Allowed

Union of India v. Govt of Tamilnadu

Madras HC22 Apr 2013WA/572/2013

Case brief

AI extract

What is this about?

The Division Bench held the appeal under Letters Patent Clause 15 maintainable against an interim order that materially affected the appellant's financial interests. The Court ruled that while Division Benches can correct errors in single judge orders, they should not re-examine the merits of the main writ petition at this stage. It further held that policy decisions are reviewable if arbitrary or against public interest. Crucially, the Court set aside the lower court's non-speaking interim injunction order, reiterating that courts must assign reasons considering prima facie case, balance of convenience, and irreparable loss before granting interim relief in fiscal matters.

What did the court decide?

Impugned interim order dated 14.03.2013 set aside. Single Judge directed to reconsider application for interim relief afresh in light of the Court's observations.

Union of India Vs Govt of Tamilnadu — Service and Employment | Madras HC (2013)

What the court decided

AI extract

Outcome

Impugned interim order dated 14.03.2013 set aside. Single Judge directed to reconsider application for interim relief afresh in light of the Court's observations.

Issue for consideration

Whether the appeal filed under Clause 15 of the Letters Patent is maintainable against an interim order of a Single Judge? +4 more

Detailed headnote5 paragraphs

1. Orders which materially and directly affect the final decision in the main case or determine vital rights are "judgments" for the purpose of Letters Patent Appeal under Clause 15. An interim order staying the implementation of a dual pricing policy which causes substantial daily loss to oil marketing companies qualifies as a judgment amenable to appeal, even if it does not finally decide all issues.

2. A Division Bench hearing a Letters Patent Appeal acts as a Court of Correction against a Single Judge's order. While it can reappraise facts and law, it should not normally go into the merits of the underlying substantive writ petition for the first time at the appellate stage.

3. A dispute between a State and the Union of India regarding commercial transactions (e.g., supply of fuel) does not attract Article 131's original jurisdiction unless it relates to constitutional distribution of powers. Such disputes are maintainable under Article 226.

4. Policy decisions of the Executive are subject to judicial review on grounds of unreasonableness, arbitrariness, mala fides, or violation of constitutional/statutory provisions. Courts should not interfere with economic policy decisions merely because they are unwise, but must ensure they are not capricious.

5. In granting interim injunctions, particularly in matters involving fiscal statutes or economic reforms, the Court must record reasons demonstrating a prima facie case, balance of convenience, and irreparable loss. A non-speaking order without such consideration is unsustainable, especially when it effectively grants final relief at the threshold without protecting the respondent's interests.

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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Dated: 22::04::2013

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Coram:

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The Hon’ble Mr.R.K.AGRAWAL, ACTING CHIEF JUSTICE and The Hon’ble Mr.Justice N.PAUL VASANTHAKUMAR

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Writ Appeal No. 572 of 2013
and
M.P.No.1 of 2013
Union of India,
Ministry of Petroleum,
Rep. by its Secretary to Government of India,
207-A, Shastri Bhavan,
New Delhi – 110 001. … Appellant/1st Respondent
vs.
1. Government of Tamil Nadu,
Rep. by its Principal Secretary and Chairman
for all State Transport Undertakings,
Transport Department, Fort.St.George,
Chennai – 600 009. ... 1st Respondent/Petitioner
2. The Managing Director,
Hindustan Petroleum Corporation Limited,
17, Jam Shebji Tata Road,
Mumbai.
3. The Managing Director,
Bharath Petroleum Corporation Limited,
Currimbhay Road, Ballard Estate,
Mumbai.
4. The Managing Director,
Indian Oil Corporation Limited,
G-9, Ali Yavar Jung Marg, Bandra (East),
Mumbai. .. Respondents 2 to 4/
Respondents 2 to 4

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Appeal filed under Clause 15 of the Letters Patent against the interim order passed in M.P.No.1 of 2013 in W.P.No.6202 of 2013 dated 14.03.2013 on the file of this Court. M.P.1/13 in W.P 6202/13 this Miscellaneous Petition is filed for the grant of an order of interim injunction, restraining the respondents from charging High Speed Diesel oil price at High price to the petitioner that the price charged on private retailers on was done prior the writ petition.

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This writ petition is filed under Article 226 of the constitution of India to issue an order or direction in the nature of a writ of Deceleration declaring that the Diesel price hike of the respondents to the Tamil Nadu state Transport corporation upto Rs.11.81 per liter and private bunk upto Rs.0.55 paise per liter as wholly arbitrary, illegal, unjust and unconstitutional and violative of Article 12 and 21 of the constitution of India and consequently direct the respondents to withdraw the dual pricing policy & High Speed Diesel on in the alternative accord exception to the Tamil Nadu state Transport corporation from the category of bulk consumers and beat them an retail customers for the purpose of diesel pricing.

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For Appellant ::: Mr. P.Wilson, Additional Solicitor General of India, Assisted by Mr.C.Kanagaraj, Central Govt.Standing Counsel For Respondent 1 ::: Mr.A.L.Somayajee, Advocate General, Assisted by Mr.V.R.Kamalanathan, Additional Government Pleader. For Respondents 2 to 4 ::: Mr.M.Ravindran, Senior Counsel Assisted by Mr.V.Anantha Natarajan J U D G M E N T

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R.K.AGRAWAL, ACJ

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This writ appeal has been filed against the interlocutory order dated 14^th March, 2013 passed by the learned single Judge in M.P.No.1 of 2013 in W.P.No.6202 of 2013, whereby the learned single Judge has passed an order of interim injunction, as prayed for, till 12^th April, 2013. The impugned order passed by the learned single Judge is reproduced below:-

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“Order: These petitions coming on for orders upon perusing the petitions and the respective affidavits filed in support thereof and upon hearing the arguments of Mr.Somayajee, Advocate General, Assisted by

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V.R.Kamalanathan, Advocate on behalf of the petitioner in both the petitions and Mr.Kanagaraj, counsel taking notice on behalf of the first respondent in both the petitions, the Court made the following order:Mr.Kanagaraj, learned counsel takes notice on behalf of the first respondent.

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Notice through Court as well as privately returnable by 12.04.2013 to the respondents R2 to R4.

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There shall be an order of interim injunction as prayed for till 12.04.2013.

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Sd/14.03.2013”

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The Government of Tamil Nadu, represented by its Principal Secretary and Chairman for all State Transport Undertakings, Transport Department, Fort.St.George, Chennai, have approached this Court, invoking the extra-ordinary jurisdiction under Article 226 of the Constitution of India, seeking to issue an order or direction in the nature of a Writ of Declaration declaring that the Diesel price hike by the appellant (first respondent in the writ petition) in respect of bulk supply of diesel to the Tamil Nadu State Transport Corporation upto Rs.11.81per litre and private bunk upto Rs.0.55 paise per litre as wholly arbitrary, illegal, unjust, unconstitutional and violative of Articles 14 and 21 of the Constitution of India, and consequently direct the respondents to withdraw the dual pricing policy of High Speed Diesel or in the alternative, accord exemption to the Tamil Nadu State Transport Corporations from the category of bulk consumers, and treat them as retail consumers for the purpose of diesel pricing.

