Madrasdated High Court · 2008

Tamil Nadu Petroleum Dealers Association,rep. by the President,Mr.A.R.Damodaran, Chennai...Petitioner in WP 949/2000M/s.Radha Agencies,rep. by its Patner,S.Bakthavathsalu ReddyVandavasi, Thiruvannamalai District. ..Petitioner in WP 21435/2000M/s.Sardha Agenciesrep. by its Partner,S.Bakthavathsalu Reddy, Valathi,Villupuram District..Petitioner in WP 21436/2000M/s. Dass Agencies,rep. by its PartnerS.Bakthavathsalu ReddyKanchipuram District..Petitioner in WP 21437/2000M/s.G.P.C.Agenciesrep. by its ProprietorG.N.Dhinagar Kumar,Chennai-39 ..Petitioner in WP 1588/2001R.ParthibanIOC Dealer,Kancheepuram..Petitioner in WP 1816/2001M/s.M.M.Agenciesrep. by its ProprietrixC.Devaki,Chennai-112...Petitioner in WP 2043/2001M/s.D.B.MuraliIndian Oil DealersThirukalukundram..Petitioner in WP 2618/2001R.NeelakantanChennai..Petitioner in WP 2657/20011.Karuppan Chetty2.S.K.Ariyappa ChettiarS.K.O.Dealers, Salem...Petitioner in WP 2750/2001 https://hcservices.ecourts.gov.in/hcservices/ M/s.Balaji Agenciesrep.by Power AgentK.Ponnuvel, No.29,Mandy Street, Alandur,Chennai..Petitioner in WP 2892/2001M/s. Ganesh Oil Companyrep. by Partner R.KrishnamurthyChennai 88..Petitioner in WP 2893/2001Kamatchi Sahayam Agenciesrep. by its PartnerD.Balakrishnan, Chennai..Petitioner in WP 2894/2001 K.R.PachaiyappanMadras..Petitioner in WP 2895/2001M/s. Prabha Agenciesrep. by its PartnerKurucila CherianChennai-15...Petitioner in WP 2896/2001Sri Ayyanar Oil Companyrep. by its PartnerP.B.Aiyan RajThiruninravoor, Tiruvallur District ..Petitioner in WP 3031/2001A.M.SrinivasanIndian Oil Kerosene Dealer,Gummidipundi..Petitioner in WP 3705/2001P.JagadeesanPooneri,Thiruvallur District..Petitioner in WP 3780/2001M/s. P.Gangadhara Iyer & co.by its ProprietorMr.P.A.Sriraman,Periyapalayam,Tiruvallur District..Petitioner in WP 3790/2001M/s.Bhavani Agencies,Proprietor Niranjanrep. by Power AgentT.R.Hameed Sultan,Chennai-34...Petitioner in WP 4332/2001 https://hcservices.ecourts.gov.in/hcservices/ M/s. G.S.Annamalai Mudaliar & Co.,by its ProprietorMeenakshisundaram,Tiruvallore District...Petitioner in WP 4429/2001V.KamaladeviThiruvannamalai..Petitioner in WP 4486/20011.K.P.Ramaish Chettiar & SonsPartnership firm rep.byits Partner R.ThiyagarajanKallakurichi, Villupuram District 2.C.Ganesan, Indian Oil Dealer,Arakkonam, North Arcot District.3.Shobha Agenciesrep. by its PartnerAshok Kumar, Gudiyatham,N.A.District...Petitioner in WP 4589/2001The Tiruvannamalai DistrictConsumers Co.op.Whole salestores Ltd.,Tioruvannamalairep. by its Secretary,P.Ramamurthy..Petitioner in WP 4919/20011.M/s.Vijayalakshmi Tradersrep. by its Managing PartnerT.Ganesh, Thoraiyur2.M/s.Vijayalakshmi Tradersrep. by its Managing PartnerT.Ganesh, Perambalur.3.Thukkaram Agenciesrep. by its PartnerT.Lakshmi Narasimhan,Manapparai, Trichy District.4.Thukkaram Agenciesrep. by its PartnerT.Lakshmi Narasimhan,Kulithalai,Karur District. https://hcservices.ecourts.gov.in/hcservices/

5.M/s.V.E.Rathina Sabapathy Mudaliar,rep. by its Proprietor RengarajSannanallur, Nagapattinam District.6.M/s. U.E.Rathinasabapathi Mudaliar,rep. by Krishnaraj, Thiruvarur.7.M/s.Sundari Agenciesrep. by Parter V.Sattanathan,Sirkali,Nagapattinam District.8.M/s. Shanmugam & Co.,rep. by Partner V.Sattanathan,Sirkali, Nagapattinam.9.M/s. A.M.Ahamed & co.,rep. by its partnerSirkali, Nagapattinam District.10.K.S.Arunachala Aiyar & Sonsrep. by its Managing PartnerArun Ramadas, Mayiladuthurai,Nagapattinam District...Petitioner in WP 4921/2001M/s. Sri Balaji Agenciesrep. by its ProprietorP.Baskar, Chennai..Petitioner in WP 5098/2001M/s.N.Srinivasa Reddiar & Sonsby its ProprietorN.Subramania ReddyTiruvallur District...Petitioner in WP 5971/2001M/s. G.Ramasamy Naidu Sonrep. by its Proprietor G.R.NarayanasamyTrichy..Petitioner in WP 8261/2001Tamil Nadu PetroleumDealers Associationrep. by its Honourary SecretaryM.Kannan, Chennai..Petitioner in WP 8335/2001M/s. Murugan Tradersrep. by its PartnerJ.SenthilrajThathiyengarpettai,Trichy District ..Petitioner in WP 21212/2001 https://hcservices.ecourts.gov.in/hcservices/ K.S.Markandan & Sonsrep. by its PartnerK.M.Viswanath, IOC DealerAvadi...Petitioner in WP 2492/2002M/s. Murugan Trandersrep. by its PartnerJ.Senthiraj, IOC DealerTrichy..Petitioner in WP 5442/2004Vs.1.The Commissioner of Civil Supplies and Consumer ProtectionChepaukChennai2.The State Level Co-ordinatorIndian Oil BhavanNungambakkam High RoadChennai – 34..ISt and 2nd respondents in W.P.13262/99 and W.P.2750/013.The District Supply OfficerVellore .. 