w w w . L a w y e r S e r v i c e s . i n



P. Lakshmi Reddy v/s Union of India, Rep. by its Secretary Ministry of Petroleum & Natural Gas, New Delhi & Others


Company & Directors' Information:- INDIA NATURAL GAS COMPANY PRIVATE LIMITED. [Dissolved] CIN = U23200MH1999PTC120457

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

Company & Directors' Information:- GAS CORPORATION INDIA LIMITED [Strike Off] CIN = U40200BR1993PLC005536

Company & Directors' Information:- NATURAL GAS COMPANY PRIVATE LIMITED [Active] CIN = U23200MH1937PTC002629

Company & Directors' Information:- S M INDIA LTD [Strike Off] CIN = U26942ML1998PLC005541

Company & Directors' Information:- THE INDIA COMPANY PRIVATE LIMITED [Active] CIN = U74999TN1919PTC000911

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

Company & Directors' Information:- INDIA CORPORATION PRIVATE LIMITED [Active] CIN = U65990MH1941PTC003461

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

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

Company & Directors' Information:- DELHI GAS LIMITED [Strike Off] CIN = U40200DL1995PLC068380

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

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

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

Company & Directors' Information:- NEW INDIA PETROLEUM COMPANY LIMITED [Dissolved] CIN = U99999MH1919PTC000534

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

Company & Directors' Information:- LAKSHMI CORPORATION LIMITED [Dissolved] CIN = U99999MH1942PTC003739

Company & Directors' Information:- DELHI GAS CO. PVT. LTD. [Strike Off] CIN = U99999DL2000PTC003642

    Writ Petition (PIL) No. 154 of 2016

    Decided On, 28 September 2019

    At, High Court of Andhra Pradesh

    By, THE HONOURABLE ACTING CHIEF JUSTICE MR. C. PRAVEEN KUMAR & THE HONOURABLE MR. JUSTICE CHEEKATI MANA VENDRANATH ROY

    For the Petitioner: K.S. Murthy, Advocate. For the Respondents: K. Lakshman, Asst. Solicitor General.



Judgment Text


1. This writ petition by way of public interest litigation if filed seeking an order in the nature of Writ of mandamus to declare that there is inaction on the part of respondents 1 to 5 in conducting full-fledged enquiry into the allegations made against respondents 6 and 7 regarding excessive refill sales, collection of extra money from consumers for mandatory inspection during domestic installation and maintaining bogus connections till February, 2015 causing huge pecuniary loss to the Union of India and consequently direct the respondents authorities to take action against the respondents 6 to 7 to recover monetary loss caused to the exchequer.

2. Concise statement of facts leading to the lis in this writ petition may be stated as follows:

(a) The petitioner is in public life for more than 30 years. He is a social worker involved in politics. As District Vice President of Bharatiya Janata Party, he regularly engages in various campaigns and issues relating to the welfare and protection of rights of the citizens at State level as well as in National level. He is also an advocate and he regularly represents issues relating to social welfare to the respective Governments and authorities for appropriate action.

(b) The respondents 6 and 7 are Gas Agencies in the name and style “Balaji Gas Agency” and “Eswar Gas Agency” of the 2nd respondent/Indian Oil Corporation Limited (hereinafter called as “IOC Ltd”.), supplying LPG cylinders to the consumers in Proddatur Town of Kadappa District. It has come to the notice of the petitioner in the year 2014 that respondents 6 and 7 are resorting to several malpractices like unauthorized and illegal hazardous activity of refilling of cylinders in excess of ceiling limit, causing loss of Crores of rupees to the exchequer of Central Government by misappropriating the subsidy amount by maintaining bogus gas connections and selling gas in black market etc. Therefore, he has applied to furnish information in this regard to the concerned authority under the Right to Information Act, 2005 (RTI Act). The 3rd respondent furnished information dated 29-12-2014 and 28-7-2015 under 5the RTI Act to the petitioner and it came to flight from the said information that refill sales of the 6th respondent is 6,88,399 cylinders of 14.2 kg weight from 01-4-2012 to 31-10-2014 and the refill sales of the 7th respondent is 51,025 during the same period with average refill of 22,206 and 16,459 per month respectively by the respondents 6 and 7, whereas the ceiling limit for monthly sales was only 8,800 refills. Therefore, it is evident that there was a flagrant violation of norms in refill sales by the respondents 6 and 7.