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Facts of the Case Briefly stated the facts giving rise to the present appeal are as follows:(i) The Government of Tamil Nadu owns eight State Transport Corporations, which operate about 20,500 bus services, for the use of the travelling public, across 22 Regions in the State. The fleet of buses carry about two crore passengers every day. The bus services are mostly availed by the middle class and the poor people, who are unable to own vehicle of their own. Transport is a basic infrastructural facility of any economy, and the availability of a proper, well-connected transport system plays a pivotal role in the economic, social and cultural upliftment of the people. The Tamil Nadu State Transport Corporations do not seek to make any profit from providing such essential services to the poor and middle class people of the State.

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(ii) Out of the total of 20,500 bus services, which are being provided by the State Transport Corporations, nearly 18,361 services are loss making services. Nonetheless, the State Transport Undertakings continue to operate on a vast number of loss making routes, because of the obligation given to provide transport facilities to the people in remote areas and villages. These Transport Undertakings, being an essential limb of the State, are not profit making enterprises. It has been incurring losses continuously, and for the year 2011-2013 alone, it has incurred a loss of Rs.1791 crores with a cash loss of Rs.1392 crores. According to the writ petitioner, the loss incurred from April 2012 to January 2013 is approximately Rs.756 crores with a cash loss of Rs.397 crores. The Share Capital of the State Transport Undertakings as on 31.03.2012 is Rs.1671crores. (iii) The principal reason for the consistent and accumulated losses is mainly due to the provision for transport facilities to the people at affordable rates and nearly 35% of the total loss incurred by the State Transport Undertakings is due to the increasing cost of High Speed Diesel. Prior to 18^th January, 2013, the diesel price fixed by the oil companies for supply of diesel to the State Transport Corporations was Rs.49.72 per litre, whereas for the outside bunk it was Rs.50.72 per litre. Thus, the State Transport Undertakings got one rupee lesser than the private bunk price per litre. The daily consumption of diesel by the State Transport Undertakings is to the tune of 17.25 lakh litres, and the total cost incurred is Rs.8.57 crores per day. The Government of India introduced the dual pricing policy on 17^th January, 2013, as a result of which the oil companies have withdrawn the concession given to the State Transport Undertakings. Under the said policy, bulk consumers of High Speed Diesel would no longer be eligible for subsidy and would have to pay “nonsubsidized market determined prices”. The oil companies have hiked the diesel price with effect from the midnight of 17^th -18^th , January, 2013 as follows:

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(a) For retail consumers, price has been increased by Rs.0.55 paise per litre (inclusive of Value Added Tax)

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(b) For bulk consumers, the price has been increased by Rs.11.81 per litre (inclusive of Value Added Tax). It vary from Rs.11.66 to Rs.11.81 per litre depends upon the place of supply.

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The difference in the price comes to about Rs.12 per litre, and the additional cost that the State Transport Undertakings would incur would be Rs.743.55 crores per annum, which will have a greater impact on the provision of

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transport facilities to the general public.

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(iv)

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The policy decision taken on 17^th January, 2013 has been challenged on the ground that the denial of subsidy to the bulk consumers is based on incorrect and imaginary premise that the bulk consumers such as the State Transport Corporations can afford to bear the burden of market price or that they can pass the additional burden to the end customers. The Public Transport Enterprises cannot pass on the additional financial burden due to the hike in fuel prices to the end customers, and it can be gainsaid that the persons, who avail public transport facilities, are mainly from lower or middle class of society who cannot afford to own vehicle of their own. Further, the decision of the Government of India for partial deregulation of the price of High Speed Diesel is totally arbitrary, inflationary, discriminatory and anti-poor. It is also submitted that the Dual Pricing Policy adopted by the respondents, insofar as it treats the Tamil Nadu State Transport Corporations as bulk consumer for the purpose of pricing of High Speed Diesel, is arbitrary, unreasonable and unfair. The cost of operation including this price hike is very less to the private operators, when compared to the State Transport Undertakings. But they are bound to collect the same bus fare. In other words, this dual pricing policy puts all State Transport Undertakings at extremely disadvantageous position vis-à-vis private operators, since State Transport Undertakings, being treated as bulk consumer, have to pay Rs.11.81 higher than the private operators. The State Transport Undertakings are a class by themselves as they cater to the transport needs of the poor and the middle class people. Thus, there is no rational basis for treating State Transport Undertakings as bulk consumers for the purpose of High Speed Diesel pricing and charge them a much higher price for High Speed Diesel. Further, there has been a total non-application of mind on the part of the respondents in not exempting the State Transport Undertakings from the category of bulk consumers for the purpose of High Speed Diesel pricing. State Transport Undertakings, being the limb of the State, cannot pass on the additional financial burden to the end customers for, they are engaged in rendering service to the public by providing transport facilities at affordable rates to the poor and middle class people.

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The writ petition preferred by the Government of Tamil Nadu along with an application for grant of interim relief came up for hearing before the learned single Judge on 14^th March, 2013, and the learned single Judge, after hearing the learned Advocate General

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appearing for the writ petitioner, and learned counsel, who took notice on behalf of the first respondent, had passed an order of interim injunction, as prayed for, till 12^th April, 2013. The order dated 14^th March, 2013 passed by the learned single Judge has already been reproduced above.

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It may be mentioned here that the appellant have not filed their response in the writ petition. On the other hand feeling aggrieved by the said order, the Union of India, Ministry of Petroleum, through its Secretary to Government of India have filed this appeal on the grounds that the impugned interim order has caused great hardship, irreparable loss, having financial implications throughout India and therefore, causes injury to Nation’s interest and is against public interest, that the writ petition challenging the policy decision of the Government of India dated 17^th January, 2013 is not maintainable and was entertained in spite of objections, and therefore, the impugned order of the learned single Judge is contrary to facts and law, erroneous and is liable to be set aside, that the State Government cannot challenge the policy decision of the Union Government under Article 226 of the Constitution of India and it is within the domain of the original jurisdiction of the Hon’ble Supreme Court, as envisaged under Article 131 of the Constitution of India, and as the writ petition itself is not maintainable, the impugned interim order is liable to be set aside, that by granting an interim order, the learned single Judge had, in effect, granted the final relief prayed for, which is not permissible under law, that no ex-parte order could be granted from enforcing the decision of the Government of India, which is fiscal in nature, that a similar writ petition being W.P.No. 1907 of 2013 was filed before the Madurai Bench of this Court, that the Division Bench, after elaborate arguments, has ordered notice and no interim order was granted and that the writ petition which has been filed with vague particulars and details has been entertained and a blanket interim order had been granted in spite of objections.

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The order of the learned single Judge has also been assailed on the ground that the learned single Judge has not considered the prime facie case, balance of convenience, irreparable loss and hardship being suffered by the petitioner, and the order itself is a non-speaking order. The writ petitioner has approached this Court nearly two months after the policy decision was taken i.e., on 17^th January, 2013 and therefore, there was no urgency for passing an exparte interim order. In fact, none of the grounds available for challenging the policy decision i.e., violation of constitutional provisions, violation of the statutory provisions of Act or Rules and mala fides are alleged in the writ petition, and therefore, the interim order, which is in the nature of final order, was not warranted. It is further stated that the dual pricing policy is not violative of any statutory enactment and there is no bar to have the dual pricing policy. Lastly, it is stated that by the interim order,

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the oil companies are suffering huge losses and therefore, the interim order is liable to be set aside. Rival Submissions:-

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We have heard Mr.P.Wilson, learned Additional Solicitor General of India, assisted by Mr.C.Kanagaraj, learned Central Government Standing Counsel, for the appellant; Mr.A.L.Somayajee, learned Advocate General, assisted by Mr.M.Kamalanathan, for the Government of Tamil Nadu-first respondent and Mr.M.Ravindran, learned senior counsel, assisted by Mr.V.Anantha Natarajan for the Oil companies-respondents 2 to 4.

