The court upheld the Oil Marketing Companies' authority to transfer customers among distributors, affirming that the policy serves constitutional objectives of equitable resource allocation and does not violate fundamental rights.

JUDGMENT :

1. These two Writ Petitions are filed challenging the very same Policy Decision dated 21.02.2025 jointly taken by three Oil Marketing Companies on Customer Transfer for Market Restructuring of Liquified Petroleum Gas (LPG) Distributorships. Hence, these Writ Petitions are disposed of by a common judgment. Since the pleadings are complete in W.P.(C) No.15265/2025, the said case is treated as the leading case, referring to the pleadings and documents of the said case.

2. Petitioner No.1 in W.P.(C) No.15265/2025 is a registered All India Association of LPG Distributors (Kerala Circle), who is having members granted with distributorship in the State of Kerala prior to Ext.P5 Unified Guidelines for Selection of LPG Distributorships, 2016 (‘UGS’ in short), issued by the Ministry of Petroleum and Natural Gas of the Government of India. Petitioner No.2 is an individual LPG Distributor and is the General Secretary of Petitioner No.1. Petitioners Nos.3 to 14 are LPG Distributors conducting LPG distribution in various parts of the State of Kerala. The Petitioners Nos.2 to 14 are members of the Petitioner No.1 Association. Hereafter, the members of the Petitioner No.1 and Petitioners Nos.2 to 14 are collectively referred to as ‘the Petitioners’. Originally, there were four Respondents at the time of filing the Writ Petition. The Respondent No.1 is the Union of India, and Respondent Nos.2 to 4 are three Oil Marketing Companies. Certain LPG Distributors got impleaded as Respondent Nos.5, 7 and 8. Another Association of LPG Distributors having members of the LPG Distributors in the State of Kerala who were granted distributorship after Ext.P5 UGS got itself impleaded as Respondent No.6. The members of the Respondent No.6 are the beneficiaries of the customer transfer from the members of the Petitioner No.1.

3. The Writ Petition is filed challenging mainly the aforesaid Policy Decision dated 21.02.2025, which is produced as Ext.P1. Incidentally, Exts.P8 and P8(A) E-mails proposing to hold customer transfer meeting are also challenged in the Writ Petition. The challenge against Ext.P1 is made mainly by contending that it is arbitrary, illegal, beyond the authority and ultra vires of Ext.P5 UGS, unconstitutional, and violative of the fundamental rights under Articles 14, 19(1)(g) & 300A of the Constitution of India.

4. Petitioner in W.P.(C) No.5556/2026 is an LPG Distributor who was awarded Distributorship prior to Ext.P5 UGS.

5. The Respondents Nos.2, 3 and 4 filed separate Counter Affidavits opposing the prayers and supporting Ext.P1 in W.P.(C) No.15265/2025. The Respondent No.6 also has filed Counter Affidavit supporting the Respondents Nos.2, 3 and 4. Petitioner has filed Reply Affidavits to the Counter Affidavits filed by the Respondents Nos.2 and 4.

6. A brief historical background of this litigation is necessary for a proper appreciation of the contentions of the parties. Originally, there was no refill ceiling limit for the LPG Distributors. The Agreements between the Oil Marketing Companies and the Distributors did not contain any provision for refill ceiling limit. When there occurred a shortage of supply of LPG cylinders, the Oil Marketing Companies used to fix the refill ceiling limit for the Distributors from time to time. Later, when