Rajasthan High Court - Jaipur
Mushtaq Ali And Ors vs U O I (Ministry Of Petroleum)Ors on 20 September, 2012
Author: Arun Mishra
Bench: Arun Mishra
In The High Court Of Judicature For Rajasthan Bench At Jaipur D.B. Civil Writ Petition (PIL) No.3738/2012 Mushtaq Ali & others v. Union of India & others Date of order 20.9.2012 Hon'ble Chief Justice Mr. Arun Mishra Hon'ble Dr. Justice Meena V. Gomber Reportable Shri Madhav Mitra, for petitioners
Shri S.S. Raghav, for UOI Shri G.S. Bapna, Advocate General, with Shri Venkatesh Garg, for respondent State By the Court The writ petition has been preferred by way of a Public Interest Litigation by the petitioners. Prayer has been made to declare transfer of cash subsidy scheme on Public Distribution System (PDS) Kerosene, to be illegal. Other ancillary reliefs have also been prayed.
Petitioners have submitted that the Central Government, Ministry of Petroleum & Natural Gas, has floated the pilot scheme for transfer of cash subsidy on PDS Kerosene in the bank accounts of the consumer. Out of 5 States, Rajasthan was also selected besides 4 other States for the project. Districts Alwar and Bharatpur have been selected for introduction of the project. In Alwar district, initially Tehsil Laxmangarh was selected for the project but since consumers of Tehsil Kotkasim were having more bank accounts in comparison to Tehsil Laxmangarh, it was selected later-on. It is submitted that the respondents have failed to create the basic infrastructure for successful running of the project. Large number of consumers, who are not having bank accounts, are suffering from non supply of Kerosene on subsidy, and there is no proper supervision of the project. It is further submitted in the petition that meeting was held under the chairmanship of Joint Secretary to the Ministry of Petroleum & Natural Gas, Government of India, on 15.11.2011 where certain questions were canvased. Certain preliminary proceedings were required to be performed for launch of the project
i) District Collector will initiate a programme to collect computerized information of 15,000 consumers along with their bank accounts with the help of private agency.
ii) For depositing the amount directly to the account of consumer, NIC was to prepare software so that deposit of subsidy be made within a specific period.
iii) Information from the Fare Price Shop Holders was to be collected for ascertaining actual quantity of purchase and these information has to be entered into computer under the guidance of Tehsildar with the help of private agencies.
iv) On district and tehsil levels special cell has to be constituted and monitored by Collector.
Tehsil Kotkasim has been selected instead of Tehsil Laxmangarh which is consisting of 24 Gram Panchayats where total number of Ration Cards holders are 25843. Copy of the list issued by the District Supply Officer has been placed on record. It is submitted that only 14120 bank accounts have been opened for the consumers. Thus large number of Ration Card holders are not having bank accounts for transfer of the subsidy. Subsidy of Rs.22,31,000/- has been deposited into 8000 accounts whereas total accounts opened were 13000. Thus the project is not running properly. Subsidy is also not being deposited regularly. Hence the petition has been preferred.
Union of India has also filed affidavit of Shri Rama Kant Singh, in which background of introduction of pilot project for direct transfer of cash subsidy on PDS Kerosene at Kotkasim Tehsil of Alwar District, has been mentioned. It is submitted that Kerosene has same density range and similar characteristics as High Speed Diesel (HSD). Possibility of adulteration of HSD with Kerosene cannot be ruled out. Apart from adulteration, Kerosene is being sold at a price which bears no correlation with the price of alternative fuels in the market. Therefore, there is considerable scope of diversion to the black market. The current subsidy on PDS Kerosene is Rs.33.52 per litre and the overall subsidy on this account is expected to be Rs.31,461 crore in 2012-13. This subsidy has to be funded through Government of India, budgetary resources and oil marketing companies and represent resources which can be alternatively better utilized. There is an urgent need to reduce this subsidy.
It is further contended in the affidavit filed by the UOI that in spite of various efforts taken by the oil companies to prevent black marketing / diversion of Kerosene, a study by National Council of Applied Economic Research (NCAER) in 2005 estimated that about 38.6% of the PDS Kerosene is diverted for unauthorized usage including adulteration and thus not reaching the targeted end users. Such diversion not only means misuse of Government Subsidies but also loss to exchequer (non payment of taxes on auto fuels). Use of adulterated fuels in motor vehicles not only damages the motor engines but it also creates environmental pollution. It is further submitted that for a long period, PDS Kerosene is priced at Rs.14 per litre. With the price differential between Kerosene and other fuels such as petrol and diesel having increased tremendously, it is felt that a much larger proportion of Kerosene gets diverted for adulteration and even the Kerosene which reached the customers is at a price which is higher than the price fixed by the Government. Diversion are mainly on account of depriving the bona fide beneficiary of the actual quantity of entitlement and selling the product in the name of fake / ghost or inoperative Ration Cards. It is also stated that in order to avoid leakage and pilferage of PDS Kerosene in the process of distribution, a direct transfer of cash equivalent of the subsidy as per actual usage by beneficiaries is most suitable alternative as it ensures that subsidy amount reached the actual consumer of kerosene in his bank account, while the entire kerosene moves at market rate reducing any incentive to divert. Further, direct transfer to bank accounts ensures that ghost customers get eliminated drastically, which is a major cause of diversion. The Government of India is engaged in a progress of financial inclusion and no person is being denied a bank account if he / she so desires and thus anybody who provides a bank account will be able to get this subsidy, if he is otherwise eligible.
