All Haryana Petroleum Dealers ... vs Union Of India & Ors
2014 Latest Caselaw 3724 Del

          *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                     Date of decision: 14th August, 2014

+                              LPA No.405/2014

       U.P. PETROLEUM TRADERS ASSOCIATION                  ..... Appellant
                    Through: Mr. A. Maitri, Adv.
                            Versus
       UNION OF INDIA & ORS.                      ..... Respondents
                    Through: Mr. Bhagvan Swarup Shukla with Mr.
                               Jasmeet Singh & Mr. Roshan Lal
                               Goel, Advs. for UOI.
                               Mr. M.M. Kalra, Adv. for IOCL.
                               Mr. Anuj Puri, Adv. for HPCL.
                                  AND
+                              LPA No.406/2014

       ALL HARYANA PETROLEUM
       DEALERS ASSOCIATION                                 ..... Appellant
                   Through: Mr. A. Maitri, Adv.

                          Versus
    UNION OF INDIA & ORS.                       ..... Respondents
                  Through: Mr. Vikram Jetly, Adv. for R-1/UOI.
                             Mr. M.M. Kalra, Adv. for IOCL.
                             Mr. Anuj Puri, Adv. for HPCL.
CORAM :-
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

RAJIV SAHAI ENDLAW, J.

1. These intra-court appeals impugn the identical but separate orders,

both dated 16th April, 2014 of dismissal of W.P.(C) No.2021/2014 and

W.P.(C) No.1976/2014 preferred by the appellants respectively. Both the

appellants claim to be an association of petroleum traders of the State of

Uttar Pradesh and Haryana respectively, affiliated to the Consortium of

Indian Petroleum Dealers. They filed the writ petitions from which these

appeals arise, averring:

(i) that gross injustice was being caused to the members of the

appellants by the oil companies i.e. Indian Oil Corporation Ltd.

(IOCL), Hindustan Petroleum Corporation Ltd. (HPCL) and

Bharat Petroleum Corporation Ltd. (BPCL) impleaded as

respondents, on account of non compliance of mandatory

provisions of the Legal Metrology Act, 2009 by the said

respondents. Ministry of Petroleum & Natural Gas stated to be

having superintending control over the respondent oil

companies was also impleaded as a respondent;

(ii) that the respondent oil companies were selling / supplying

petroleum and diesel by measuring petroleum and diesel in

litres when the Legal Metrology Act prohibits measure of

"mass" in any other unit than in kilogram;

(iii) that "mass" is not equivalent to volume; only 830 grams in

weight / mass constitutes one litre;

(iv) that thus the price paid for one litre is for 830 grams only and

not 1000 grams which is one kilogram;

(v) that the respondent oil companies are however continuing to

sell petrol and diesel in volume instead of on mass, taking

advantage of expansion and shrinkage in volume on account of

rise and fall in temperature;

(vi) that there will be no such variation if petrol / diesel is sold by

weight;

(vii) that the respondent oil companies and their officers by

continuing to sell petrol / diesel in litres instead of by weight

are siphoning off / misappropriating Rs.40 to 45 crores per day;

(viii) that owing to the respondent oil companies failing to adopt the

measures as prescribed in the Legal Metrology Act, the

members of the appellants suffer as the volume of petrol / diesel

transported in lorries, exposed to heat, is much larger than the

volume sold by the members of the appellants who store such

petrol / diesel supplied by the respondent oil companies to them

in underground tanks where the temperature is lower, resulting

in the volume shrinking;

(ix) that the appellants had earlier filed a complaint before the

Monopolies and Restrictive Trade Practice Commission

[substituted by the Competition Appellate Tribunal (CompAT)]

vide enquiry No.75/1992 which was dismissed; Civil Appeal

No.10229/2013 preferred thereagainst to the Supreme Court

was also dismissed on 18th November, 2013 granting liberty to

the appellants to agitate their grievances before appropriate

forum;

Accordingly, in the writ petitions, direction was sought to the

respondent oil companies to supply petrol / diesel to the members of the

appellants on weight basis and alternatively to give temperature adjustment

at the time of preparing invoice of the dealers and seeking a direction to the

Ministry of Petroleum and Natural Gas to ensure compliance by the

respondent oil companies of the provisions of the Legal Metrology Act.

