Relief for OMCs as HC sets aside order on diesel sales

A single-judge bench had granted an interim stay on the sale of the fuel at market price

The Centre Government and Oil Marketing Companies today got a relief in the dual diesel case, after the Acting Chief Justice of the Madras High Court set aside an interim stay, passed by a Single Judge in March, on selling diesel at market price to the Tamil Nadu State Transport Corporation, which is one of the bulk consumers of diesel.

The Stay was given by the Single Judge, after the State Undertaking filed an appeal stating that the implementation of the dual pricing system with effect from January 18, 2013 to pay the market price instead of paying the subsidised price of diesel will have a great impact on the provision of transport facilities to the public. The Petition stated, that the eight STUs together would incur around Rs 745.55 crore per annum because of the system.

Hearing the petition, Justice S Rajeswaran, on March 14, has granted an interim injunction against the Ministry and oil marketing companies for increasing prices of purchase of diesel for bulk consumers, higher than the price hike for retail diesel customers till April 12, 2013.

Responding to which, on March 25, the Central government has filed an appeal with the Division Bench of the Madras High Court against this interim order.

In today's Order, the First Bench of the Madras High Court, consist of the acting Chief Justice, had set aside the Division Bench Order.

While confirming it, C Kanagaraj, government pleader representing the Union Government said that while setting aside the Order, the First Bench also directed the Single Judge to consider the interim application afresh and pass final orders after going it thorough, giving fare reasons for Centre Government.

Hence the Single Judge will have to rehear the matter with regarding to interm application by setting aside the interim stay granted against the Centre Government, said Kanagaraj. He added the new price for Bulk consumers will be continued.

Asked when the Single Judge is expected to hear the matter, Kanagaraj said, the State Government has to bring the matter now, later which we the Centre will file a counter post which the matter will be heard.

Earlier, the senior counsel representing the oil companies informed the division bench that there are a total of around 20,000 bulk customers for the companies across the country and if all of them approaches the Court following the interim injunction by the Madras High Court, the oil companies would loose around Rs 400 crore every day.

Even in Tamil Nadu, the STUs are not the only bulk customers and there are around 1,400 bulk customers in the State including the central and state offices.

The oil companies will not be able to pay for the imports of fuel and survive, if all the bulk customers would go for a stay on the price increase, he added.