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The learned Advocate General raised a preliminary objection with regard to the maintainability of the writ appeal. According to him, the impugned order passed by the learned single Judge does not amount to a judgment, and hence no appeal would lie under Clause 15 of the Letters Patent. In support of the same, he has relied upon the decisions of the Hon’ble Supreme Court in the case of Midnapore Peoples’ Coop.Bank Ltd. vs. Chunilal Nanda reported in 2006 (5) SCC 399, and a Division Bench Judgment of this Court in the case of Green Peace Construction Pvt.Ltd. vs. R.Shivakumar reported in 2011 (1) CTC 48.

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In reply, Mr.P.Wilson, learned Additional Solicitor General of India, submitted that the present appeal is maintainable, as by the impugned interim order, the appellant herein i.e., Union of India, as also the Oil Companies, are suffering huge losses as they are required to supply diesel to the State Transport Corporations at the subsidized rate. To add strength to his submission, he has relied upon the decisions of the Hon’ble Supreme Court in the case of Midnapore Peoples’ Coop.Bank. Ltd (supra), and two Division Bench judgments of this Court in the case of Jet Airways (India) Limited, Chennai vs. Jet Airways Thozhilalar Sangam, Chennai and four others reported in 2000 (4) CTC 243 and State of Tamil Nadu, Rep. by the Secretary to Government, Home Department and another vs. RajKamal Films International and five others (W.A.SR.Nos. 9428 and 9285 of 2013 decided on 30.01.2013).

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On merits, learned Additional Solicitor General of India submitted that the learned single Judge had not given any reasons as to why the order of interim injunction, as prayed for, has to be granted. Further, even though the provisions of Code of Civil Procedure are not applicable to writ jurisdiction, yet the principles for grant of temporary injunction, as provided under Order 39 Rule 1 of the Code of Civil Procedure, would be applicable viz. prima facie case, balance of convenience and irreparable loss have to be established before the order of temporary injunction is granted. In support of the aforesaid plea, he has relied upon the decisions of the Hon’ble Supreme Court in the case of Assistant Collector of Central Excise, Chandan Nagar, West Bengal vs. Dunlop India Limited

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and others reported in 1985 (1) SCC 260; State of U.P and others vs. Ram Sukhi Devi reported in 2005 (9) SCC 733; State of U.P. and others vs. Modern Transport Company, Ludhiana and another reported in 2002 (9) SCC 514 and Union of India vs. Era Educational Trust and another reported in 2000 (5) SCC 57.

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He, further submitted that by passing an order of temporary injunction, the learned single Judge had, in effect, granted the final relief, as claimed for by the Government of Tamil Nadu, which could not have been done. He has relied upon the decisions of the Hon’ble Supreme Court in the case of Special Director and another vs. Mohd. Ghulam Ghouse and another reported in 2004 (3) SCC 440; State of U.P and others vs. Ram Sukhi Devi (supra) and State of U.P. and others vs. Modern Transport Company, Ludhiana and another(supra). According to him, if the learned single Judge was inclined to pass an order of interim injunction in favour of the Government of Tamil Nadu, on its application, pending writ petition, he ought to have protected the interests of the respondents, in case the writ petition ultimately fails. In support of this submission, he relied upon the decision of the Hon’ble Supreme Court in the case of Mahanadi Coalfields Ltd. vs. Orient Paper and Industries Ltd and others reported in 1995 Supp (2) SCC 717. Learned Additional Solicitor General of India also submitted that supply of diesel by the oil companies to the State Transport Undertakings, owned by the Government of Tamil Nadu, fall under the realm of contract and the Court cannot alter the terms of the contract or re-write the contract. For this submission, he relied upon the decision of the Hon’ble Supreme Court in the case of Union Territory of Pondicherry and others vs. P.V.Suresh and others reported in 1994 (2) SCC 70. In any event, he submitted that the policy decision taken by the Government of India on 17^th January, 2013 to sell diesel to all consumers taking bulk supplies directly from the installations of the oil marketing companies at the non-subsidized market determined price with immediate effect, and that the oil marketing companies will not be eligible to any subsidy on such direct sale of diesel to bulk consumers, was in the interest of the nation so as to reduce the burden of subsidy provided by the Central Government to the oil marketing companies and to undertake other welfare schemes, and as such the same cannot be questioned in any court of law.

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According to him, the learned single Judge had, therefore, erred in law in entertaining the writ petition, as also passing an order of interim injunction. In this connection, he strongly relied upon the decisions of the Hon’ble Supreme Court in the case of Balco Employees’ Union (Regd.) vs. Union of India reported in 2002 (2) SCC 333; Dhampur Sugar (Kashipur) Ltd. vs. State of Uttranchal and others reported in 2007 (8) SCC 418; State of Himachal Pradesh and others vs. Himachal Pradesh Nizi Vyansayik Prishikshan Kendra Sangh reported in 2011 (6) SCC 597; State of Harayana and others vs. Mahabir Vegetable Oils Private Limited reported in 2011 (3) SCC 778; Shri

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Sitaram Sugar Co. Ltd. vs. Union of India reported in 1990 (3) SCC 223 and Krishnan Kakkanth vs. Government of Kerala reported in 1997 (9) SCC 495.

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According to the learned Additional Solicitor General it is permissible for the Government to have the dual price fixation and it cannot be challenged in a court of law. In this regard, reliance has been placed on the decision of the Hon’ble Supreme Court in the case of Pallavi Refractories and others vs. Singareni Collieries Co. Ltd. and others reported in 2005 (2) SCC 227. The learned Additional Solicitor General of India vehemently argued that the writ petition preferred by the Government of Tamil Nadu challenging the policy decision dated 17^th January, 2013 taken by the Government of India is not maintainable. If at all, the Government of Tamil Nadu is aggrieved it has to approach the Hon’ble Supreme Court under Article 131 of the Constitution of India, as it is a dispute between the State of Tamil Nadu and the Union of India. In this connection, reliance has been placed upon the decision of the Hon’ble Supreme Court in the case of Union of India vs. State of Rajasthan reported in 1984 (4) SCC 238. Learned Additional Solicitor General also submitted that Mr.C.Kanagaraj, learned Central Government Standing Counsel appearing for the Union of India, had raised objection with regard to maintainability of the writ petition, as also has sought time for seeking instructions which was not granted, and the learned single Judge ought to have heard on the maintainability of the writ petition instead of granting an order of interim injunction in such a sensitive matter involving consequences, which will have a national impact. By the impugned order of interim injunction, the Government exchequer has been put to great loss and the impugned order passed by the learned single Judge is liable to be vacated.

