public interest litigation = whether the second respondent owns multiple dealerships or outlets for petroleum products, in violation of the applicable rules and regulations, has to be determined by the oil company or companies concerned with the issue. None of the oil companies were impleaded to these proceedings. In their absence, it would not be possible for the Court to make any factual determination. Whether an individual holds a dealership or outlet benami would turn on an appreciation of factual material which cannot be inquired into in the exercise of the jurisdiction under Article 32. Consequently all that we observe is that it would be open to the petitioner to bring such material as she has in her possession to the attention of the concerned oil companies for such action as is deemed necessary. We clarify that we have not expressed any opinion on the merits of such a claim, which is left open to be determined in accordance with law, after hearing all necessary parties. = “a) As a constant drive, the PSU OMCs undertake regular and surprise inspection of Retail Outlets and take action under the provisions of the Marketing Discipline Guidelines (MDG) and Dealership Agreements against the outlets found indulging in irregularities/malpractices like adulteration, short delivery etc. Further, the MDG provides for termination of outlet in the first instance itself for serious malpractices like adulteration, tampering of seats and unauthorized fittings/gears in the dispensing units and graded penalties for other malpractices/irregularities. b) The Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 issued by the Central Government under Essential Commodities Act, 1955 provides for punitive action against malpractices such as adulteration. Provisions are also available in the contractual documents and administrative guidelines to prevent malpractices in the trade of petroleum products. c) A Quality Control Cell is also functional in each of the Public Sector OMCs which carries out surprise inspections at Ros for checking various irregularities including adulteration. It may be appreciation that during the last three years and current year (upto June 2016), OMCs have carried out 5,61,796 number of inspections at their Ros across the country. d) Industry Transport Discipline Guidelines (ITDG) have been revised and strengthened in 2014 by making penal action more stringent. On first instance of established pilferage, Tank Truck is blacklisted and on second instance transportation contract is terminated and all TTs under that contract are blacklisted for two years across industry automatically through e-portal. There is a similar provision of penal action in case any tampering with Vehicle Tracking System (VTS_. e) Furthermore, OMCs have resorted to other initiatives to prevent irregularities in Retail outlets and Monitoring of movement of tank trucks through Global Positioning System (GPS). It is submitted that as on 01.09.2016, there are 52653 number of Retail Outlets across India, out of which 18586 number of Retail Outlets are automated and 13211 number of Retail Outlets already compiled with the standard of “No Automation No Operation” (NANO). The advantage of Retail Outlets complied with Standard NANO is that the dispensing unit becomes automatically non-operative if any efforts for 9 manipulation of dispensing unit or storage tank are made. This will ensure OMCs to keep a track of the activities at the Retail Outlet. Under this initiative, tank stocks and sales of each dispensing unit can be tracked online and analysed.” Moreover, it has been stated that the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 and the Kerosene (Restriction on Use and Fixation of Ceiling Price) Order, 1993 have made provisions to enable the States and Union Territories to take action against malpractices. Moreover, it has been stated that the Ministry intends to implement the direct transfer scheme in kerosene in identified districts of different states on a pilot basis.

1

 

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

WRIT PETITION (CIVIL) NO 675 OF 2013

SEEMA UPADHYAY ..Petitioner

VERSUS

UNION OF INDIA THR. THE SECRETARY, MIN.

OF PETROLEUM AND NATURAL GAS AND ORS ..Respondents

J U D G M E N T

Dr D Y CHANDRACHUD, J

1 Invoking the jurisdiction of this Court under Article 32 of the Constitution,

the petitioner seeks the following reliefs:

“a) … a writ, order or direction in the nature of mandamus

commanding the respondents to get the matters of the known

and reported cases of adulteration operated by the Mafias

referred herein above, investigated through an independent

agency preferably CBI;

b) … appropriate writ of mandamus commanding the

respondents to directly transfer the cash subsidy in the bank

accounts of the beneficiaries of the kerosene oil on the basis

of their Adhar Card or through public distribution system or

some other full proof mechanism;..”

REPORTABLE

2

2 On 23 August 2013 when the petition came up for preliminary hearing,

the following directions were issued:

“From para 5 onwards the writ petition makes several

allegations against Devender Agrawal and one of his relative

Dharmendra Agarwal. The petitioner has not however chosen

to implead the said two parties as party respondents to the

petition. At the oral request of the petitioner, we permit the

petitioner to implead the said 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 factual basis of the

petition relates to Devender Agrawal and his relative, Dharmendra Agarwal.

This is evident from paragraph 9 of the writ petition, which is extracted below:

“9. That Shri Agrawal owns a dozen of petty dealers of diesel

and about a dozen of S.P.company petrol pumps in his name

or in the names of near relations while the cost of one such

petrol pump is about Rs 1 to 1.50 crores.