3rd Respondent in W.P.13262/99The District Supply Officer Salem.. 3rd Respondent in W.P.2750/01The Government of Tamil Nadu,rep. by its Secretary to Government,Food, Civil Supplies & ConsumerProtection Department,Fort St.George, Chennai-9.The Government of Tamil Nadu,rep. by The Special commissionerand Commissioner of CivilSupplies & Consumer Protection,Chepauk, Chennai - 5. https://hcservices.ecourts.gov.in/hcservices/ The Union of India,rep. by its Secretary,Ministry of Petroleum& Natural Gas,Shastri Bhavan,New Delhi.The State Level Co-Ordinator,Indian Oil Corporation,Indian oil Bhavan,Nungambakkam High Road,Chennai - 34...Respondents 1 to 4 in WP.949/20001.The Government of Tamil Nadu,rep. by its Secretary to Government,Co-Operation, Food and ConsumerProtection Department,Fort St.George, Chennai-9.2. The Commissioner of CivilSupplies and Consumer Protection,Chepauk, Chennai - 05.3. The State Leval Co-Ordinator,Indian Oil Bhavan,Nungambakkam,Chennai - 34...1 to 3 Respondents in WP.21435 to 21437/2000, 1588/01, 1816/01,2043/01, 2618/01, 2657/01, 2892 to2896/01, 3031/01, 3705/01, 3780/01,3790/01, 4332/01, 4429/01, 4486/01,4919/01, 4921/01, 5098/01, 5971/01,8261/01, 21212/01, 2492/02 & 5442/04.4.The District Supply Officer,Thiruvannamalai,Thiruvannamalai District...4th Respondent in WP.21435 to21437/2000 4486/01, 4919/015. The Union Government of India,rep. by its Secretary to Government,Ministry of Petroleum andNatural Gas, New Delhi.5th Respondents in WP.21435 to 21437/2000(R5 impleaded as per order of Court dated 08.09.2003 in WPMP.34714, 34716, 34719/01 by PSJ) https://hcservices.ecourts.gov.in/hcservices/ The Chief Regional Manager,Hindustan Petroleum Corporation Ltd.,Thalamuthu Natarajan Maligai,Gandhi Irwin Road, Chennai - 8..4th Respondent in WP.1588/01,2043/01, 2657/01,5098/01The District Supply Officer,Kancheepuram District...4th Respondent in WP.1816/01, 2618/01, WP.2892, 2893/01.The District Supply Officer,Chennai...4th Respondent in WP.2894, 2895, 2896/01The District Supply Officer,Thiruvallur District...4th Respondent in WP.3031 3705, 3780, 3790, 4429, 5971/01, 2492/02The Assistant Commissioner of CivilSupplies & Consumer Protection,T.Nagar, Chennai...4th Respondent in WP.4332/01The Union of India,rep. by its Secretary,Ministry of petroleum and Natural Gas,New Delhi...5th Respondent in WP.1816/01, 2618/01, 3780/01, 3790/01(R5 impleaded as per order of(suo motu) dated 18.12.2003 (WP.No.1816/01, 2618/01)dated 24.12.2003 (WP.No.3780/01, 3790/01.The District Supply Officer,Ariyalur...5th Respondent in WP.8261/01The Senior Depot Manager,Indian Oil Corporation Ltd.,Trichy Depot, Good Shed Road,Tricbirapalli...6th Respondent in WP.21212/01 &7th Respondent in WP.5442/04The Depot Manager,Hindustan Petroleum Corporation,Grand Anaicut Road,Devadana Village, Trichy...6th Respondent in WP.8261/01 https://hcservices.ecourts.gov.in/hcservices/ The Commissioner of Civil Suppliesand Consumer Protection,Chepauk, Chennai - 5.The Chief Divisional Manager,I.O.C, 739, Anna Salai,Chennai - 2.The District Supply Officer,Villupuram,The District Supply Officer,Vellore.The Government of India,Ministry of Petroleum and Natural Gas,rep. by its Deputy Secretary toGovernment at New Delhi.The Government of Tamil Nadu,rep. by its Secretary to Government,Food and Co-Operation and Consumer Protection Department,Fort St.George, Chennai-9...Respondents in WP.4589/01(R5 & R6 - impleaded as per order of this Court dated 22.08.2003in WPMP.No.34841/01)1. The Government of Tamil Nadu,rep. by its Secretary,Co-Operation, Food and Consumer Protection Department,Chennai.2. The Special Commissioner and Commissioner ofCivil Supplies and Consumer Protection Department,Ezhilagam, Chennai - 5...Respondents in WP.8335/01The District Supply Officer,Tiruchirapalli,Tiruchirapalli District...4th Respondent in WP.8261/01, 21212/01, 5442/04, & 4921/01The District Supply Officer,Perambalur,Peramblur District...5th Respondent in WP.21212/01 & 5442/04 & 4921/01 https://hcservices.ecourts.gov.in/hcservices/ The District Supply Officer,Nagapattinam,Nagapattinam District.The District Supply Officer,Thiruvarur,Thiruvarur District.The District Supply Officer,Karur, Karur District.The State Level Coordinator (HPC)Thalamuthu Natarajan Building,Chennai...Respondents 6 to 9 in WP.4921/01The Terminal Manager (IOC)Korukkupet, Chennai...6th Respondent