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Learned Additional Solicitor General submitted that this Court while deciding the writ appeal under Clause 15 of the Letters Patent can go into all the questions raised by the appellant herein, as the appeal remedy against the order passed by the learned single Judge, in exercise of extra-ordinary jurisdiction under Article 226 of the Constitution of India is nothing, but continuation of the very constitutional remedy, which was available to the writ petitioner under Article 226 of the Constitution of India. In support of his submission, he has relied upon a Division Bench of this Court in the case of Villupuram Market Committee, etc. Villupuram & others v. K.Sekar reported in 2007 (2) L.W. 919.

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In reply, the learned Advocate General submitted that the policy decision taken by the Central Government can be challenged if it is in violation of the provisions of the Constitution, statutory enactment and against public interest or does not sub-serve the public interest. He further submitted that under the dual pricing policy, there is no restriction imposed on any of the bulk consumers to get high speed diesel from the retail outlets operated by the

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petro dealers, and the effect of the impugned order passed by the learned single Judge is only to provide a single place for the supply of high speed diesel required for operating the buses. According to the learned Advocate General, if the impugned order had not been passed, the buses of the State Transport Undertakings would have to go to the retail outlets for getting their tanks filled up, for which the State would have paid only concessional rate payable to high speed diesel, as there is no such prohibition in the policy. Thus, neither the Union of India nor the oil marketing companies are suffering any losses on account of the interim injunction granted by the learned single Judge. He further submitted that the interim injunction was granted only till 12^th April, 2013, and before the learned single Judge, learned standing counsel appearing for the Union of India did not raise any such plea, as has been raised in the present appeal. It is always open to the Union of India to move an application for vacating the exparte order of interim injunction passed by the learned single Judge, and all the pleas raised herein by the appellant shall be considered by the learned single Judge at the time of passing final orders on the application filed for grant of interim relief or finally deciding the main writ petition. He further submitted that it is the usual practice of this Court not to assign any reasons while granting interim relief by passing an order of interim injunction at the initial stage, which practice has been followed by the learned single Judge in this case also. According to him, after exchange of affidavits, this Court considers all the pleas raised by the respective parties while passing order on the miscellaneous application, and therefore, the impugned order passed by the learned single Judge does not call for any interference.

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Mr.M.Ravindran, learned senior counsel appearing for the Oil Marketing Companies, submitted that the learned single Judge ought not to have granted an order of temporary injunction where a policy decision is under challenge. The effect of grant of temporary injunction has a cascading effect and the oil marketing companies are put to loss of approximately Rs.424 crores daily, as other bulk consumers have also approached the other High Courts for grant of interim injunction. He has relied upon a decision of the Hon’ble Supreme Court in Bhavesh D.Parish vs. Union of India reported in 2000 (5) SCC 471.

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POINTS FOR DETERMINATION:

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i.Whether the present appeal filed under Clause 15 of the Letters Patent is maintainable against the order dated 14^th March, 2013 passed by the learned single Judge granting an order of interim injunction?

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ii.Whether this Court can go into all questions raised by the appellant on the merits of the matter, in exercise of powers under Clause 15 of the Letters Patent?

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vi. Whether a writ petition under Article 226 of the Constitution of India is maintainable where a policy decision has been challenged?

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iv. Whether the writ petition preferred by the first respondent herein was maintainable, in view of the provisions of Article 131 of the Constitution of India?

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iii. Whether the learned single Judge was justified in not granting time to the learned standing counsel appearing for the appellant to seek instructions?, and

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v. Whether the interim order passed by the learned single Judge, without assigning any reasons, could be sustained in law?

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DISCUSSION:

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Point (i)

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We have already extracted the interim order dated 14^th March, 2013 passed by the learned single Judge. The learned single Judge had passed an order of interim injunction, as prayed for, till 12^th April, 2013. The present appeal has been filed under Clause 15 of the Letters Patent. The said clause is reproduced below:-

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“15. Appeal from the Courts of original jurisdiction to the High Court in its Appellate Jurisdiction—

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And we do further ordain that an appeal shall lie to the said High Court of Judicature at Madras from the judgment (not being a judgment passed in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court and not being an order made in the exercise of a revisional jurisdiction, and not being a sentence or order passed or made in exercise of the power of superintendence under the provisions of Section 107 of the Government of India Act, or in the exercise of criminal jurisdiction) of one Judge of the said High Court or one Judge of any Division Court, pursuant to Section 108 of the Government of India Act, and that notwithstanding anything herein-before provided, an appeal shall lie to the said High Court from a judgment of one Judge of the said High Court or one Judge of any Division Court, pursuant to Section 108 of the Government of India Act made (on or after the first day of February, 1929) in the exercise of appellate jurisdiction in respect of a decree or order made in the exercise of appellate jurisdiction by a Court subject to the superintendence of the said High Court, where the Judge who passed the judgment declares that the case is

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a fit one for appeal, but that the right of appeal from other judgments of Judges of the said High Court or of such Division Court shall be to Us, Our heirs or successors in Our or Their Privy Council, as hereinafter provided.”

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In the case of Midnapore Peoples’ Coop.Bank Ltd., (supra), the Hon’ble Supreme Court was considering an appeal filed under Clause 15 of the Letters Patent in the proceedings arising out of Contempt of Courts Act, 1971 against an order directing the Registrar, Co-operative Societies, Midnapore to show cause as to why he should not be punished for committing contempt, and replacing him by another person as the enquiry officer. The Hon’ble Supreme Court in paragraphs 15 & 16 of the Report has held as follows- (SCC, pages 413-414)

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“15. Interim orders/interlocutory orders passed during the pendency of a case, fall under one or the other of the following categories:

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(i) Orders which finally decide a question or issue in controversy in the main case.

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(ii) Orders which finally decide an issue which materially and directly affects the final decision in the main case.

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(iii) Orders which finally decide a collateral issue or question which is not the subject-matter of the main case.

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(iv) Routine orders which are passed to facilitate the progress of the case till its culmination in the final judgment.

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(v) Orders which may cause some inconvenience

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or some prejudice to a party, but which do not finally determine the rights and obligations of the parties.

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The term “judgment” occurring in clause 15 of the Letters Patent will take into its fold not only the judgments as defined in Section 2(9) CPC and orders enumerated in Order 43 Rule 1 CPC, but also other orders which, though may not finally and conclusively determine the rights of parties with regard to all or any matters in controversy, may have finality in regard to some collateral matter, which will affect the vital and valuable rights and obligations of the parties. Interlocutory orders which fall under categories (i) to (iii) above, are, therefore, “judgments” for the purpose of filing appeals under the Letters Patent. On the other hand, orders falling under categories (iv) and (v) are not “judgments”

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for the purpose of filing appeals provided under the Letters Patent.”

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In the case of Green Peace Constructions Pvt. Ltd (supra), a Division Bench of this Court was considering the appeal filed against the order passed by the learned single Judge directing attachment of property as an interim measure, and also for recording evidence. The Division Bench, after referring to the decisions of the Hon’ble Supreme Court, in the case Shah Babulal Khimji vs. Jayaben D.Kania and another reported in AIR 1981 SC 1786 and Employer in Relation to Management of Central Mine Planning and Design Institute Ltd., vs. Union of India and another, reported in AIR 2001 SC 883, has held in paragraph-11 as follows:-

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“A careful reading of the order under Appeal would show that the order of attachment is only by way of interim arrangement, which had not reached finality. That order is also revocable in the event the Court negatives the contention of the first respondent/plaintiff, after perusing the evidence. As the lower Court has already granted injunction in favour of the first respondent/plaintiff, the order of attachment cannot be considered to be one of affecting vital and valuable rights of the appellant finally. In that view of the matter, the Appeal under Clause 15 of the Letters Patent is not maintainable.”