The names of the main petty diesel dealers are:

1) Mukesh Automobiles, Hathras Jalesar Marg, Gangoli

Hathras in the fraudulent name of Mukesh Kumar S/o

Mahendra Pal Agrawal. Subsequently it was transferred to

Nagla Salem (Sadabad Behdoi Marg) All formalities are

done by Devender Agrawal @ Mukesh Kumar whereas no

allotment can be made in the alias name and the same is

contrary to the guideline of the Petroleum Ministry.

2) Petty Diesel dealer license obtained in the name of Pooran

Singh S/o Shri Chandrapal Singh Singh at Jalesar Marg,

Hathras Junction.

3) Petty Diesel dealer license at Hathras-Jalesar Marg, village

Bhopatpur, in the name of Rakesh Agrawal brother of

Devender Agrawal.

4) Petty Diesel dealer at Hathras-Sadabad Marg, near

Kachhpura (Bisana) in the name of Manohar Lal.

5) Petty Diesel dealer license at Hathras-Aligarh Marg near

Hanuman Chowki, Village Basai Qaji, obtained fraudulently

3

in the name of Santosh Kumar S/o Netrapal, servant of

Devendra Agrawal.

6) Petty Diesel dealer license in Qasba Mindu at Hathras in

the name of Suresh Chandra and partner Shri Deepak

Kumar. Deepak Kumar is the brother of the wife of

Devendra Agrawal.

7) Petty Diesel dealer license at Hathras-Jalesar Marg, at

Nagla Islamia in the name of Praveen Kumar S/o Gopal

Dass Agrawal. Praveen Kumar is the brother of the wife of

Devendra Agrawal.

MAIN COMPANY PETROL PUMPS

I) Village Utara Block Sasni, District Mahamayanagar in

the name of Prem Prakash Sharma.

II) Devende Automobile, Ladpur Block, Hathras, in the

name of Deepak Agrawal. Tin No.0962701283C.

Depak Kumar is the brother of the wife of Devendra

Agrawal. He also has Petty a Diesel License at Qasba

Maindu.

III) Village Keshopur-Maho Block Hathras in the name of

Santosh Kumar, servant of Devender Agrawal. He also

has a license for Petty Diesel dealer at Village Basai,

near Hanuman Chowki.

IV) Rahul Automobiles, Barwana-Hathras Junction to

Jalesar Road in the name of Shrawan Kumar Agrawal

Tin No.09127502025C. Shrawan Kumar is the brother

of the wife of Devender Agrawal.

V) Shrawan Kumar Automobile in the name of Devender

Agrawal at O Marora (Kajrauth) Block Iglas, District

Aligarh. Tin No.09127400903. This Tin No. is in the

name of Jai Maa Durga Automobile. Hatheas

registered in the name Devender Agrawal.

VI) Mayank Automobiles Sonai (Aligarh) owned by

Smt.Renu Agrawal W/o Rakesh Agrawal, brother of

Devender Agrawal.

VII) Pradeep Automobiles, Khtauli-Katailiya (Sasni), in the

name of Ramji Lal Agrawal and Pradeep Kumar Tin

No.09327401402.

VIII) Qasba Vijaygarh, Block Akrabad, Aligarh in the name

of Jai Kishore Agrawal, relation of Devender Agrawal.

IX) Chandan Automobile, Kuktai, Sadabad-Agra Marg,

near Mandi Samiti in the name of Devender Agrawal.

There are two Petty Diesel dealer licenses in the name of

Deepak Agrawal – one at Maindu Hathras and the other in the

name of Devender Automobiles at Ladpur-Hathras whereas

two such licenses in the name of one person is contrary to the

rules.”

4

The allegation is that Devender Agrawal owns multiple dealerships for the

distribution of petroleum products, and they are held in the names of persons

closely related to or associated with him. It is in this view of the matter that this

Court considered it necessary to allow the impleadment of the aforesaid

individual against whom allegations have been made. On 11 March 2015 the

Solicitor General was requested to assist the Court.

3 On 26 August 2016 this Court allowed the impleadment of the Ministry of

Petroleum and Natural Gas. In the order of this Court, reference was also made

to the allegations contained in paragraph 9 of the writ petition. This Court

directed a fact finding inquiry into the averments contained in paragraph 9, by

an officer of the rank of Joint Secretary to the Government of India, to be

nominated by the Secretary in the Ministry of Petroleum and Natural Gas. The

relevant part of the order reads thus:

“Having heard learned counsel for the parties, we are inclined

to direct a fact finding enquiry into the averments made in the

above paragraph, by an officer of the rank of Joint Secretary to

Government of India, to be nominated by the Secretary,

Ministry of 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 petitioner may furnish the details and supporting materials,

if so advised, to the Enquiry Officer within two weeks from

today. The Enquiry Officer shall be free to take such assistance

of the licensing authorities concerned who have issued

licences to the dealers concerned as may be necessary.