in WP.5442/04 & ..10th Respondent in WP.4921/01The Depot Manager,Indian Oil Corporation,Goods Shed Road, Trichy...11th Respondent in WP.4921/01 & ..7th Respondent in WP.5442/04The Terminal Manager (HPC)Thondiyarpet, Chennai...7th Respondent in WP.8261/01 & ..12th Respondent in WP.4921/01The Union of India,rep. by its Secretary,Ministry of Petroleum &Natural Gas, Shastri Bhavan,New Delhi...13the Respondent in WP.4921/01(R13 impleaded as per order of this Courtdated 16.09.2003 in WPMP.No.35246/01)Petition filed for issuance of writ of Certiorarified Mandamuscalling for the records of the proceedings of the respondentsherein, viz., Rc. No. K. 4/8100/99 dated 10.5.1999 on the file ofthe first respondent and in Na. Ka. J. 1/31246/99 dated 09.6.1999 onthe file of the third respondent and quash the same in so far aswith-holding of the commission of Rs.30/- per KL of return oncapital equipment is concerned and consequently a Mandamusforbearing the respondents from in any way interfering with uniformpayment of commission at Rs. 101/- per KL so far as the petitionersherein are concerned. https://hcservices.ecourts.gov.in/hcservices/ to issue a writ of Mandamus to direct the respondents 1 and 2 to fixand pay the commission of the wholesalers at Rs.126/- per KL withregard to the wholesalers having underground tank facilities andRs.83/- per KL with regard to the wholesalers having barrel storagefacilities in accordance with the order of Third Respondent inLetter No.P.20028/PP dated 6.11.1997 (W.P.949/00)Issue a Writ of Certiorarified Mandamus calling for the recordsrelating to Letter No.P.20028/1/95-PP dated 6.11.97 and thesubsequent order bearing RC.No.K4/8100/99 dated 10.5.99 and theconnected order bearing letter No.272 dated 25.11.00 on the file ofthe fifth, second and first respondents respectively and to quashthe same in so far as it relates to the deduction of commissionunder the heading" Return on capital equipment" and to direct therespondents to pay the petitioner the commission on par with thewhole sale dealers of Tanker storage (Prayer amended as per order ofcourt dated 8.9.03 in WPMP.34715,34718 & 34720/01 by PSJ)(WP.21435 to 21437/00)to issue a writ of Certiorarified Mandamus calling for therecords relating to the order bearing R.C.No.K4/8100/99 dated10.5.99 and the connected order bearing letter No.272 dated 25.11.00on the file of the second and first respondent respectively and toquash the same in so far as it relates to the deduction ofcommission of Rs.30/- per KL as return of capital equipment isconcerned and to direct the respondents to pay the petitioner thecommission on par with the wholesale Dealers of Taker storage(W.P.1588/2001) W.P.1816/07 w.P.2043/2001, W.P.2618/01, 2657/01,2892 to 2896/01, 3031/01, 3705/01, 3780/01, 3790/01, 4332/01,4429/01, 4486/01 4919/01, 5098/01, 5971/01, 8261/01, 21212/01,2492/02 & 5442/04)to issue a writ of certiorarified Mandamus call for the recordsof the proceedings of the respondents herein in RC.K4/8100/99 dated10.5.99 of the first respondent and quash the same in so far aswithholding of the commission of Rs.30/- per KL on return on capitalequipment is concerned and consequently for bearing the respondentsfrom in any way interfering with uniform payment of commission atRs.101/- per KL (W.P.2750/01) to issue a writ of certiorarified Mandamus calling for therecords of the proceedings of the first respondent inRC.No.K4/8100/99 dated 10.5.99 and that of the 5th respondent inP.No.20028/2/2000/PP dated 27.10.2000 as well as that of the 6threspondent in letter No.(Permanent) 272 dated 25.11.2000 and quashthe same in so far as it is against the petitioner are concerned inwith holding the commission of return of capital equipments isconcerned and consequently for bearing the respondents from in any https://hcservices.ecourts.gov.in/hcservices/ way reducing the commission payable to form 13 licence holders(W.P.4589/01)prayer amended as per order of this court dated 22.8.03 inWPMP.34842/01 to issue a writ of Certiorarified Mandamus calling forthe records relating to the orders of the 13th respondent inP.20028/1/95-PP dated 6.11.1997 and in P.20028/2/2000-PP dated27.10.2000 and the consequential order of the 2nd respondent inRC.No.K.4/8100/99 dated 10.5.99 and the order of the Ist respondentin letter No.272 dated 25.11.2000 and to quash the same in so far asit relating to deduction of commission on return on capitalequipment is concerned and