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Kottayam & Idukki District Petroleum Dealers Association v/s Union of India


Company & Directors' Information:- A R C INDIA PETROLEUM PRIVATE LIMITED [Active] CIN = U11202TG2009PTC063249

Company & Directors' Information:- A P DEALERS LTD [Dissolved] CIN = U51900WB1979PLC032031

Company & Directors' Information:- S K DEALERS PRIVATE LIMITED [Strike Off] CIN = U52100TG2012PTC080663

Company & Directors' Information:- A B K DEALERS PRIVATE LIMITED [Active] CIN = U52190WB2011PTC159240

Company & Directors' Information:- G. P. DEALERS PVT. LTD. [Active] CIN = U74999WB1994PTC064103

Company & Directors' Information:- S A K DEALERS PRIVATE LIMITED [Active] CIN = U52190WB2011PTC158583

Company & Directors' Information:- J N L DEALERS PRIVATE LIMITED [Strike Off] CIN = U52190WB2011PTC158582

Company & Directors' Information:- N B DEALERS PRIVATE LIMITED [Active] CIN = U52390WB2011PTC158996

Company & Directors' Information:- R & R DEALERS PRIVATE LIMITED [Under Process of Striking Off] CIN = U51109WB1997PTC084417

Company & Directors' Information:- P & K DEALERS PRIVATE LIMITED [Active] CIN = U52190WB2011PTC159152

Company & Directors' Information:- I P B DEALERS PRIVATE LIMITED [Active] CIN = U52190WB2011PTC159239

Company & Directors' Information:- P K K DEALERS PRIVATE LIMITED [Active] CIN = U52190WB2011PTC158435

Company & Directors' Information:- P K T DEALERS PRIVATE LIMITED [Active] CIN = U52190WB2011PTC158436

Company & Directors' Information:- G AND S DEALERS PRIVATE LIMITED [Strike Off] CIN = U52201RJ1997PTC013426

Company & Directors' Information:- S R PETROLEUM PRIVATE LIMITED [Strike Off] CIN = U23200MH1999PTC122909

Company & Directors' Information:- N S S DEALERS PRIVATE LIMITED [Under Process of Striking Off] CIN = U72900UP2001PTC026256

Company & Directors' Information:- H N DEALERS (INDIA) PRIVATE LIMITED [Under Process of Striking Off] CIN = U51909WB2011PTC167181

Company & Directors' Information:- H M DEALERS PRIVATE LIMITED [Active] CIN = U51909WB2009PTC136799

Company & Directors' Information:- N. P. PETROLEUM LIMITED [Strike Off] CIN = U23201UP1995PLC018153

Company & Directors' Information:- A V K DEALERS PRIVATE LIMITED [Strike Off] CIN = U52190WB2011PTC158439

Company & Directors' Information:- K M DEALERS PRIVATE LIMITED [Converted to LLP] CIN = U51909WB2002PTC094480

Company & Directors' Information:- R H PETROLEUM PRIVATE LIMITED [Active] CIN = U23209MH1996PTC101701

Company & Directors' Information:- DEALERS INDIA PVT LTD [Under Liquidation] CIN = U51909WB1949PTC018001

Company & Directors' Information:- K S M PETROLEUM PRIVATE LIMITED [Active] CIN = U01120TZ1978PTC000800

Company & Directors' Information:- INDIA DEALERS PVT LTD [Active] CIN = U67120WB1958PTC023972

Company & Directors' Information:- A B DEALERS PRIVATE LIMITED [Active] CIN = U51109WB2005PTC103126

Company & Directors' Information:- R S DEALERS PRIVATE LIMITED [Strike Off] CIN = U51909WB2008PTC129222

Company & Directors' Information:- DEALERS AND CO PVT LTD [Strike Off] CIN = U31909RJ1947PTC000484

Company & Directors' Information:- A. M. PETROLEUM PRIVATE LIMITED [Strike Off] CIN = U51524MH2014PTC255581

Company & Directors' Information:- R G DEALERS PRIVATE LIMITED [Strike Off] CIN = U51109MH2010PTC206216

Company & Directors' Information:- V S DEALERS PRIVATE LIMITED [Strike Off] CIN = U74999TG2007PTC056653

Company & Directors' Information:- S V S PETROLEUM PRIVATE LIMITED [Active] CIN = U51909DL2002PTC116940

Company & Directors' Information:- INDIA PETROLEUM COMPANY LIMITED [Dissolved] CIN = U99999MH1936PTC002453

    Writ Petition (Civil) No. 21676 of 2011

    Decided On, 27 September 2019

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE SHAJI P. CHALY

    For the Appearing Parties: M. Ramesh Chander, K.A. Sanjeetha, P. Vijayakumar, P. Gopinath, K. John Mathai, Ramola Nayanpally, Molly Jacob, Advocates.



