Supreme Court of India
SEEMA UPADHYAY versus UNION OF INDIA THR. THE SECRETARY, MIN. OF PETROLEUM AND NATURAL GAS AND ORS. on 5 April 2018
SEEMA UPADHYAY
v.
UNION OF INDIA THR. THE SECRETARY, MIN.OF PETROLEUM AND NATURAL GAS AND ORS.
(Writ Petition (Civil) No. 675 of 2013)
APRIL 05, 2018
[DIPAK MISRA CJI, A. M. KHANWILKAR AND
DR. D. Y. CHANDRACHUD, JJ.]
Public Distribution System – Dealership – Kerosene –Allegation in writ petition was that second respondent owned multipledealerships for distribution of petroleum products, and they areheld in the names of persons closely related to or associated withhim – Fact finding inquiry was conducted – However the inquirydid not result in any conclusive determination on the allegations –Held: The issue as to whether the second respondent owned multipledealerships or outlets for petroleum products, in violation of theapplicable rules and regulations, has to be determined by the oilcompany or companies concerned with the issue – None of the oilcompanies were impleaded to these proceedings – In their absence,it would not be possible for the Court to make any factualdetermination – Whether an individual holds a dealership or outletbenami would turn on an appreciation of factual material whichcannot be inquired into in the exercise of the jurisdiction underArt.32 – Consequently it would be open to the petitioner to bringsuch material as she has in her possession to the attention of theconcerned oil companies for such action as is deemed necessary –As regards the allegation of adulteration of petroleum products,Ministry of Petroleum and Natural Gas in its affidavit stated thesteps taken by public sector oil manufacturing companies to conductregular checks on the quality and quantity of petrol and diesel beingsupplied by retail outlets to the public at large – It was stated in theaffidavit that Motor Spirit and High Speed Diesel (Regulation ofSupply, Distribution and Prevention of Malpractices) Order, 2005and the Kerosene (Restriction on Use and Fixation of Ceiling Price)Order, 1993 have made provisions to enable the States and UnionTerritories to take action against malpractices and that the Ministry
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Aintended to implement the direct transfer scheme in kerosene inidentified districts of different states on a pilot basis – These areessentially matters of policy – Union Ministry of Petroleum andNatural Gas is seized of the issue – Moreover, defence that petitionhas been instituted for reasons other than a genuine effort to espousean issue of public interest also cannot be discarded – Petition isBaccordingly disposed of – Kerosene (Restriction on Use and Fixationof Ceiling Price) Amendment Order, 2007 – Essential commodities– Motor Spirit and High Speed Diesel (Regulation of Supply,Distribution and Prevention of Malpractices) Order, 2005 –Kerosene (Restriction on Use and Fixation of Ceiling Price) Order,C1993.
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.675 of 2013.
Under Article 32 of the Constitution of India.
DDr. Rajeev Sharma, Chandra Shekhar, Dharmendra Sharma, VipinKumar Sharma, Raghuvir Sharma, Haji Salimuddin, Ram Anugrah Singh,Advs. for the Petitioner.
Ms. Pinky Anand, ASG, S. Wasim A. Qadri, Mrs. Binu Tamta,Ms. Sridha Mehra, Raj Bahadur Yadav, R. D. Chauhan, Arun K.EChauhan, Farasat Ali Siddiqui, Arvind Kumar, Ram Swaroop Sharma,Kaushal Yadav, Dr. Kailash Chand, Advs. for the Respondents.
The Judgment of the Court was delivered by DR. D. Y. CHANDRACHUD, J. 1. Invoking the jurisdiction ofthis Court under Article 32 of the Constitution, the petitioner seeks theFfollowing reliefs:
“a)… a writ, order or direction in the nature of mandamuscommanding the respondents to get the matters of the known andreported cases of adulteration operated by the Mafias referredherein above, investigated through an independent agencyGpreferably CBI;
b) … appropriate writ of mandamus commanding the respondentsto directly transfer the cash subsidy in the bank accounts of thebeneficiaries of the kerosene oil on the basis of their Adhar Cardor through public distribution system or some other full proofHmechanism;..”