direct the Ist & 2nd respondents to paythe petitioner's commission on par with the whole sale dealers oftaken storage in so far as the petitioner are concerned in all otheraspects as per the 13th respondent's order in P.20028/1/95-PP dated6.11.97 & P.20028/2/2000-PP dated 27.10.2000 (WP.4921/01)(prayer amended as per order of this court dated 16.9.03 inWPMP.35247/01)to issue a writ of certiorari calling for the records of the Istrespondent in G.O.Ms.No.96, co-operation, food and consumerprotection Department, dated 24.5.2000 and circular of the 2ndrespondent in RC.No.K4/8887/99 dated 17.3.2001 and quash the same inSo far as they relates to the members of the petitioner Associationare concerned (WP.8335/01)For Petitioners in : Mr. D. Peter Francis W.P. 4589/01, 2750/01, 13262/99, 949/00 For Petitioners in: Mr. M. JawaharW.P. Nos. 1588, 2043,2657 & 8335/01For Petitioners in: Mr. P. RajamanickamW.P. Nos. 1816, 2618, 2892 – 2896, 3031 &3705/01 & 2492/02For Petitioners in: Mr. V. BalakrishnanW.P. Nos. 3780, 3790, 4332, 4429 & 5971/01For Petitioners in: Mr. R. RaviW.P. No. 4486/01For Petitioners in: Mr. L. ChandrakumarW.P. No. 4919/01 https://hcservices.ecourts.gov.in/hcservices/ For Petitioners in: Mr. M. BaskarW.P. No. 4921, 8261 &21212/01For Petitioners in: Mr. M. DevendranW.P. No. 5098/01For Petitioners in: Mr. R. BabuW.P. No. 5442/04For Petitioners in: Mr. G.K. SelvarajanW.P. Nos. 21435 -21437/2000For State : Mrs. C.K. Vishnupriya A.G.P. (w)For Union of India : Mr.P. Wilson, Asst Solicitor GeneralFor Indian Oil Corporation : Mr.P.N. RadhakrishnanFor Hindustan Petroleum Corporation: Mr.O.R. Santhana KrishnanCOMMON ORDERThese petitions were listed before this Court on beingspecially ordered by the Honourable Chief Justice vide his orderdated 11.6.2008 and posted for final disposal.2.In this batch of writ petitions, the petitioners were alllicencees to store Petroleum otherwise than in bulk quantity notexceeding 25,000 Litres. 3.It is stated by the petitioners that they have been doingthe business of getting the kerosene in bulk in terms of the licenceconditions and storing the same in barrels. For the purpose ofsupplying the same to the retailers, they take delivery of kerosenefrom the point of supply and keep it stored in barrels in the areasnotified to them. According to them, they have investedsubstantial amounts in the purchase of drums for storing keroseneand the life span of such barrels is very limited and periodicallythey will have to replace the barrels from time to time. 4.The commission for selling kerosene is fixed by theCentral Government and the issue relating to the restriction of useand fixation of ceiling of price of kerosene is controlled by theKerosene (Restriction on use and Fixation of Ceiling Price) Order, https://hcservices.ecourts.gov.in/hcservices/ 1993 framed under Section 3 of the Essential Commodities Act, 1955[for short, 'E.C. Act']. Under Section 4 of the Act, restrictionshave been made on the dealers storing the supply of kerosene in anyother place other than the place of storage and also selling it withthe price fixed by the Central Government or the Government OilCompany. 5.It is stated by the petitioners that on the demand made bythe Tamil Nadu Petroleum Merchants' Association, the CentralGovernment increased the commission for 1 KL of kerosene atRs.126/-. Even though the Central Government had increased thecommission rate, it is their grievance that the State Governmenthad not implemented the same. 6.After several representations made by the petitioners, thefirst respondent State Government, by proceedings dated 10.5.1999,fixed the commission at Rs.101/- per KL. It was stated that theState Level Co-ordinator had communicated to the Commissioner forCivil Supplies, the Ex-depot rates of Superior Kerosene Oileffective from 28.02.1999 and consequent on the revision of ExciseDuty, the ex-depot rates became effective from 20.4.1999 consequenton the revision in Railway freight rates. A separatecommunication was also given with reference to the delivery ratesfor the hilly areas. Therefore, the Commissioner for CivilSupplies informed all the District Collectors the revision of marginavailable to wholesale dealers, which is as follows:-For Dealers havingTanker storage (FromXIII)For Dealers havingbarrel storage1 Return on CapitalinvestmentRs. 16.00 Per KLRs. 16.00 Per KL2Return on CapitalEquipmentRs. 30.00 Per KLNIL3Leakage AllowanceRs. 5.50 Per KLRs. 5.50 Per KL4Operating expensesRs. 49.50 Per KLRs. 49.50 Per KLTOTALRs. 101.00 Per KLRs. 71.00 Per KL7.It was specifically mentioned therein that the margin ofReturn on Capital Equipment of Rs.30/- per KL is not allowed for thedealers like the petitioners having barrel storage having licence inForm XI and they will have a total margin of Rs.71/- per KL only. https://hcservices.ecourts.gov.in/hcservices/