Judgment Text


1. This writ petition is filed by the petitioners who are Petroleum Dealers Association of Kottayam and Idukki Districts and three retail dealers who are members of the 1st petitioner Association, seeking to quash Ext.P9 decision taken by the Ministry of Petroleum and Natural Gas, Government of India, dated 19.05.2011, declining permission to the Oil Marketing Companies Standard Temperature Accounting (STA) and supply temperature compensated petroleum products to the dealers, and for other related reliefs. Material facts for the disposal of the writ petition are as follows:

2. Petitioners have approached this Court earlier by filing W.P.(C) No.21133 of 2010 and has secured Ext.P5 judgment, whereby the 1st respondent was directed to consider and pass orders on Ext.P3 representation submitted by the petitioners after affording an opportunity of being heard to a representative of the petitioners and the oil companies, as expeditiously as possible, at any rate, within two months from the date of receipt of a certified copy of the judgment. Therein, the liberty of the petitioners to request the 1st respondent to obtain a report in the subject matter from the 6th respondent, i.e., the Fluid Control Research Institute, Kanjikode, Palakkad, which is stated to be the expert agency competent to give advise regarding the matter, was also directed to be considered appropriately by the 1 st respondent.

3. Apparently, petitioners have submitted an application to secure a report from the 6th respondent, however, the 6th respondent expressed its inability to give an opinion in the matter as they are not an expert agency in the issues stated in the writ petition. Thereupon, as per Ext.P6 letter dated 19.11.2010,1st respondent informed the petitioners that the representation submitted are required to be examined in consultation with the Oil Industry, after getting a report from other expert agency, if any, before arriving at a decision in the matter. Anyhow, from Ext.P7 communication dated 09.05.2011 issued by the Indian Institute of Petroleum (IIP), it is evident that the said institution was addressed by the authority concerned as per a letter dated 25.04.2011 and expert opinion is submitted by the said authority.

4. According to the petitioners, petitioners have submitted a representation dated 14.05.2011, expressing their grievances and seeking to ventilate the same, evident from Ext.P8. The 1st respondent has later passed Ext.P9 order dated 19.05.2011, after hearing the representatives of the petitioners and the Oil Companies, and arrived at the conclusion that the apprehensions pointed out by the petitioners have no legal basis taking into account the report submitted by the Indian Institute of Petroleum. It is thus challenging Ext.P9, this writ petition is filed.

5. The 1st respondent has filed a detailed counter affidavit, justifying the stand adopted in Ext.P9. The 3rd respondent has also filed a counter affidavit fully supporting the stand adopted by the 1st respondent and also contending that petitioners are not having any personal grievance with respect to the shortage of the petroleum products supplied by the Oil Marketing Companies.

6. I have heard Sri. M. Ramesh Chander, learned Senior Counsel for the petitioners, assisted by Advocate K.A. Sanjeetha, Sri. P. Vijayakumar, learned ASGI, learned Senior Counsel appearing for respondents 2 to 4, Sri. P. Gopinath Menon, assisted by Advocate Ramola Nayanpally, and Smt. Molly Jacob, learned Standing Counsel appearing for the 5th respondent, Kerala State Civil Supplies Corporation Ltd. Perused the pleadings and the documents on record.

7. The paramount contention advanced by learned Senior Counsel for the petitioners is that, Ext.P9 order is issued relying on a report obtained behind the back of the petitioners without putting them on notice and without even serving a copy on them before hearing, and therefore, the right to object to the report is thus taken away. It is also contended that, Ext.P9 order is passed relying on a report of the year 2006, and that too, on the basis of data collected from a "Hilly station", where the temperature changes on the cooler side. That apart, it is submitted that, the action of the Oil Companies in not transferring the petroleum products to the dealer at 15 degree centigrade known as standard litre, is unjust, arbitrary and illegal.