2. On 23 August 2013 when the petition came up for preliminaryhearing, the following directions were issued:
“From para 5 onwards the writ petition makes several allegationsagainst Devender Agrawal and one of his relative DharmendraAgarwal. The petitioner has not however chosen to implead thesaid two parties as party respondents to the petition. At the oralrequest of the petitioner, we permit the petitioner to implead thesaid two persons as party respondent Nos. 2 and 3 respectively.Amended writ petition shall be filed within one week.
Notice shall issue only after amended petition is filed.”
The above order indicates that a substantial part of the factualbasis of the petition relates to Devender Agrawal and his relative,Dharmendra Agarwal. This is evident fromparagraph 9 of the writpetition,which is extracted below:
“9. That Shri Agrawal owns a dozen of petty dealers of diesel andabout a dozen of S.P.company petrol pumps in his name or in thenames of near relations while the cost of one such petrol pump isabout Rs 1 to 1.50 crores.
The names of the main petty diesel dealers are:
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1) Mukesh Automobiles, HathrasJalesar Marg, GangoliHathrasin the fraudulent name of Mukesh Kumar S/o Mahendra PalAgrawal. Subsequently it was transferred to Nagla Salem(SadabadBehdoi Marg) All formalities are done by DevenderAgrawal @ Mukesh Kumar whereas no allotment can be madein the alias name and the same is contrary to the guideline ofthe Petroleum Ministry.
2) Petty Diesel dealer license obtained in the name of PooranSingh S/o Shri Chandrapal Singh Singh at Jalesar Marg, HathrasJunction.
3) Petty Diesel dealer license at Hathras-Jalesar Marg, villageBhopatpur, in the name of Rakesh Agrawal brother ofDevender Agrawal.
4) Petty Diesel dealer at Hathras-Sadabad Marg, near Kachhpura(Bisana) in the name of Manohar Lal.
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A5) Petty Diesel dealer license at Hathras-Aligarh Marg nearHanuman Chowki, Village BasaiQaji, obtained fraudulentlyin the name of Santosh Kumar S/o Netrapal, servant ofDevendra Agrawal.
6) Petty Diesel dealer license in QasbaMindu at Hathras inthe name of Suresh Chandra and partner Shri DeepakKumar. Deepak Kumar is the brother of the wife ofDevendra Agrawal.
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7) Petty Diesel dealer license at Hathras-Jalesar Marg, at NaglaIslamia in the name of Praveen Kumar S/o Gopal DassAgrawal. Praveen Kumar is the brother of the wife ofDevendra Agrawal.
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I) Village Utara Block Sasni, District Mahamayanagar in thename of Prem Prakash Sharma.
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II) Devende Automobile, Ladpur Block, Hathras, in the nameof Deepak Agrawal. Tin No.0962701283C. Depak Kumaris the brother of the wife of Devendra Agrawal. He alsohas Petty a Diesel License at Qasba Maindu.
III) Village Keshopur-Maho Block Hathras in the name ofESantosh Kumar, servant of Devender Agrawal. He alsohas a license for Petty Diesel dealer at Village Basai, nearHanuman Chowki.
IV) Rahul Automobiles, Barwana-Hathras Junction to JalesarRoad in the name of Shrawan Kumar Agrawal TinFNo.09127502025C. Shrawan Kumar is the brother of thewife of Devender Agrawal.
V) Shrawan Kumar Automobile in the name of DevenderAgrawal at O Marora (Kajrauth) Block Iglas, DistrictAligarh. Tin No.09127400903. This Tin No. is in the nameGof Jai MaaDurga Automobile. Hatheas registered in thename Devender Agrawal.
VI) Mayank Automobiles Sonai (Aligarh) owned by Smt.RenuAgrawal W/o Rakesh Agrawal, brother of DevenderAgrawal.