8.It was stated that in order to avoid dual pricing ofKerosene at consumer level, the total margin allowed for thewholesale dealers was taken as Rs. 101/- uniformly for all thedealers and for all the wholesale centres. Therefore, it wasdirected that the dealers having licence (Form XI) having barrelstorage should remit to the Government account at the rate of Rs.30/- per KL. The District Supply Officers were directed tocollect the amount from the wholesale dealers having barrel storagein advance and were directed to remit it into the Governmentaccount. It was also stated that because of this, there cannot beany increase in the retail pricing. Pursuant to this order,consequential proceedings were issued by the District SupplyOfficers directing the wholesale dealers to collect Rs.30/- per KL(1000 Litres) of Kerosene. It is against this communication, thepresent writ petitions have been filed.9.Initially, the petitioners have not made Union of India asa party and subsequently, on an application being taken out, theUnion of India was also impleaded as a party to some of the writpetitions. 10.It was stated by the petitioners that the impugnedcommunication charging Rs.30/- per KL on Return of Capital Equipmentto the wholesale dealers having tanker storage with licence underForm 13 and denying the same to the petitioners having barrelstorage under form 11, was discriminatory and violative of Articles14 and 19(1)(g) of the Constitution of India.11.It is now stated by them that licences were issued onlyunder the Kerosene Regulation Order and in both the cases, thelicences were issued under Rule 3 and the conditions of licences areone and the same. It is also stated that the trade practice forthe last three decades was uniform but allowing the tanker storagedealers to retain Rs.30/- and denying the same to the dealers in tobarrel storage was unjustified and the petitioners were not heard onthe same. It is also stated that both the licencees are equal andthey cannot be treated unequally in the matter of retention ofReturn on Capital Equipment. 12.The writ petitions have been admitted and the petitionersare also enjoying interim order from paying back the amountscollected in terms of the impugned order.13.On behalf of the State Government, a detailed counteraffidavit dated 22.02.2002 has been filed in W.P. No. 8335 of 2001.It was stated by the State Government that out of the 519 wholesaledealers in Kerosene operating in the State, 343 dealers are having https://hcservices.ecourts.gov.in/hcservices/ underground storage with dispensing facility and 176 dealers areoperating with the conventional barrel system. It was also statedthat it is open to the petitioners to modernise the storage facilityand they availed the Return on Capital Equipment. The tankerdealers are also taking the Kerosene from the supply point to thestorage point. The petitioners allegation of loss of Kerosenethrough evaporation because of the temperature variation was deniedby the State. It was also claimed that the alleged loss claimed bythe dealers may not be correct because the Oil Companies suppliedthe products to wholesale dealers according to the dip measurementand, therefore, the question of loss at the filling point may notarise. Even the loss while filling the barrels are also minimaland the downstream barrel leakage, if any, occurrs will not affectthe wholesale dealers. 14.On behalf of the second respondent, a counter affidavitdated 23.8.2000 was filed by the Indian Oil Corporation Limited.They had stated that the use of tankers require higher investmentand in the matter of fixation of Return on Capital Equipment, TamilNadu Petroleum Dealers' Association was also heard by the StateGovernment and after hearing their views only, the amounts werefixed. Therefore, it is not for them to state that the fixationhas been done without opportunity given to them. The dealers ofbarrel storage, having collected the excess amount from theconsumers, are bound to pay back the same to the State Government asotherwise, it would amount to unjust enrichment. 