8. So also, it is submitted that, the Oil Companies while transferring the petroleum products between themselves, transfer it at 15 degree centigrade, however, the same is not maintained while transferring the products to the dealer, which causes huge loss to the dealer and unjust enrichment to the Oil Companies. That apart, it is submitted that, the Oil Companies are bound by the Marketing Discipline Guidelines and the standard litre fixed as per Ext.P1 and they are not at liberty to deviate from the same.

9. On the other hand, learned ASGI submitted that, Ext.P7 expert opinion was obtained pursuant to the direction in the judgment of this Court and the contrary allegation made is only a malafide attempt to discredit the expert opinion which establishes that the petitioners allegations are without any merit. That apart, it is pointed out that, petitioners have also chosen not to implead the Indian Institute of Petroleum/the Council of Scientific & Industrial Research as party respondents in the writ petition. It is also submitted that, the detailed study of Indian Institute of Petroleum, on the basis of which, Ext.P7 experts opinion was provided, was conducted during 2006-2008, which was an extensive study carried out across various geographical locations. Anyhow, it is admitted that the study was conducted before the litigations in question, which rules out any possibility of the oil companies/the respondents having influenced the study in any manner whatsoever.

10. That apart, it is submitted that, the IIP study revealed that the average tank truck delivery temperature at the retail outlet was found to be almost equal to the average ambient temperature. Further, it was also revealed that the average dispenser temperature at retail outlets was a little higher than the average lorry delivery temperature, and therefore, the claim of the petitioners regarding dispensing temperature being less than the delivery temperature is not borne out of the factual data. It is also submitted that, the tank trucks are loaded at ambient temperature and the ordered quantity is delivered to the dealer's premises, and in turn, the dealers also deliver to the end customers at ambient temperature only. This is established consequent to the comprehensive study conducted by the IIP during the year 2006-2008.

11. It is also submitted that, the material obtained by the petitioners from the internet regarding the automatic temperature compensation in Canada, is a technique being used only for the sale of natural gas of propane. That apart, it is submitted that, there is no parameter known as 'Standard litre' as contended by the petitioners, and the products are sold to retail dealers at ambient temperature and the dealers in turn sell the same to the end customers at ambient temperature, and therefore, chance of expansion or contraction in the volume of the product is negligible. It is also pointed out that, the reliance made by the petitioners on Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order,1998 is not correct, since the said order is replaced by Order,2005. It is also the contention of the 1st respondent that the allegation of the petitioners that the study conducted by the expert agency, evident from Ext.P7, is only with respect to a "hill station" is not correct, and the study was conducted during the summer and winter seasons covering representative sales outlets across different geographical and climatic regions of the country.

12. The 3rd respondent has filed a counter affidavit, supporting the contention advanced by the 1 st respondent. So also, it is submitted that, the petroleum products like Motor Spirit as well as High Speed Diesel are supplied to the retail dealers at ambient temperature during all seasons in a specific geographical area. The tank trucks are also calibrated at ambient temperature by the Department of Legal Metrology. The dealers also place orders of the MS/HSD at ambient temperature and pay the price fixed for the products at ambient temperature. Thus, when a dealer places an order, to say,12,000 litres at ambient temperature, the dealer gets the full amount of such 12,000 litres at ambient temperature when the tank truck is sealed at the terminal. So also, it is submitted that, supplies are made on delivered basis and they receive the product at their retail outlets after measuring the quantity through dip rod, duly calibrated by the Department of Legal Metrology at ambient temperature. Therefore, if there is any shortage at the time of receipt, the dealers are entitled to record such shortages, if any, after taking the tank truck dips while acknowledging the receipt of the product, and none of the petitioners have made any such record of shortages, strongly indicating the shortages. Thus, at the time of receipt, the quantity in the tank truck is not an optical illusion as claimed by the petitioners, and it is in fact, the full amount ordered by the petitioners. Furthermore, petitioners and other dealers sell the products to the customers at the same ambient temperature, if not higher, and hence, cannot make any claim of suffering any loss.

