Delhi High Court
Wool Worth (India) Ltd. & Anr vs Union Of India & Ors on 23 February, 2011
Author: S. Muralidhar
IN THE HIGH COURT OF DELHI AT NEW DELHI
W.P.(C) 2373/1998
Reserved on: 31st January 2011
Decision on: 23rd February 2011
WOOL WORTH (INDIA) LTD. & ANR ..... Petitioners
Through: Mr. J. P. Sengh, Senior Advocate with
Mr. B. C. Pandey, Mr. Narender Sharma, Mr. Satya
Priya and Mr. Sumit Batra, Advocates.
versus
UNION OF INDIA & ORS ..... Respondents
Through: Mr. Sachin Datta, CGSC with
Ms. Gayatri Verma and
Mr. Abhimanyu Kumar, Advocates.
CORAM: JUSTICE S. MURALIDHAR
1. Whether reporters of the local newspapers
be allowed to see the judgment? No
2. To be referred to the Reporter or not? No
3. Whether the judgment should be reported in the Digest? No
JUDGMENT
23.02.2011
1. The subject matter of the present writ petition is a Notification dated 1 st
July 1997 issued by the Ministry of Petroleum and Natural Gas („MPNG‟),
Government of India stating that supply of furnace oil for captive use of
100% export oriented undertakings („EOUs‟) would be made at international
rates. The grievance of the Petitioner, which is an EOU, is that despite the
above Notification, furnace oil was supplied at international rates only for
the period between 7th October 1997 and 31st March 1998. The further
grievance is that after 1st April 1998, the price for supply of furnace oil by
Hindustan Petroleum Corporation Ltd. („HPCL‟) and Indian Oil Corporation
Ltd. („IOCL‟), Respondent Nos. 3 and 4 respectively, was nearly doubled the
previous price although there was no such increase in the international
market during the said period for furnace oil or any other oil products.
2. According to the MPNG, the Notification dated 1st July 1997 itself made it
clear that supply would be made at international rates only where furnace oil
was an exportable surplus and where furnace oil was not an exportable
surplus, "the oil companies would import furnace oil on behalf of 100%
EOUs and supply them at the landed cost plus applicable duties if any,
delivery charges and margins, etc. with no adjustments in the pool account."
It is submitted that the supply of furnace oil was not made at international
rates prior to 7th October 1997 and later than 31st March 1998 since there was
no exportable surplus and due to non-availability of facilities at port
locations.
3. Whether furnace oil was not an exportable surplus between 1 st July 1997
and 6th October 1997 is a pure question of fact. It possibly cannot be
determined by this Court in exercise of its powers under Article 226 of the
Constitution. Neither in the writ petition nor in the rejoinder affidavit have
the Petitioners produced any material to show that there was an exportable
surplus of furnace oil during the aforementioned period. The assurance held
out in the Notification dated 1st July 1997 was not an unqualified one. If, in
fact, there was no exportable surplus, the question of supplying furnace oil at
international rates did not arise.
4. The next aspect to be considered is whether HPCL and IOCL acted
arbitrarily in charging the rates they did for the supply of furnace oil to the
EOUs‟ for the period after 31st March 1998. Here again, it is asserted by the
Respondents on the basis of factual data that the furnace oil ceased to be an
exportable surplus from 1st April 1998. Consequently, they could not supply
furnace oil at international rates beyond that date. The second reason was
that vide Notification dated 21st November 1997, the MPNG started
dismantling the Administered Price Mechanism („APM‟) in phases starting
from 1st April 1998. The price of furnace oil was decontrolled from that date
and the oil companies were allowed to fix the price based on market
considerations. Therefore, the rates charged by the HPCL and IOCL were
consistent with the aforementioned Notification dated 21st November 1997.
5. One of the grievances made by the Petitioners is that after 1st April 1998
the HPCL and IOCL began charging @ Rs. 4,801/- per KL of furnace oil
which was nearly double the previous price and there was no such increase
in the international prices for the furnace oil.
6. In reply, it is pointed out that for the period from 7th October 1997 to 31st
March 1998, EOUs, including the Petitioner, were paying rates ranging from
Rs. 3,500/- per KL to Rs. 2,500/- per KL of furnace oil. The price of Rs.
2,506/- per KL was for the fortnight between 16th and 31st March 1998, when
the international prices were at their lowest. That was, therefore, not
representative of the international price of furnace oil for the entire period
from 7th October 1997 to 31st March 1998. As already pointed out, after 31st
March 1998 the APM began to be dismantled.
7. This Court is satisfied that the impugned Notification dated 1st July 1997
did not hold out an unqualified assurance to the EOUs that for the entire
period of one year thereafter, furnace oil would be supplied to them by the
MPNG only at the international rates. It was qualified by the existence of an
exportable surplus of furnace oil. The Respondents have been able to show
that barring the period between 7th October 1997 and 31st March 1998, there
was no exportable surplus of furnace oil.
8. This Court is unable to grant the reliefs as prayed for in this writ petition.
The writ petition is dismissed.
S. MURALIDHAR, J.
FEBRUARY 23, 2011
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