Delhi High Court
Wool Worth (India) Ltd. & Anr vs Union Of India & Ors on 23 February, 2011
Author: S. Muralidhar
Bench: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
W.P.(C) 2373/1998
Reserved on: 31st January 2011
Decision on: 23rd February 2011
WOOL WORTH (INDIA) LTD. & ANR ..... Petitioners
Through: Mr. J. P. Sengh, Senior Advocate with
Mr. B. C. Pandey, Mr. Narender Sharma, Mr. Satya
Priya and Mr. Sumit Batra, Advocates.
versus
UNION OF INDIA & ORS ..... Respondents
Through: Mr. Sachin Datta, CGSC with
Ms. Gayatri Verma and
Mr. Abhimanyu Kumar, Advocates.
CORAM: JUSTICE S. MURALIDHAR
1. Whether reporters of the local newspapers
be allowed to see the judgment? No
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported in the Digest? No
JUDGMENT
23.02.2011
1. The subject matter of the present writ petition is a Notification dated 1 st July 1997 issued by the Ministry of Petroleum and Natural Gas („MPNG‟), Government of India stating that supply of furnace oil for captive use of 100% export oriented undertakings („EOUs‟) would be made at international rates. The grievance of the Petitioner, which is an EOU, is that despite the above Notification, furnace oil was supplied at international rates only for the period between 7th October 1997 and 31st March 1998. The further grievance is that after 1st April 1998, the price for supply of furnace oil by W.P.(C) No. 2373 of 1998 Page 1 of 4 Hindustan Petroleum Corporation Ltd. („HPCL‟) and Indian Oil Corporation Ltd. („IOCL‟), Respondent Nos. 3 and 4 respectively, was nearly doubled the previous price although there was no such increase in the international market during the said period for furnace oil or any other oil products.
2. According to the MPNG, the Notification dated 1st July 1997 itself made it clear that supply would be made at international rates only where furnace oil was an exportable surplus and where furnace oil was not an exportable surplus, "the oil companies would import furnace oil on behalf of 100% EOUs and supply them at the landed cost plus applicable duties if any, delivery charges and margins, etc. with no adjustments in the pool account." It is submitted that the supply of furnace oil was not made at international rates prior to 7th October 1997 and later than 31st March 1998 since there was no exportable surplus and due to non-availability of facilities at port locations.
3. Whether furnace oil was not an exportable surplus between 1 st July 1997 and 6th October 1997 is a pure question of fact. It possibly cannot be determined by this Court in exercise of its powers under Article 226 of the Constitution. Neither in the writ petition nor in the rejoinder affidavit have the Petitioners produced any material to show that there was an exportable surplus of furnace oil during the aforementioned period. The assurance held out in the Notification dated 1st July 1997 was not an unqualified one. If, in W.P.(C) No. 2373 of 1998 Page 2 of 4 fact, there was no exportable surplus, the question of supplying furnace oil at international rates did not arise.
4. The next aspect to be considered is whether HPCL and IOCL acted arbitrarily in charging the rates they did for the supply of furnace oil to the EOUs‟ for the period after 31st March 1998. Here again, it is asserted by the Respondents on the basis of factual data that the furnace oil ceased to be an exportable surplus from 1st April 1998. Consequently, they could not supply furnace oil at international rates beyond that date. The second reason was that vide Notification dated 21st November 1997, the MPNG started dismantling the Administered Price Mechanism („APM‟) in phases starting from 1st April 1998. The price of furnace oil was decontrolled from that date and the oil companies were allowed to fix the price based on market considerations. Therefore, the rates charged by the HPCL and IOCL were consistent with the aforementioned Notification dated 21st November 1997.
5. One of the grievances made by the Petitioners is that after 1st April 1998 the HPCL and IOCL began charging @ Rs. 4,801/- per KL of furnace oil which was nearly double the previous price and there was no such increase in the international prices for the furnace oil.
6. In reply, it is pointed out that for the period from 7th October 1997 to 31st March 1998, EOUs, including the Petitioner, were paying rates ranging from W.P.(C) No. 2373 of 1998 Page 3 of 4 Rs. 3,500/- per KL to Rs. 2,500/- per KL of furnace oil. The price of Rs. 2,506/- per KL was for the fortnight between 16th and 31st March 1998, when the international prices were at their lowest. That was, therefore, not representative of the international price of furnace oil for the entire period from 7th October 1997 to 31st March 1998. As already pointed out, after 31st March 1998 the APM began to be dismantled.
7. This Court is satisfied that the impugned Notification dated 1st July 1997 did not hold out an unqualified assurance to the EOUs that for the entire period of one year thereafter, furnace oil would be supplied to them by the MPNG only at the international rates. It was qualified by the existence of an exportable surplus of furnace oil. The Respondents have been able to show that barring the period between 7th October 1997 and 31st March 1998, there was no exportable surplus of furnace oil.
8. This Court is unable to grant the reliefs as prayed for in this writ petition. The writ petition is dismissed.
S. MURALIDHAR, J.
FEBRUARY 23, 2011 ak W.P.(C) No. 2373 of 1998 Page 4 of 4