(c) So the petitioner made a complaint dated 20-4-2015 to the 3rd respondent/IOC Ltd. alleging that the 6th respondent is resorting to illegal refilling of cylinders and the 7th respondent is collecting Rs. 75/- for mandatory inspection for domestic installation. However, the Senior Manager of IOC Ltd. by his letter dated 05-6-2014 informed the petitioner that he was not aware of the illegal refilling and justified the collection of extra money by the 7th respondent. So the said letter of the Area Sales Manager shows his intention to safeguard the interest of the respondents 6 and 7 due to some vested interest. When the Sales Manager came for enquiry on 11-5-2015, he did not contact the petitioner during enquiry. As the petitioner is the complainant the Sales Manager should have taken his version as the petitioner got documentary and oral evidence to prove the allegations made by him. So the enquiry was made in biased manner.

(d) Modified Direct Benefit Transfer Scheme was launched on 15-11-2014. As per the said scheme, the connection of the consumer should be Aadhaar linked and Bank linked to get benefit of subsidy deposited directly into their bank accounts. The grace period was three months from 15-11-2014 to 15-02-2015 and during the said period, the customers have to get the above process completed to get subsidy. The active customer strength of the 6th respondent fell down from 55,079 to 39,805 (difference 15,274) and the active consumer strength of the 7th respondent fell down from 39,083 to 26,654 (difference 12,429) during the grace period. Thousands of connections maintained by the respondents 6 and 7 are thus bogus till February, 2015 and the agencies through huge network of brokers, sold the subsided cylinders in black market. This has caused huge subsidy loss to the 1st respondent/Union of India. It is public money and the respondents 6 and 7 caused loss of Crores of rupees to the exchequer of the Union of India. False entries were made in the records that cylinders (27,500 x 3) were sold to customers to the subsidy amount. In fact they were sold to non-existing customers The money that was earned by the respondents 6 and 7 through the above illegal activity for a period of three months is Rs.1,65,00,000/-. As this malpractice has been in existence for many years, the loss that could be caused would be rs.33 Crores to the 1st respondent/Union of India. Therefore, the petitioner made a representation dated 16-6-2015 to the 4th respondent. As per their letter they have agree that the respondents 6 and 7 made average refill sales of 22,206 and 16,459 respectively against ceiling limit of 8,800 per month. But they have not taken any action for such illegal activity. The reply is silent as to the action taken against the respondents 6 and 7. So the petitioner also made a representation dated 27-5-2015 to the 1st respondents/Union of India taking to its notice the illegal activities of respondents 6 and 7 and demanded for detailed enquiry by the 5th respondents. However, there is no reply given to it.

(e) Therefore, as respondents 6 and 7 have maintained several bogus connections and sold cylinders in black market for subsidized rates and these sales found their way obviously to commercial units like hotels, hospitals, restaurants etc., for exorbitant amounts, it has caused subsidiary loss of Rs.250/- per cylinder to the Union of India and the respondents 6 and 7 had unlawful gain of Crores of rupees causing loss to the public money. As the enquiry on his compliant was made in a casual manner, he prayed to declare the inaction of the respondents 1 to 5 in conducting full-fledged enquiry into the allegations made against the respondents 6 and 7 and thereby prayed to direct the respondents to cause detailed enquiry into the said malpractices which resulted into huge monetary loss to the State exchequer and to the public and take appropriate action against the respondents 6 and 7 and to take steps to recover the said monetary loss caused by them to the exchequer.

3. Respondents 2 to 5 resisted this petition. Counter was filed on behalf of the respondents 2 to 5 by the Chief Manager (LPG-Sales), Vijayawada Area Office, IOC Ltd., denying the aforesaid allegations made by the petitioner.

(a) It is said that surprise inspection was conducted by Food and Civil Supplies (FCS) Department on 29-4-2015 at M/s. Balaji Gas Agency, Proddatur and no evidence of illegal and unauthorized refilling of sales was found at the time of inspection. The customer strength of both the distributors was verified along with sales data and it is not found in the said verification that the distributors are selling cylinders to bogus customers. However, it is admitted that both the distributors were selling refills more than the monthly ceiling limit of 8,800 due to non-availability of other distributors. It is stated that refill sales to the customers cannot be restricted to the monthly ceiling limit in the absence of any other distributors in the area. So restructuring of these distributors were called in Proddatur Town as per advertisement dated 15-9-2013 and all six new distributors were already been commissioned. So there is no violation of any norms.

