A Division Bench of the Kerala High Court on Friday set aside a single judge’s directive to the public sector oil marketing companies to sell high-speed diesel to the Kerala State Road Transport Corporation at retail price, instead of the higher price charged from bulk consumers.

Not the court’s forte

The Bench comprising Justice CS Das and Justice Basant Balaji while allowing the appeals filed by the three public sector oil companies held that the single judge’s interim order was unsustainable in law and observed that it was not the function or forte of the Court to decide the optimal or competitive price at which diesel should be sold to the KSRTC.

Subsidy not a right

The court also pointed out that the Supreme Court while dismissing a petition by the KSRTC in 2017 against the withdrawal of subsidy for diesel had observed that subsidy could not be claimed as a right. The Supreme Court had also held that no writ lies for extending or continuing the benefit of privilege in the form of concession.

The court noted that the Supreme Court order indicated that the administered pricing mechanism had been dismantled and the pricing of diesel deregulated in a phased manner. Afterwards, the OMCs were given complete autonomy to fix the price as per their respective policies.

The Bench added that notwithstanding the Supreme Court order, the petitioner continued to purchase petroleum products from the OMCs as a bulk purchaser at the prices fixed by the OMCs. The petitioner, had on its free will and volition, renewed its contract with the oil companies, not once, but twice, on the same terms and conditions for supply of diesel. Thus, it was beyond any semblance of doubt that the petitioner was fully conscious that the fixation of the price for petroleum products was exclusively within the domain of the OMCs.

The court also noted after the Supreme Court order, the petitioner had not complained about the price fixation. Instead, it had enjoyed the benefits under the contract, especially the credit facility. It’s only now that the petitioner cried foul when the price of diesel sold to bulk consumers had risen above the price of retail customers. The petitioner was “stopped from approbating and reprobating on the contract terms”.

The court accepted the contention of the oil companies that a bulk purchaser fell within a separate class and could not be treated at par with retail customers. Counsel for the companies also submitted that petroleum products were supplied to the petitioner at their doorsteps, with credit facilities and other benefits as envisaged in the contract.

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