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VII) Pradeep Automobiles, Khtauli-Katailiya (Sasni), in thename of Ramji Lal Agrawal and Pradeep Kumar TinNo.09327401402.
VIII) QasbaVijaygarh, Block Akrabad, Aligarh in the name ofJai Kishore Agrawal, relation of Devender Agrawal.
IX) Chandan Automobile, Kuktai, Sadabad-Agra Marg, nearMandi Samiti in the name of Devender Agrawal.
There are two Petty Diesel dealer licenses in the name of DeepakAgrawal – one at MainduHathras and the other in the name ofDevender Automobiles at Ladpur-Hathras whereas two suchlicenses in the name of one person is contrary to the rules.”
The allegation is that Devender Agrawal owns multiple dealershipsfor the distribution of petroleum products, and they are held in the namesof persons closely related to or associated with him. It is in this view ofthe matter that this Court considered it necessary to allow the impleadmentof the aforesaid individual against whom allegations have been made.On 11 March 2015 the Solicitor General was requested to assist theCourt.
3. On 26 August 2016 this Court allowed the impleadment of theMinistry of Petroleum and Natural Gas. In the order of this Court,reference was also made to the allegations contained in paragraph 9 ofthe writ petition. This Court directed a fact finding inquiry into theaverments contained in paragraph9, by an officer of the rank of JointSecretary to the Government of India, to be nominated by the Secretaryin the Ministry of Petroleum and Natural Gas. The relevant part of theorder reads thus:
“Having heard learned counsel for the parties, we are inclined todirect a fact finding enquiry into the averments made in the aboveparagraph, by an officer of the rank of Joint Secretary toGovernment of India, to be nominated by the Secretary, Ministryof Petroleum and Natural Gas. The Enquiry Officer, so appointed,shall look into the allegations, made in para “9” and submit a report,after holding an enquiry into the relevant facts. The petitionermay furnish the details and supporting materials, if so advised, tothe Enquiry Officer within two weeks from today. The EnquiryOfficer shall be free to take such assistance of the licensing A
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Aauthorities concerned who have issued licences to the dealersconcerned as may be necessary. Enquiry Officer shall also beassisted in all respects by the District Administration of the StateGovernment. Needless to say that the Enquiry Officer shall issuea notice to respondent NO.2- Devender Agrawal alias MukeshKumar/Agrawal for purpose of holding an enquiry and take intoBconsideration the materials that may be placed on record by himwhile drawing his conclusion.”
4. The second aspect which has been dealt with in the order ofthis Court dated 26 August 2016 is the adulteration of petroleum products.Under paragraph 8A of the Kerosene (Restriction on Use and FixationCof Ceiling Price) Amendment Order, 2007, all kerosene sold in India isrequired to be blended with a marker at five parts per million (ppm)concentration with a view to preventing its diversion or use for adulterationof other petroleum products. This Court directed that an affidavit befiled by the Ministry of Petroleum and Natural Gas to clarify whetherDthe petrol and diesel vending machines are sensitive to the above markerand would decline to dispense the product if the same is adulterated bythe use of kerosene. On this aspect the order dated 26 August 2016 isextracted below:
“Mr. Kumar has also drawn our attention to Kerosene (RestrictionEon Use and Fixation of Ceiling Price) Amendment Order, 2007.He submits that in terms of Rule 8A of the said Order all kerosenesold in India, whether under the public distribution system orparallel marketing system, has to be blended with a marker at fiveparts per million (ppm) concentration with a view to preventing itsdiversion or use for adulteration of other petroleum products. HeFsubmits that according to his instructions kerosene is now beingsold through public distribution systems and parallel marketingsystems duly blended with marker as required under the said Rule.He is, however, unable to say whether the petrol and dieselvending/dispensing machines, installed in the petrol and dieselGvending stations, are sensitive to the said marker and whether themachines refuse to dispense the product if the same is adulteratedby use of kerosene. He submits that given time, he will file anadditional affidavit of the concerned officer to clarify the position.He may do so. The affidavit shall also clarify whether technologytoday permits use of any machine that can detect adulteration of H
the product and decline to dispense the same in case it isadulterated. The affidavit may also indicate whether “test kit”referred to in sub-clause 5 (ii) (ka) of clause 2 of the Order,mentioned above, is a part of the dispensing machine or isindependent of the same.”