2. The learned Single Judge dismissed the writ petitions accepting the

preliminary contention of the counsel for the respondent oil companies that

the dispute and difference if any which the members of the appellants had

with the respondent oil companies in this regard was to be resolved by

arbitration provided for in the agreement entered into by each of the said

members of the appellants with the respective oil companies and holding the

writ petitions to be not maintainable on this ground; liberty was however

given to agitate the grievance in accordance with the dispute resolution

mechanism provided for in the agreement between the members of the

appellants and the respective oil companies. It was further observed that the

liberty given by the Supreme Court while dismissing the appeal preferred

against the order of the CompAT, was to raise the dispute before the

appropriate forum and which was of arbitration and not under Article 226 of

the Constitution of India.

3. The appellants in the memorandums of appeal, rather than addressing

the reasoning given by the learned Single Judge for holding the writ

petitions to be not maintainable, have parrot like repeated the averments in

the writ petitions. The counsel for the appellants also, inspite of our

repeated asking as to whether not a direction to the respondent oil companies

as sought to supply petrol / diesel to the members of the appellants by

weight i.e. in kilograms instead of by volume i.e. in litres, would amount to

changing the agreement entered into between the members of the appellants

and the respective oil companies and whether it is permissible and

appropriate in exercise of powers under Article 226 of the Constitution of

India to so change the agreement and as to what would be the consequences

of the same on the other terms of the agreement, did not choose to reply. In

fact, inspite of our prodding on the earlier date in this regard, no copy of the

agreements so entered into have even been produced and along with the

memorandums of appeal, only the extract of the arbitration clause in the

agreement has been annexed. We are thus unable to know as to what are

the terms of the said agreement.

4. The counsel for the appellants however invited attention to

Harbanslal Sahnia Vs. Indian Oil Corporation Ltd. AIR 2003 SC 2120

laying down that the rule of exclusion of writ jurisdiction by availability of

an alternative remedy is a rule of discretion and not one of compulsion.

5. Per contra, the counsel for the respondent HPCL has invited attention

to the order supra of the Supreme Court in appeal preferred against the order

of the CompAT.

6. We have perused the order of the CompAT as well as the order of the

Supreme Court in appeal preferred thereagainst. The complainant in the

proceeding before the CompAT is the appellant in LPA No.405/2014.

Though the complaint was on the same grounds as before us, but the

CompAT inter alia by referring to the clauses of the agreement between the

members of the appellants and the respective oil companies held that no case

of the respondent oil companies having indulged in any unfair trade practice

was made out. The Supreme Court, while dismissing the appeals held, "the

right of the appellant association obviously is guided by the terms and

conditions of the agreement entered into between the members of the

association and the respondents and therefore this Court finds no reason to

entertain the grievance raised by the appellant." In the face of the said

reasoning of the CompAT and the Supreme Court as well as the learned

Single Judge of this Court in dismissing the writ petitions from which these

appeals arise, it was incumbent upon the appellants to demonstrate to us that

the relief claimed in the writ petitions and in these appeals would not

tantamount to changing the agreement and / or will have no impact on the

agreement. Till the appellants succeed in doing so, they cannot, relying on

Harbanslal Sahnia (supra), urge that inspite of the contractual remedy, they

are entitled to invoke Article 226. The Supreme Court, in The Rajasthan

State Industrial Development and Investment Corporation Vs. Diamond

and Gem Development Corporation Ltd. (2013) 5 SCC 470 reiterated the

settled legal proposition that matters/disputes relating to contract cannot be

agitated nor terms of contract can be enforced through writ jurisdiction

under Article 226 of the Constitution.

7. We are conscious that the appellants have based their case in these

proceedings on the provisions of the Legal Metrology Act. However we are

not satisfied that the contract of the members of the appellants with the

respondent oil companies would remain unaffected from the reliefs claimed

in these proceedings. In fact, at one point of time when the counsel for the

appellants argued that the contract to sell and purchase petrol / diesel in litres

is contrary to the Legal Metrology Act, we had enquired whether not the

same would have the effect of making the contract void / voidable. We

reiterate that we in these proceedings, cannot issue a direction to the

respondent oil companies to, under their contract, supply diesel / petrol to

the members of the appellants by weight without being satisfied that the

same will not affect the other terms and conditions of the said contract and

which the appellants have chosen not to place before us.

