IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
PUBLIC INTEREST LITIGATION NO. OF 2008
In the matter of Article 14, 21 and 226 of the Constitution of India.
In the matter of Essential Commodities Act 1955
In the matter of Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005.
In the matter of Prevention of Corruption Act 1988
In the matter of Code of Criminal Procedure, 1973.
In the matter of Environment Protection Act, 1986 r/w Environment Impact Assessment Notification of 1994 and Environment Impact Assessment Notification of 2005..
In the matter of Standards of Weights and Measures Act, 1976.
In the matter of Article 14, 21 and 226 of the Constitution of India.
1. The Secretary,
Ministry of Petroleum & Natural Gas
New Delhi-110 001
2. The Chairman cum Managing Director
Indian Oil Corporation
Indian Oil Bhavan,
3. The Chairman cum Managing Director,
Bharat Petroleum Corporation Ltd
4. The Chairman cum Managing Director
Hindustan Petroleum Corporation Ltd
Mumbai – 400 001
5. The Chairman cum Managing Director
6. Petroleum and Analysis Cell
Ministry of Petroleum and Natural Gas
7. Joint Director,
Central Bureau of Investigation,
Tanna House, Nathalal Parekh Marg
Near Regal, Mumbai.
8. The Secretary
Ministry of Environment and Forests,
9. Controller of Legal Metrology
Government Barracks No. 7
Free Press Journal Marg, Nariman Point
10. M/s. Authentrix Ltd.
11. M/s. SGS (
12. Shri M.S. Srinivasan,
Secretary, Petroleum and Natural Gas,
New Delhi-110 001.
THE HON’BLE CHIEF JUSTICE
AND OTHER HON’BLE JUDGES OF
THE HIGH COURT OF
HUMBLE PETITION OF THE
MOST RESPECTFULLY SHEWETH
1. The Petitioner is a public spirited citizen of
2. The cause of action for the filing of this Public Interest Litigation is for the concern of the Petitioner which got accentuated over the fact that recently the price of crude oil has crossed all price barriers and is close to touching the astronomical price of $ 150 per barrel, whereas it used to be about $ 25 to 30 about 5 years back. This has a grave potential of casting a grave blow on our fragile economy and particular the common people for whom today the primary means of transport has become motor cycles and scooters.
3. The Petitioner submits that in this grave moment of menacingly spiralling price rise in the petroleum sector he came across a news report dated ___ in the Times of India where the following was written: ‘CRACK DOWN ON FUEL MAFIA’.
4. The text of this report is quoted as under, and the same is also annexed as EXHIBIT-"A":
‘CRACK DOWN ON FUEL MAFIA’
The Oil Sector Officers’ Association has called for an immediate crack down on the fuel adulteration mafia which is generating profits of thousands of crores illegally.
Following a report in the TOI on Tuesday, association convener Ashok Singh said the association would do its utmost to put an end to the fuel adulteration which was widespread across which was widespread across the country. He said the association had been demanding that marker (a chemical additive which helps easy detection of adulteration) should be added to the fuels, petrol and diesel, at the refining stage itself. “But for some strange reason it is being added to the adulterant, kerosene. Its addition at the refining stage would have broken the back of the adulteration mafia. But it is not being done because of pressure from vested interests,” a senior official of an oil PSU observed.
The TOI had reported how the proposed hike in petrol and diesel prices would make adulteration more lucrative for the mafia. While kerosene is sold at Rs. 11 per litre, petrol is retailed at Rs. 50.54 per litre and diesel at Rs. 36.12 per litre.
At present, marker is added only to kerosene and not to naptha which is another adulterant commonly used by the mafia, allegedly being backed by vested interests in the petroleum ministry, oil companies, police force and politics. Notorious adulterators like the Vorah and Cheda brothers, Singh Bandhu, Dattu and Naghpals are operating brazenly, jeopardising the lives of millions of people who inhale dangerous emissions from adulterated fuels.
