KSRTC Owes 123 Crores To IOC Even Prior To Differential Pricing: IOC Before Kerala High Court

The State Owned Oil Marketing Companies (OMCs) have told the Kerala High Court today that Kerala State Transport Corporation (KSRTC) owes the Indian Oil Corporation an amount of Rs. 123 Crores, from a period when there was no differential pricing for bulk and retail purchasers.  

The Single Bench of Justice N. Nagaresh heard in part, a Writ Petition filed by the KSRTC challenging the increase in price by (OMCs) for bulk diesel being purchased by KSRTC from them.

Senior Advocate Dushyant Dave appeared for KSRTC and argued that the increased price is in violation of the national policy on pricing, since, per the policy of the government, oil has to be supplied at market price. He also argued that asking the state owned KSRTC to pay more for fuel than private buses is discriminatory and violative of Article 14 of the Constitution. "Oil companies are in a monopolistic position. They cant behave like this", Dave said.

Dave also submitted that the Court can exercise jurisdiction despite the existence of an arbitration clause in the contract."Why should state owned companies act against public interest? Why should Kerala's consumers suffer", Dave submitted.

Senior Advocate Parag Tripathi appeared for OMCs and submitted that it is KSRTC's own case that their fleet is running in full and that they are not procuring oil at a higher rate. "Hence there is no prejudice caused to them, based on their own pleading", he argued.

He also argued that the central government does not fix the prices and that the market is no longer regulated. He said that the KSRTC owes the IOC an amount of Rs. 123 cores and that the petitioner in default should not be permitted to challenge the pricing. He also argued that there is no violation of Article 14 since the two categories, private retail purchasers and state as bulk purchaser, are not the same.

The Court will continue the hearing on April 13. Though Dave insisted for an interim order, the Court said that it cannot grant any interim order without completing the hearing. 

The KSRTC has claimed in the Writ Petition that it was charged Rs 121.35 per litre for diesel by the OMCs, while the other consumers of the companies were getting it for Rs 91.72 per litre. "There is no reason forthcoming for supplying the diesel to the KSRTC alone at a higher price. It cannot be said that it is because of the bulk use by the KSRTC, as there is no shortage of petroleum products in the country. There is no valid explanation for treating KSRTC as a separate class," the plea, filed through Advocate Deepu Thankan, has said.

"The increase in the price of diesel to the KSRTC alone will force them to take a decision to cancel the schedules to manage the cost of services. The increase in price of diesel will directly affect the KSRTC passengers as the KSRTC will have to proportionally increase the tariff rates," the plea has further contended.

KSRTC, in its plea, has urged the High Court to direct the OMCs to sell diesel to it at the market rates prevailing at retail outlets and to declare the charging of a higher price from the corporation as "discriminatory, arbitrary, unreasonable and violative of Article 14 of the Constitution".

Earlier, the High Court had refused to grant any interim relief to KSRTC.

Prior to that, the Supreme Court had refused to entertain the same plea by the KSRTC and had asked them to approach the Kerala High Court, while harshly criticising some policies of the state government. "You are the state where people get appointed for 2 years and give them pension for lifetime. The state has a lot of money", the Supreme Court had observed.