Allahabad High Court
M/S Markandey Oil Trader vs Union Of India Thru Secy. And Others on 30 April, 2013
Author: Ashok Bhushan
Bench: Ashok Bhushan, Manoj Misra
HIGH COURT OF JUDICATURE AT ALLAHABAD 'AFR' Judgment reserved on 10.04.2013 Judgment delivered on 30.04.2013 Case :- WRIT - C No. - 50302 of 2012 Petitioner :- M/S Markandey Oil Trader Respondent :- Union Of India Thru Secy. And Others Petitioner Counsel :- Manish Goyal,Vinay Kumar Mishra Respondent Counsel :- C.S.C.,A.S.G.I.(2012/5278),Arvind Srivastava,P.N.Saxena,Prakash Padia,Rishabh Kumar,Santosh Kumar Nigam And Case :- WRIT - C No. - 50675 of 2012 Petitioner :- M/S Agarwal Trading Agency Rasara Respondent :- U.O.I. And Others Petitioner Counsel :- Vinay Kumar Mishra,Manish Goyal Respondent Counsel :- C.S.C.,A.S.G.I. 2012/5284,Prakash Ch.Yadav,Rishabh Kumar And Case :- WRIT - C No. - 54866 of 2012 Petitioner :- M/S Ayodhya Nath Rajwanshi Prasad Respondent :- Union Of India Thru Secy. And Others Petitioner Counsel :- Manish Goyal,Vinay Kumar Mishra Respondent Counsel :- C.S.C.,A.S.G.I.(2012/5438),Mr. Aman Khan,Rishabh Kumar And Case :- WRIT - C No. - 5783 of 2013 Petitioner :- M/S Jagjeevan Patel And Company Respondent :- Union Of India And Others Petitioner Counsel :- Vinay Kumar Mishra Respondent Counsel :- C.S.C.,A.S.G.I.2013/5153,Fahd Iqbal Hon'ble Ashok Bhushan, J.
Hon'ble Manoj Misra, J.
(Delivered by Hon'ble Manoj Misra, J.)
1. These four writ petitions raise a common question, which is, as to whether the State Government / district administration has jurisdiction to periodically alter the quota of Super Kerosene Oil (hereinafter referred to as SKO) allocated to a distributor / dealer of an Oil Marketing Company, within that district, for distribution through the Public Distribution System (hereinafter referred to as the PDS). As these petitions raise a common question, with the consent of the learned counsel for the parties, were heard together and are being decided by a common judgment.
2. Each of the four writ petitioners in these connected petitions is a distributor of Kerosene Oil holding licence in Form IIIA under the U.P. Kerosene Control Order, 1962 (hereinafter referred to as 'Control Order, 1962') with storage licence under the Petroleum Act, 1934 and the Rules framed thereunder. The petitioners of Writ Petition Nos. 50302 of 2012, 54866 of 2012 and 5783 of 2012 are distributors of Bharat Petroleum Corporation Ltd. (an Oil Marketing Company) whereas the petitioner of Writ Petition No. 50675 of 2012 is a distributor of Indian Oil Corporation Ltd. (another Oil Marketing Company).
3. The petitioners of Writ Petition Nos. 50302 of 2012, 54866 of 2012 and 50675 of 2012 are distributors within the district of Ballia and are aggrieved by an order dated 03.09.2012 passed by the Deputy Secretary, Food and Civil Supplies, Anubhag-7, Govt. of UP, pursuant to the order of this Court dated 30.5.2012 in Writ Petition no.39542 of 2004, by which the company-wise /dealer-wise quota of SKO within the district of Ballia has been re-fixed on the basis of a report dated 28.06.2012 submitted by the District Magistrate, Ballia. Whereas the petitioner of Writ Petition No.5783 of 2013 is a distributor in the district of Azamgarh and is aggrieved by an order dated 17.1.2013 passed by the District Magistrate Ballia by which his quota for the month of January 2013 has been altered.
4. Admittedly, the allocation of SKO to the respective States by the Central Govt. is periodically altered and so are the quotas of the distributors periodically fixed/altered dependent on various factors and as, by the time these writ petitions have become ripe for hearing and final decision, fresh re-allocation has already become due, we are not entering into the merits of individual allocation of SKO to each of the petitioners. We, therefore, confine the adjudication in this petition only to the short question of jurisdiction of the State / district administration to periodically alter the quota allocated to a distributor / dealer of an Oil Company of SKO for distribution through the PDS. Moreso, it was on this very issue that the petitions were entertained and interim orders were passed.