15.Counter affidavits have been filed by the HindustanPetroleum Corporation Ltd. in W.P. Nos. 1588 and 8261 of 2001refuting the allegations made by the petitioners. It is stated bythem that the cost of establishing an underground tanker storagefacility with dispensing facility will cost around Rs. 4.5 lakhswhereas the dealers storing kerosene in barrels will have to spendonly around Rs.50,000/- for buying 75 barrels for storage of 15 KLKerosene. It was also stated that the wear and tear and replacingall the barrels cannot be a capital expenditure and the argumentthat the Form XI licencees are in no way less equal to Form XIIIlicencees was also denied. It was also stated by them that all ofthem do not belong to the same class and allowing Return on CapitalEquipment for the tanker storage was based upon a reasonableclassification. Therefore, the allegation of violation ofArticles 14 and 19(1)(g) of the Constitution does not arise. Itwas also stated that it is open to the petitioners to establish anunderground tanker storage and dispensing facilities and claim thebenefit. 16.On behalf of the State Government and the Commissioner forCivil Supplies, another counter affidavit dated 10.01.2005 was alsofiled in W.P. No. 5442 of 2004. It was stated by the State https://hcservices.ecourts.gov.in/hcservices/ Government that while the expenditure involved in erection of bulkstorage facility involves large space and cost and periodicalmaintenance to prevent damage and leakage, in barrel storage, thecost involved is much minimal. Large capital investment isrequired for tanker storage whereas the same is not true in respectof the barrel storage. While the retail price will have to befixed at the uniform rate by allowing Return on Capital Equipment todifferent class of persons, at the maximum, the margin of profit forthe petitioners may come down. But, in no way, it will make thepetitioners to go out of business. Therefore, the argument basedupon Article 19(1)(g) of the Constitution cannot be sustained.17.Even with reference to Article 14 of the Constitution,merely because both the wholesale dealers are dealing in Kerosene,they do not become equals. The Return on Capital Equipment isbased upon the expenditure involved in setting up the facility. 18.On behalf of the Union of India, Mr. P. Wilson, learnedAssistant Solicitor General submitted that by communication dated23.5.2008, the Government of India, Ministry of Petroleum andNatural Gas has issued the following circular, which is as follows:-"I am directed to refer to the above subject tosay that the existing rates of Dealers' Commission onKerosene Oil as communicated vide this Ministry'sletter No. P-20028/2/2000-PP dated 28th February, 2007are as under:Wholesale dealers (Form XV)Rs.243/KLWholesale dealers Rs.200/KL(other than Form XV)2.It was decided that the Commission would bereviewed on a regular annual basis. In view ofthis, a review of the matter was accordingly made andthe Committee of Directors (Marketing) of the OilMarketing Companies was asked to make suitablerecommendations in this regard. The matter hasbeen examined in detail by the Committee. Aftercareful consideration of the recommendations of theCommittee, it has been decided to revise the rates ofcommission of Kerosene for wholesale Dealers' as perthe following details:Wholesale dealers (Form XV)Rs.255/KLWholesale dealers Rs.212/KL(other than Form XV)3.The above rates of commission will serve asguidelines to the district / local authoritiesfixing the retail (consumer) selling price ofkerosene in urban / semi urban and rural areas. If https://hcservices.ecourts.gov.in/hcservices/ any States / Union Territories have revised the ratesof commission on their own, they may considerreworking it to bring them in line with theseguidelines.4.The State Governments are requested to takenecessary action in the matter under intimation tothis Ministry.5.The revised rates of Dealers' Commission will beeffective from the date of issue of this letter."Therefore, the learned Assistant Solicitor General submitted that inthe light of the revised pricing for the wholesale dealers, thecommission margin of dealers will go up and all the writ petitionsshould be dismissed as infructuous. 19.In any event, he submitted that the decision of theGovernment of India to provide Rs.30/- per KL on the Return ofCapital Equipment is based upon a policy with sound basis and hence,the same cannot be attacked in the light of Article 14 of theConstitution of India. 