It is further contended by Union of India that to run the scheme, it is the responsibility of the concerned State/UT and the scheme is as per Finance Minister's announcement in his Budget Speech. A Task force has been constituted by the Government in February 2011 and under the Chairperson, Unique Identification Authority of India (UIDAI) to recommend implementable solution for direct transfer of subsidies on PDS Kerosene, domestic LPG and fertilizers. The Task Force will recommend the methodology for transfer of subsidy equivalent in cash to the entitled beneficiaries. Interim report of the Task Force has suggested a phased approach for implementing the direct transfer of cash subsidy in the consultation with the State Governments.
It is further contended by UOI that the empowered group of ministers under the recoveries of the oil marketing companies in its meeting dated 8.8.2011 accorded in principle approval to the recommendation of the interim report of the Task Force for phase-wise implementation on the direct transfer of cash subsidy for Kerosene and for proposal of the Ministry of Petroleum & Natural Gas regarding direct transfer of cash subsidy for Kerosene to be implemented in consultation with the respective State/UT Governments.
It is further contended in the affidavit filed on behalf of Union of India that the pilot scheme will give the experience on how the direct transfer of subsidy be enabled in a full scale project. No burden or loss is being caused to the consumer and no public interest is being adversely affected.
In the reply filed by State of Rajasthan, it is contended that state government received letter from the central government dated 14.6.2011. The letter contained decision of the central government that with a view to ensure that the subsidy is not diverted in the process of distribution, it has decided that the state government should create a suitable infrastructure which will be able to transfer the cash equivalent of subsidy to the bank account of the intended beneficiaries. Copy of the letter of the central government has been filed as Annexure-R2/1 to the return. The scheme has been launched in the form of pilot project for Tehsil Kotkasim (Alwar). Initially Tehsil Laxmangarh (Alwar) was selected but later-on in the meeting with the Government of India held on 15.11.2011 it was decided that the pilot project may be taken in Tehsil Kotkasim. Minutes of the meeting dated 15.11.2011 has been filed as Annexure-R2/2 along with the return. The scheme is in the process of implementation and the intention is to cover all the genuine and eligible Ration Card Holders and the benefit would be extended to all the genuine and eligible Ration Card Holders. Amount of subsidy will go in the bank / post office accounts of the beneficiaries which would eliminate chances of diversion of subsidy and its illegal usurpation. Initially out of Rs.25 lakh deposited in the account of District Supply Officer, a sum of Rs.23.25 lakh was utilized for distribution of subsidy. Thus the project is being implemented successfully and there is no diversion of subsidy in the process of distribution. There is no report of harassment or hardship. Ration Cards which are existing are being treated as valid. The process of issuing new Ration Cards is going on and till such time the old Ration Cards are replaced, they are being treated as valid. Thus no difficulty is being caused to the consumers who are of desirous of obtaining Kerosene supply. If any specific complaint is received, the District Supply Officer shall ensure that the bank account is opened free of charge. Banking system has been spread in all the areas. In case of any specific complaint it could be inquired into by the District Supply Officer.
Shri Madhav Mitra, learned counsel appearing on behalf of the petitioners has submitted that there is no proper preliminary infrastructure preparation made by the respondents before launching the pilot scheme; old Ration Cards have not been substituted; bank accounts have not been opened of all the Ration Card Holders; and the Union Government is not remitting the subsidy timely as such the scheme be ordered to be closed.
Shri G.S. Bapna, learned Advocate General, appearing on behalf of the State and Shri S.S. Raghav, learned counsel appearing on behalf of the Union of India, have submitted that no case for interference is made out as the purpose of the scheme is wholesome and they are preparing new Ration Cards and till such time the old Ration Cards are being treated as valid, and the subsidy is being transferred in the bank / post office accounts of the recipients/ beneficiary of the subsidy. Subsidy is being released by the Union of India on time bound basis on the principle worked out by it.