The association has also demanded that global tenders be invited for the purchase of marker. In a complaint to the Central Bureau of Investigation, western region, the association has alleged that marker worth Rs. 200 crore was purchased from Mumbai based SGS(
SGS gets the chemical from Authentrix, a UK-based company. The association has also alleged that prior clearance from the ministry of environment was not obtained and the
5. Since the highlighted portions of the text quoted above reveals a disturbing state of affairs, accordingly, the Petitioner got in touch with various persons to collect information in this regard. Based thereupon, the Petitioner came across statutory violations of laws which have happened in this entire deal whereby M/s. Authentrix and its
3.1 Respondent No.1 Secretary, Petroleum and Natural Gas, Shastri Bhavan,
3.2 Respondent No. 2 is the Chairman cum Managing Director, Indian Oil Corporation. It was his duty to have placed the correct legal facts before finalising the contract with M/s. Authentrix/SGS (
3.3 Respondent No. 3 is the Chairman cum Managing Director of Hindustan Petroleum Corporation Ltd, Respondent No. 4 is the Chairman cum Managing Director of Bharat Petroleum Corporation Ltd., and Respondent No. 5 is the Chairman cum Managing Director IBP Ltd. The role of these 3 respondents was similar to that of Respondent No.2 stated above.
3.4 Respondent No. 6 is the Petroleum and Analysis Cell
of the Ministry of Petroleum and Natural Gas,
3.5 Respondent No. 7 is the Joint Director, Central Bureau of Investigation, West Zone, Mumbai before whom the complanitn of this huge corruption is pending for probe.
3.6 Respondent No. 8 is the Secretary, Ministry of Environment and Forests. Despite the fact that introduction of marker had implications with reference to standards of fuel emission but no Environment Impact Assessment as required under law was done in the matter and no consequent Environmental Clearance from the Ministry of Environment and Forests, in this reference.
3.7 Respondent No. 9 is Controller of Legal Metrology Mumbai. The marker was introduced as an extraneous element in kerosene which had implications on weights and measures. However, no permission under the Standards of Weights and Measures Act, 1976 was taken in this reference.
3.8 Respondent No. 10 is M/s. Authentrix Ltd. This company was awarded the contract in violation of several laws of the land and is the prime pecuniary beneficiary in relation thereof.
3.9 Respondent No. 11 is M/s. SGS (
3.10 Respondent No. 12 is Shri M.S. Srinivasan, Secretary, Petroleum and Natural Gas. It was on his personal instructions and for the reason of his taking extraordinarily-intense interest in this matter that this contract came to be awarded notwithstanding the violations of laws.
4.0 BRIEF FACTS:
4.1 The problem of adulteration of petrol and diesel with kerosene has been an endemic problem. Various actions have been taken from time to time to tackle this problem. However, because of a powerful nexus among various beneficiaries and public servants, this problem has sustained for long. While there were several actions being taken in this reference, in this sequence, in one of the actions, teams were sent to the countries of
4.2 Based on such reports, on
4.3 In the said letter, annexed as EXHIBIT-"B", the said Respondent No. 6 espoused the commercial cause of this company instead of confining themselves to academic issues for which they were accorded a brief. In doing so, the said Respondent No. 6 did not even consider the aspect of inviting bids from global companies and performing their duties for setting-up specifications. Such setting of specifications was also necessary because the act of taking action against adulterators is a statutory function entailing imprisonment and also which has got other penal consequences. As per the established rules of natural justice ingrained in the Constitution of India, if any citizen is put to an adversity and his personal liberty curtailed through imprisonment, in that case, all the technical parameters which would prove the case have to precise, specific and overwhelmingly credible.
4.4 It is also pertinent to note that in this academic study the said Petroleum Planning and Analysis Cell, under extremely suspicious circumstances, got in touch with private parties and solicited commercial offers from them in this reference. This is apparent from the letter of Respondent No. 11, namely, SGS (India) Ltd., dated 4th October, 2005, which is annexed with the said letter of 21st October, 2005 which has been marked as EXHIBIT-"B" above.
4.5 Based on this report, the Ministry of Petroleum and Natural Gas, Government of India, vide its letter dated
“Introduction of Marker in PDS Kerosene:
Oil companies shall implement field trials on marking of PDS Kerosene as proposed by PPAC/Industry in Andhra Pradesh in a time bound manner and give their views on the techno-economic viability of the proposal at the earliest. Addl. Director (Mktg), PPAC shall coordinate implementation of field trials and give action plan of the Industry in this regard.” (Emphasis supplied).