20.First of all, the matter itself relates to dealing inessential commodity covered by the Essential Commodities Act and theControl Order framed thereunder. The petitioners cannot make itappear that the market must be free or they have right to free tradein the said commodity and if the commission is not attractive, thereis no compulsion on the dealers to carry on the business. Themethod of barrel storage has become obsolete and keeping in tune inthe modernisation, it is also open to the petitioners to opt fortanker storage and avail the same return. 21.It is on the basis of these rival contentions, the issuewill have to be decided. The short question that arises forconsideration in these writ petitions is as to whether the impugnedorder of the respondents in granting a Return on Capital Equipmentto dealers with tanker storage facilities and not allowing the sameto the barrel storage is arbitrary and violative of Article 14 ofthe Constitution of India.22.The Supreme Court in Bhagwati Saran and another v. TheState of U.P. [AIR 1961 SC 928] dealt with the case of prosecutionunder the Iron and Steel of Production and Distribution Order 1941and the question came up for distinction between the registeredstockholders and control stockholders. The following passagefound in paragraph 15 of the said judgment may be usefullyreproduced:- https://hcservices.ecourts.gov.in/hcservices/ Para 15:".... Differentiation could never per se bediscrimination, nor is there any presumption that theadoption of different rules for groups differentlysituated is unequal treatment violative of Article14. On the other hand, the presumption is the otherway and the party that alleges unjustifiablediscrimination should establish it to thesatisfaction of the Court. We consider that there isno material on the basis of which an argument couldbe sustained that the special conditions to whichlearned counsel adverted contained any element ofunfair or irrational discrimination to attractArticle 14."23.The Supreme Court in J. Pandurangarao v. The AndhraPradesh Public Service Commission, Hyderabad and another [AIR 1963SC 268], while dealing with the classification permitted underArticle 14 of the Constitution, observed in paragraph 7 asfollows:-Para 7:"The scope and effect of the provisions of Article14 can no longer be the subject-matter of any doubtor dispute. It is well-settled that though Article14 forbids class legislation, it does not forbidreasonable classifications for the purposes oflegislation. When any impugned rule or statutoryprovision is assailed on the ground that itcontravenes Article 14, its validity can besustained if two tests are satisfied. The first testis that the classification on which it is foundedmust be based on an intelligible differentia whichdistinguishes persons or things grouped togetherfrom others left out of the group; and the second isthat the differentia in question must have areasonable relation to the object sought to beachieved by the rule or statutory provision inquestion. As the decisions of this Court show, theclassification on which the statutory provision maybe founded may be referable to differentconsiderations. It may be based on geographicalconsiderations or it may have reference to objectsor occupations or the like. In every case, theremust be some nexus between the basis of theclassification and the object intended to beachieved by the statute, vide Shri Ram KrishnaDalmia v. Shri Justice S.R. Tendolkar (1959 SCR279 : AIR 1958 SC 538]...." https://hcservices.ecourts.gov.in/hcservices/

24.In the light of the above touchstone, it can safely beconcluded that the petitioners have not made out the case. They arealso eligible for Return on Capital Equipment. Except for statingthat their licence conditions are similar to that of tanker storagedealers, they have not come out with any plea about the preciseinvestment made by them and the consequential denial for return ontheir equipment. In fact, the contention raised by the OilCorporations and the State Government that barrel storage dealerswill have to invest very little compared to tanker storage, had notbeen denied by them. It must also be stated that their allegedloss during supply point to the storage point was also denied by theOil Companies. The petitioners have not made out any case for thepurpose of showing that they are equally eligible for the Return ofCapital Equipment. 