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[Bulk Diesel Prices] Maintainability Issue Not Considered: Oil Companies Argue Before Kerala HC In Appeals Against Interim Order In Favour Of KSRTC

Hannah M Varghese
19 April 2022 9:30 AM GMT
[Bulk Diesel Prices] Maintainability Issue Not Considered: Oil Companies Argue Before Kerala HC In Appeals Against Interim Order In Favour Of KSRTC
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The Kerala High Court on Tuesday heard the State-owned oil marketing companies in the appeals challenging the interim order issued in favour of Kerala State Road Transport Corporation (KSRTC) wherein the OMCs have been directed to levy the price of High Speed Diesel (HSD) at par with the price available at retail pumps temporarily.A vacation bench of Justice V.G. Arun and Justice C.S Sudha...

The Kerala High Court on Tuesday heard the State-owned oil marketing companies in the appeals challenging the interim order issued in favour of Kerala State Road Transport Corporation (KSRTC) wherein the OMCs have been directed to levy the price of High Speed Diesel (HSD) at par with the price available at retail pumps temporarily.

A vacation bench of Justice V.G. Arun and Justice C.S Sudha will continue hearing the appeals on Tuesday after recording KSRTC's submission that a contempt petition will not be filed during court vacation.

Senior Advocate Parag Tripathi appeared for the appellants and argued that the impugned interim order did not prima facie deal with the points raised by them, particularly the issue of maintainability. He argued that the contract between KSRTC and the oil companies includes an arbitration clause, so the maintainability of the plea itself is a question. Similarly, commercial disputes are not amenable to writ jurisdiction. But the interim order does not address the question of maintainability.

It was also pointed out that the bulk price of crude oil jumped internationally after the Ukraine conflict, which has inevitably led to a hike in fuel prices across the globe. The senior counsel submitted that the balance of convenience in favour of the appellants has not been dealt with either in the interim order.

On these grounds, he sought for a stay on the implementation of the interim order. 

Advocate Deepu Thankan appearing for KSRTC submitted that Senior Advocate Dushyant Dave had some personal inconvenience today while seeking an adjournment.  

It is the case of the oil companies that KSRTC is a bulk customer of HSD and inherently different from a retail consumer, therefore they form separate categories.

The appellants also pointed out that KSRTC had approached the Court for similar reliefs in 2013, but the Supreme Court had dismissed the petition holding that this was a matter of policy and that no interim order could have been passed by the High Court in such matters.

It has been argued that while KSRTC admits that it has not procured diesel from consumer pumps after the price hike, it has not disclosed the source or manner in which it has been obtaining HSD to run its schedules smoothly, thereby evidencing that no actual loss or injury has been differed by the Corporation.

Further, the oil companies submitted that KSRTC owes significant dues to the oil marketing companies for the bulk diesel already supplied which shows that the balance of convenience is clearly in favour of them.

On the strength of settled law, it was urged that arbitration is an effective alternative remedy and that price fixation is not the forte of the courts while adding that the scope of judicial review in non-statutory price fixation matters was extremely limited.

The appellants have contended that despite all these contentions, the Single Judge proceeded to pass the impugned interim order and that they are gravely and adversely affected by the same.

It has been prayed that the same may be vacated since if allowed to stand, it would occasion a travesty of justice and cause severe hardship to the appellants.

Case Title: Bharat Petroleum Corporation Ltd. v. Kerala State Road Transport Corporation & connected matters.

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