'You Are The Only State Where Persons Are Appointed For 2 Years & Give Them Life-Long Pension': Supreme Court Remarks While Rejecting KSRTC's Plea Against Fuel Price Hike

The Supreme Court on Monday orally criticised the Kerala Government's policy to grant life-long pension to persons appointed as the personal staff of Ministers.

"You are the only state where persons are only appointed by Minister for 2 years & give them a life long pension. Please tell your state, if they can do that, why can't they do this?", the Supreme Court orally observed while refusing to entertain a writ petition by Kerala State Road Transport Corporation ("KSRTC") challenging decisions taken by the State-owned Oil Marketing Companies, relating to increase in fuel prices sold to bulk purchasers.

The bench of Justices Abdul Nazeer and Krishna Murari also granted KSRTC liberty to approach the High Court.

The writ petition had sought directions to the Union of India to set up an Independent Statutory Regulatory Authority headed by a retired Judge of the Supreme Court of India as Chairperson assisted by other technical members having in depth knowledge of the energy sector in India in order to ensure protection of consumers interest as intended under the Act.

Relief of issuing directions to Center to notify petroleum, petroleum products and natural gas under Section 11(f) read with Section 2(zc) of the Petroleum and Natural Gas Regulatory Board Act 2006 and to ensure legal protection to Indian consumers was also sought.

When the matter was called for hearing, Senior Advocate V Giri for the Corporation submitted that the differential price was being charged from the Corporation which was above the market rate. He further submitted that irrespective of there being an agreement, there was a difference of Rs 7 per liter.

"One of the main reasons is the differential price which is being charged above the market rate. Diff is of Rs 7 per liter even though there is an agreement," submitted Senior Counsel.

Justice Abdul Nazeer, the presiding judge at this juncture while expressing his inclination to not entertain the plea, asked the Corporation to approach the High Court.

"Why are you here? It's Kerala ! Let the High Court make a decision. Let them file there, they can handle it," remarked Justice Nazeer.

Referring to a report of The Indian Express, the judge further said, "It's the only state where even the Minister appoints persons for 2 years and they get full pension throughout their life. Tell your government, we read today in the Indian Express. You are the only state where they are only appointed for 2 years & they get a life long pension. Please tell your state, if they can do that, why can't they do this? Please convey this. Today Indian Express carries this. Very High Authorities of your state have said this."

Personal staff pension issue challenged before the High Court

It may be noted that a Public Interest Litigation (PIL) is pending before the Kerala High Court challenging the manner of appointment of personal staff to ministers in the State and the consequent pension benefits provided to them despite having served only a couple of years in office.

Since April 1984, the personal staff were made eligible for a pension through a special rule issued by virtue of a decision of the state cabinet. It was also decided that up to 25 individuals can be appointed in the personal staff of a minister, Leader of Opposition and Chief Whip and Chief Minister to the tune of 35 personal staff.

It is alleged in the petition that the minimum pension for personal staff is Rs 3550. If the person has two and a half years of service, he will receive this amount for the rest of his life along with 7% DA and gratuity as per the rules. The maximum pension for personal staff is Rs 83,400, the same as that of government employees.

Details Of The Petition Of KSRTC

The petitioner had argued that the decision of the State-owned Oil Marketing Companies to increase the price of diesel sold in bulk, only to the Corporation , which is significantly higher than even the market price of diesel is 'manifestly discriminatory, arbitrary and unreasonable decision'

The writ petition filed through Advocate Biju Raman and Advocate Deepak Prakash has argued that this is further burdening the Corporation which is already suffering exponential financial crisis year after year, and which will eventually render its shutting down inevitable.

The petitioner had argued that as per the prevailing general principles of businesses across the globe, bulk purchasers get discounts from the sellers in comparison to the retail prices because the seller saves a considerable amount of money.

However, in the present case, despite saving a huge amount of money in terms of agency commissions and logistical expenses, the State-owned OMCs were not selling the diesel in bulk as per the present retail market rate to the Petitioner Corporation.

"The average consumption of diesel by the Petitioner Corporation is around 4,10,000 liters per day. The decision of the State-owned OMCs to increase the fuel price of bulk purchase of diesel will result in an approximate accumulated loss of around Rs. 19,00,000/- (Rupees Nineteen Lakhs), which will add to the currently persisting acute financial crisis being suffered by the Petitioner and lead the Corporation to stop functioning," the plea stated.

According to the petitioner, the Respondents were acting against the statutory mandate as enshrined in the Essential Commodities Act and Essential Services Maintenance Act, by which it is established that the Corporation is discharging essential public service and was a bulk consumer of the same, and Respondents ought to not to treat the Petitioner Corporation at par with other private entities.

It was stated that till 01.02.2022 the Petitioner was getting diesel in bulk at the commercial rate agreed between the parties, however the same was increased "unreasonably" thereafter.

The petitioner had submitted that prior to the decision of the Respondent OMC to hike the price for bulk purchaser of diesel, the Petitioner Corporation had been purchasing diesel at the current market rate which is fixed by the OMCs on the basis of the memorandum of understanding between the parties.

Case Title: Kerala State Road Transport Corporation vs Union of India & Ors

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