court which was made on March 29, 2019 and connections were restored.

SNGPL Deputy Chief Billing Officer Tahir Mehmood said the company has yet to pay about Rs400m [late surcharge].

Ogra spokesman Imran Ghaznavi said the judgment of Feb 8, 2018 (regarding transmitting the case to GUC) was passed in absence of Ogra and the authority remained unheard as there was no intimation to the fixation of the case (which was fixed on the application of early hearing filed by the SM Foods in concealment of facts).

“Moreover it is also the matter of record that the docket of the said order was received at Ogra office on July 7, 2017; therefore after getting the certified copies, ICA was prepared but unfortunately at the time of the filing of ICA, Multan Bench was closed/locked due to dispute between lawyers and judiciary. Therefore Ogra filed the ICA at principle seat in Lahore; however the court returned the ICA for filing at Multan Bench when the bench starts its working,” he stated while claiming that the ICA was filed in time from the date of knowledge.

He stated that no loss whatsoever has been occurred to the public exchequer by any act of Ogra while pursuing the matter forcefully as the Ogra has succeeded to prove the guilt of SM Foods (in various cases).

“As far as the recovery of the amount is concerned, there is no bar on the SNGPL to initiate legal proceedings to recover the default amount against SM Foods, if any. The SNGPL is in a better position to update on the status of recovery, pursuant to the disposals of writ petitions as to what action they have taken against SM Food Makers Ltd in this regard,” he concluded.

SNGPL General Manager Azhar Hussain Khokhar said the company had recovered its entire amount and only the late payment charges are yet to be recovered.

“These charges will also be recovered which with the passage of time are being increased due to non-payment by the company,” he said while justifying the delay.

Over a query as to why the SNGPL did not initiate legal proceedings over non-payment despite there is no legal bar over the recovery, he said: “The SNGPL and its legal cell are looking into the matter and taking measures they consider appropriate.”

Published in Dawn, May 28th, 2020