¶80

In the case of Jet Airways (India) Limited (supra), a Division Bench of this Court, while considering the writ appeal filed against the interim order of stay granted by the learned single Judge, held that under the fact situation there is no special circumstances/reasons for the learned single Judge to give the impugned directions, even without hearing the sixth respondent therein, and consequently set aside the order.

¶81

In the case of State of Tamil Nadu, Rep. by the Secretary to Government, Home Department and another vs. RajKamal Films International and five others (supra), a Division Bench of this Court has interfered in an appeal preferred by the State against the interim order passed by the learned single Judge.

¶82

In the present case, the interim order passed by the learned single Judge, though does not finally decide a issue, but materially and directly affects the appellant, as the Oil Marketing Companies, which supply diesel to the first respondent herein, would be required to supply diesel at the rate at which they are supplying to the retail consumers thereby causing daily loss to the Oil Marketing

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Companies running into several crores of rupees, and thus burdening the appellant in grant of subsidy. The view, which we are taking, is in lines with the principles laid down by the Hon’ble Supreme Court in Shah Babulal Khimji vs. Jayaben D.Kania and another (supra) (which has been followed by the Hon’ble Supreme Court in the case of Midnapore Peoples’ Coop.Bank Ltd., (supra), wherein the Hon’ble Supreme Court, while considering the scope of Clause 15 of the Letters Patent had held that every interlocutory order cannot be regarded as a judgment, but only those orders would be judgments, which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned.

¶85

Thus, the appeal preferred under Clause 15 of the Letters Patent by the appellant is maintainable. Point (ii)

¶86

Learned Additional Solicitor General submitted that this Court, in the appeal preferred under Clause 15 of the Letters Patent, should consider the question as to whether the writ petition preferred by the first respondent herein is at all maintainable or not, as it challenges the policy decision taken by the appellant, and also whether the first respondent herein has any case on merits. No doubt, in Villupuram Market Committee (supra), the Division Bench of this Court has held that even though it is in nature of an appeal under Clause 15 of the Letters Patent, inasmuch as such an appeal is as against the order of the learned single Judge passed in exercise of the extra-ordinary jurisdiction vested with the learned single Judge under Article 226 of the Constitution of India, the Appellate remedy as against the said order is nothing, but continuation of the very constitutional remedy, which was available to the writ petitioner under Article 226 of the Constitution of India and mere provision of an appeal before the Division Bench, as provided under Clause-15 of the Letters Patent, cannot be held to be an independent proceedings of the remedy, which was invoked by the writ petitioner under Article 226 of the Constitution of India. The Division Bench further observed that in other words, Letters Patent as against an order passed under Article 226 of the Constitution of India cannot be dealt with in isolation or disjunctive of the parent proceedings, namely the writ petition, from which alone it stems up.

¶87

What is the true nature and scope of the jurisdiction exercised by the High Court in a Letters Patent Appeal is no longer resintegra. We find that the Hon'ble Supreme Court in the case of Baddula Lakshmaiah and others vs. Sri Anjaneya Swami Temple and others reported in (1996) 3 SCC 52 has held that "a letters patent appeal, as permitted under the Letters Patent, is normally an intracourt appeal whereunder the Letters Patent Bench, sitting as a Court of Correction, corrects its own orders in exercise of the same jurisdiction as was vested in the Single Bench. Such is not an appeal against an order of a sub-ordinate court. In such appellate

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jurisdiction the High Court exercises the powers of a Court of Error. So understood, the appellate power under the Letters Patent is quite distinct, in contrast to what is ordinarily understood in procedural language."

¶90

In the case of Sanjay Kumar and others vs. Narinder Verma and others reported in (2006) 6 SCC 467, the Hon'ble Supreme Court has held that the Letters Patent Appeals could have proceeded only on the basis of the writ petitions and the judgment of the learned Single Judge, which was being challenged.

¶91

In B. Venkatamuni vs. C.J. Ayodhya Ram Singh and others, reported in (2006) 13 SCC 449, the Hon'ble Supreme Court has held as follows:

¶92

"11. In an intra-court appeal, the Division

¶93

Bench undoubtedly may be entitled to reappraise both questions of fact and law, but the following dicta of this Court in Umabai V. Neelkanth Dhondiba Chavan [(2005) 6 SCC 243] could not have been ignored by it, whereupon the learned counsel for the respondents relied “ (SCC p. 261, para 52).

¶94

'52. It may be, as has been held in Asha Devi V. Dukhi Sao [(1974) 2 SCC 492], that the power of the appellate court in intra-court appeal is not exactly the same as contained in Section 100 of the Code of Civil Procedure but it is also well known that entertainment of a letters patent appeal is discretionary and normally the Division Bench would not, unless there exists cogent reasons, differ from a finding of fact arrived at by the learned Single Judge. Even as noticed hereinbefore, a court of first appeal which is the final court of appeal on fact may have to exercise some amount of restraint."

¶95

From the aforesaid decisions, we find that now it is wellsettled that in an intra-court appeal, the Division Bench examines the correctness of the order passed by the learned Single Judge visa-vis the material on record. It acts as a Court of Correction.

¶96

Therefore, in view of the aforesaid legal position, we are of the considered opinion that in an appeal filed under Clause 15 of the Letters Patent against the interim order passed by the learned single Judge, we, as a Court of Appeal, should not go into the merits of the claim raised for the first time by the first respondent herein, which had not been raised before the learned single Judge at the time when the impugned order was passed by the learned single Judge.

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Point (iii)

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The submission of the learned Additional Advocate General that Mr.C.Kanagaraj, learned Central Government Standing Counsel appearing for the Union of India had raised objections with regard to the maintainability of the writ petition, and has also sought time for getting instructions, which was not granted by the learned single Judge, is not borne out from the order dated 14^th March, 2013 passed by the learned single Judge. The Supreme Court in the case of State of Maharashtra vs. Ramdas Shrinivas Nayak reported in AIR 1982 SC 1249 has held that statement of the Judges recorded in their judgment, as to what transpired in court is binding and the Court cannot allow the statement of the judges to be contradicted by statements at the Bar or by affidavit and other evidence. The Hon’ble Supreme Court has further held If the judges say in their judgment that something was done, said or admitted before them, that has to be the last word on the subject as the principle is well settled that statements of fact as to what transpired at the hearing, recorded in the judgment of the court, are conclusive of the facts so stated and no one can contradict such statements by affidavit or other evidence. If a party thinks that the happenings in court have been wrongly recorded in a judgment, it is incumbent upon the party, while the matter is still fresh in the minds of the judges, to call attention of the very judges who have made the record to the fact that the statement made with regard to his conduct was a statement that had been made in error. That is the only way to have the record corrected and if no such step is taken, the matter must necessarily end there. Thus, we are not inclined to accept the plea raised by the learned Additional Solicitor General that the learned standing counsel had sought time to seek instructions and has also raised the question of maintainability of the writ petition before the learned single Judge, which was not acceded to by the learned single Judge. Point (iv)

¶100

The plea raised by the learned Additional Solicitor General is that in view of the provisions of Article 131 of the Constitution of India, the writ petition preferred by the first respondent herein before this Court questioning the policy decision dated 17^th January, 2013 taken by the Central Government is not maintainable.

