Supreme Court of India
SEEMA UPADHYAYversusUNION OF INDIA THR. THE SECRETARY, MIN. OF PETROLEUM AND NATURAL GAS AND ORS.
- Citation
- 2018 INSC 304
- Decided
- 5 April 2018
- Disposal
- Disposed off
- Bench
- DIPAK MISRA
Holding
The Court held that factual questions about benami ownership of petroleum dealerships must be determined by the oil companies, and in their absence the Court cannot decide the matter under Article 32, leading to the dismissal of the petition.
Summary
The petitioner alleged that the second respondent, Devender Agrawal, owned numerous diesel and petrol dealerships under the names of relatives, constituting benami arrangements, and also raised concerns of adulteration of petroleum products and the need for direct transfer of kerosene subsidies. The Supreme Court allowed the impleadment of the accused individuals and directed a fact‑finding inquiry by a Joint Secretary of the Ministry of Petroleum and Natural Gas. The inquiry report was inconclusive, and the Court held that factual determinations about benami ownership must be made by the oil companies, which were not parties to the suit, and therefore could not be decided under Article 32. Regarding adulteration, the Ministry’s affidavit indicated that marker‑doping of kerosene had been discontinued and that dispensing units lack technology to detect adulteration, making the matter a policy issue. The Court also observed that the petition was not a genuine public‑interest litigation, noting a similar earlier PIL that had been dismissed. Consequently, the petition was disposed of.
Issues considered
- Whether the Supreme Court can adjudicate factual allegations of benami ownership of petroleum product dealerships under Article 32 in the absence of the oil companies as parties.
- Whether the petitioner is entitled to a mandamus directing investigation of alleged adulteration of petroleum products by a CBI or other agency.
- Whether the petition constitutes a genuine public‑interest litigation.
- Whether the Court can direct the Ministry to implement direct transfer of kerosene subsidy through Aadhaar or other mechanisms.
Legislation cited
Subjects
public interest litigationbenamipetroleum dealershipadulterationkerosene subsidyArticle 32fact‑finding inquiryMinistry of Petroleum and Natural Gas
Judgment
[2018] 3 S.C.R. 837 837
SEEMA UPADHYAY A
v.
UNION OF INDIA THR. THE SECRETARY, MIN.
OF PETROLEUM AND NATURAL GAS AND ORS.
(Writ Petition (Civil) No. 675 of 2013) B
APRIL 05, 2018
[DIPAK MISRA CJI, A. M. KHANWILKAR AND
DR. D. Y. CHANDRACHUD, JJ.]
Public Distribution System – Dealership – Kerosene –
C
Allegation in writ petition was that second respondent owned multiple
dealerships for distribution of petroleum products, and they are
held in the names of persons closely related to or associated with
him – Fact finding inquiry was conducted – However the inquiry
did not result in any conclusive determination on the allegations –
Held: The issue as to whether the second respondent owned multiple D
dealerships or outlets for petroleum products, in violation of the
applicable rules and regulations, has to be determined by the oil
company or companies concerned with the issue – None of the oil
companies were impleaded to these proceedings – In their absence,
it would not be possible for the Court to make any factual
E
determination – Whether an individual holds a dealership or outlet
benami would turn on an appreciation of factual material which
cannot be inquired into in the exercise of the jurisdiction under
Art.32 – Consequently it would be open to the petitioner to bring
such material as she has in her possession to the attention of the
concerned oil companies for such action as is deemed necessary – F
As regards the allegation of adulteration of petroleum products,
Ministry of Petroleum and Natural Gas in its affidavit stated the
steps taken by public sector oil manufacturing companies to conduct
regular checks on the quality and quantity of petrol and diesel being
supplied by retail outlets to the public at large – It was stated in the
G
affidavit that Motor Spirit and High Speed Diesel (Regulation of
Supply, Distribution and Prevention of Malpractices) Order, 2005
and the Kerosene (Restriction on Use and Fixation of Ceiling Price)
Order, 1993 have made provisions to enable the States and Union
Territories to take action against malpractices and that the Ministry
H
837
838 SUPREME COURT REPORTS [2018] 3 S.C.R.
A intended to implement the direct transfer scheme in kerosene in
identified districts of different states on a pilot basis – These are
essentially matters of policy – Union Ministry of Petroleum and
Natural Gas is seized of the issue – Moreover, defence that petition
has been instituted for reasons other than a genuine effort to espouse
an issue of public interest also cannot be discarded – Petition is
B
accordingly disposed of – Kerosene (Restriction on Use and Fixation
of Ceiling Price) Amendment Order, 2007 – Essential commodities
– Motor Spirit and High Speed Diesel (Regulation of Supply,
Distribution and Prevention of Malpractices) Order, 2005 –
Kerosene (Restriction on Use and Fixation of Ceiling Price) Order,
C 1993.
CIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.
675 of 2013.
Under Article 32 of the Constitution of India.
D Dr. Rajeev Sharma, Chandra Shekhar, Dharmendra Sharma, Vipin
Kumar Sharma, Raghuvir Sharma, Haji Salimuddin, Ram Anugrah Singh,
Advs. for the Petitioner.
Ms. Pinky Anand, ASG, S. Wasim A. Qadri, Mrs. Binu Tamta,
Ms. Sridha Mehra, Raj Bahadur Yadav, R. D. Chauhan, Arun K.
E Chauhan, Farasat Ali Siddiqui, Arvind Kumar, Ram Swaroop Sharma,
Kaushal Yadav, Dr. Kailash Chand, Advs. for the Respondents.
The Judgment of the Court was delivered by
DR. D. Y. CHANDRACHUD, J. 1. Invoking the jurisdiction of
this Court under Article 32 of the Constitution, the petitioner seeks the
F following reliefs:
“a)… a writ, order or direction in the nature of mandamus
commanding the respondents to get the matters of the known and
reported cases of adulteration operated by the Mafias referred
herein above, investigated through an independent agency
G preferably CBI;
b) … appropriate writ of mandamus commanding the respondents
to directly transfer the cash subsidy in the bank accounts of the
beneficiaries of the kerosene oil on the basis of their Adhar Card
or through public distribution system or some other full proof
H mechanism;..”
SEEMA UPADHYAY v. UOI THR. THE SECY., MIN. OF PETROLEUM 839
AND NATURAL GAS [ DR. D. Y. CHANDRACHUD, J.]
2. On 23 August 2013 when the petition came up for preliminary A
hearing, the following directions were issued:
“From para 5 onwards the writ petition makes several allegations
against Devender Agrawal and one of his relative Dharmendra
Agarwal. The petitioner has not however chosen to implead the
said two parties as party respondents to the petition. At the oral B
request of the petitioner, we permit the petitioner to implead the
said two persons as party respondent Nos. 2 and 3 respectively.
Amended writ petition shall be filed within one week.
Notice shall issue only after amended petition is filed.”
C
The above order indicates that a substantial part of the factual
basis of the petition relates to Devender Agrawal and his relative,
Dharmendra Agarwal. This is evident fromparagraph 9 of the writ
petition,which is extracted below:
“9. That Shri Agrawal owns a dozen of petty dealers of diesel and D
about a dozen of S.P.company petrol pumps in his name or in the
names of near relations while the cost of one such petrol pump is
about Rs 1 to 1.50 crores.
The names of the main petty diesel dealers are:
1) Mukesh Automobiles, HathrasJalesar Marg, GangoliHathras E
in the fraudulent name of Mukesh Kumar S/o Mahendra Pal
Agrawal. Subsequently it was transferred to Nagla Salem
(SadabadBehdoi Marg) All formalities are done by Devender
Agrawal @ Mukesh Kumar whereas no allotment can be made
in the alias name and the same is contrary to the guideline of
F
the Petroleum Ministry.
2) Petty Diesel dealer license obtained in the name of Pooran
Singh S/o Shri Chandrapal Singh Singh at Jalesar Marg, Hathras
Junction.
3) Petty Diesel dealer license at Hathras-Jalesar Marg, village G
Bhopatpur, in the name of Rakesh Agrawal brother of
Devender Agrawal.
4) Petty Diesel dealer at Hathras-Sadabad Marg, near Kachhpura
(Bisana) in the name of Manohar Lal.
H
840 SUPREME COURT REPORTS [2018] 3 S.C.R.
A 5) Petty Diesel dealer license at Hathras-Aligarh Marg near
Hanuman Chowki, Village BasaiQaji, obtained fraudulently
in the name of Santosh Kumar S/o Netrapal, servant of
Devendra Agrawal.
6) Petty Diesel dealer license in QasbaMindu at Hathras in
B the name of Suresh Chandra and partner Shri Deepak
Kumar. Deepak Kumar is the brother of the wife of
Devendra Agrawal.
7) Petty Diesel dealer license at Hathras-Jalesar Marg, at Nagla
Islamia in the name of Praveen Kumar S/o Gopal Dass
C Agrawal. Praveen Kumar is the brother of the wife of
Devendra Agrawal.
