Supreme Court Addresses Allegations of Petroleum Adulteration and Benami Dealerships: Seema Upadhyay vs. Union of India (2018)

Date of the Judgment: April 5, 2018

Citation: Not Available in the source

Judges: Dipak Misra, CJI, A.M. Khanwilkar, J, Dr. D.Y. Chandrachud, J

Can allegations of widespread petroleum adulteration and benami ownership of dealerships be effectively addressed through a Public Interest Litigation (PIL)? The Supreme Court of India recently examined this question in a case involving allegations against specific individuals and the broader issue of fuel adulteration. The court addressed the need for proper investigation and whether such matters can be resolved through the court’s jurisdiction under Article 32 of the Constitution. The bench consisted of Chief Justice Dipak Misra, Justice A.M. Khanwilkar and Justice Dr. D.Y. Chandrachud, with the judgment authored by Justice Dr. D.Y. Chandrachud.

Case Background

The petitioner, Seema Upadhyay, filed a writ petition under Article 32 of the Constitution, seeking an independent investigation, preferably by the CBI, into alleged petroleum adulteration by certain mafias. She also sought the direct transfer of cash subsidies for kerosene to beneficiaries’ bank accounts using Aadhaar cards or other reliable methods. The petition specifically targeted Devender Agrawal and his relative, Dharmendra Agarwal, alleging that Devender Agrawal owned multiple petroleum dealerships under benami names.

Timeline:

Course of Proceedings

Initially, the court noted that the petition heavily relied on allegations against Devender Agrawal and Dharmendra Agarwal, who were subsequently impleaded as respondents. The court directed a fact-finding inquiry into the allegations of benami dealerships by an officer of the rank of Joint Secretary to the Government of India, nominated by the Ministry of Petroleum and Natural Gas. The inquiry was to include a review of the materials provided by the petitioner and the responses from the concerned parties. The Court also sought clarification from the Ministry of Petroleum and Natural Gas regarding the use of markers in kerosene to prevent adulteration and whether dispensing machines could detect such adulteration.

Legal Framework

The court referred to the Kerosene (Restriction on Use and Fixation of Ceiling Price) Amendment Order, 2007, which mandates that all kerosene sold in India be blended with a marker at five parts per million (ppm) concentration to prevent its diversion or use for adulteration of other petroleum products. The court also noted the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, which provides for punitive action against malpractices such as adulteration.

The relevant provision is:

“8A of the Kerosene (Restriction on Use and Fixation of Ceiling Price) Amendment Order, 2007, all kerosene sold in India is required to be blended with a marker at five parts per million (ppm) concentration with a view to preventing its diversion or use for adulteration of other petroleum products.”

Arguments

The petitioner argued that Devender Agrawal owned multiple petroleum dealerships under benami names, violating applicable rules. The petitioner also raised concerns about the adulteration of petroleum products, particularly the use of kerosene to adulterate petrol and diesel. The petitioner sought an independent investigation into these matters and the implementation of direct cash subsidies for kerosene to prevent its diversion.

The Ministry of Petroleum and Natural Gas, in its affidavit, stated that while a marker was initially used in kerosene, it was discontinued in 2009 due to the discovery of a chemical powder that could negate its effectiveness. The ministry also stated that current dispensing machines do not have the technology to detect adulteration during dispensation. However, the ministry outlined steps taken by public sector oil companies to conduct regular checks on the quality and quantity of petroleum products, including surprise inspections of retail outlets and monitoring of tank trucks through GPS.

The second respondent, Devender Agrawal, argued that the petition was not a genuine public interest litigation but was motivated by political rivalry, citing that the petitioner’s spouse and the second respondent had contested elections in 2007 and 2012. They also mentioned that a similar petition was dismissed by the High Court of Judicature at Allahabad.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a numbered list. However, the core issues addressed were:

• Whether the allegations of benami ownership of petroleum dealerships by the second respondent could be determined under Article 32 jurisdiction.
• Whether the court could direct an independent investigation into the alleged adulteration of petroleum products.
• Whether the court could mandate the implementation of direct cash subsidies for kerosene.

Treatment of the Issue by the Court

The following table demonstrates how the Court dealt with the issues:

Authorities

The Court did not explicitly cite any case laws or books. However, the following legal provisions were considered:

• Kerosene (Restriction on Use and Fixation of Ceiling Price) Amendment Order, 2007: This order mandates that all kerosene sold in India be blended with a marker at five parts per million (ppm) concentration to prevent its diversion or use for adulteration of other petroleum products.
• Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005: This order provides for punitive action against malpractices such as adulteration.

Judgment

The Supreme Court disposed of the petition, stating that it could not make any factual determination regarding the benami ownership of dealerships under its Article 32 jurisdiction. The Court directed the petitioner to bring the material in her possession to the attention of the concerned oil companies for appropriate action. The Court also noted the steps taken by the Ministry of Petroleum and Natural Gas to prevent adulteration and stated that these were matters of policy. The Court did not order any specific directions regarding the implementation of direct cash subsidies for kerosene.

The Court did not cite any authorities in its reasoning. The court’s reasoning was based on the limitations of its jurisdiction under Article 32 to make factual determinations and the policy nature of the issues raised.

What weighed in the mind of the Court?

The Court’s decision was primarily influenced by the limitations of its jurisdiction under Article 32 of the Constitution, which is not designed for detailed factual inquiries. The Court emphasized that determining benami ownership requires an appreciation of factual material that cannot be effectively addressed in a writ petition. Additionally, the Court recognized that the steps taken by the Ministry of Petroleum and Natural Gas to prevent adulteration were policy matters, which are best left to the executive branch. The Court also considered the second respondent’s defense that the petition was motivated by political rivalry, which further influenced its decision to not keep the proceedings pending.

The Court’s reasoning was primarily based on legal considerations, particularly the scope of Article 32 jurisdiction and the separation of powers between the judiciary and the executive. While factual allegations were present, the Court’s decision was driven by the legal framework and its limitations.

Key Takeaways

• The Supreme Court cannot make factual determinations regarding benami ownership of dealerships under its Article 32 jurisdiction.
• Matters of policy, such as the measures to prevent petroleum adulteration, are best left to the executive branch.
• Public Interest Litigations (PILs) must be genuine and not motivated by personal or political rivalry.
• Individuals with specific grievances must seek redressal from the appropriate authorities (e.g., oil companies) rather than directly through the Supreme Court under Article 32 for factual inquiries.

Directions

The Supreme Court directed the petitioner to bring the material in her possession to the attention of the concerned oil companies for appropriate action.

Development of Law

The judgment clarifies the limitations of the Supreme Court’s jurisdiction under Article 32 of the Constitution in matters requiring detailed factual inquiries. It also reinforces the principle that policy matters are primarily within the domain of the executive branch. There is no change in the previous position of law, but the Court has clarified the scope of Article 32.

Conclusion

The Supreme Court disposed of the writ petition filed by Seema Upadhyay, stating that the allegations of benami ownership of petroleum dealerships and petroleum adulteration could not be effectively addressed through its jurisdiction under Article 32. The Court directed the petitioner to approach the concerned oil companies and acknowledged the steps taken by the Ministry of Petroleum and Natural Gas to prevent adulteration. This judgment highlights the limitations of judicial intervention in matters of policy and the need for genuine public interest litigation.