After hearing the learned counsel for the parties, we are of the opinion that the scheme which has been framed, cannot be stated to be suffering from arbitrariness but is a wholesome provision made by the Union of India for preventing adulteration of HSD with Kerosene, which cannot be ruled out and there are complaints of use of Kerosene instead of HSD causing air pollution and resulting in so many diseases due to consumption of Kerosene/adulterated HSD in various kinds of motor vehicles causing injury to the health lung diseases, even dreaded diseases like cancer, are not ruled out. Thus the decision which has been taken by the Union of India considering inter-alia the aforesaid aspect and also that the benefit of subsidy must reach to the actual recipient when subsidy to the tune of Rs.31,461 crore is being released by the Union of India, it is the duty of the UOI to ensure that it reaches to the beneficiary i.e. the ultimate consumer. Subsidy is meant for the persons who utilizes the same and it is being distributed under the scheme in question to the appropriate persons who are holding Ration Cards. The transfer of subsidy directly to their bank / post office account ensures that it is not miss-utilized under the fake and ghost or inoperative Ration Cards by making false supplies or false entries in the register maintained with respect to supplies as to PDS. It is not uncommon that distribution of subsidized products is under the PDS is not proper and cases are received by the courts with respect to illegal usurpation of the subsidized goods supposed to be distributed under the Public Distribution Scheme. Thus, the scheme is wholesome and fulfils the objective of Article 39(b)(c) of the Constitution of India, cannot be said to be illegal or arbitrary in any manner. It ensures distributive justice and is to ensure that the person entitled to benefit actually receives the same.
Thus we find that the scheme cannot be said to be illegal or arbitrary in any manner. Such schemes are as a matter of fact necessary with respect to several products on which government is giving subsidy such as LPG, fertilizers etc. so that subsidy reaches to the proper hands and benefit of the same is not miss-utilized and the ultimate beneficiary who must receive it, is not deprived of the same. Some time they are forced to purchase the product at a higher cost from open market as the subsidized goods/articles supposed to be distributed under PDS are often subjected to black marketing.
Coming to the submission raised by Shri Madhav Mitra, learned counsel for the petitioners, with respect to the non issue of fresh Ration Cards, it is stated by the Advocate General appearing on behalf of the State that no problem is being caused due to non issuance of new Ration Cards; they are treating the old Ration Cards to be valid till they are replaced. As compared to the Ration Cards, number of bank accounts are less but scheme is such which is intended to take care of fake/ghost/inoperative Ration Cards. As old Ration Cards are being permitted to be used for availing the benefit of subsidy on Kerosene.
Coming to question of Bank accounts, in our opinion, in case Ration Card Holders want to avail the benefit of subsidy, it is for them to open bank / post office accounts and to obtain the benefit of the same. In case of any specific complaint of non opening of account by bank or post office, it has been assured by the Advocate General that District Supply Officer will look into the complaint and help in the opening of bank / post office account. In case any such grievance/complaint is received by the District Supply Officer, we direct that he shall ensure that bank / post office account is opened within ten days of receiving such complaint.
Coming to the question of distribution of timely subsidy, subsidy is being released on quarterly basis as per the scheme and that is based on the supply obtained in the previous quarter. There is a rational behind the scheme. It is pointed out in the reply of the State Government that initially Rs.25 lakh was deposited in the account of District Supply Officer and a sum of Rs.23.25 lakh was utilized for distribution of subsidy upto 19.1.2012. Same indicates that subsidy is being distributed properly, promptly and effectively.
At the same time to make scheme more effective, we direct the State Government and concerned Gram Panchayat to make publicity of the scheme and procedure to obtain benefit so that the persons who desire to obtain the benefit, are able to obtain it, the license holders of PDS shops must inform the consumers of the available benefit and the subsidy and requirement of opening of bank / post office account for receipt of the subsidy, District Supply Officer shall also make an effort in this regard and ensure that consumers are informed of the same.
We also direct the District Supply Officer to look into as to how many Ration Card Holders who have purchased subsidized Kerosene, have not been able to open bank / post office account as per the distribution made and let effort be also made to ensure that such persons also open the bank / post office accounts who are in receipt of supply of Kerosene. Let data be collected by District Supply Officer and appropriate steps be taken as assured by the Advocate General for opening of their bank / post office accounts for transfer of subsidy to their accounts promptly to which they are entitled for.
Shri Mitra also submitted that there should be periodical review. Periodical review as stated by Shri Raghav, learned counsel for Union of India is already taking place. Since it is a pilot project, to adjudge the successful running of the scheme as such, obviously its implementation has to be watched and such project has to be made successful for which no stone should be left unturned.
In view of the aforesaid discussion and directions, we hold the scheme to be valid. Petitioners' prayer to quash the scheme is hereby rejected. Petition is accordingly disposed off with aforesaid direction. No costs.
(Dr. Meena V. Gomber) J. (Arun Mishra) CJ.
db [All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.] Deepankar Bhattacharya PS