MAIN COMPANY PETROL PUMPS
I) Village Utara Block Sasni, District Mahamayanagar in the
name of Prem Prakash Sharma.
D
II) Devende Automobile, Ladpur Block, Hathras, in the name
of Deepak Agrawal. Tin No.0962701283C. Depak Kumar
is the brother of the wife of Devendra Agrawal. He also
has Petty a Diesel License at Qasba Maindu.
III) Village Keshopur-Maho Block Hathras in the name of
E
Santosh Kumar, servant of Devender Agrawal. He also
has a license for Petty Diesel dealer at Village Basai, near
Hanuman Chowki.
IV) Rahul Automobiles, Barwana-Hathras Junction to Jalesar
Road in the name of Shrawan Kumar Agrawal Tin
F
No.09127502025C. Shrawan Kumar is the brother of the
wife of Devender Agrawal.
V) Shrawan Kumar Automobile in the name of Devender
Agrawal at O Marora (Kajrauth) Block Iglas, District
Aligarh. Tin No.09127400903. This Tin No. is in the name
G of Jai MaaDurga Automobile. Hatheas registered in the
name Devender Agrawal.
VI) Mayank Automobiles Sonai (Aligarh) owned by Smt.Renu
Agrawal W/o Rakesh Agrawal, brother of Devender
Agrawal.
H
SEEMA UPADHYAY v. UOI THR. THE SECY., MIN. OF PETROLEUM 841
AND NATURAL GAS [ DR. D. Y. CHANDRACHUD, J.]
VII) Pradeep Automobiles, Khtauli-Katailiya (Sasni), in the A
name of Ramji Lal Agrawal and Pradeep Kumar Tin
No.09327401402.
VIII) QasbaVijaygarh, Block Akrabad, Aligarh in the name of
Jai Kishore Agrawal, relation of Devender Agrawal.
IX) Chandan Automobile, Kuktai, Sadabad-Agra Marg, near B
Mandi Samiti in the name of Devender Agrawal.
There are two Petty Diesel dealer licenses in the name of Deepak
Agrawal – one at MainduHathras and the other in the name of
Devender Automobiles at Ladpur-Hathras whereas two such
licenses in the name of one person is contrary to the rules.” C
The allegation is that Devender Agrawal owns multiple dealerships
for the distribution of petroleum products, and they are held in the names
of persons closely related to or associated with him. It is in this view of
the matter that this Court considered it necessary to allow the impleadment
of the aforesaid individual against whom allegations have been made. D
On 11 March 2015 the Solicitor General was requested to assist the
Court.
3. On 26 August 2016 this Court allowed the impleadment of the
Ministry of Petroleum and Natural Gas. In the order of this Court,
reference was also made to the allegations contained in paragraph 9 of E
the writ petition. This Court directed a fact finding inquiry into the
averments contained in paragraph9, by an officer of the rank of Joint
Secretary to the Government of India, to be nominated by the Secretary
in the Ministry of Petroleum and Natural Gas. The relevant part of the
order reads thus: F
“Having heard learned counsel for the parties, we are inclined to
direct a fact finding enquiry into the averments made in the above
paragraph, by an officer of the rank of Joint Secretary to
Government of India, to be nominated by the Secretary, Ministry
of Petroleum and Natural Gas. The Enquiry Officer, so appointed,
G
shall look into the allegations, made in para “9” and submit a report,
after holding an enquiry into the relevant facts. The petitioner
may furnish the details and supporting materials, if so advised, to
the Enquiry Officer within two weeks from today. The Enquiry
Officer shall be free to take such assistance of the licensing
H
842 SUPREME COURT REPORTS [2018] 3 S.C.R.
A authorities concerned who have issued licences to the dealers
concerned as may be necessary. Enquiry Officer shall also be
assisted in all respects by the District Administration of the State
Government. Needless to say that the Enquiry Officer shall issue
a notice to respondent NO.2- Devender Agrawal alias Mukesh
Kumar/Agrawal for purpose of holding an enquiry and take into
B
consideration the materials that may be placed on record by him
while drawing his conclusion.”
4. The second aspect which has been dealt with in the order of
this Court dated 26 August 2016 is the adulteration of petroleum products.
Under paragraph 8A of the Kerosene (Restriction on Use and Fixation
C 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. This Court directed that an affidavit be
filed by the Ministry of Petroleum and Natural Gas to clarify whether
D the petrol and diesel vending machines are sensitive to the above marker
and would decline to dispense the product if the same is adulterated by
the use of kerosene. On this aspect the order dated 26 August 2016 is
extracted below:
“Mr. Kumar has also drawn our attention to Kerosene (Restriction
E on Use and Fixation of Ceiling Price) Amendment Order, 2007.
