Government instructions aimed at promoting public interest and equitable distribution, not violative of Article 14 of the Constitution, and not attracting the principles of natural justice.

JAWAHAR LAL GUPTA, J.

1. Are the instructions issued by the Government of India vide letters dated 17/09/2001 and 18/10/2001 by which the Public Sector Oil Marketing Companies have been directed to close down the extension counters set-up by the dealers and "transfer all the consumers enrolled through these counters to the newly-commissioned distributors",arbitrary,illegalandviolativeoftheprinciplesofnaturaljustice?Thisistheshortquestionthatarisesinthispetition.Thefactsmaybebrieflynoticed.

2. The four Oil Companies viz. the Indian Oil Corporation and others have appointed distributors for the sale of Liquefied Petroleum Gas. There are more than 300 distributors in the North-West region. They are the members of the Petitioner-Federation.

3. The oil Companies allot distributorship to persons belonging to the categories of Ex-servicemen, War Widows, unemployed Engineers /Graduates, Freedom-fighters, members of Scheduled Castes and Tribes and disabled Army Personnel etc. Each dealser is allotted an area of operation. Even the number of refills which can be supplied by the dealer is regulated by the Company. Ceiling limits on the number of refills have been periodically imposed by the Government of India. To illustrate vide letter dated 21/04/1995, the cieling limit was revised and raised to 5000 refills per month for a town having population upto 10 lacs. On 10/03/2000, the limit was raised to 8000.

4. The petitioner alleges that its members have been granted the right to distribute "LPG cylinders after going through the rigourous mandatory procedure provided by the respondents under different categories........The members ......have invested huge amount of money towards the construction/purchase of the office, godown etc." After revision of cieling limits, they expected that "their area of operation would not be reduced and the number of connections which have been issued to them would neither be reduced nor transferred." In fact, the distributors "were allowed by the respondent-authorities to extend their area upto 30 kms. "The involved further expenditure. However, the Government of India "in violation of the guide-lines laid down by them and against the principles of natural justice, equity and fairplay, issued a communication dated 17-9-2001 to respondent Nos. 2 to 5 directing them to close the extension counters of the existing distributors in all the areas where new distributors have been appointed. "A copy of this communication has been placed on record as Annexure P. 4. The members represented against the circular. The authorities "instead of taking a sympathetic view .....have been threatening to stop the supply of gas meant for refilling."

5. Aggrieved by the issue of the instructions for closure of the extension units, the petitioner approached thuis court through the present writ petition. Subsequently, the Government issued instructions vide letter dated dated 18/10/2001 pointing out that the Public Sector Oil Marketing Companies had not "restructured the LPG markets and in view of this, newly-commissioned distributorships are facing difficulties in getting their share of market to make themselves viable." It was further mentioned that "the cieling limit concept has lost its relevance after the release of LPG connections on demand by the LPG distributors in all the markets throughout the country and due to this most of the urban /semi-urban areas are almost saturated." Thus, the Companies were "advised to effect the transfer of customers.....on the basis of the viability norms of each market instead of cieling limit." Accordingly, it was directed that the LPG connections be transferred "from the old distributors to the newly commissioner/unviable LPG distributorships in the all saturated markets.......to ensure the viability of newly commissioned/unviable distributorships within Ist year of its operation. Inter-company transfer of LPG connections may also be effected where the need arises." The instructions o