¶101

In the case of Union of India vs. State of Rajasthan (supra), the Hon’ble Supreme Court in paragraph-12 of the judgment has held as follows:-

¶102

“On a careful consideration of the whole matter in the light of the decisions of this Court referred to above, we feel that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship

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that exists between them and the powers, rights, duties, immunities, liabilities, disabilities etc. flowing therefrom. Any dispute which may arise between a State in the capacity of an employer in a factory, a manufacturer of goods subject to excise duty, a holder of a permit to run a stage carriage, a trader or businessman carrying on business not incidental to the ordinary functions of Government, a consumer of railway services etc. like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution. It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court. It is well to remember that the constitutional proposals of the Sapru Committee advocated the strengthening of the position of the Federal Court in India and widening its jurisdiction on the original side so that the Federal Court could act as an interpreter and guardian of the Constitution and as a tribunal for the determination of the disputes between the constituent units of the Federation. The Joint Committee on Indian Constitutional Reforms was also of opinion that the object of conferring exclusive original jurisdiction on the Federal Court was that the disputes of the kind specified between the Federation and the Provinces as the constituent units of the Federation should not be left to be decided by courts of law of a particular unit but be adjudicated upon only by the highest tribunal in the land which would be beyond the influence of any one constituent unit. The Special Committee consisting of Sriyuts S. Varadachariar, Alladi Krishnaswami Ayyar, B.L. Mitter, K.M. Munshi and B.N. Rau appointed by the Constituent Assembly to consider and report on the constitution and powers of the Supreme Court suggested “that the Supreme Court, like the Federal Court under the 1935 Constitution,

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would be the best available forum for the adjudication of all disputes between the Union and a unit and between one unit and another and proposed that the court should have an exclusive original jurisdiction in such disputes”. (Vide The Framing of India's Constitution—A Study by Shri B. Shiva Rao at p. 483). Considered in the light of the foregoing the conclusion becomes inevitable that disputes of the nature involved in this case could not have been in the contemplation of the framers of the Constitution when they adopted Article 131 of the Constitution.” (SCC, page 244)

¶107

Applying the principles laid down by the Hon’ble Supreme Court in the aforesaid case, to the facts of the present case, we find that in the writ petition preferred by the first respondent herein, the dispute between the State of Tamil Nadu and the Union of India is in the capacity of a trader and businessman carrying on business through Oil Marketing Companies and the State Transport Undertakings. It is not incidental to the original function of the Government. Thus, the writ petition is maintainable. Point (v)

¶108

In the interim order dated 14^th March, 2013, the learned single Judge had simply passed an order of interim injunction, as prayed for, till 12^th April, 2013. No reasons have been assigned by the learned single Judge. Even though the provisions of Order 39 Rule 1 of the Code of Civil Procedure are not maintainable to the writ proceedings, in view of explanation to Section 141of the Code of Civil Procedure, 1908, the principles applicable for grant of interim injunction viz., consideration of prima facie case, balance of convenience, irreparable loss are applicable, while considering the question of grant of interim relief in the writ proceedings also.

¶109

In the case of Assistant Collector of Central Excise, Chandan Nagar, West Bengal vs. Dunlop India Limited and others (supra), the Hon’ble Supreme Court has deprecated the practice of granting exparte orders, which are often exparte and non-speaking, while entertaining the writ petitions under Article 226 of the Constitution of India. It had further held that where matters of public revenue are concerned, interim orders ought not to be granted merely because a prima facie case has been shown. More is required. The balance of convenience must be clearly in favour of the making of an interim order and there should not be the slightest indication of a likelihood of prejudice to the public interest.

¶110

In the case of Union of India vs. Era Educational Trust and another (supra), the Hon’ble Supreme Court has held as follows:-

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(SCC, pages-59-60, para-6)

¶113

“It may be that Order XXXIX CPC would not be applicable at the stage of granting interim relief in a petition under Article 226 or 227 of the Constitution, but at the same time various principles laid down under Order XXXIX for granting ad interim or interim reliefs are required to be taken into consideration. In the case of Morgan Stanley Mutual Fund v. Kartick Das after considering the various authorities this Court laid down the guiding principles in relation to grant of an ad interim injunction which are as under: (SCC pp. 24142, para 36)

¶114

“36. As a principle, ex parte injunction could be granted only under exceptional circumstances. The factors which should weigh with the court in the grant of ex parte injunction are—

¶115

(a) whether irreparable or serious mischief will ensue to the plaintiff;

¶116

(b) whether the refusal of ex parte injunction would involve greater injustice than the grant of it would involve;

¶117

(c) the court will also consider the time at which the plaintiff first had notice of the act complained so that the making of improper order against a party in his absence is prevented;

¶118

(d) the court will consider whether the plaintiff had acquiesced for sometime and in such circumstances it will not grant ex parte injunction;

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(e) the court would expect a party applying for ex parte injunction to show utmost good faith in making the application;

¶120

(f) even if granted, the ex parte injunction would be for a limited period of time;

¶121

(g) general principles like prima facie case, balance of convenience and irreparable loss would also be considered by the court.”

¶122

In the case of State of U.P and others vs. Modern Transport Co., Ludhiana and another(supra), the Hon’ble Supreme Court has held that the High Court should give reasons while passing interim orders, more so, when the interim orders have the effect of granting the final relief.

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¶124

In the case of State of U.P and others vs. Ram Sukhi Devi (supra), the Hon’ble Supreme Court has deprecated the practice of granting interim orders, which practically give principal relief sought in the petition for no better reasons than that of prima facie case having been made out, without being concerned about the balance of convenience, public interest and a host of other considerations.

¶125

In the case of Special Director and another vs. Mohd.Ghulam Ghouse and another (supra), the Hon’ble Supreme Court has held that Courts should ensure that the final relief is not granted at the threshold by the interim order, and it should record reasons for granting interim protection.

¶126

In the case of Mahanadi Coal Fields Ltd. vs. Orient Paper & Industries Ltd., and others (supra), the Hon’ble Supreme Court has held while the purpose of an interlocutory order is to preserve in status quo the rights of the parties during the pendency of the litigation, the Court is also required to put into the scales the need to protect the interest of the respondent before it if the writ petitions ultimately fail and uncertainty as to their results is resolved in such respondent’s favour.

¶127

In the case of Bhavesh D.Parish and others vs. Union of India and another reported in 2000 (5) SCC 471, the Hon’ble Supreme Court has held in paragraph-31 of the Report as follows:- (SCC, page 487)

¶128

“While the courts should not abrogate (sic abdicate) their duty of granting interim injunctions where necessary, equally important is the need to ensure that the judicial discretion does not abrogate from the function of weighing the overwhelming public interest in favour of the continuing operation of a fiscal statute or a piece of economic reform legislation, till on a mature consideration at the final hearing, it is found to be unconstitutional. It is, therefore, necessary to sound a word of caution against intervening at the interlocutory stage in matters of economic reforms and fiscal statutes.”