5. According to the petitioners as per SKO allocation policy, notified vide Notification No. P-21016 (41)/90 dated 23.01.1991 (annexure No.8 to writ petition No.50302 of 2012) issued by the Government of India, Ministry of Petroleum and Chemicals, the Central Government makes bulk allocation of SKO to States and Union Territories, who in turn decide about disctict wise allocations within the States whereas the dealer wise allocation is carried out by the Oil Marketing Companies and that the State or the district administration has no jurisdiction to alter the quota of the distributor/ dealer of an Oil Marketing Company. It is their case that under sub clause (ii) of Clause 3 of the Control Order, 1962 an Oil Company which supplies Kerosene to an Agent for the purpose of distribution to the distributor is not required to have a license as envisaged under sub clause (i) of the Control Order, 1962, therefore, the Control Order, 1962 does not provide for any restriction on the Oil Company in allocation of quota to their respective agents/ distributors. It is also their case that under condition no.5 of the license issued under the Control Order, 1962 a licensee, before the commencement of calendar month, has to intimate the licensing authority with regard to the quota fixed by the Oil Company, which clearly demonstrates that the quota is to be fixed by the Oil Company and not by the district administration. It is also their case that the State Level Coordinator of Oil Industries apprised the Principal Secretary, Govt. of UP vide letter dated March 1, 2001(annexure no.9 to the petition) that as per the Central Govt. Notification dated 23.1.1991 dealer wise allocation has to be left with the Oil Companies only. Attention of the Court was also drawn to an order dated 4th October 1989 (annexure 11 to the petition) passed by the apex court in Special Leave Petition No.14185 of 1988 connected with Special Leave Petition No.11702 of 1989 and Writ Petition (Civil) No.979 of 1988 wherein admission of the district magistrate to the effect that his jurisdiction is limited to fix quota of Kerosene Oil area wise and not dealer wise, within his district, was noted and acted upon. Thus, according to the petitioners the State Govt. / district administration acted wholly without jurisdiction in altering the periodical allocation of SKO of the distributors/ dealers when such alteration was within the exclusive domain of the Oil Companies.
6. Per contra, the learned counsel for the State Level Co-ordinator, the learned State Counsel as well as the counsel for the intervenor-distributor, submitted that as per the policy, the allocation of PDS-SKO for each State/Union Territories is decided by the Ministry of Petroleum and Natural Gas, which is communicated to the State Level Co-ordinator for release by Oil Companies. In turn, State Level Coordinator informs the State Govt. (Food & Civil Supplies Deptt.) with regard to the allocation. Thereafter, the Food and Civil Supplies Authorities of the State decide district wise/oil company wise allocation of PDS-SKO of various districts and communicate the same to the District Magistrates/State Level Co-ordinators for proper distribution. Attention of the Court was drawn to paragraph 6 of the counter affidavit filed on behalf of the State Level Coordinator where it is stated that wholeseller-wise allocation is decided by the district magistrate/ district supply officer of the concerned district and is communicated to respective Oil Companies/ State Level Coordinator for release of SKO to their whole-sellers. In paragraph no.7 of the said counter affidavit it is stated that in the allocation of quota to the whole-sellers in each district, State Level Coordinator has no role to play. In paragraph 8 thereof, it is stated that in so far as the allocation of quota wholeseller-wise is concerned, it is only the district authority who finalises. Attention of the Court was also drawn to the counter affidavit filed on behalf of the State Govt. where it has been stated that prior to year 2001, the allocation of quota of Kerosene Oil was done by the State Level Co-ordinator, Indian Oil Corporation, Lucknow due to which several practical difficulties were seen in distribution of the Kerosene Oil at district level. Hence, to address to the difficulties in distribution, a State level meeting was called on 02.09.2000 and in the said meeting, in the presence of State Level Co-ordinator of the Indian Oil Corporation, Lucknow and the representative of Oil Companies, it was decided that the State should reallocate the distribution of Kerosene Oil as per geographical status and requirements with respect to specific areas and, as such, regarding the reallocation, reports were called by the State Govt. from the district magistrates and after receiving the proposals from districts, Govt. Order No.612-29-7-2001-M-143/2000 dated 12.02.2011 and Govt. Order No.817/29-7-2001-M-143/2000 dated 27.02.2001 were issued by which the State Govt. was empowered to allocate the quota of the kereosene oil and to inform the State Level Coordinator and Regional Managers of all concerned companies. Attention of the Court has also been drawn to the counter affidavit filed by intervenor in Writ Petition No.50302 of 2012, which encloses a letter No. P-21016/14/2000 dated 20th March, 2001 of the Government of India, Ministry of Petroleum and Natural Gas addressed to the Principal Secretary, Govt. of Uttar Pradesh, Lucknow (U.P.), which reads as under:-
"Subject-Modification in the distribution system of PDS kerosene by the Uttar Pradesh Govt.