4.6 Notwithstanding these instructions, in a highly suspicious manner, Respondent No. 12, namely, Shri M.S. Srinivasan, Secretary, Petroleum and Natural Gas, did a complete volte face. Pursuant thereto, he decided that there was no need to undertake field trials and instead the contract be given straight away to M/s. Authentrix/SGS. .5 Based on this report, the Ministry of Petroleum and Natural Gas, Government of India, vide its letter dated
“Introduction of Marker in PDS Kerosene:
4. Presentation by M/s. Authentrix on marking of adulterants.
4.1 Earlier, the R&D Centre, IOC on behalf of the Industry had floated global enquiries and identified the marker system of M/s. Authentrix as meeting the requirements/characteristics for implementing marker in potential adulterants. It was decided in November, 2005 to implement marking of PDS kerosene in the State of
4.2 In today’s meeting, M/s. Authentix along with M/s. SGS Inida (Police)Ltd made a presentation on doping of markers in adulterants. M/s. Authentix/OMCs stated that doping of marker be undertaken at supply locations such as terminals and depots as marking at refineries would not be feasible on account of logistic constraints.
4.3 M/s. Authentix confirmed that they would require 8 weeks from the date of placing order by OMCs to supply market, test kits, impart training and implement the marker programme.
4.4 Detailed deliberations were held on introduction of marker in adulterants and the following decisions were taken:
(i) OMCs would implement marking of kerosene all over the country effective 1.10.2006.
(ii) IOC would coordinate on behalf of the Industry and finalise the modalities/contract and ensure placing of orders/signing of contracts or agreements with M/s. Authentix within 10 days.
(iii) Marker would be doped in kerosene at supply locations such as terminals/depots.
(iv) Test kits would also be provided to retail outlet dealers to enable them test MS/HSD at the time of receipt from OMCs.
(v) Dealers would also be imparted training on testing of product using the test kits of M/s. Authentix.
(vi) IOC WOULD OBTAIN TESTING PROTOL FROM m/S. Authentix to mitigate legal issues, if any.
(vii) OMCs would discontinue marking of MS/HSD at Mumbai and
(viii) Adequate publicity campaign would be undertaken on implementation of marker in kerosene.” (Emphasis supplied).
4.7 Based on such clear-cut and specific instructions issued by Respondent No. 12, i.e. the Secretary Shri Shrinivasan, Respondent No. 2 to 5 without raising any objections over this blatantly illegal proposal constituted an Industry Committee of Marker, comprising officers of 4 public sector oil companies, for the purpose of putting a rubber-stamp on the proposal which had already been finalised earlier by Respondent No. 12, Shri Shrinivasan. Accordingly, this committee, in lightening speed, prepared a report on
4.6 The Petitioner further came to know that for the reason of these illegal actions, the Officers’ Association of the Oil Sector filed a complaint with the Central Bureau of Investigation with reference to corruption having been practised by Respondent No. 12 and also by other persons. Hereto annexed is the copy of the said complaint filed before the CBI and the same is marked as EXHIBIT-"F". However despite the fact that it was incumbent on the CBI to have registered an FIR at once in terms of section 154 of Cr.P.C., yet the CBI failed to perform its statutory functions and till now has not registered the requisite FIR against high-level functionaries.
4.7 The Petitioner further submits that it is the clear-cut provision in the CBI Manual that CBI has to curb corruption at high places. Despite the fact that there has been a blatant and conspicuous action of corruption at high places having mammoth pecuniary consequences and also having a long drawn out socio-economic implications, yet the CBI has not performed the functions the way it should have.
4.7 The Petitioner submits that for the reason of such actions contrary to law, the authority of the people who have been accorded statutory functions to control adulteration of petroleum products have been undermined. This authority has now been conferred on a private party i.e. Respondents No. 10 and 1. This has been done without making any commensurate changes in the law in this reference.
4.8 It is further submitted that any statutory authority can only be accorded to persons who have been appointed in accordance with law and the same cannot be given to a private agency. If this is done this shall militate against the established system of governance.