5. In terms of the directions issued by this Court an inquiry hasbeen conducted by the Joint Secretary in the Ministry of Petroleum andNatural Gas. A copy of the report has been placed on record. Theinquiry has not resulted in any conclusive determination on the allegationsset out in paragraph 9 of the petition.
6. Basically, the issue as to whether the second respondent ownsmultiple dealerships or outlets for petroleum products, in violation of theapplicable rules and regulations, has to be determined by the oil companyor companies concerned with the issue. None of the oil companies wereimpleaded to these proceedings. In their absence, it would not be possiblefor the Court to make any factual determination. Whether an individualholds a dealership or outlet benami would turn on an appreciation offactual material which cannot be inquired into in the exercise of thejurisdiction under Article 32. Consequently all that we observe is that itwould be open to the petitioner to bring such material as she has in herpossession to the attention of the concerned oil companies for such actionas is deemed necessary. We clarify that we have not expressed anyopinion on the merits of such a claim, which is left open to be determinedin accordance with law, after hearing all necessary parties.
7. On the second aspect of the matter which has been adverted inthe order of this Court dated 26 August 2016,it would be necessary toset out the contents of the affidavit filed before this Court on 6 October2016 by the Ministry of Petroleum and Natural Gas. In so far as ismaterial, the affidavit contains the following averments:
“a. With regard to the issue of doping of PDS Kerosene withmarker, it may be informed that Ministry of Petroleum & NaturalGas vide letter No.P-11013/5/2006-Dist.dated 15.01.2007, hadadvised the Oil Manufacturing Companies (OMCs) regardingamendments to MS & HSD control order, 2005 and KeroseneControl Order, 1993 enacted and published through Gazettenotifications, wherein all Kerosene sold in India, whether underPDS or parallel marketing system, was to be blended with marker A
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at five parts per Million (ppm) concentrations with the objectiveof preventing its diversion or adulteration of MS/HSD. Accordingly,doping of kerosene with Marker was introduced throughout thecountry.
b. Subsequently, in the month of September, 2008, it came to theBnotice of Vigilance Department of Indian Oil Corporation Ltd.(IOCL), Northern Region that a brown chemical powder, providedto them by an informer could be used to negate the efficiency ofMarker System. This was also corroborated in the findings in theLab Test conditions. Since Marker System was found launderable,it was decided to discontinue the existing Marker System withCeffect from 01.01.2009.
c. Upon discontinuation of doping of marker in PDS kerosenewith effect from 01.01.2009, necessary amendments in the MotorSpirit and High Speed Diesel (Regulation of Supply, Distributionand Prevention of Malpractices) Order and the KeroseneD(Restriction on Use and Fixation of Ceiling Price) Order weremade.
d. The Public Sector Oil Marketing Companies, (OMCs) havefurther informed that they have interacted with all the majorDispensing Unit manufacturers in India and, as per the feedbackEreceived, the current Dispensing Unit Manufacturers do notpossess readymade technology for detecting adulteration duringdispensation of fuel. It has been additionally informed that the‘test kit’ for detection of marker was not a part of dispensing unit.OMCs have clarified that ‘test kit’ is essentially a chemical testFwhich helps in detecting presence of marker doped kerosene (i.e.,sample test indicates positive result when its colour changes topink).”