Enquiry Officer shall also be assisted in all respects by the

District Administration of the State Government. Needless to

say that the Enquiry Officer shall issue a notice to respondent

NO.2- Devender Agrawal alias Mukesh Kumar/Agrawal for

purpose of holding an enquiry and take into consideration the

materials that may be placed on record by him while drawing

his conclusion.”

5

4 The second aspect which has been dealt with in the order of this Court

dated 26 August 2016 is the adulteration of petroleum products. Under

paragraph 8A of the Kerosene (Restriction on Use and Fixation of Ceiling Price)

Amendment Order, 2007, all kerosene sold in India is required to be blended

with a marker at five parts per million (ppm) concentration with a view to

preventing its diversion or use for adulteration of other petroleum products. This

Court directed that an affidavit be filed by the Ministry of Petroleum and Natural

Gas to clarify whether the petrol and diesel vending machines are sensitive to

the above marker and would decline to dispense the product if the same is

adulterated by the use of kerosene. On this aspect the order dated 26 August

2016 is extracted below:

“Mr. Kumar has also drawn our attention to Kerosene

(Restriction on Use and Fixation of Ceiling Price) Amendment

Order, 2007. He submits that in terms of Rule 8A of the said

Order all kerosene sold in India, whether under the public

distribution system or parallel marketing system, has to be

blended with a marker at five parts per million (ppm)

concentration with a view to preventing its diversion or use for

adulteration of other petroleum products. He submits that

according to his instructions kerosene is now being sold

through public distribution systems and parallel marketing

systems duly blended with marker as required under the said

Rule. He is, however, unable to say whether the petrol and

diesel vending/dispensing machines, installed in the petrol and

diesel vending stations, are sensitive to the said marker and

whether the machines refuse to dispense the product if the

same is adulterated by use of kerosene. He submits that given

time, he will file an additional affidavit of the concerned officer

to clarify the position. He may do so. The affidavit shall also

clarify whether technology today permits use of any machine

that can detect adulteration of the product and decline to

dispense the same in case it is adulterated. 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 is independent of the same.”

6

5 In terms of the directions issued by this Court an inquiry has been

conducted by the Joint Secretary in the Ministry of Petroleum and Natural Gas.

A copy of the report has been placed on record. The inquiry has not resulted

in any conclusive determination on the allegations set out in paragraph 9 of the

petition.

6 Basically, the issue as to whether the second respondent owns multiple

dealerships or outlets for petroleum products, in violation of the applicable rules

and regulations, has to be determined by the oil company or companies

concerned with the issue. None of the oil companies were impleaded to these

proceedings. In their absence, it would not be possible for the Court to make

any factual determination. Whether an individual holds a dealership or outlet

benami would turn on an appreciation of factual material which cannot be

inquired into in the exercise of the jurisdiction under Article 32. Consequently

all that we observe is that it would be open to the petitioner to bring such

material as she has in her possession to the attention of the concerned oil

companies for such action as is deemed necessary. We clarify that we have

not expressed any opinion on the merits of such a claim, which is left open to

be determined in accordance with law, after hearing all necessary parties.

7 On the second aspect of the matter which has been adverted in the order

of this Court dated 26 August 2016, it would be necessary to set out the

contents of the affidavit filed before this Court on 6 October 2016 by the Ministry

7

of Petroleum and Natural Gas. In so far as is material, the affidavit contains the

following averments:

“a. With regard to the issue of doping of PDS Kerosene with

marker, it may be informed that Ministry of Petroleum & Natural

Gas vide letter No.P-11013/5/2006-Dist.dated 15.01.2007, had

advised the Oil Manufacturing Companies (OMCs) regarding

amendments to MS & HSD control order, 2005 and Kerosene

Control Order, 1993 enacted and published through Gazette

notifications, wherein all Kerosene sold in India, whether under

PDS or parallel marketing system, was to be blended with

marker at five parts per Million (ppm) concentrations with the

objective of preventing its diversion or adulteration of MS/HSD.