13. It is also submitted that, when the 6th respondent expressed its inability to examine the issues contained in the writ petition,1st respondent sought permission from this Court to obtain a report from the Indian Institute of Petroleum, Dehradun, in the contempt proceedings initiated against the 1st respondent, and the petitioners are not at liberty to challenge the report submitted by the IIP, since the petitioners were parties to the proceedings, and they did not raise any objection with respect to the liberty given by this Court to the 1st respondent to secure report from the IIP. Thus, according to the 3rd respondent, petitioners have not made out any case, justifying interference of this Court, as there is no illegality, patent arbitrariness or other legal infirmity in the order impugned.

14. I have evaluated the rival submissions made across the Bar. The sole question to be considered is, whether any manner of interference is warranted to Ext.P9 order passed by the 1st respondent. It is an admitted fact that, since the 6th respondent declined to conduct the test in respect of the grievance raised by the petitioners that they are not supplied with 'standard litres' of the petroleum products, reference was made to Indian Institute of Petroleum. It is true that it is evident from Ext.P7 report that the study was conducted during the year 2006-2008. However, it was on the basis of the reference made to the IIP alone, consequent to the directions issued by this Court in Ext.P5 judgment and its consequential proceedings that the study was undertaken by the said authority. It is true that the study was conducted by the said authority during the year 2006-2008, but based on the report, it was found that the apprehensions voiced by the petitioners cannot have any basis. It is also clear from Ext.P7 that the study was conducted both during summer and winter covering representative sales outlets across different geographical and climatic regions of the country.

15. Data on ambient temperature, temperature of MS as delivered through road tankers/lorry, dispenser temperature and percentage loss on decantation were collected from the representative sales outlets, and statistical analysis of the data, using x-y scatter plots for qualitative conclusion and regression analysis for quantitative estimation of the temperature variations and the extent of losses, was done. The study report shows that the data analysis showed that the average lorry temperature was found to be almost equal to the average ambient temperature with the average lorry temperature only 0.002 C lower than the average ambient temperature. The data analysis further showed that the average dispenser temperature was a little higher than the average lorry temperature with the average dispenser temperature higher than the average lorry temperature by 0.241 C.

16. It was on the basis of the said study report, Ext.P9 order is passed. Moreover, petitioners have not raised any contention that the technology adopted by IIP to understand the issue and the report accordingly have become obsolete and outdated and so as to have any re-consideration of the same consequent to the direction issued by this Court in the earlier round of litigation. It is also pertinent to note that, IIP could not bring to the notice of this Court, the report drawn by it, since it was not a party to the writ petition, and it is also clear, none of the parties were aware of such a report drawn by the IIP. It is evident from Ext.P9 that representatives of the petitioners were heard. However, the contention put forth by the petitioners is that, petitioners have given Ext.P8 representation dated 14.05.2011 subsequent to the hearing, and none of the aspects raised by the petitioners therein were considered. It is also pointed out that, the copy of the report relied upon by the 1st respondent was not provided to the petitioners, which has caused serious prejudice to the petitioners to counter the material aspects contained in Ext.P7 report.

17. It is quite interesting to note that, if the petitioners were heard on 16.05.2011, the issue ought to have been raised by the petitioners before the 1st respondent authority itself. However, petitioners are not having a case that they have raised any contentions before the 1st respondent when the subject matter was heard by the 1st respondent. Moreover, the Indian Institute of Petroleum is not made a party to this proceedings, and therefore, when a contention is raised by the petitioners that the report submitted by the IIP is not correct, the said authority definitely should have been provided with an opportunity to contest the proceedings. The issue with respect to non-joinder of the said necessary party was raised by the 1st respondent as well as the 3rd respondent in their counter affidavits filed. Even then, petitioners have not chosen to implead the IIP or its expert agency in the writ petition. Therefore, I have no doubt that the writ petition is bad for non-joinder of necessary parties in the party array.