25.The Central Government, as contended by Mr. P. Wilson,learned Assistant Solicitor General, has also fixed the commissioncommensurate with the increased cost. Therefore, the petitionerscannot complain about the loss in doing their business. In anyevent, the Return on Capital Equipment is based upon differentcriteria and it depends on the volume of investment and not on thesimilarity in the business. 26.Though not in the same context, but in the context of feefixation to be made by self-financing educational institutions, thethree Judges Bench of the Supreme Court in Modern School v.Union of India and others [2004 (5) SCC 583] dealt with the aspectof an institution investing money for establishing the institution,should have a reasonable profit after providing any investment andexpenditure and it should take into account the need to run theinstitution and provide facilities. (See: Paragraphs 16 and 17).27.The same view was also expressed by the Supreme Court inIslamic Academy of Education and another v. State of Karnatakaand others [2003 (6) SCC 697]. Speaking for the Bench, S.B.Sinha, J., in his concurring opinion in paragraph 154 of the saidjudgment, had observed as follows:-Para 154:"The fee structure, thus, in relation to each andevery college must be determined separately keepingin view several factors, including facilitiesavailable, infrastructure made available, the age ofthe institution, investment made, future plan forexpansion and betterment of the educational standardetc. The case of each institution in this behalf isrequired to be considered by an appropriateCommittee...." https://hcservices.ecourts.gov.in/hcservices/

28.In the light of the same, the contentions raised by thepetitioners will have to be necessarily rejected and accordingly,all the writ petitions will stand dismissed. However, the partiesare allowed to bear their own costs. All connected MiscellaneousPetitions will stand closed. Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.griTo1.The Commissioner of Civil Supplies and Consumer ProtectionChepaukChennai2.The State Level Co-ordinatorIndian Oil BhavanNungambakkam High RoadChennai – 343.The District Supply OfficerVellore4. The District Supply Officer Salem.4.a. The Special Commissioner and Commissioner of civil Supplies and Consumer protection Chepauk, Chennai-5.5. The Secretary to GovernmentFood, Civil Supplies & ConsumerProtection Department,Fort St.George, Chennai-9. https://hcservices.ecourts.gov.in/hcservices/

6. The SecretaryThe Union of India,Ministry of Petroleum& Natural Gas,Shastri Bhavan,New Delhi.7. The District Supply Officer,Thiruvannamalai,Thiruvannamalai District.8.The Chief Regional Manager,Hindustan Petroleum Corporation Ltd.,Thalamuthu Natarajan Maligai,Gandhi Irwin Road, Chennai - 89. The District Supply Officer,Kancheepuram District.9.a. the secretary to GovernmentCooperation Food and Consumer Protection Department,Fort St. George, Chenani-9.10.The District Supply Officer,Thiruvallur District.11. The Assistant Commissioner of CivilSupplies & Consumer Protection,T.Nagar, Chennai.12.The District Supply Officer,Ariyalur.13.The Senior Depot Manager,Indian Oil Corporation Ltd.,Trichy Depot, Good Shed Road,Tricbirapalli.14.The Chief Divisional Manager,I.O.C, 739, Anna Salai,Chennai - 2.15. The District Supply Officer,Villupuram,16.The District Supply Officer,Vellore District. https://hcservices.ecourts.gov.in/hcservices/

17.The District Supply Officer,Tiruchirapalli18.The District Supply Officer,Perambalur,19.The District Supply Officer,Nagapattinam20.The District Supply Officer,Thiruvarur,21.The District Supply Officer,Karur, 22.The State Level Coordinator (HPC)Thalamuthu Natarajan Building,Chennai.23.The Terminal Manager (IOC)Korukkupet, Chennai.24.The Terminal Manager (HPC)Thondiyarpet, Chennai.25. The District supply officrChennai26. The Depot ManagerHindustan Petroleum CorporationGrnd Anaicul road, Devandana Village, Trichy27. The Depot Manager,Indian Oil Corporation,Goods Shed Road, Trichy.2 ccs to Mr.P. Rajamanickam, Advocate, SR. 387611 CCS TO Government Pleader, SR. 384701 cc to Mr.O.r. Santhanakrishnan, Advocate, SR. 380854 ccs to Mr.P.N. radhakrishnan, Advoate, SR 380421 cc to mr.D. Peter Francis, Advoate, SR. 382601 cc to Mr.L. Chandrakumar, Advocate, SR. 380903 ccs to Mr.G.K. Selvarajan, Advocate, SR. 37966W.P. No. 13262 of 1999, etc. batchCK (CO)kk,km,rvl,gkg 12/9