Accordingly, doping of kerosene with Marker was introduced

throughout the country.

b. Subsequently, in the month of September, 2008, it came to

the notice of Vigilance Department of Indian Oil Corporation

Ltd. (IOCL), Northern Region that a brown chemical powder,

provided to them by an informer could be used to negate the

efficiency of Marker System. This was also corroborated in the

findings in the Lab Test conditions. Since Marker System was

found launderable, it was decided to discontinue the existing

Marker System with effect from 01.01.2009.

c. Upon discontinuation of doping of marker in PDS kerosene

with effect from 01.01.2009, necessary amendments in the

Motor Spirit and High Speed Diesel (Regulation of Supply,

Distribution and Prevention of Malpractices) Order and the

Kerosene (Restriction on Use and Fixation of Ceiling Price)

Order were made.

d. The Public Sector Oil Marketing Companies, (OMCs) have

further informed that they have interacted with all the major

Dispensing Unit manufacturers in India and, as per the

feedback received, the current Dispensing Unit Manufacturers

do not possess readymade technology for detecting

adulteration during dispensation 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 test which helps in detecting presence

of marker doped kerosene (i.e., sample test indicates positive

result when its colour changes to pink).”

The affidavit has also sets out the steps which have been taken by public sector

oil manufacturing companies to conduct regular checks on the quality and

8

quantity of petrol and diesel being supplied by retail outlets to the public at large.

These are as follows:

“a) As a constant drive, the PSU OMCs undertake regular and

surprise inspection of Retail Outlets and take action under the

provisions of the Marketing Discipline Guidelines (MDG) and

Dealership Agreements against the outlets found indulging in

irregularities/malpractices like adulteration, short delivery etc.

Further, the MDG provides for termination of outlet in the first

instance itself for serious malpractices like adulteration,

tampering of seats and unauthorized fittings/gears in the

dispensing units and graded penalties for other

malpractices/irregularities.

b) The Motor Spirit and High Speed Diesel (Regulation of

Supply, Distribution and Prevention of Malpractices) Order,

2005 issued by the Central Government under Essential

Commodities Act, 1955 provides for punitive action against

malpractices such as adulteration. Provisions are also

available in the contractual documents and administrative

guidelines to prevent malpractices in the trade of petroleum

products.

c) A Quality Control Cell is also functional in each of the Public

Sector OMCs which carries out surprise inspections at Ros for

checking various irregularities including adulteration. It may be

appreciation that during the last three years and current year

(upto June 2016), OMCs have carried out 5,61,796 number of

inspections at their Ros across the country.

d) Industry Transport Discipline Guidelines (ITDG) have been

revised and strengthened in 2014 by making penal action more

stringent. On first instance of established pilferage, Tank Truck

is blacklisted and on second instance transportation contract is

terminated and all TTs under that contract are blacklisted for

two years across industry automatically through e-portal.

There is a similar provision of penal action in case any

tampering with Vehicle Tracking System (VTS_.

e) Furthermore, OMCs have resorted to other initiatives to

prevent irregularities in Retail outlets and Monitoring of

movement of tank trucks through Global Positioning System

(GPS). It is submitted that as on 01.09.2016, there are 52653

number of Retail Outlets across India, out of which 18586

number of Retail Outlets are automated and 13211 number of

Retail Outlets already compiled with the standard of “No

Automation No Operation” (NANO). The advantage of Retail

Outlets complied with Standard NANO is that the dispensing

unit becomes automatically non-operative if any efforts for

9

manipulation of dispensing unit or storage tank are made. This

will ensure OMCs to keep a track of the activities at the Retail

Outlet. Under this initiative, tank stocks and sales of each

dispensing unit can be tracked online and analysed.”

Moreover, it has been stated that the Motor Spirit and High Speed Diesel

(Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005

and the Kerosene (Restriction on Use and Fixation of Ceiling Price) Order, 1993

have made provisions to enable the States and Union Territories to take action

against malpractices. Moreover, it has been stated that the Ministry intends to

implement the direct transfer scheme in kerosene in identified districts of

different states on a pilot basis.

8 These are essentially matters of policy. The Union Ministry of Petroleum

and Natural Gas is seized of the issue. Steps have been taken 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 filed in these

proceedings by the second respondent, it has been stated that the petition is

not a genuine recourse to the jurisdiction in public interest. It has been stated

that the spouse of the petitioner and the second respondent contested elections

in 2007 and 2012 to the Legislative Assembly in Uttar Pradesh and the second

respondent was returned as the elected candidate. A public interest litigation

was filed before the High Court of Judicature at Allahabad in which, it has been

10

submitted, the allegations were identical to those contained in the writ petition

in the present case. The writ petition before the High Court was dismissed on

6 April 2011. From the averments contained in the counter affidavit, the

defence that the petition has been instituted for reasons other than a genuine

effort to espouse an issue of public interest cannot be discarded. Be that as it

may, we are not inclined to keep the proceedings pending before this Court any

further in view of what has been stated in the earlier part of this judgment.

10 The petition shall, accordingly, stand disposed of.

…………………………………….CJI

[DIPAK MISRA]

…………………………………….J

[A M KHANWILKAR]

…………………………………….J

[Dr D Y CHANDRACHUD]

New Delhi;

April 05, 2018