Sir, I am directed to refer to your letter No. 905/29/7/2001/143/2000 dated 8th March, 2001 on the subject mentioned above, and to state that based on the allocation approved by this Ministry, Oil Company-wise share out of the allocation is decided as per the market share of each oil company. Oil companies decide the dealer-wise allocation as per the district-wise allocation/requirement made by the State Govt.
This Ministry have considered the proposal of the State Govt to make dealer-wise allocation by the State Govt. This Ministry will have no objection to the proposal of the State Govt. provided the market share of company-wise State allocation of SKO is not disturbed.
Yours faithfull, (Y.K. Cherian) Dy. Secretary to the Govt. of India"
7. Placing reliance on the Central Govt. letter dated 20th March 2001 it has been contended on behalf of the respondents that the Central Govt. has also agreed to the dealer-wise allocation of SKO by the State Govt. subject to the condition that the market share of company-wise State allocation of SKO is not disturbed. It has been contended on behalf of the respondents that there is no averment in the writ petition that by the impugned orders the market share of company-wise State allocation of SKO has been disturbed.
8. To wriggle out of the effect of the letter written by the Deputy Secretary to the Govt. of India by which the proposal for dealer-wise allocation of SKO by the State Government was accepted by the Central Govt., the learned counsel for the petitioner submitted that such letter is without any authority and is in the teeth of the provisions of Clause 5 of the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999 notified by the Central Govt. under Section 3 of the Essential Commodities act, 1955. It was contended that under Clause 5 of the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999, it is the Central Govt. alone which has the power to regulate and control the supply of petroleum product by an oil marketing company. It was thus contended that conferment of any authority on the State Govt. and its officers to determine the dealer-wise allocation of SKO would be illegal and violative of the provisions of the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999.
9. Before examining the weight of rival submissions, it would be useful for us to examine the stand taken by the State Level Coordinator as well as the State Govt. in its counter affidavit. In paragraphs 4, 5, 6, 7, 8, 9 and 10 of the counter affidavit filed on behalf of the State Level Coordinator, in writ petition no.50302 of 2012, it has been stated as follows:-
"4.That in order to manage eqitable distribution, allocation of PDS SKO to the States/ Union territories is decided by the Ministry of Petroleum & Natural Gas for proper distribution of PDS SKO. In this regard, after allocation of PDS SKO quantity for each State/ companywise is decided by the Ministry, and state/ company-wise allocation is communicated to the State Level Coordinator (SLC) by Petroleum Planning and Analysis Cell (PP & AC) for release by Oil Companies. In turn, State Level Coordinator informs to the State Govt. (Food & Civil Supplies Deptt.) with regard to allocation of PDS SKO.
5. That, thereafter, Food & Civil Supplies authorities of UP Govt., decides district-wise/ oil company-wise allocation of SKO of various districts of UP and communicate the same to all District Magistrates/ State Level Coordinator (SLC) for proper distribution.
6. That in this regard, initially the allocation, decided by the State Govt., is called district-wise/ Oil company-wise allocation and thereafter the further wholeseller-wise allocation is decided by the District Magistrate/ District Supply Officer of the concerned district and is communicated to respective Oil Companies/ State Level Coordinator for release of SKO to their wholesellers.
7. That, moreover, in the allocation of quota to the wholesellers in each district, State Level Coordinator has no role to play. However, the concerned oil companies is to ensure that the PDS SKO should not be released more than the allocation given by State Govt/ PPAC and keep SLC informed at the month's end.
8. That in so far as the allocation of quota in a district to wholeseller-wise is concerned, it is only the district authority who finalises. In so far as the State Level Coordinator is concerned, he has no other role to play whatsoever in so far as the distribution of SKO is concerned.