(b) As regards the allegation relating to collection of Rs.75/- in excess from the customers, it is stated that mandatory inspections were carried out at customer premises as per the Industry Guidelines to educate the customers regarding right way of using LPG, to avoid LPG accident and Rs.75/- is charged for carrying out the said mandatory inspection at customer premises and it is as per applicable chares and no overcharging is made on the customers in this regard. So that allegation is stoutly denied.

(c) As regards bogus and illegal connections are concerned, it is stated that the petitioner has wrongly construed inactive customer strength as bogus connections and denied that the distributors have amassed huge wealth by maintaining such bogus connections. It is stated that after introduction of Aadhaar linkage, LPG customers are getting inactive and the strength of the active customers got drastically reduced after introduction of Aadhaar and KYC in conjunction with the introduction of DBTL (Direct Benefit Transfer of LPG subsidy) system. Therefore, the customers are becoming inactive due to various reasons and it cannot be attributed to the distributors.

(d) It is stated that customers were getting subsidized refills in the market from any of the LPG agencies after introduction of DBTL system and customers were eligible only for one connection under one name and one address. So they have to buy refills at the full cost in the market against which the subsidy amount is being directly transferred to their bank accounts as declared with the Aadhaar linkage. So the reduction in the number of customers cannot be ground to allege that there were bogus connection and subsidy amount is being misappropriated by the agents.

(e) Therefore, the respondents prayed to dismiss the petition.

4. We have learned Sri K.S. Murthy, learned counsel for the petitioner, Sri B.Krishna Mohan, learned Assistant Solicitor General of India appearing for the 1st respondent and Sri Dominic Fernandes, and learned Standing counsel for the respondents 2 to 5 /IOC Ltd.

5. The fact that the respondents 6 and 7 are agents under the 2nd respondent, doing business in supplying cylinders to the LPG cylinders in Proddatur Town of Kadapa District is not in dispute. It is also not in controversy that the ceiling limit for monthly sales by each agency is 8,800 refills per month. When the petitioner sought information in this regard from the concerned authority under the RTI Act, it is unequivocally stated in the said information furnished to the petitioner under the RTI Act that the ceiling limit for refill sales is 8,800 per month. The petitioner has produced the said information furnished to him by the PIO & DGM of IOC Ltd., dated 29-12-2014, along with the material papers field with this writ petition. It is evident from the said information furnished under the RTI Act that the ceiling limit of monthly refills 8,800/- per month. Now it is relevant to note that it is informed to the petitioner by the Senior Area Manager of IOC Ltd. by the letter dated 28-7-2015 which is also filed with the material papers that the Field Officer Sri Satya Prasad has conducted enquiry in two spells based on the complaint given by the petitioner and that the refill sales is 6,88,399 for the period from 01-4-2012 to 31-10-2014 and average refill sales per month is 22,206 as against the ceiling limit of 8,800 per month for Balaji Gas Agency i.e the 6th respondent and the refill sales of Eswar Gas Agency i.e the 7th respondent is 5,10,256 for the period from 01-4-2012 to 31-10-2014 and average refill sales per month is 16,459. Therefore, it is evident that the refill sales during the said period by both the respondents 6 and 7 is beyond the ceiling limit of 8,800 per month. When there was a ceiling limit for refill sales at 8,800 per month and when the refill sales is admittedly beyond the said ceiling limit per month, the violation of the said ceiling limit cannot be brushed aside simply on the ground that as there are no other distributors in the area that the refill sales to the customers cannot be restricted to the monthly ceiling limit as pleaded k the counter by the respondents. In fact, thus justification given in the counter affidavit for the first time that as there were no other distributors in the area, refill sales to the customers cannot be restricted to the monthly ceiling limit is not stated in the in the said letter dated 28-7-2015 written to the petitioner by the Senior Area Manager. Therefore, there is a doubt regarding the said justification which is now pleaded for the first time in the counter affidavit. Further, there is nothing to indicate either in the counter affidavit or in the letter dated 28-7-2015 addressed by the Senior Area Manager, IOC Ltd., to the petitioner that any permission is accorded to the respondents 6 and 7 to proceed with the refills sales beyond the ceiling limit of 8,800 per month on the ground that there are no other distributors in the area. So it requires probe into the said allegation to ascertain and find out whether the respondents 6 and 7 are justified in effecting refill sales over and above the ceiling limit of 8,800 per month and whether the same is authorized or not. In the aforesaid letter dated 28-7-2015, the authorities have simply ignored the said allegation made in the complaint given by the petitioner stating simply that as regards the illegal refilling of LPG cylinders that there is no compliant received at area office. This shows evasive nature of the concerned authority who conducted the enquiry. Even if no complaint is received from any person in the area office, still when the petitioner himself has given a compliant, they are expected to enquire deep into the matter and find out whether the said refill sales beyond the ceiling limit is authorized and justified or not.

