IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.10699 of 2005 1. THE BIHAR KEROSENE DEALERS ASSOCIATION 2. M/s RATANLAL MAHESH KUMAR Versus THE UNION OF INDIA & ORS. For the Petitioners : K.D. Chatterjee.. Adv. vijay krishna tripathy, Adv. For the State : Advocate General, Bihar. Purnendu Singh, J.C. For Respondent No.1.: Mr. Sudhir Singh A.S.G. W i t h CWJC No.9926 of 2005 1. MUZAFFARPUR KEROSENE DEALERS ASSOSICATION 2. SURENDRA SINGH DIWAKAR Versus THE UNION OF INDIA & ORS. For the Petitioners : BIPIN KUMAR ARUN KUMAR, Advs. For the State : Advocate General, Bihar. Purnendu Singh, J.C. For Respondent No.1.: Mr. Sudhir Singh A.S.G. ----------- 8/ 19/12/2008. Heard learned counsel for the petitioner and learned Advocate General for the State. This order shall dispose off both the writ applications which question the common order dated 12.8.2005 (at Annexure-14 in C.W.J.C. No.10699 of 2005) of annulment of the Government decision to grant 1% leakage allowance to the whole sale dealers in respect of Kerosene oil supplied to them. The petitioners contend that ever since 1966 the State Government had a conscious policy decision to grant 1% leakage allowance to whole sale Kerosene dealers. By an order dated 1.4.2003, the State Government withdrew the leakage allowance, on the ground that since whole sale dealers are granted stock 2 loss compensation by the Ministry of Petroleum and Natural Gas, New Delhi, there was no justification for double benefit by grant of leakage allowance. This was assailed by the petitioners in C.W.J.C. No.3862/03. This Court required the Union of India also to file its response. In pursuance thereof the State authorities came out with an order dated 24.9.2003 restoring the facility of leakage allowance, to the extent of 0.25%. The petitioners then withdrew the writ application. Thereafter followed the impugned order dated 12.8.2005 withdrawing the same. The petitioners urged that having granted the leakage allowance it came to be withdrawn without any reasons or justification for reconsideration of the decision. That the was a conscious policy decision of the State Authorities in light of the technical response submitted by the Ministry of Petroleum and Natural Gas, Government of India, New Delhi in the writ application preferred by the petitioners earlier. At this juncture it was also pointed out that the State Authorities are even today granting leakage allowance in respect of petrol and diesel. That diesel was a Class- B petroleum product like Kerosene oil. Learned Advocate General appearing on behalf of the State sought to persuade this Court that the 3 methodology for transportation and storage of Kerosene oil had improved and, therefore, there was no justification for giving any leakage allowance when there could be no leakage during transit. In any event, the petitioners were being adequately compensated by grant of product loss compensation by the Ministry of Petroleum and Natural Gas, Government of India, New Delhi. That the petitioners had adequately been heard before the order impugned came to be passed. It was lastly submitted that the entire system of distribution of Kerosene oil through the wholesale dealers has been under review of the State and a policy decision has been taken to re-channelize the same through the Bihar State Food and Civil Supplies Corporation exclusively by taking it over from the private Wholesale dealers. From the orders of this Court dated 28.8.2003 and 25.9.2003 in C.W.J.C. No.3862/03 it is apparent that this Court did not give any directions for grant of leakage allowance. The Court only noticed that the counsel for the Union of India informed the Court on instructions of a survey report of the public sector undertaking oil companies that there is bound to be some product loss “including operating product loss/leakage of S.O.A. at any stage”. On basis of a survey the committee of Directors (Marketing) had 4 considered and recommended a stock loss/leakage allowance of 0.23%. This Court, therefore, directed the counsel for the Union of India to bring the report on record. The latter order notices the counter affidavit filed by the Union of India placing on record that there was bound to be product loss including leakages of S.O.A. at any stage assessed at 0.23% and compensation for which was included while recommending the dealer’s commission. In this background, the Court observed “that it appeared undeniable that there was some product loss and the State Government will be well advised to re- consider its decision and allow leakage facility up to 0.25%”. The Court further observed that “It must be made clear that there was no formal adjudication on the dispute nor any order or direction was given by this Court after fully hearing the parties”. Subsequently, the State Authorities issued the order dated 24.9.2003 granting leakage allowance to the extent of 0.25% to wholesale dealers. The Bench then went on to reiterate with reference to the order dated 24.9.2003 that there had been no formal adjudication by the Court on the dispute and that there was no order or direction. That the issue was perfectly left upon for the Government to decide independently and objectively. 5 Learned Advocate General, on a query by the Court, very fairly acknowledged that product loss includes loss by seepage. This would naturally take within its connotation, leakage. The Court is not concerned with the perceived understanding of Court orders by the State Authorities. The Government is run by educated persons. If they choose to act in a particular manner with reference to a court order, when the Court had made no such order, they do so at their own risk. What this Court observed, was in the background of an expert report of the Ministry of Petroleum and Natural Gas, Government of India, New Delhi acknowledging product loss. Any decision taken by the State Authorities was in the background of this expert report, irrespective of any observations of this Court. If the State Authorities acknowledge the fact of product loss, to this Court leakage shall be an integral part of one of the methods of product loss. The two are integrally connected to that extent. Compensation for product loss and accountability and liability to answer for the physical absence of the product to the extent of product loss are two different matters. Compensation for the former does not answer the latter. The impugned order dated 12.8.2005 is non- 6 speaking in nature. It seeks to take shelter behind the observation of this Court that it had not given any directions in that regard, but had only required a re- consideration to justify withdrawal of the grant of leakage allowance of 0.23% by the order dated 28.8.2003. What the impugned order leaves unanswered is the acceptability by the State of product loss. In what manner was product loss different from leakage to justify withdrawal of the 0.23% leakage allowance granted after the availability of an expert report from the Ministry of Petroleum and Natural Gas, Government of India, New Delhi is left unanswered by the State Authorities. In absence of the aforesaid, the order becomes non-speaking in nature and is vitiated by non-application of mind. Though the learned Advocate General has invited the attention of the Court to certain orders passed by the State Authorities when the petitioner and their representatives were given an opportunity of hearing, and which discussion does not form part of the order dated 12.8.2005, even if the respondents be permitted to rely upon the same, being clearly in excess of the impugned order dated 12.8.2005 and therefore not permissible in view of the decision of the Supreme Court in 2005 (7) S.C.C. 627 (Hindustan Petroleum Corporation Limited vs. Darius Shapur 7 Chenai and others) at para-24, it is of no avail to the respondents in the present controversy. The order dated 12.8.2005 is therefore vitiated for non-application of mind and disclosing no reasons for a revision of the earlier decision in light of the expert report to grant 0.25% leakage allowance. The order dated 12.8.2005 is, therefore, set aside. Insofar as the policy decision of the State to re- channelise distribution of Kerosene oil through the Bihar State Food and Civil Supplies Corporation is concerned, those are policy matters for the State to decide, and not for the Court to dwell upon. The writ applications are allowed to the extent indicated. KC ( Navin Sinha, J.)