9. That it is further submitted that in distribution of Kerosene Oil, the Oil Companies are responsible for making the product available at their storage points which is further to be lifted by the wholesellers, as per the directions of the district authorities. The wholesellers, after lifting the product, will deliver it to the retailers in accordance with the quantity allocated by the district authorities based on ration cards attachment. It is further submitted that the entire distribution of kerosene oil with the State is monitored and controlled by the Govt. of UP.
10. That in this regard a Govt. Order has been issued by the State Government, namely, Principal Secretary of the State Government addressed to the State Level Coordinator, Indian Oil Corporation Ltd dated 12.2.2001, a true copy thereof is being filed and marked as Annexure CA-1 to this affidavit. By the said Govt. Order, the earlier Govt. Order dated 03.02.2001 was cancelled. From a perusal of the aforesaid Govt. Order, it is clear that a meeting was convened at the Govt. Level on 02.09.2000 in which a decision was taken for the distribution of Kerosene oil through district authorities. From a perusal thereof, it is clear that there is absolutely no role in so far as the State Level Coordinator is concerned, in order to distribute the SKO to the general public or even in respect of the allotment of quota to the wholesellers."
The stand taken by the State Govt. in its counter affidavit is consistent with the stand of the State Level Coordinator as is reflected from paragraph 6 of the counter affidavit filed on its behalf, in Writ Petition No.50302 of 2012, the relevant extract of which reads as follows:
"6. .............................it is submitted that prior to year 2001 the allocation of quota of the kerosene oil was done by the state level coordinator Indian Oil Corporation Lucknow due in (should be read as "to") which several practical difficulties where (should be read as "were") seen in distribution of the kerosene oil at district level hence to meet out the difficulties in distribution a state level meeting was called on 02/09/ 2000 and in the said meeting in presence of the state level coordinator of Indian Oil Corporation Lucknow, the representatives of oil companies it was decided that the state should reallocate the distribution of kerosene oil as per the geographical status and as per the requirement of the specific area and as such regarding the reallocation the reports were called by the State Government from the District Magistrates and after receiving the proposals from districts Government Order No.......dated 12.02.2001 and Govt. Order No......dated 27.2.2001 were issued by which the State Government was empowered to allocate the quota of the Kerosene Oil and was to inform as such to the State Level Coordinator of Indian Oil Corporation and Regional Managers of all concerned Oil Companies. Accordingly from the year 2001 the distribution of kerosene oil is done district wise/ company wise from the State Govt."
10. Having heard the learned counsel for the parties and on perusal of the record including the statement made by the State Level Co-ordinator in its counter-affidavit as also the letter dated 20th March 2001 of the Deputy Secretary, Government of India, Ministry of Petroleum and Natural Gas addressed to the Principal Secretary, Govt. of Uttar Pradesh, Lucknow (U.P.), it is clear that as per the policy prevailing since 2001, the allocation of quota to the wholesellers/distributors in each district is to be finalised by the district authorities. The decision of which is to be communicated to the State Level Co-ordinator for release of SKO by various Oil Companies. The condition in the license, as relied by the learned counsel for the petitioners, that the dealer/ distributor/ agent has to inform about the quota fixed by the Oil Company does not imply that the dealer-wise quota cannot be redetermined by the district authorities. From the counter affidavit filed by the State Level Coordinator, it is clear that the wholeseller-wise allocation is decided by the district magistrate/ district supply officer of the concerned district and is communicated to respective Oil Companies/ State Level Coordinator for release of SKO to their whole-sellers. Thus, ultimately, the position, as obtaining under the license, remains the same, inasmuch as the quota is released by the Oil Company to its wholeseller/ distributor/ dealer, albeit under the advice of the district authorities. We, therefore, do not find any conflict between the condition in the license issued under the Control Order, 1962 with the new policy whereinunder the district administration reallocates the dealer-wise/ wholeseller-wise/ distributor-wise quota of SKO for PDS. We find that under the new policy, the district administration acts as an aid to the Oil Companies in fixing the quota of their distributors/ wholesellers/ dealers.
11. To assess the weight of the submission of the learned counsel for the petitioners that the new policy offends the provisions of Clause 5 of the Petroleum Products (Maintenance of Production, Storage and Supply) Order, 1999, it would be necessary for us to examine Clause 5, which reads as under:-
"5. Regulation of supply and distribution of petroleum products---(1) The Central Government for uninterrupted and equitable distribution and availability of petroleum products may, by order, require any oil marketing company to supply or cause to be supplied one or more petroleum products from the stocks held by it at any place in India to installations or depots of any oil marketing companies in such quantities and in such manner as may be specified therein and for this purpose may, by the same or a different order, require any oil retaining company to make available to the oil marketing company such petroleum product or products for a period specified in the order.
