[BREAKING] Kerala High Court sets aside order directing oil companies to sell bulk diesel to KSRTC at retail price

The Kerala High Court on Friday set aside the interim order of a single-judge directing certain Oil Marketing Companies (OMCs) to provide bulk diesel to the Kerala State Road Transport Corporation (KSRTC) at retail price [Bharat Petroleum Corporation Ltd v. Kerala State Road Transport Corporation]..A Division Bench of Justices CS Dias and Basant Balaji allowed the appeals moved by three state-owned OMCs against the interim order in favour of KSRTC. "This Court finds that the petitioner has not represented their alleged grievance to the OMCs; instead has rushed to this Court. Therefore, no inaction can be alleged against the respondents 2 to 4, warranting the issuance of a writ of mandamus. Furthermore, the final relief sought in the writ petition has been granted as an interim measure, which again is impermissible in view of the law laid down by the Hon’ble Supreme Court in the State of U.P and others v. Ram Sukhi Devi," the Court said in its judgment..The interim order was passed in a petition moved by KSRTC, through Advocate Deepu Thankan, challenging the decision of the OMCs to increase the price of High Speed Diesel (HSD) sold in bulk to the KSRTC to a higher rate than the market price of diesel charged to retail consumers..In the appeal against the interim order, the OMCs submitted that the single-judge did not prima facie deal with the points raised by them, particularly challenging maintainability on the ground that the jurisdiction of the Court is limited when there is a contractual agreement as opposed to a statutory requirement.Further, it was submitted that the contract between the OMCs and KSRTC contain an arbitration clause making arbitration an effective alternative remedy.Moreover, the oil market is a de-regulated one and price fixation is not the forte of the court, it was argued.The appeal also pointed out that KSRTC had approached the Court for similar relief 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.However, the KSRTC pressed the Court to dismiss the appeal on the ground that the Supreme Court has authoritatively held that an appeal against exercise of a discretionary power by a single-judge cannot be entertained unless it can be shown that the exercise of discretion was arbitrary, capricious or perverse. It was also claimed that KSRTC is suffering a loss of over ₹80 lakh per day and that staying the operation of the interim order would put it and the public at irreparable loss and hardship..The Court concurred with the arguments on behalf of the appellants and noted that KSRTC, being a bulk purchaser, cannot be treated on par with retail consumers. "...the petitioner cannot be treated at par with retail customers because the latter would have to go to a retail outlet and pay for the product then and there. On the contrary, petroleum products are supplied to the petitioner at their doorsteps, with credit facilities and other benefits as envisaged in the contract. Therefore, the petitioner a bulk purchaser, falls ― within a separate class and cannot be treated at par with retail customers," the Court said while allowing the appeals. .Senior Advocate Parag Tripathi appeared for the appellant OMCs. Senior Advocate Dushyant Dave appeared for KSRTC..[Read Judgement]