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2020 Supreme(Mad) 1451
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
ABDUL QUDDHOSE, J.
M/s. Wallia Agency, Through its Partner, N. Rajarampandian – Appellant
Versus
Union of India, Represented by its Secretary to Government of India, Ministry of Petroleum and Natural Gas, Government of India, New Delhi & Others – Respondent
W.P.(MD)No. 14340 of 2020 & W.M.P.(MD)Nos. 11990, 11992 & 13062 of 2020
Decided On : 21-12-2020
For the Petitioner:M. Ajmal Khan, Senior Counsel, T. Jayanthi Rani, Advocates.
For the Respondents:R1 & R2, L. Victoria Gowri, Assistant Solicitor General of India, R3, No Appearance, R4, R7 & R8, M.S. Krishnan, Senior Counsel, K. Muraleedharan, R5, Natesh Raja, R6, M. Sridhar, Advocates.
The court emphasized that communications must have statutory force to be binding and that disputes under distributorship agreements should be referred to arbitration.
Headnote:
TRANSPORTATION CHARGES - LPG Distributors - LPG (Regulation of Supply and Distribution) Order, 2000 - 9(e)
Fact of the Case:
The petitioner challenged the communication preventing the collection of transportation charges by LPG distributors and the consequential circular issued by the respondents. The petitioner claimed entitlement to collect additional transportation costs based on a communication from the District Collector, while the respondent Oil Corporation contended that such collection was illegal and in violation of the distributorship agreement.
Finding of the Court:
The court found that the communications from the District Collectors in 2009 and 2010 permitting the collection of additional transportation costs did not have statutory force and were not binding on the Oil Companies. The court also noted that the petitioner's distributorship agreement prohibited the collection of additional transportation costs and that any dispute should be referred to arbitration.
Issues: The issues included the entitlement of LPG distributors to collect additional transportation charges, the legal sanctity of the communications from the District Collectors, and the maintainability of the Writ Petition.
Ratio Decidendi: The court held that the communications from the District Collectors did not have statutory force and were not binding on the Oil Companies. It also emphasized that the petitioner's distributorship agreement prohibited the collection of additional transportation costs and that any dispute should be referred to arbitration.
Final Decision: The Writ Petition was dismissed, and no costs were awarded. Connected miscellaneous petitions were closed.
JUDGMENT :
(Prayer: Petition filed under Article 226 of the Constitution of India seeking a Writ of Certiorari, to call for the records of the impugned communication in No.P-20028/1/2019-PP-LPG, dated 19.03.2019 of the first respondent and the consequential 7th and 8th respondents' impugned circular of Email, dated 06.10.2020 preventing the collection of Transportation Charges and quash the same.)
(This petition was heard through Video Conferencing)
1. This Writ Petition has been filed challenging the communication issued by the first respondent, dated 19.03.2019 and the consequential circular, dated 06.10.2020 issued by the 7th and 8th respondents preventing the collection of transportation charges by the LPG Distributors of the 4th respondent Oil Corporation.
2. Heard Mr.M.Ajmal Khan, learned Senior Counsel for the petitioner, Mrs.L.Victoria Gowri, learned Assistant Solicitor General of India for respondents 1 and 2, Mr.M.S.Krishnan, learned Senior Counsel for R4, R7 and R8, Mr.Natesh Raja, learned Counsel for R5 and Mr.M.Sridhar, learned Counsel for R6.
3. The issues that arise for consideration in this Writ Petition are as follows:
a) Whether the distributors of Oil Marketing Companies are entitled to collect additional transportation charges from their customers in addition to the service charges received by them from the Oil Marketing Companies, under the distributorship agreement.
b) What is the legal sanctity of the communication sent by the some of the District Collectors in the year 2009 and 2010 in the State of Tamilnadu permitting the distributors to collect additional transportation charges from their customers.
4. The case of the petitioner is that they are entitled to collect additional transportation costs, since the District Collector has permitted them to collect such charges under Clause 9(e) of the LPG (Regulation of Supply and Distribution) Order, 2000. According to the petitioner, only after consultation with Oil Marketing Companies, the communication, dated 16.06.2010, was sent by the District Collector, Ramanathapuram, permitting the distributors of Oil Marketing Companies in the district of Ramanathapuram, to collect additional transportation costs from their customers, wherever, the need arises. Therefore, according to the petitioner, the impugned letter, dated 19.03.2019 sent by the 1st respondent to the Chief Secretaries of all the State Governments and Union Territories calling upon them not to permit collection of additional transportation costs by the distributors without consulting them and the consequential circular, dated 06.10.2020, sent by the 7th and 8th respondents preventing the distributors from collecting additional transportation costs from their customers, are per se, arbitrary and illegal.
5. However, it is the contention of respondent Oil Corporation, as seen from the counter affidavit filed by them that the collection of additional transportation costs by the petitioner from their customers is illegal. According to them, the petitioner has entered into a distributorship agreement with them and they are bound by the terms and conditions contained therein. According to them, the service charges payable to the petitioner by them includes delivery charges also and the petitioner is prohibited from collecting any additional transportation costs from their customers. It is their case that the Public Sector Oil Corporations serve public interest. According to them, illegally, the petitioner has been collecting additional transportation costs from their customers in violation of the terms and conditions of the distributorship agreement. It is also their case that the communication of the District Collector, Ramanathapuram, dated 16.06.2010, permitting the distributors to collect additional transportation costs, has no legal sanctity, as it was without consultation with the Oil Marketing Companies.
6. It is their case that the communication sent in the year 2009 and 2010 by the District Collector