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The affidavit has also sets out the steps which have been takenby public sector oil manufacturing companies to conduct regular checksGon the quality and quantity of petrol and diesel being supplied by retailoutlets to the public at large. These are as follows:
“a) As a constant drive, the PSU OMCs undertake regular andsurprise inspection of Retail Outlets and take action under theprovisions of the Marketing Discipline Guidelines (MDG) andDealership Agreements against the outlets found indulging inH
irregularities/malpractices like adulteration, short delivery etc.Further, the MDG provides for termination of outlet in the firstinstance itself for serious malpractices like adulteration, tamperingof seats and unauthorized fittings/gears in the dispensing unitsand graded penalties for other malpractices/irregularities.
b) The Motor Spirit and High Speed Diesel (Regulation of Supply,Distribution and Prevention of Malpractices) Order, 2005 issuedby the Central Government under Essential Commodities Act, 1955provides for punitive action against malpractices such asadulteration. Provisions are also available in the contractualdocuments and administrative guidelines to prevent malpracticesin the trade of petroleum products.
c) A Quality Control Cell is also functional in each of the PublicSector OMCs which carries out surprise inspections at Ros forchecking various irregularities including adulteration. It may beappreciation that during the last three years and current year (uptoJune 2016), OMCs have carried out 5,61,796 number of inspectionsat their Ros across the country.
d) Industry Transport Discipline Guidelines (ITDG) have beenrevised and strengthened in 2014 by making penal action morestringent. On first instance of established pilferage, Tank Truck isblacklisted and on second instance transportation contract isterminated and all TTs under that contract are blacklisted for twoyears across industry automatically through e-portal. There is asimilar provision of penal action in case any tampering with VehicleTracking System (VTS).
e) Furthermore, OMCs have resorted to other initiatives to preventirregularities in Retail outlets and Monitoring of movement of tanktrucks through Global Positioning System (GPS). It is submittedthat as on 01.09.2016, there are 52653 number of Retail Outletsacross India, out of which 18586 number of Retail Outlets areautomated and 13211 number of Retail Outlets already compiledwith the standard of “No Automation No Operation” (NANO).The advantage of Retail Outlets complied with Standard NANOis that the dispensing unit becomes automatically non-operative ifany efforts for manipulation of dispensing unit or storage tank aremade. This will ensure OMCs to keep a track of the activities at
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Athe Retail Outlet. Under this initiative, tank stocks and sales ofeach dispensing unit can be tracked online and analysed.”
Moreover, it has been stated that the Motor Spirit and High SpeedDiesel (Regulation of Supply, Distribution and Prevention of Malpractices)Order, 2005 and the Kerosene (Restriction on Use and Fixation of CeilingBPrice) Order, 1993 have made provisions to enable the States and UnionTerritories to take action against malpractices. Moreover, it has beenstated that the Ministry intends to implement the direct transfer schemein kerosene in identified districts of different states on a pilot basis.
8. These are essentially matters of policy. The Union Ministry ofCPetroleum and Natural Gas is seized of the issue. Steps have beentaken from time to time, as elaborated in the affidavit filed in this Court.
9. While we have dealt with the two grievances of the petitioner,we may also note that that in the counter affidavit which has been filedin these proceedings by the second respondent, it has been stated thatDthe petition is not a genuine recourse to the jurisdiction in public interest.It has been stated that the spouse of the petitioner and the secondrespondent contested elections in 2007 and 2012 to the LegislativeAssembly in Uttar Pradesh and the second respondent was returned asthe elected candidate. A public interest litigation was filed before theHigh Court of Judicature at Allahabad in which, it has been submitted,Ethe allegations were identical to those contained in the writ petition in thepresent case. The writ petition before the High Court was dismissed on6 April 2011. From the averments contained in the counter affidavit, thedefence that the petition has been instituted for reasons other than agenuine effort to espouse an issue of public interest cannot be discarded.FBe that as it may, we are not inclined to keep the proceedings pendingbefore this Court any further in view of what has been stated in theearlier part of this judgment.
10. The petition shall, accordingly, stand disposed of.
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Devika Gujral
Petition disposed of.
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