BREAKING| Kerala High Court Grants Interim Relief To KSRTC, Directs Oil Companies To Supply High Speed Diesel At Retail Prices

Arguments: 

When the matter was taken up today, Senior Advocate Parag Tripathi appearing for the oil companies submitted four main arguments.

1. Pricing based on a commercial policy is not amenable to writ jurisdiction. Oil prices are currently very high. There is nothing perverse in my commercial call and it cannot be challenged in a writ. 

2. Petitioner cannot seek equal treatment with retail consumers under Article 14 of the Constitution. Article 14 requires equals to be treated equally and unequals to be treated unequally. Bulk consumers and retail consumers are unequal. High-speed diesel is a different category. Bulk category customers get credit while retail category customers do not. Therefore, they can't argue that they are treated differently and that it is a violation of Article 14.

3. When there is an arbitration clause in the agreement between the parties, the Court can interfere under Article 226 only in exceptional cases. But there is no such public interest or extraordinary circumstances in this case that warrants interference under Article 226.

4. Pricing is neither the concern nor the forte of a writ court. Price fixation is not within the expertise of the court. There is no statutory requirement for price fixation since it is a deregulated market and it is purely contractual. Contractual obligations can only be examined by a court if they fall in the public law domain.

Responding to these arguments, Senior Advocate Dushyant Dave appearing for KSRTC submitted that the respondents are state instrumentalities and that it's too late to say they are not amenable to writ jurisdiction. He persistently sought interim relief to direct them to levy the price for HSD at par with that charged to retail consumers.

It was also argued that the respondents cannot assert that Article 14 does not apply here on the ground that they are unequal because the agreement between them has no whisper to that effect. It does not differentiate between retail or bulk consumers. Therefore, he argued that KSRTC was entitled to be supplied diesel at a competitive price.

The petitioner further contended that Supreme Court has reaffirmed that despite an arbitration clause, one can approach the court.

The OMCs' behaviour is completely arbitrary and capricious, the counsel pointed out while arguing that government-owned oil companies cannot act like obsolete monarchs.

Background: 

The petition was filed through Advocates Deepu Thankan, Ummul Fida, Lakshmi Sreedhar, R. Rajanandini Menon and Shahnas K.P. 

The Court had earlier refused to grant interim relief on the plea moved by Kerala State Road Transport Corporation (KSRTC) challenging the decision of State-owned Oil Marketing Companies to increase the price of diesel sold to the Corporation, which is allegedly much higher than the market price. The Oil Marketing Companies were directed to file a statement explaining the present pricing mechanism by the next posting date.