He submits that in terms of Rule 8A of the said Order all kerosene
sold in India, whether under the public distribution system or
parallel marketing system, has 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. He
F submits that according to his instructions kerosene is now being
sold through public distribution systems and parallel marketing
systems duly blended with marker as required under the said Rule.
He is, however, unable to say whether the petrol and diesel
vending/dispensing machines, installed in the petrol and diesel
G vending stations, are sensitive to the said marker and whether the
machines refuse to dispense the product if the same is adulterated
by use of kerosene. He submits that given time, he will file an
additional affidavit of the concerned officer to clarify the position.
He may do so. The affidavit shall also clarify whether technology
today permits use of any machine that can detect adulteration of
H
SEEMA UPADHYAY v. UOI THR. THE SECY., MIN. OF PETROLEUM 843
AND NATURAL GAS [ DR. D. Y. CHANDRACHUD, J.]
the product and decline to dispense the same in case it is A
adulterated. The affidavit may also indicate whether “test kit”
referred to in sub-clause 5 (ii) (ka) of clause 2 of the Order,
mentioned above, is a part of the dispensing machine or is
independent of the same.”
5. In terms of the directions issued by this Court an inquiry has B
been conducted by the Joint Secretary in the Ministry of Petroleum and
Natural Gas. A copy of the report has been placed on record. The
inquiry has not resulted in any conclusive determination on the allegations
set out in paragraph 9 of the petition.
6. Basically, the issue as to whether the second respondent owns C
multiple dealerships or outlets for petroleum products, in violation of the
applicable rules and regulations, has to be determined by the oil company
or companies concerned with the issue. None of the oil companies were
impleaded to these proceedings. In their absence, it would not be possible
for the Court to make any factual determination. Whether an individual
holds a dealership or outlet benami would turn on an appreciation of D
factual material which cannot be inquired into in the exercise of the
jurisdiction under Article 32. Consequently all that we observe is that it
would be open to the petitioner to bring such material as she has in her
possession to the attention of the concerned oil companies for such action
as is deemed necessary. We clarify that we have not expressed any E
opinion on the merits of such a claim, which is left open to be determined
in accordance with law, after hearing all necessary parties.
7. On the second aspect of the matter which has been adverted in
the order of this Court dated 26 August 2016,it would be necessary to
set out the contents of the affidavit filed before this Court on 6 October F
2016 by the Ministry of Petroleum and Natural Gas. In so far as is
material, the affidavit contains the following averments:
“a. With regard to the issue of doping of PDS Kerosene with
marker, it may be informed that Ministry of Petroleum & Natural
Gas vide letter No.P-11013/5/2006-Dist.dated 15.01.2007, had G
advised the Oil Manufacturing Companies (OMCs) regarding
amendments to MS & HSD control order, 2005 and Kerosene
Control Order, 1993 enacted and published through Gazette
notifications, wherein all Kerosene sold in India, whether under
PDS or parallel marketing system, was to be blended with marker
H
844 SUPREME COURT REPORTS [2018] 3 S.C.R.
A at five parts per Million (ppm) concentrations with the objective
of preventing its diversion or adulteration of MS/HSD. Accordingly,
doping of kerosene with Marker was introduced throughout the
country.
b. Subsequently, in the month of September, 2008, it came to the
B notice of Vigilance Department of Indian Oil Corporation Ltd.
(IOCL), Northern Region that a brown chemical powder, provided
to them by an informer could be used to negate the efficiency of
Marker System. This was also corroborated in the findings in the
Lab Test conditions. Since Marker System was found launderable,
it was decided to discontinue the existing Marker System with
C effect from 01.01.2009.
c. Upon discontinuation of doping of marker in PDS kerosene
with effect from 01.01.2009, necessary amendments in the Motor
Spirit and High Speed Diesel (Regulation of Supply, Distribution
and Prevention of Malpractices) Order and the Kerosene
D (Restriction on Use and Fixation of Ceiling Price) Order were
made.
d. The Public Sector Oil Marketing Companies, (OMCs) have
further informed that they have interacted with all the major
Dispensing Unit manufacturers in India and, as per the feedback
E received, the current Dispensing Unit Manufacturers do not
possess readymade technology for detecting adulteration during
dispensation of fuel. It has been additionally informed that the
‘test kit’ for detection of marker was not a part of dispensing unit.