6. As regards the other malpractices pointed out by the petitioner in his complaint that there are bogus connections being illegally maintained by the respondents 6 and 7 and this sales of bogus connections is to hotels, restaurants, hostels etc. and that the respondents 6 and 7 have been siphoning of the subsidy amount illegally and earned Crores of rupees unlawfully and causing loss to the exchequer of the 1st respondent/Union of India etc also, it appears from the record that no full-fledged enquiry was conducted in this regard. A reading of the letter dated 28-7-2015 referred to supra and the counter affidavit shows that the enquiry was made in a superficial way and in a causal manner. There was no full-fledged enquiry made into the allegations made by the petitioner in his complaint. When the allegations made in the complaint by the petitioner are serious in nature and when they are relate to indulging in large scale malpractice and irregularities in maintaining bogus connections and siphoning of the subsidy amount by respondents 6 and 7 resulting into serve monetary loss to Crores of rupees to the exchequer and when the said money is the public money and when there are serious allegations of effecting refill sales more than the ceiling limit per month, the authorities, concerned cannot abrogate their duty and responsibility by brushing aside the said allegations by conducting a superficial enquiry in a flippant manner. The authorities concerned are expected to make a deep probe into the allegations in a full-fledged manner and ascertain whether there is any truth in the said allegations or not and if any truth is found in the said allegations, then they have to initiate appropriate legal action against the concerned who indulged in the said malpractice and irregularities causing huge monetary loss to the exchequer. The officer who is entrusted with the task of conducting enquiry into the said allegations is also expected to conduct the enquiry in a fair and transparent manner. He is expected to examine the petitioner also who has given the said complaint, who claims that he is in possession of a necessary evidence to prove the said allegations made by him in his complaint. In fact the grievance of the petitioner in this writ petition is also that the officer who conducted enquiry in a superficial manner did not approach him to take his version and if he has approached him that he would have produced the material available with him in proof of the allegations made by him. We find some justification in the said grievance of the petitioner. It is nowhere state

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d wither in the counter affidavit or in the aforesaid letter dated 28-7-2015 that the officer who has conducted enquiry has taken the version of the petitioner. Therefore, the material on record discloses that the enquiry was not conducted in appropriate manner which serious allegations of like nature demands. On the other hand, the material on record discloses that the enquiry was conducted only in a casual, superficial and in a flippant manner. 7. Therefore, in the said facts and circumstances of the case, we are of the considered view that the allegations which are serious in nature require a full-fledged enquiry and a deep probe by a competent authority for taking appropriate action to remedy the situation and to take appropriate action against the erring persons if the said serious allegations are ultimately found to be true, in the larger public interest as the issue pertains to siphoning of public money. 8. In view of the above discussion, the writ petition is allowed. The respondents 2 to 5 are directed to order for full-fledged enquiry and deep probe into the allegations made by the petitioner in his compliant and also in the present writ petition by entrusting the matter for enquiry of the Vigilance Cell relating to the IOC Ltd. The enquiry should be held in a fair and transparent manner not giving any scope to entertain and doubt that a blased and a flippant enquiry is made. The Enquiry Officer shall also examine the petitioner and take his views and also collect the evidence available with the petitioner in proof of the said allegations. The aforesaid exercise of conducting a full-fledged enquiry and probe into the allegations shall be completed within a period of 6(six) weeks from the date of this order. Pending applications, if any, shall stand closed. No costs.
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