Delhi High Court
Pradeep Sharma vs Union Of India And Anr. on 2 February, 2011
Author: Sanjiv Khanna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 5732/2010
PRADEEP SHARMA ..... Petitioner
Through Mr. Shailender Singh &
Mr. Rajesh Kumar, Advocates.
versus
UNION OF INDIA AND ANR. ..... Respondents
Through Mr. Darpan Wadhwa,
Ms. Sheena Iype, Advocate for
UOI with Mr. Vikram Ganguly,
Advocate for R-11.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE SANJIV KHANNA
ORDER
% 02.02.2011
SANJIV KHANNA, J.
The petitioner-Mr. Pradeep Sharma has filed the present writ
petition in 2010 in public interest praying for the following relief:-
(a) "
Pass directions calling for the relevant records
pertaining to the fixation of price of ethanol
for EBP at the rate of Rs.27 per Litre; and
(b) I
ssue and appropriate writ in the nature of
mandamus or any other appropriate writ, order
or direction directing that the fixation of price
of ethanol for EBP at the rate of Rs.27 per litre
is arbitrary and without any rationale and is
thus per void and invalid in law; and
(c) P
ass any such other order/s as may be deemed
fit and proper in the facts and circumstances of
the case"
2. It is stated that the petitioner is a Journalist and that the decision of
the Government of India in fixing the purchase price of ethanol @ Rs.27/-
per litre to be paid by Oil Manufacturing Companies (OMCs) shall cause
tremendous loss to the exchequer. It is stated that the price of ethanol in
the domestic market was between Rs.18/- to Rs.20/- a litre and even
imported price was Rs.21.34 per litre. It is stated that the ex-mill price of
sugar was Rs.25/- per kg. and the price of the ethanol cannot be more.
Reliance is placed on newspaper reports as well as certain quotations. It is
stated that the price of ethanol has been fixed to benefit vested interest.
However, persons against whom allegations have been made, have not
been impleaded as a party.
3. Loss to the public exchequer or payment of excessive price by the
State is certainly a matter of concern. However, the respondent Union of
India in response has stated that the price of ethanol has been fixed at
Rs.27/- by a group of 5 ministers who were given the task to fix the price
as an interim measure and subject to adjustment with respect to the final
price recommended by the expert committee and approved by the
competent authority. It is stated that Dr. Saumitra Chaudhari, Member
Planning Commission is the head of the expert committee. The
formula/principles of pricing of ethanol would be transparent and take into
account the dynamics involved. The recommendations would be submitted
to the National Bio-Fuel Committee constituted under the National Policy
on Bio-fuels. The final price determined would be decided by the National
Bio-Fuel Committee headed by the Prime Minister. Thus the price
fixation is not final and is subject to adjustment.
4. It is submitted that the group of Ministers while deciding the ad hoc
interim price of ethanol at Rs.27/- have taken the following parameters
into consideration :-
(i) As the ethanol to be procured for the Ethanol Blending Petrol (EBP
for short) programme has to come from indigenous sources only, it will
contribute in improving the economic condition of sugarcane farmers
community as well as in increasing the indirect rural employment in
agriculture sector. This will also give an impetus to increase the
production of sugar with proportionate increase in ethanol production.
(ii) Foreign exchange will be saved as expenditure involving in import
of crude oil will be reduced.
(iii) Ethanol is an eco-friendly fuel and it will help in mitigating climate
change, which is currently point of concern in India and all over the world.
5. In the counter affidavit, the factual background and matrix leading
to the said interim ad hoc price fixation decision has been stated. The facts
stated are as under:-
(a) The Central Government vide its notification dated 1st January, 2003
had resolved that 5% EBP would be supplied in 9 States and 4 Union
Territories. By another notification dated 20th September, 2006, the
Government had extended the EBP Programme to 20 states and 4 Union
Territories and issued a direction that OMCs shall sell the 5% EBP subject
to commercial viability.
(b) The Cabinet Committee on Economic Affairs (CCEA) in its
meeting held on 9th October, 2007 decided that 5% mandatory and 10%
optional blending of ethanol with petrol w.e.f. October, 2007 and 10%
mandatory blending from October, 2008. A uniform purchase price of
Rs.21.50 per litre was fixed for three year. However, EBP Programme
was adversely affected by default in supply of ethanol. Against the
requirement 180 crore litres of ethanol for 5% EBP the OMCs contract for
146.6 crore litres of ethanol, the actual procurement was substantially
lower at 58.70 crore litres. In the year 2009 the short fall was more
pronounced at 85% of the prorated quantity. In the month of June-July,
2009 OMCs floated tenders on delivery price basis for supply of ethanol in
16 States and 3 Union Territories for supply of 69 crore litres ethanol for
one year after 31st October, 2009. Offers were received for barely 27.30
crore litres i.e. 40% of the tender quantity at the rates ranging between
Rs.25 to Rs.43 per litre. No offer for supply was received from the State of
Chhattisgarh & Jharkhand. It is pointed out that the price of crude oil as
well as sugar are volatile and the price of Indian basket of crude oil had
gone up to $ 132 per barrel in June, 2008, then declined to $ 46 per barrel
in December, 2008 and had risen to $ 89 per barrel in December, 2010.
6. It is apparent from what has been stated that the prices of ethanol
are volatile and move up and down depending upon various factors. It
also appears that the respondent was concerned about the future supplies
as in the past there were defaults and supplies were not made. These are
economic policy matters which are essentially complex and various
aspects have to be taken into consideration. Price fixation in the case at
hand is essentially an Executive or administrative function. Exercise of
judicial review in such matters is rare and not resorted to unless there is
violation of constitution or transgression of legal limits or power or the
action clearly amount to abuse of power. Administrators also have right to
trial and error, so long as both trial and error are bonafide and within the
limit of the authority. The challenge and question to the economic policy
matters has to be in different fora.
7. In view of the explanation given by the respondent for the present,
we are not inclined to exercise power of judicial review and delve deeper
into the matter. As we have refused to exercise power of judicial review,
it should not be interpreted and it does not mean that the Court has
accepted or rejected the price fixation. The writ petition is accordingly
disposed of, without any orders as to costs.
SANJIV KHANNA, J.
CHIEF JUSTICE
FEBRUARY 02, 2011
kkb
