Kerala HC sets aside interim order given to KSRTC as oil companies have the last laugh

Kerala HC sets aside interim order given to KSRTC as oil companies have the last laugh

Kochi: In a jolt to the already beleaguered Kerala State Road Transport Corporation (KSRTC), the High Court on Friday allowed the appeals moved by state-owned Oil Marketing Companies (OMC) challenging the interim order issued in favour of KSRTC.

In the interim order, the OMCs were directed to levy the price of High Speed Diesel (HSD) at par with the price available at retail pumps temporarily.

A vacation bench of Justices C S Dias and Basant Balaji set aside the impugned interim order passed in a petition moved by KSRTC on April 13.

The court said KSRTC, a bulk purchaser, falls within a separate class and cannot be treated at par with retail customers.

Through this, the temporary relief to the KSRTC now stands withdrawn. It will now have to pay more for petroleum products at a time when they find it difficult to pay salaries to the nearly 35,000 employees.

Citing various orders, the division bench on Friday said "it is not the function or forte of this Court" to decide the optimal or competitive price at which diesel should be sold to the KSRTC.

The division bench accepted the contention of the OMCs that the KSRTC "cannot be treated at par with retail customers" because the latter would have to go to a retail outlet and pay for the product then and there.

"On the contrary, petroleum products are supplied to the petitioner at their doorsteps, with credit facilities and other benefits as envisaged in the contract. Therefore, the petitioner, a bulk purchaser, falls within a separate class and cannot be treated at par with retail customers," the High Court said in its order.

The high court also noted that the single judge has erred in not adverting to the objection raised by the OMCs and in not stating the reason for not relegating the parties to the alternative remedy, dehors the arbitration clause.

Last month, the interim order had directed the OMCs to sell HSD to the state-run transport corporation at the same rate that is applicable at fuel retail outlets.

In March, when the fuel prices were hiked, the OMCs asked the bulk purchasers to pay more. The KSRTC then approached the High Court and on March 22, the court refused to stay the new directive of OMCs decision to increase fuel prices for bulk diesel purchase, but posted the case for detailed hearing and in April gave the interim order, which now stands withdrawn.

Consequent to the fresh order, KSRTC will have to pay Rs 14 extra for every litre of diesel, more than what is available in the retail outlets.

The public utility already which reeling under huge losses, due to the bulk purchase directive will now have to shell out around Rs 80 lakh per day.

Incidentally, the order came at a time when almost a huge majority of the nearly 5,100 schedules of the KSRTC on Friday is not operating as a section of its staff is on a strike demanding salaries on time.

Successive governments in the state have making tall promises, have done nothing concrete leaving the public utility to have a hand-to-mouth existence.

(With PTI and IANS inputs)

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