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Friday, April 6, 2018

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

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