OMCs have clarified that ‘test kit’ is essentially a chemical test
F which helps in detecting presence of marker doped kerosene (i.e.,
sample test indicates positive result when its colour changes to
pink).”
The affidavit has also sets out the steps which have been taken
by public sector oil manufacturing companies to conduct regular checks
G on the quality and quantity of petrol and diesel being supplied by retail
outlets to the public at large. These are as follows:
“a) As a constant drive, the PSU OMCs undertake regular and
surprise inspection of Retail Outlets and take action under the
provisions of the Marketing Discipline Guidelines (MDG) and
Dealership Agreements against the outlets found indulging in
H
SEEMA UPADHYAY v. UOI THR. THE SECY., MIN. OF PETROLEUM 845
AND NATURAL GAS [ DR. D. Y. CHANDRACHUD, J.]
irregularities/malpractices like adulteration, short delivery etc. A
Further, the MDG provides for termination of outlet in the first
instance itself for serious malpractices like adulteration, tampering
of seats and unauthorized fittings/gears in the dispensing units
and graded penalties for other malpractices/irregularities.
b) The Motor Spirit and High Speed Diesel (Regulation of Supply, B
Distribution and Prevention of Malpractices) Order, 2005 issued
by the Central Government under Essential Commodities Act, 1955
provides for punitive action against malpractices such as
adulteration. Provisions are also available in the contractual
documents and administrative guidelines to prevent malpractices
in the trade of petroleum products. C
c) A Quality Control Cell is also functional in each of the Public
Sector OMCs which carries out surprise inspections at Ros for
checking various irregularities including adulteration. It may be
appreciation that during the last three years and current year (upto
June 2016), OMCs have carried out 5,61,796 number of inspections D
at their Ros across the country.
d) Industry Transport Discipline Guidelines (ITDG) have been
revised and strengthened in 2014 by making penal action more
stringent. On first instance of established pilferage, Tank Truck is
blacklisted and on second instance transportation contract is E
terminated and all TTs under that contract are blacklisted for two
years across industry automatically through e-portal. There is a
similar provision of penal action in case any tampering with Vehicle
Tracking System (VTS).
e) Furthermore, OMCs have resorted to other initiatives to prevent F
irregularities in Retail outlets and Monitoring of movement of tank
trucks through Global Positioning System (GPS). It is submitted
that as on 01.09.2016, there are 52653 number of Retail Outlets
across India, out of which 18586 number of Retail Outlets are
automated and 13211 number of Retail Outlets already compiled G
with the standard of “No Automation No Operation” (NANO).
The advantage of Retail Outlets complied with Standard NANO
is that the dispensing unit becomes automatically non-operative if
any efforts for manipulation of dispensing unit or storage tank are
made. This will ensure OMCs to keep a track of the activities at
H
846 SUPREME COURT REPORTS [2018] 3 S.C.R.
A the Retail Outlet. Under this initiative, tank stocks and sales of
each dispensing unit can be tracked online and analysed.”
Moreover, it has been stated that the Motor Spirit and High Speed
Diesel (Regulation of Supply, Distribution and Prevention of Malpractices)
Order, 2005 and the Kerosene (Restriction on Use and Fixation of Ceiling
B Price) Order, 1993 have made provisions to enable the States and Union
Territories to take action against malpractices. Moreover, it has been
stated that the Ministry intends to implement the direct transfer scheme
in kerosene in identified districts of different states on a pilot basis.
8. These are essentially matters of policy. The Union Ministry of
C Petroleum and Natural Gas is seized of the issue. Steps have been
taken from time to time, as elaborated in the affidavit filed in this Court.
9. While we have dealt with the two grievances of the petitioner,
we may also note that that in the counter affidavit which has been filed
in these proceedings by the second respondent, it has been stated that
D the petition is not a genuine recourse to the jurisdiction in public interest.
It has been stated that the spouse of the petitioner and the second
respondent contested elections in 2007 and 2012 to the Legislative
Assembly in Uttar Pradesh and the second respondent was returned as
the elected candidate. A public interest litigation was filed before the
High Court of Judicature at Allahabad in which, it has been submitted,
E the allegations were identical to those contained in the writ petition in the
present case. The writ petition before the High Court was dismissed on
6 April 2011. From the averments contained in the counter affidavit, the
defence that the petition has been instituted for reasons other than a
genuine effort to espouse an issue of public interest cannot be discarded.
F Be that as it may, we are not inclined to keep the proceedings pending
before this Court any further in view of what has been stated in the
earlier part of this judgment.
10. The petition shall, accordingly, stand disposed of.
G
Devika Gujral Petition disposed of.
H
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