18. Moreover, it is clear from Ext.P9 that the representatives of the petitioners were heard. Even though petitioners have a contention that the copy of the report was not provided to the petitioners, I do not think petitioners have raised any such contention before the 1st respondent, when the petitioners were provided with an opportunity of hearing on 16.05.2011. It is also a mystery how the petitioners happened to sent Ext.P8 representation dated 14.05.2011, after the hearing was conducted. If at all a representation was so prepared by the petitioners, petitioners ought to have submitted the same before the 1st respondent on 16.05.2011 when the matter was heard. So also, I find force in the contention advanced by learned Senior Counsel for the 3rd respondent that petitioners have not produced any documents before this Court to establish that there was shortage in supply of petroleum products to the retail outlet dealers. Therefore, the contention put forth by the petitioners with respect to loss that is suffered consequent to the temperature difference while transporting the products and dispensing, cannot be sustained.

19. Moreover, it is clear from the contention put forth by the 3rd respondent that the temperature variation allowance is not being provided to the retail outlet dealers, since the petroleum products are being supplied by the Oil Marketing Companies after storing the same in their own premises in ambient temperature, after receiving the same from the Refinery, and there is no loss caused due to temperature variations. So also, it is evident from the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order,2005, that the product from the supply point shall be transported by the transporter in a container or tank-truck certified to be fit by the explosives authorities, transport authorities and oil company to carry the product with accurate calibration as certified by the weights and measures authorities and supported by delivery documents and deliver the same to the storage or dispensing point in the same condition as delivered to him by the originating supply point both in respect of quality and quantity.

20. So also, the dealer or consumer is given the liberty to inspect the container or tank-truck in which the product is received to ensure that the container or tank-truck, including the seal and lock is not in any manner tampered with, and that the quantity and quality of the product is as per delivery documents issued by the oil company and the quality of the product conforms to the requirements of the Bureau of Indian Standard specifications number IS 2796 and IS 1460 for motor spirit and high speed diesel respectively, and for this purpose, the oil company shall indicate density of the product at 15 degrees centigrade in the delivery documents and the dealer or consumer shall maintain a record of densities and keep samples of product duly signed jointly by him and the driver of the tank truck and also take other measures as prescribed by the oil company. So also, as per Order 2005, the variation in density at 15 degrees centigrade of the product in tank truck compared to the density mentioned in delivery documents should not be more than +/-0.0030. Petitioners are not having a case that the mandatory requirements are not followed by the transporters and the Oil Marketing Companies.

21. Therefore, if the petitioners had a case that the quantity of the product supplied to the dealers was less due to shrinkage or other circumstances, then definitely there would have been records with the retail dealers in accordance with the above statutory stipulations. No such documents are produced by the petitioners before this Court. Even though petitioners have a contention that copy of the report was not served on them, even assuming to be true, a remand to the 1st respondent to re-consider the issue will not make or serve any purpose, since the report submitted is an authoritative one as of now, especially due to the fact that the petitioners have not made the Indian Institu

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te of Petroleum a party to this writ petition. Therefore, remanding the matter back for reconsideration is a futile exercise, and the principles of 'useless formality theory' will apply to the facts and circumstances of the case. 22. Moreover, the representation made is not a statutory one, and having realized that the issues put forth were considered taking into account relevant inputs and available records, it cannot be absolutely said that there was violation of principles of natural justice. Above all these aspects, it is clear from Ext.P9 that reasons are assigned enabling the petitioners to clearly identify the apprehensions expressed by them. True, an administrative authority exercising a function must act fairly, failing which, this Court is at liberty to review the impugned decision and issue appropriate direction so as to protect the rule of law. However, I could not locate any such disturbing features in Ext.P9 order warranting review of the administrative action. All these aspects make it clear that petitioners are not entitled to get any reliefs as are sought for in the writ petition, since there is no illegality, arbitrariness or other legal infirmities justifying interference under Article 226 of the Constitution of India, and they are declined. However, it is evident from Clause 9 of Order,2005 that the Central Government is left with powers, from time to time, by a general or special order to issue such directions as it considers necessary regarding storage, sale, transportation and disposal of motor spirit or high speed diesel, and upon the issue of such directions, such dealer, transporter, consumer or any authority shall be bound to comply with the same. 23. In that view of the matter, in due course, if the petitioners come across with any actual shortage in the petroleum products supplied to them, supported by authoritative documents in contemplation of Order 2005, or in accordance with law, they are at liberty to approach the Central Government and seek appropriate reliefs. The writ petition is disposed of accordingly.
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