Summary
State transport undertakings challenged withdrawal of diesel subsidy for direct bulk purchases while retail subsidy continued. The Court upheld the fiscal policy as rational and non-discriminatory, rejected a right to continued subsidy based on public-service functions, and addressed payment for periods covered by interim relief.
Issues
- Whether bulk consumers had an enforceable right to continued diesel subsidy or exemption from the pricing policy.
- Whether withdrawal discriminated against public transport undertakings.
- Who bore the deficit arising during interim relief.
Held
- Subsidy was a fiscal concession rather than a right to its indefinite continuation. The Government’s decision followed consideration of oil-company losses, excessive borrowing, fiscal consolidation and allocation of funds for social welfare; it was not arbitrary or discriminatory under Article14 on these facts. (¶¶ 8–13, 16–20)
- Providing public transport did not give these corporations a legal entitlement to compel Union or State subsidy or an exception to the bulk-consumer policy. The Court declined interference with the policy challenged here. (¶ 16–20)
- Kerala’s undertaking, recorded when interim relief was granted, required reimbursement of the deficit to the oil companies upon dismissal. Elsewhere parties could work out equities, failing which bulk consumers had to pay the OMCs. The statements that Karnataka and Tamil Nadu transport corporations incurred no interim-order liability were recorded. (¶ 21–23)
Result
Writ petitions dismissed; appeals and transferred cases disposed of without costs. Withdrawal of bulk-diesel subsidy upheld, with interregnum payment governed by Kerala’s undertaking and the directions for other parties.