8. We may note that it is also the contention of the counsel for the

respondent HPCL that this Court also does not have the territorial

jurisdiction to entertain the writ petitions as the appellant in LPA

No.405/2014 is an association of the petroleum traders of the State of Uttar

Pradesh and the appellant in LPA No.406/2014 is an association of

petroleum traders of the State of Haryana and whose retail outlets are in the

States of Uttar Pradesh and Haryana. Reliance in this regard is placed on

Kusum Ingots & Alloys Ltd. Vs. Union of India (2004) 6 SCC 254, Oil and

Natural Gas Commission Vs. Utpal Kumar Basu (1994) 4 SCC 711 and

Sterling Agro Industries Ltd. Vs. Union of India AIR 2011 Delhi 174.

9. Though the aforesaid two reasons are sufficient to dismiss these

appeals but we find that the appellants even under the Legal Metrology Act

have failed to make out any case. Their entire case is based on:

(i) that vide Section 4, every unit of weight or measure has to be in

accordance with the metric system based on international system of

units;

(ii) that the base unit of mass, as per Section 5, is kilogram;

(iii) that Sections 11 & 12 prohibit use of any other unit than the

standard units of weight and measure;

       (iv)     that litre is not the base unit of mass;

       (v)      that weight/mass can never be equivalent to volume, which

       changes with temperature;

       (vi)     that the respondent oil companies are using dip rod method for

measuring petrol and diesel and which is not an approved method

under the Act for measurement of mass;

(vii) that the respondent oil companies are contravening the

mandatory provisions of the Act.

10. However, though Section 4 of the Act provides that every unit of

weight or measure shall be in accordance with the metric system based on

the international system of units but the appellants have not explained the

basis of their presumption that the unit of litre as a measure of volume is not

in accordance with the metric system or is not based on the international

system of units. The Act and the Legal Metrology (General) Rules, 2011

framed thereunder are not found to define, what is the "metric system" or

what is the "international system of units". The appellants also have not

bothered to pay any attention thereto. The "Metric System" is defined in the

Black‟s Law Dictionary Eighth Edition as "a decimal system for measuring

length, weight, area or volume based on the meter as a unit length and the

kilogram as a unit mass". We have wondered as to why, „litre‟ cannot be

said to be a part of the decimal system of measurement inasmuch as it

satisfies the requirement of being based on meter as a unit i.e. 1 litre is equal

to 10-3m3. Similarly, neither the Act nor the Legal Metrology (General)

Rules define the International System of Units. We however find that the

Legal Metrology (National Standards) Rules, 2011 also framed under the

Legal Metrology Act in Rule 3 thereof read with Rules 2 (d), (e) and (h)

thereof refer to the International System of Units (SI) evolved by the Bureau

International des Poids et Mesures (International Bureau of Weights &

Measures) (BIPM) set up by the Metre Convention signed in Paris on 20 th

May, 1875 to ensure worldwide unification of measurements. The BIPM

publishes a document known as the "SI Brochure" which defines and

presents the International System of Units. Clause 2 of the 8 th Edition, 2006

(updated in 2014) of the said Brochure reports that there are Seven units

upon which the most accurate and reproducible measurements can be made

and which are known as Base Units. The said seven Base Units are

(i) metre as a unit of length; (ii) kilogram as a unit of mass; (iii) second as a

unit of time; (iv) ampere as a unit of electricity; (v) kelvin as a unit of

thermodynamic temperature; (vi) candela as a unit of luminous intensity;

and (vii) mole as a unit of amount of substance. However, the said Brochure

besides the said Base Units, also refers to Derived Units (which are products

of powers of Base Units) and Clause 4 of the said Brochure refers to " units

outside the SI" as some of the Non-SI units which still appear in the

scientific, technical and commercial literature and will continue to be used

for years owing to their historic importance. It further lists the non-SI units

which are accepted for use with the international system because they are

widely used with the SI in matters of everyday life and because their use is

expected to continue indefinitely and yet further because they have an exact

definition in terms of an SI Unit. The said list includes the unit of litre as a

measure of volume and gives the value of a litre in SI units as:

"1 L = 1 l = 1 dm3 = 10 cm3 = 10-3 m3"

Infact, the said Brochure also refers to the 12th General Conference on

Weights and Measures of the year 1964 (also see Rule 3 read with Rule 2(d)

of the Legal Metrology (National Standards) Rules, 2011) which declared

that the word 'litre' maybe employed as a special name for the cubic

decimetre (dm3).

It thus follows that litre though not an SI unit has been accepted by the

BIPM for use with the SI Units under the International System of Units. It

would further follow that litre is a unit of measure in accordance with the

Metric System based on the International System of Units, within the

meaning of section 4 of the Legal Metrology Act.

