Calcutta High Court: In the case which underscores the critical issue of access to essential commodities for economically disadvantaged individuals and the role of the government in ensuring affordability and fairness in distribution systems like the Public Distribution System (PDS), a single-judge bench comprising of Bibek Chaudhuri, J., directed the Central Government to adopt and make a policy decision regarding the subsidised price of kerosene oil for consumers. The Court also directed the State Government to impose minimal taxes, cess, and duties to ensure that the poorest citizens can afford kerosene oil for essential purposes.
Factual Matrix
In the instant matter, the petitioners, who are ration card holders and members of Priority Households under the National Food Security Act, 2015, filed a writ petition in a representative capacity on behalf of all ration card holders in West Bengal. The central issue revolves around the reasonableness of the soaring prices of kerosene oil under the PDS. The petitioners argued that the escalating price of kerosene oil, an essential commodity distributed through the PDS, is making it inaccessible to economically disadvantaged people.
Relief Sought
The petitioners have prayed for the following writs:
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A writ of mandamus directing the Central Government to frame guidelines or policies for the transparent fixation of kerosene prices under the PDS.
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A direction to revise the kerosene price to the level prevailing in February 2022 until such guidelines are framed.
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Rule nisi on the above prayers, to be made absolute if no sufficient cause is shown.
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An order capping the price of kerosene at the February 2022 level until the disposal of the case or an ad-interim order in line with this prayer.
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Costs to be borne by the respondents.
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Any other orders or directions deemed fit by the court.
Moot Point
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Whether the writ petition should be treated as a public interest litigation (PIL) due to its representative nature and the assertion that it seeks to protect the interests of all ration card holders in West Bengal?
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Whether the Central Government’s delegation of kerosene pricing to oil marketing companies illegal and violative of constitutional rights?
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Whether the petitioners’ claim of unreasonable and arbitrary price increases in kerosene is substantiated?
Additionally, the case raises concerns about the legality and constitutionality of the price fixation mechanism for kerosene oil and whether the government’s decision to delegate pricing authority to oil marketing companies violates Article 14, 19(1)(g), 21 and 300-A of the Constitution of India.
Parties’ Contentions
The petitioners contend that the soaring price of kerosene oil is contrary to the objective of the PDS, which is to provide essential commodities at subsidised prices to financially disadvantaged individuals. It was contended that the Central Government has failed to declare a “declared price” for PDS kerosene, leading to oil marketing companies determining prices arbitrarily and without considering the needs of the poor.
The petitioners highlight the disproportionate increase in the price of kerosene compared to petrol and diesel, suggesting that the price rise disproportionately affects economically weaker segments of the population.
The Central Government contended that it has been reducing kerosene allocations as LPG and electricity coverage has expanded, reducing dependency on kerosene. The Central Government emphasized that the Direct Benefit Transfer in PDS Kerosene Scheme, 2016 has not been implemented yet due to the nature of kerosene oil consumers and that it is working towards providing subsidies directly to consumers.
The State of West Bengal supports the petitioners’ argument that the price hike has made kerosene unaffordable for many beneficiaries under the PDS, especially those in areas without electricity connections.
Court’s Assessment
The Court is inclined to treat the petition as a public interest litigation due to its representative nature and the potential violation of constitutional rights. The Court observed that the present PIL aims to protect the interests of economically weaker sections and uphold the principles of social justice.
The Court observed that the delegation of kerosene pricing to oil marketing companies is a matter of concern, especially when it affects the economically disadvantaged. The Central Government has a statutory obligation to declare the price of PDS kerosene, and delegating this responsibility without proper guidelines raises questions of reasonableness and legality.
The Court noted that the petitioners have provided evidence of substantial and unreasonable price increases in kerosene, while the price of petrol remains stable. This raises concerns about the impact on the economically weaker segments of society.
The Court observed that the pricing of kerosene oil is based on import parity pricing, which considers international market prices, ocean freight, and inland freight. This pricing mechanism is complex and does not directly reflect the cost of crude oil.
While recognizing the laudable policy of the Central Government to promote a subsidy-based economy, however, the Court emphasized the need to consider the financial capacity of kerosene oil users, as the price of kerosene has risen significantly, making it unaffordable for many. The Court noted the importance of kerosene oil as an essential commodity, often referred to as “Poor Man’s Fuel,” and highlights the hardships faced by economically vulnerable consumers due to the soaring price of kerosene.
“Kerosene oil is an essential commodity which has been categorized by the petitioners as “Poor Man’s Fuel.” This Court appreciates the laudable policy of the Central Government that the Central Government has been trying to put an aid of subsidy based economy. At the same time, it is the onerous duty of the State to consider the financial ability of the consumers who are using kerosene oil sold in public distribution system.”
The Court didn’t determine the specific selling price of kerosene oil but urged the government to address the pricing issue in the best interest of the people. The Court emphasizes the duty of the welfare state to ensure that essential commodities like kerosene oil are affordable to the poorest of the poor and directed the Central Government to take a policy decision to fix the subsidised price of kerosene oil for consumers. The State Government is also instructed to impose minimal taxes, cess, and other duties to keep the selling price of kerosene affordable for the needy citizens.
Court’s Decision
The Court directed the Central Government to adopt and take a policy decision to fix the subsidised price of kerosene oil for consumers. The Court also called on the State Government to impose minimum rates of taxes, cess, and other duties to ensure that the poorest citizens can access affordable kerosene oil for their essential needs.
[Yeasin Molla v. Union of India, 2023 SCC OnLine Cal 2756, order dated 12-09-2023]
*Judgment by Justice Bibek Chaudhuri
Advocates who appeared in this case :
Mr. Shyamal Sarkar, Sr. Adv, Mr. Ram Anand Agarwala, Mr. Kumar Gupta, Ms. Nibedita Pal, Mr. Ananda Gopal Mukherjee, Ms. Sonam Ray, Counsel for the Petitioners
Mr. Saptangshu Basu, Sr. Adv. Mr. Amit Kumar Nag, Mr. Partha Banerjee, Counsel for the Respondent No. 2 to 4
Mr. Sanajit Ghosh, Mr. Rivu Dutta, Mr. Rhitam Chatterjee, Counsel for the Union of India
Mr. Sirsanya Bandopadhyay, Mr. Arka Kumar, Counsel for the State
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