¶129

In view of the settled legal position, as discussed above, when we consider the impugned order dated 14^th March, 2013 passed by the learned single Judge, we find that the learned single Judge has neither assigned any reasons while passing the interim injunction nor has considered the question of prima facie case, balance of convenience, irreparable loss, nor had protected the interest of the

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respondents while passing the impugned order. The order dated 14^th March, 2013, therefore, cannot be sustained in law and is liable to be set aside.

¶132

Point (vi)

¶133

The submission of the learned Additional Solicitor General that the writ petition challenging the policy decision taken by the Central Government is not maintainable is not correct. The policy decisions taken by the Government, whether it is Central or State can be challenged on the ground that it is violative of Article 14 of the Constitution of India or on the grounds of malafide, unreasonableness, arbitrariness or un-fairness, against the public interest, etc.

¶134

In the case of Kumari Shrilekha Vidyarthi and others vs. State of U.P & others reported in (1991 (1) SCC 212) the Hon’ble Supreme Court has held that Article 14 of the Constitution of India applies also to matters of governmental policy and if the policy or any action of the government, even in contractual matters, fails to satisfy the test of reasonableness it would be unconstitutional.

¶135

In the case of Ugar Sugar Works Ltd. vs. Delhi Administrative and others, reported in (2001) 3 SCC 635, the Hon’ble Supreme Court has held as follows:

¶136

"18. .....It is well settled that the Courts, in exercise of their power of judicial review, do not ordinarily interfere with the policy decisions of the executive unless the policy can be faulted on grounds of mala fide, unreasonableness, arbitrariness or unfairness etc. Indeed, arbitrariness, irrationality, perversity and mala fide will render the policy unconstitutional. However, if the policy cannot be faulted on any of these grounds, the mere fact that it would hurt business interests of a party, does not justify invalidating the policy...."

¶137

In the aforesaid paragraph the Hon’ble Supreme Court has further held that the Courts are not expected to express their opinion as to whether at a particular point of time or in a particular situation any such policy should have been adopted or not. It is best left to the discretion of the State.

¶138

In the case of Ms. Aruna Roy and others vs. Union of India and others, reported in (2002)7 SCC 368, the Apex Court has held as follows:-

¶139

"96....It is ultimately for Parliament to take a decision on the National Education Policy one way or the other. It is not the province

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of the Court to decide on the good or bad points of an education policy. The Court's limited jurisdiction to intervene in implementation of a policy is only if it is found to be against any statute or the Constitution..."

¶142

It has further held in paragraph 97 of said Report as follows: "It cannot, however, compel that a particular practice or tradition followed in framing and implementing the policy, mus be adhered to. The Court has to keep in mind the above limitations on its jurisdiction and power. It is true that if a policy framed in the field of education or other fields runs counter to the constitutional provisions or the philosophy behind those provisions, this Court must, as part of its constitution duty, interdict such policy."

¶143

In the case of Union of India and another vs. International Trading Co. and another, reported in (2003) 5 SCC 437, the Hon’ble Supreme Court has held as follows: "15.While the discretion to change the policy in exercise of the executive power, when not trammelled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily on by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the state, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to

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see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness."

¶146

In the case of Delhi Development Authority and another vs. Joint Action Committee, Allottee of SFS Flats and others, reported in (2008)2 SCC 672, the Hon’ble Supreme Court has held as follows:"64. An executive order termed as a policy decision is not beyond the pale of judicial review. Whereas the superior courts may not interfere with the nitty gritties of the policy, or substitute one by the other but it will not be correct to contend that the court shall like its judicial hands off, when a plea is raised that the impugned decision is a policy decision. Interference therewith on the part of the superior court would not be without jurisdiction as it is subject to judicial review.

¶147

Broadly, a policy decision is subject to judicial review on the following grounds : (a) if it is unconstitutional;

¶148

(b) if it is dehors the provisions of the Act and the Regulations; (c) if the delegatee has acted beyond its power of delegation; (d) if the executive policy is contrary to the statutory or a larger policy."

¶149

In the case of Villianur Iyarkkai Padukappu Maiyam vs. Union of India and others, reported in (2009) 7 SCC 561, the Hon’ble Supreme Court has held as follows:-

¶150

"168. In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or malafide, a decision bringing about change cannot per se be interfered with by the court.

¶151

"169. It is neither within the domain of the courts nor the scope of judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are

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the courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical. Wisdom and advisability of economic policy are ordinarily not amenable to judicial review. In matters relating to economic issues the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within the limits of the authority. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts."

¶154

In the case of Balco Employees’ Union (Regd.) vs. Union of India & others (supra), the Hon’ble Supreme Court has held that unless the policy framed is absolutely capricious and, not being informed by any reason whatsoever, can be clearly held to be arbitrary and founded on mere ipse dixit of the executive functionaries thereby offending Article 14 of the Constitution or such policy offends other constitutional provisions or comes into conflict with any statutory provision, the Court cannot and should outstep its limit and tinker with the policy decision of the executive functionary of the State.

¶155

In the case of Dhampur Sugar (Kashipur) Ltd., vs. State of Uttaranchal and others (supra), the Hon’ble Supreme Court has held that it is well settled that public authorities must have liberty and freedom in framing policies. No doubt, the discretion is not absolute, unqualified, unfettered or uncanalised and judiciary has control over all executive actions. At the same time, however, it is well established that courts are ill-equipped to deal with these matters. In complex social, economic and commercial matters, decisions have to be taken by governmental authorities keeping in view several factors, and it is not possible for courts to consider competing claims and conflicting interests and to conclude which way the balance tilts. There are no objective, justiciable or manageable standards to judge the issues nor such questions can be decided on a priori considerations.

¶156

In the case of State of H.P and others vs. Himachal Pradesh Nizi Vyavsayik Prishikshan Kendra Sangh (supra), the Hon’ble Supreme Court has held as follows:- (SCC, page 604, para-22)

¶157

“With regard to the importance of human resources, especially manpower requirement in various professional and technical fields, the Government is free to frame its policy, alter or modify the same as to the needs of the society. In such matters, the courts

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cannot interfere lightly as if the Government is unaware of the situation. Apart from these aspects, procedurally also the High Court has committed an error in quashing the Cabinet decision dated 18-7-2009 which was not challenged in the writ petition by raising valid grounds. Further, both parties were not afforded opportunity to put forth their stand as to the subsequent development, namely, the Cabinet decision dated 18-7-2009. For all these reasons, the impugned order of the High Court is to be interfered with. However, we permit the respondent Association or its members to challenge the said decision/order of the Government by way of fresh proceeding, if they so desire.”

¶160

In the case of State of Harayana and others vs. Mahabir Vegetable Oils Pvt. Ltd. (supra), the Hon’ble Supreme Court has held that Courts should not normally interfere with the fiscal policy of Government more so when such decisions are taken in public interest.

¶161

In the case of Sitaram Sugar Co. Ltd., and another vs. Union of India and others (supra), the Hon’ble Supreme Court has held that Courts should not interfere with the economic policy, which is the function of the experts.

¶162

In the case of Krishna Kakkanth vs. Government of Kerala (supra), the Hon’ble Supreme Court has held unless the Government policy is demonstrably arbitrary, capricious, irrational, discriminatory or violative of the Constitutional or Statutory provisions, it cannot be struck down by the Courts and the Wisdom of public policy is irrelevant.

