Oil Companies Move Appeals Assailing Interim Order In Favour Of KSRTC; Kerala High Court To Consider Tomorrow

Three oil companies have filed three separate appeals before the Kerala High Court challenging the interim order issued in favour of Kerala State Road Transport Corporation (KSRTC) wherein the oil companies have been directed to levy the price of High Speed Diesel (HSD) at par with the price available at retail pumps temporarily.

A vacation bench of Justice V.G. Arun and Justice C.S Sudha will hear the appeals tomorrow.

KSRTC had moved a plea through Advocate Deepu Thankan challenging the decision of State-owned Oil Marketing Companies to increase the price of diesel sold to the Corporation, which was allegedly much higher than the market price. A Single Judge had granted interim relief in this plea a week ago. 

The oil companies claim that in response to this plea, they had submitted a petition primarily praying for consideration of the maintainability of KSRTC's plea and a counter-affidavit for this limited purpose, raising several contentions to dismiss the plea as not maintainable. 

It is the case of the oil companies that KSRTC is a bulk customer of HSD and inherently different from a retail consumer, therefore they form separate categories.

The appellants also pointed out that KSRTC had approached the Court for similar reliefs in 2013, but the Supreme Court had dismissed the petition holding that this was a matter of policy and that no interim order could have been passed by the High Court in such matters.

It has been argued that while KSRTC admits that it has not procured diesel from consumer pumps after the price hike, it has not disclosed the source or manner in which it has been obtaining HSD to run its schedules smoothly, thereby evidencing that no actual loss or injury has been differed by the Corporation. 

Further, the oil companies submitted that KSRTC owes significant dues to the oil marketing companies for the bulk diesel already supplied which shows that the balance of convenience is clearly in favour of them. 

On the strength of settled law, it was urged that arbitration is an effective alternative remedy and that price fixation is not the forte of the courts while adding that the scope of judicial review in non-statutory price fixation matters was extremely limited. 

The appellants have contended that despite all these contentions, the Single Judge proceeded to pass the impugned interim order and that they are gravely and adversely affected by the same. 

It has been prayed that the same may be vacated since if allowed to stand, it would occasion a travesty of justice and cause severe hardship to the appellants. 

Case Title: Bharat Petroleum Corporation Ltd. v. Kerala State Road Transport Corporation & connected matters.