11. Section 5(1) of the Act lists the same Base Units as under the SI and

in which as aforesaid litre is not included. However, Section 5(2) provides

that "the specifications of the base units mentioned in sub-section (1),

derived units and other units shall be such as may be prescribed." Again,

though the Act and the Legal Metrology (General) Rules are not found to

explain as to what are "derived units and other units" within the meaning of

Section 5(2), but the Legal Metrology (National Standards) Rules supra,

(i) in Rule 2(c) define derived units on the same lines as under the SI

Brochure aforesaid;

(ii) Rule 2(h) further explains that SI is divided into three classes of units i.e.

Base Units, Derived Units and Supplementary Units; and,

(iii) Rule 2(i) defines "permitted units" as units which though not part of SI

are recognized and permitted by the CGPM/International System of Units

for use along with SI units.

It thus follows that the Legal Metrology Act has expressly admitted to

use of litre as a measure of volume. Rather the Fourth Schedule to the said

Rules listing "Units permitted to be used to with base, supplementary or

derived units" specifies that the permitted unit of volume shall be litre and

that "1 L = 1 l = 1 dm3 = 10 cm3 = 10-3 m3".

12. The argument of the appellants, of petrol/diesel being measurable only

in mass, the unit of which is kilogram is also incomprehensible. Mass again

is not defined, neither in the Act nor in the Rules. Mass is defined in the

Concise Oxford English Dictionary, Tenth Edition as "the quantity of matter

which a body contains". However, Rule 13 of the Legal Metrology

(General) Rules provide that every measuring instrument shall conform to

the details specified in the Eighth Schedule thereof. Part IV of the Eighth

Schedule titled "Measuring System for Liquids Other Than Water" provides

for measurement of liquids other than water, by volume. The same thus runs

counter to the argument of the appellants that the measure of liquids has to

be by mass only. Again, while providing the extent of error in measurement

of such liquids, measurements are given in litres which is also indicative of

the measurement in litres being within the domain of the legal metrology

system.

13. Reference may also be made to Rule 12 of the Legal Metrology

(Packaged Commodities) Rules, 2011 which in Clause (2)(a) provides that

except in the cases of commodities specified in the Fourth Schedule of the

Rules, the declaration of the quantity shall be in terms of the unit of mass if the

commodity is solid, semi-solid, viscous or a mixture of solid and liquid and

which is again indicative of the reference to measurement in units of mass in

the Act being to solids, semi-solids, viscous or mixture of solid and liquid.

Rule 12(2)(d) categorically provides that the declaration of the quantity shall be

in terms of the unit of volume, if the commodity is liquid or is sold by cubic

measure. The Fourth Schedule to the said Rules provides that Industrial Diesel

Fuel is to be measured in terms of volume, though again it does not refer to

petrol and diesel or so with which we are concerned but is again indicative of

the measurement in volume in litres being very much in the domain of standard

units with which the legal metrology system is concerned.

14. The purport of our above discussion is not to categorically hold either

way inasmuch as we have had no assistance as aforesaid, from either of the

counsels in the said respect. The purport of this discussion is only to show that

if at all the grievance of the appellants is genuine, the proper forum if not

arbitration as above suggested, would be the authorities under the Legal

Metrology Act itself. Chapter V of the Act deals with offences and penalties

and if at all the respondent oil companies are violating the provisions of the

Act, the remedy of the appellants would be to file a complaint thereof within

the ambit of the Act before the authorities constituted under the Act and who

being adept in every aspect of the subject, would be better equipped to deal

therewith.

15. As far as the grievance of the appellants of use by the respondent oil

companies of the dip-rod method is concerned, we find that Rule 14 of the

Legal Metrology (General) Rules provides that the procedure for carrying out

calibration of vehicle tanks etc. as may be specified in the Ninth Schedule

thereto. The Ninth Schedule itself, while referring to maximum permissible

error, refers to the capacity of vehicle tanks in litre; not only so, it also provides

the detailed procedure for measurement by dip-rod method. We have

wondered that when the Rules framed under the Act themselves are providing

for measurement of vehicle tanks in litres, how can it be said that the unit of

litre being used by the respondent oil companies is in contravention of the Act.

16. We therefore do not find any merit in these appeals. The appeals are

accordingly dismissed.

RAJIV SAHAI ENDLAW, J.

CHIEF JUSTICE th AUGUST 14 2014 „gsr/bs‟