4.9 The Petitioner humbly submits that since the aforesaid actions violate specific provisions of law, accordingly, this PIL is being filed for seeking necessary relief in relation thereof. As to what are the specific grounds and the specific legal provisions which have been violated in the matter these are detailed under the heading GROUNDS.
4.1 FIRST: Huge contract of the value of Rs. 200 crores awarded without issuing global tenders and without even doing the basic work of preparing specifications and cost estimates:
It is an established stipulation which has been made not only in the ‘purchase manuals’ of the departments but has also been so stipulated in the instructions issued by the Central Vigilance Commission, that for any large purchase there has to be open tenders. This is more so, because the purchase here is not for a proprietary item since there are several firms who are into this business.
Since in this case, the value of supply was large and since there were several international companies who were in this business of petroleum product markers, as such, it was necessary for open tenders to be called globally and thereafter, the selection be made for the best offer as per the prescribed procedures for evaluation.
However, in this case, the Respondents No. 10 and 11 were awarded contract without the issuance of any global/open tender and that this was done on the basis of single offer. This is clearly apparent from the orders given by the Respondent No. 12 vide the minutes circulated on 12th July, 2006 (EXHIBIT-"D").
In this reference, the instructions issued by the Central Vigilance Commission are clear some of which are quoted hereunder from the ’Guidelines for Purchases’ issued by the CVC:
6.0 Notice Inviting Tender:
“6.1 Against the most preferred and transparent mode of Global tender enquiry/Advertised tender enquiry, some of the Organizations are generally issuing limited tender inquiry to select venders, irrespective of the value of purchase. Further, the credentials of the firms and the criteria adopted for selection of such venders, in most of the cases, are not put on record. This not only results in lack of competition but also favoritism to the select vendors. It has been noticed that even in cases where Advertised/Global tender inquiries were issued, the same were published in the local dailies and not in any National Newspaper and particularly in Indian Trade Journal,
• In order to give wide publicity, generate enough competition and to avoid favoritism, as far as possible, issue of advertised/Global tender inquiries should be resorted to and published in ITJ and select National Newspapers. The copies of the tender notices should be sent to all the registered/past/likely suppliers by UPC and also to the Indian Missions /Embassies of major trading countries in case of imported stores.
6.3 …………. In case of proprietary purchases, the detailed justification for purchase from a single vendor is not being placed on record. As by issuing single tender, the competition is totally eliminated and the possibility of paying higher prices cannot be ruled out.
• It is imperative that the purchase on Single tender basis be made with the detailed justification in its support and with the approval of Competent Authority, including associated finance.” (Emphasis supplied).
The Petitioner humbly submits that from the aforesaid it is clearly apparent that there has been a very crystal clear violation of established and prescribed principles of purchase through the process of competitive bidding and transparency. This sacrosanct principle was breached in this case so as to accord pecuniary favours to private parties.
4.2 SECOND: Private company personnel illegally assigned to perform statutory functions under the Essential Commodities Act, 1955 – authority of those accorded statutory powers of search and seizure got undermined:
It is seen from the scope of the contract that Mssrs. SGS i.e. Respondent No. 11, shall be checking all the petrol pumps once in every 4 months and shall then be booking the guilty persons whose samples fail.
It is also seen that the statutory powers of checking petrol pumps have been given to “Sales Officer” of the public sector oil companies of the rank of “Sales Officer” and above, vide Clause 7 of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, issued under the Essential Commodities Act, 1955, which is annexed hereto and marked as EXHIBIT-"G". The relevant part of the said order is quoted hereunder:
7. Power of search and seizure –
(1) Any Gazetted officer of the Central Government or a State Government or any police officer not below the rank of Deputy Superintendent of Police duly authorized, by general or special order of the Central Government or a State Government, as the case may be, or any officer of the oil company, not below the rank of sales officer, may, with a view to securing compliance with the provisions of this Order, or for the purpose of satisfying himself that this Order or any order made there under has been complied with or there is reason to believe that all or any of the provisions of this Order have been and are being or are about to be contravened.-
(a) enter and search any place or premises of a dealer, transporter, consumer or any other person who is an employee or agent of such dealer or transporter or consumer,
(b) stop and search any person or vehicle or receptacle used or intended to be used for movement of the product;
(c) take samples of the product and seize any of the stocks of the product and the vehicle or receptacle or any other conveyance used or suspected to be used for carrying such stocks and thereafter take or authorize the taking of all measures necessary for securing the production of stocks or items so seized before the Collector or District Magistrate having jurisdiction under the provisions of the Essential Commodities Act, 1955 and for their safe custody pending such production;
(d) inspect, seize and remove with, such aid or assistance as may be necessary, books, registers, any other records or documents of the dealer, transporter, consumer or any other person suspected to be an employee or agent of the dealer, transporter or consumer;
(2) While exercising the power of seizure provided under sub-clauses( c) and (d) above, the authorized officer shall record in writing the reasons for doing so and a copy of such recording shall be provided to the dealer, transporter, consumer or any other concerned person, as the case may be.