¶163

In the case of Pallavi Refractories and others vs. Singareni Collieries Co. (supra), the Hon’ble Supreme Court has held that dual price fixation by the Government Companies is permissible.

¶164

In the case of Union Territory of Pondicherry and others vs. P.V.Suresh and others (supra), the Hon’ble Supreme Court has held that the Court cannot alter the terms of the contract or rewrite the contract.

¶165

In the case of Centre for Public Interest Litigation vs. Union of India reported in 2012 (3) SCC 1, the Hon’ble Supreme Court in paragraphs 99 &100 of the Report has held as follows:- (SCC, page 62)

¶166

“ In majority of the judgments relied upon by the learned Attorney General and the learned counsel for the respondents, it has

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been held that the power of judicial review should be exercised with great care and circumspection and the Court should not ordinarily interfere with the policy decisions of the Government in financial matters. There cannot be any quarrel with the proposition that the Court cannot substitute its opinion for the one formed by the experts in the particular field and due respect should be given to the wisdom of those who are entrusted with the task of framing the policies. We are also conscious of the fact that the Court should not interfere with the fiscal policies of the State. However, when it is clearly demonstrated that the policy framed by the State or its agency/instrumentality and/or its implementation is contrary to public interest or is violative of the constitutional principles, it is the duty of the Court to exercise its jurisdiction in larger public interest and reject the stock plea of the State that the scope of judicial review should not be exceeded beyond the recognised parameters.

¶169

When matters like these are brought before the judicial constituent of the State by public-spirited citizens, it becomes the duty of the Court to exercise its power in larger public interest and ensure that the institutional integrity is not compromised by those in whom the people have reposed trust and who have taken an oath to discharge duties in accordance with the Constitution and the law without fear or favour, affection or ill-will and who, as any other citizen, enjoy fundamental rights and, at the same time, are bound to perform the duties enumerated in Article 51-A. Reference in this connection can usefully be made to the judgment of the three-Judge Bench headed by Kapadia, C.J. in Centre for PIL v. Union of India, 2011 (4) SCC 1”

¶170

In the case of Brij Mohan Lal vs. Union of India & Others reported in 2012 (6) SCC 502, the Hon’ble Supreme Court has held in paragraphs 96 & 99 as follows:- (SCC, pages 545 & 546) “It is a settled principle of law that matters relating to framing and implementation of policy primarily fall in the domain of the

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Government. It is an established requirement of good governance that the Government should frame policies which are fair and beneficial to the public at large. The Government enjoys freedom in relation to framing of policies. It is for the Government to adopt any particular policy as it may deem fit and proper and the law gives it liberty and freedom in framing the same. Normally, the courts would decline to exercise the power of judicial review in relation to such matters. But this general rule is not free from exceptions. The courts have repeatedly taken the view that they would not refuse to adjudicate upon policy matters if the policy decisions are arbitrary, capricious or mala fide.”

¶173

“It is also a settled cannon of law that the Government has the authority and power to not only frame its policies, but also to change the same. The power of the Government, regarding how the policy should be shaped or implemented and what should be its scope, is very wide, subject to it not being arbitrary or unreasonable. In other words, the State may formulate or reformulate its policies to attain its obligations of governance or to achieve its objects, but the freedom so granted is subject to basic constitutional limitations and is not so absolute in its terms that it would permit even arbitrary actions.”

¶174

In the case of Natural Resources Allocation, IN RE, Special Reference No.1 of 2012 reported in 2012 (10) SCC 1, the Hon’ble Supreme Court in paragraph-184 of the Report has held as follows:(SCC, page 136)

¶175

“Another aspect which emerges from the judgments (extracted in paras 159 to 182, above) is that, the State, its instrumentalities and their functionaries, while exercising their executive power in matters of trade or business, etc. including making of contracts, should be mindful of public interest, public purpose and public good. This is so, because every holder of public office by virtue of which he acts on behalf of the State, or its

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instrumentalities, is ultimately accountable to the people in whom sovereignty vests. As such, all powers vested in the State are meant to be exercised for public good and in public interest. Therefore, the question of unfettered discretion in an executive authority, just does not arise. The fetters on discretion are clear, transparent and objective criteria or procedure which promotes public interest, public purpose and public good. A public authority is ordained, therefore to act, reasonably and in good faith and upon lawful and relevant grounds of public interest.”

¶178

From the aforesaid decisions of the Hon’ble Supreme Court, the following principles emerge as to when the Courts can interfere in a policy decision:-

¶179

I.If the policy fails to satisfy the test of reasonableness, it would be unconstitutional.

¶180

II.The change in policy must be made fairly and should not give the impression that it was so done arbitrarily on any ulterior intention.

¶181

III.The policy can be faulted on grounds of mala fides, unreasonableness, arbitrariness or unfairness, etc

¶182

IV.If the policy is found to be against any statute or the Constitution or runs counter to the philosophy behind these provisions.

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V.It is dehors the provisions of the Act or legislations.

¶184

VI.If the delegate has acted beyond its power of delegation.

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VII.If the policy is against public interest or does not sub-serve public interest, public purpose and public good.

¶186

Thus, the plea taken by the learned Additional Solicitor General that the policy decision of the Government cannot be interfered with by the Court of law cannot be accepted, as under certain circumstances, enumerated above, which are not exhaustive, the policy decision can be interfered with. However, the question as to whether the policy decision taken by the Central Government on 17^th January, 2013 and implemented by the Oil Marketing Companies is liable to be interfered with or not is yet to be gone into by the learned single Judge in the writ petition. CONCLUSION:

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In view of our findings on point no.(v) (i.e., whether the interim order passed by the learned single Judge, without assigning any reasons, could be sustained in law), wherein we have come to the conclusion that the learned single Judge ought to have given reasons

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https://hcservices.ecourts.gov.in/hcservices/

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while passing the order of interim injunction and the order dated 14^th March, 2013 cannot be sustained, we set aside the impugned order dated 14^th March, 2013 passed by the learned single Judge.

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In fine, the writ appeal is allowed. The learned single Judge is requested to consider the application for grant of interim relief afresh in the light of the observations made above. No costs. Consequently, miscellaneous petition is closed.

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Sd/

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Asst.Registrar //True Copy//

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Sub.Asst.Registrar

¶194

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The Secretary to Government of India,

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Ministry of Petroleum,
Union of India,
207-A, Shastri Bhavan,
New Delhi – 110 001.

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Principal Secretary and Chairman for all State Transport Undertakings, Government of Tamil Nadu,

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Transport Department, Fort.St.George,

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Chennai – 600 009.

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The Managing Director,
Hindustan Petroleum Corporation Limited,
17, Jam Shebji Tata Road,
Mumbai.

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The Managing Director,
Bharath Petroleum Corporation Limited,
Currimbhay Road, Ballard Estate,
Mumbai.

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The Managing Director, Indian Oil Corporation Limited, G-9, Ali Yavar Jung Marg, Bandra (East), Mumbai.

¶203

2 CC to Mr.C.Kanagaraj, Advocate, S.R.No.23620 & 23684
5 CC to Mr.V.Anantha Natarajan, Advocate, S.R.No.23681
1 CC to Mr.V.R.Kandanathan, AGP, S.R.No.23969

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