(2) Every person in charge of any installation or depot, shall on receipt of the petroleum product or products supplied by any oil marketing company whether in pursuance of any order made under sub-clause (1) or otherwise, distribute and sell the same in such areas and such manner, as specified.
Provided that the Central Government at any time, may issue such further directions to the person-in-charge of a depot or installation as may be necessary for equitable distribution of such petroleum product or products:
Provided further that the Central Government may by general or special order authorize any State Government or its officers, to issue such directions to the person-in-charge of a depot or installation as may be necessary for the equitable distribution, of such petroleum product or products subject to such terms and conditions, as may be specified.
(3) The order referred to in sub-clause (1) may contain such supplemental or incidental provisions relating to the supply of any petroleum product including prices and other charges as the Central Government may consider necessary."
12. A perusal of Clause 5 reveals that the Proviso two to sub-Clause (2) of Clause 5 empowers the Central Government by general or special order to authorize any State Government or its officers, to issue such directions to the person-in-charge of a depot or installation as may be necessary for the equitable distribution, of such petroleum product or products subject to such terms and conditions, as may be specified. It has already been brought to our notice that the Government of India, Ministry of Petroleum and Natural Gas by its letter No. P-21016/14/2000 dated 20th March, 2001 addressed to the Principal Secretary, Govt. of Uttar Pradesh, Lucknow (U.P.) has accepted the new arrangement which authorises the State Govt. to make dealer-wise allocation of Kerosene Oil. Therefore, we do not find that the dealer-wise allocation by the State Govt. offends Clause 5 of the Control Order, 1999. Even otherwise, the provisions of Clause 5 does not place any restriction on the State Govt./ district authorities in carving out a proposal for district-wise/dealer-wise allocation of quota of SKO for the purpose of PDS. Another notable feature is that neither the State Level Co-ordinator nor any of the Oil Marketing Companies are aggrieved by the impugned Government Order or the report of the District Magistrate by which dealer-wise quota has been re-fixed. Moreover, we are of the view that the district administration is better equipped than the oil companies in collecting data with regards to the requirement of SKO in various regions of a district for the pupose of better distribution to the consumers, therefore, if the district authorities are required to inform the State Level Co-ordinator about the requirement in various regions of a district for release of the quota by the Oil Companies no fault can be found with such system. In such a situation, taking a view that the district authorities would have no jurisdiction to fix the dealer-wise/district-wise quota of SKO would defeat the very purpose for which Public Distribution System has been put in place.
13. Further, it is not the case of the petitioners that by alteration of the dealer-wise/district-wise allocation, the State-wise quota of the Oil Marketing Companies, as fixed by the Central Govt, have been altered. Accordingly, we do not find any substance in the argument of the petitioners that the order dated 03.09.2012 passed by the Govt. of Uttar Pradesh altering monthly quota of Kerosene oil dealer-wise/company-wise, for the Public Distribution System, is without jurisdiction.
14. Before parting, we would like to bring on record that on behalf of the petitioners it was also submitted that the District Magistrate while making the allocation did not adopt a fair, transparent and intelligible criteria and the quota earlier allocated to the petitioners was arbitrarily reduced while enhancing it for other distributors without much justification. It was submitted that as per the guidelines, the monthly allocation to a distributor should neither be less than 75 K.L. nor above 250 K.L. But despite the above guideline, monthly allocation in case of certain distributors has even exceeded 250 K.L., which suggests arbitrariness. It was further submitted that while making allocations, the demand from different areas was not properly adjusted, inasmuch as there was no proper consideration of the distance between the distributor and the consumer while reallocating the quota amongst the distributors. The respondents, however, have rebutted the aforesaid submissions and have sought to justify the allocation.
15. Be that as it may, as fresh periodical allocation has already become due, and for which reason we have not entered into the merits of each allocation, it is observed that the district authorities while making fresh allocation proposal shall take into consideration all the relevant aspects as well as the guidelines obtaining as on date so as to ensure fair distribution of Kerosene.
16. Subject to the aforesaid observations, the writ petitions are dismissed. The interim orders, if any, stand discharged.
Order Date :-30.04.2013 Sunil Kr Tiwari (Manoj Misra, J.) (Ashok Bhushan, J.)