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Kerala HC disposes of 3 PILs against unilateral change in LPG distributors

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The Kerala High Court has held that no right is vested with the consumer in objecting to the porting done by the oil marketing corporations/Government of India under any guidelines issued with respect to LPG portability.

The Division Bench of Chief Justice S. Manikumar and Justice Shaji P. Chaly considered three Public Interest Litigations (PILs) in respect of transfer of LPG connections from one distributor/agency to another without informing the customers/consumers, and seeking a direction in respect of the implementation of the orders issued, and transfer of the LPG connections to the nearest distributor of the consumers at the earliest.

The issue with respect to the transfer of consumers from one distributor to another was considered by the High Court in several petitions filed by the distributors and had held that the oil marketing corporations have got power and authority to port consumers from one distributor to another.

Among the PILs, two were filed by organizations said to be constituted to protect the interest of gas consumers; whereas, the third PIL is filed by an individual consumer seeking transfer of LPG connections to the nearest distributor of consumers by implementing the Unified Guidelines for Selection of LPG Distributor 2016 and order of the Government of India, Ministry of Petroleum and Natural Gas, dated 23.06.2016 and 16.02.2018 respectively, whereby appropriate directions were issued to the oil marketing corporations to close down the existing extension counters in various places, including the State of Kerala by 31.03.2018 and transfer the existing customers to the nearby distributor through intra company or inter company, as the case may be.

The paramount contention advanced by the Consumers’ Associations against the guidelines and the Government Order is that the respondents have no authority to transfer the LPG connections of consumers without the knowledge of the consumers as per their convenience. It is also submitted that the right to transfer a consumer from one distributor pertaining to LPG connection is left with the consumer and the Public Sector Oil Company has no right regarding the same. However, contrary to the right of the consumers, the respondents have started a practice of transferring LPG connections in different parts of the State from one distributor to another without any consent or authorisation of consumers and the said unauthorised act of the respondents have put the LPG consumers into a state of hardship and various inconveniences, is the contention.

That apart, it is submitted that due to the improper act of the respondents, the consumers are to suffer irregular services from the distributor and they are at far off places from their houses. According to the Consumers’ Associations, consequent to the porting of the consumers, abnormal delay has occurred in respect of refilling the cylinders and therefore, the delay in supplying the gas cylinder is a chronic problem for consumers.

It is also pointed out that even though affected consumers have made several requests to the respondents informing them of the hardships faced by them, the respondents have not initiated any action to resolve their issue. The sum and substance of the contention advanced by the petitioners is that the rights crystalised to a consumer cannot be taken away by the orders of the Government or the oil marketing corporations, and if at all the said right can be restricted or taken away, it can only be by legislative intervention. In the absence of the same, the forcible migration of a consumer without their consent by the oil marketing corporations, is illegal and arbitrary.

During the hearing, the Bench noted that the order issued by the Government of India, Ministry of Petroleum & Natural Gas, New Delhi, on 16.02.2018, clearly specifies that the extension counters which are operating in various States as well as Union Territories, including Kerala, shall be closed by 31.03.2018 and the existing customers be transferred to the nearby distributor through intra company or inter-company, as the case may be. It is clearly indicative of a fact that the existing distributors were managing the supply and serving the customers by devising a mechanism of starting extension counters and without which they were unable to manage supply and service.

From one of the agreements produced by the oil marketing corporations executed by and between the parties, along with its counter affidavit, the Court noted that without any reference to or consent of the dealer, the oil marketing corporation is at liberty to appoint one or more additional dealers in the same territory as referred to in Clause 1(a) and such additional dealer or dealers shall be entitled to sell gas in the same territory without any objection from the dealer and the dealer shall not be entitled to claim any overriding remuneration, commission or allowances for the purpose.

The Bench opined that the guidelines and the agreement executed by and between the oil marketing corporations and the distributors would show that the consumers are under the direct supervision and control of the oil marketing corporations and the consumer cannot turn around and say that they are entitled to continue with the existing distributors. The conditions contained under the guidelines would make it clear to the Court that the entire procedure, for appointment of distributors and the supplies to be made to the consumers are all streamlined and structured in a very emphatic and disciplined manner so as to avoid any complex situations in the business dealings by and between the parties.

“The guidelines and policies are introduced by the Government of India and the Oil Marketing Corporations to render better services to the consumers of LPG connections, taking into account the distance between the consumer and the distributor, the feasibility and viability of the supply, efficient services and cost effective methods in order to protect the interest of the consumers. When the distribution of the LPG cylinders is regulated and controlled under the Essential Commodity Act, 1955, and the Oil Marketing Corporations are controlling the appointment of the distributors and the supply of LPG Gas cylinders; it is for the Oil Marketing Corporations to take into account the necessary and required viable aspects for effectively and safely supplying gas cylinders and rendering services to the consumers,” held the Bench.

Further, the Court held that the object of the Company portability Guidelines granting liberty to the consumer is to protect the interest of the consumer by the consumer themselves, which means that if a consumer wants to migrate, they are entitled to do so; but that will not stand in the way of the oil marketing corporations implementing the guidelines/orders issued by the Government of India by appointing new distributors for better service to the consumers, and to port the LPG connections to new distributors or existing distributors to attain the required results envisioned by the government.

“Moreover, merely because such a provision is made in the Inter-company Portability Guidelines, that cannot be, in any manner, interpreted as a right conferred on the consumer to object to the porting done by the Oil Marketing Companies, when new distributors are appointed. To put it otherwise, the portability principles are introduced by the Government of India through the Oil Marketing Corporations with the sole object of protecting the interest of the consumers and thus, protecting the public interest by providing cost effectiveness, easy access, services, and safety, in the matter of supply of LPG cylinders from door to door. Moreover, LPG cylinders are to be supplied by the distributors at the door steps of the consumers. Therefore, the consumer is not at all affected, in any manner, in the matter of supply of the LPG cylinders. Above all, these are all the policy decisions taken by the Government of India and the Oil Marketing Corporations with the avowed object of rendering principled and maximum services bearing in mind the convenience of the people, and therefore, interference with such policies by courts exercising the powers conferred under Article 226 of the Constitution of India, is also limited in nature. Thus to say, that can be done, only if any arbitrariness or illegality, or whimsicality is detected in the process of drawing up and implementing the policy.”

After due deliberation of the facts and the law as discussed above, the High Court opined that that there is no illegality or arbitrariness, or other legal infirmities in the action of the Government of India and the Oil Marketing Corporations porting the consumers from one distributor to another.

In view of the Court , such a course of action adopted by the Government and the Oil Marketing Corporations would only enure to the benefit of the consumers, and by no stretch of imagination, it can be visualised and presumed that the shifting of consumer from one distributor to another, would, in any manner, prejudice the consumer.

However, the Bench is of the considered opinion that the transfer of a consumer from one distributor and the consequences arising therefrom to the distributor is already settled by the High Court in All Indian Distribution Federation (supra), Vembanad Gas Agencies (supra) and K. Ashraf and others v. Bharat Petroleum Corporation Limited and therefore, it has no locus standi or any right to get itself impleaded in the petition in question,opposing the reliefs sought for by a consumer to implement the guidelines and the orders issued by the Government of India and the Oil Marketing Corporations.

Therefore, the Bench dismissed the two petitions filed by the organizations and disposed of the third PIL directing the oil marketing corporations to implement guidelines and orders issued by the Government of India.

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