(3) The provisions of section 100 of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure shall, as far as may be, apply to searches and seizures under this Order.” (Emphasis supplied).
The Petitioner submits that notwithstanding the fact that the statutory powers of checking petrol pumps and for conducting search and seizures were given to the “Sales Officer” of oil companies, yet, with a view to according pecuniary favours to Respondents No. 10 and 11, Respondent No. 12, i.e. Secretary Petroleum, Shri Shrinivasan bypassed these legal provisions. In this way, Respondent No. 12 violated the law to favour private parties.
It is submitted and reiterated that when a statutory Notification made under the Essential Commodities Act, 1955, has accorded powers to “Sales Officer” to check petrol pumps and take samples, such powers could not have been conferred to private parties, namely, those in employment with Respondents No. 10 and 11. Obviously, this when seen from the fact that a mammoth order of about Rs. 200 crores was issued without public tenders and without doing any cost estimates, these all seem to have been done for oblique reasons.
4.3 THIRD: Conferring illegal statutory powers to private persons shall undermine the prosecution and administrative action process and will thus help adulterators:
The Petitioner submits that for the reason of the impugned contract, statutory powers have been conferred to private people to check petrol pumps and to initiate the process of administrative action for cancellation of petrol pump licence and to prosecute the offenders under the provisions contained in section 3 and 7 of the Essential Commodities Act, 1955, where punishment could go upto 7 years in imprisonment.
It is submitted that since Oil companies are statutory Corporations, as such for all administrative actions, they are required to follow the rules of natural justice and to abide by the provisions of law. Further, for the process of prosecution and trial of offences under Essential Commodities Act, 1955, all the rules of natural justice and legal provisions would be required to be followed.
The Petitioner submits that for the reason of the illegal of the exercise of statutory powers by the private persons, the entire process when it shall be subject to judicial scrutiny with reference to prosecution in criminal cases and also in the quasi-judicial process of taking administrative action for cancellation of petrol pump licence, these all shall get undermined ,and which in turn shall help the culprits escape.
The Petitioner submits that for this reason this contract turns inimical to public interest and as such it would become necessary for the same to be rescinded.
4.4 FOURTH: No requisite exercise done to prepare the estimated cost of the proposed work based on which further modalities of purchase is done – violations of CVC Circular:
The Petitioner humbly submits that it is an established procedure of effecting purchases to prepare the estimated rates before any contract is awarded. This ensures that there cannot be rigging of prices vis-à-vis the intrinsic cost of the supplies. In case the purchase is on a single offer basis then this requirement of preparing cost estimates becomes critically vital. However, in this case, no such cost estimates were made.
It is learnt that there are about 250 personnel deployed by the Respondents No. 10 and 11 for checking purposes. Further, it is seen that the quantity of marker put in kerosene is very little and that its import prices are shown to be astronomical. It could very much be possible that the profits could be to the tune of 500% to 1000% percent of the cost against the desirable average of 10 – 20% .
It is submitted that had there been an intensive exercise for preparign the cost break-up and the cost estimates, the price arrived at could have been more rational and credible.
It is further reiterated that the omission to make the cost estimates becomes enormously glaring for the reason that even the tenders were not called in this case and the entire dealing was done on a single bid basis.
That it was required to have made an estimated cost is clearly stipulated in para 5 of Chapter 5 the CVC Manual on purchase. The said chapter 5 of the CVC Manual is annexed herewith and marked as EXHIBIT-"H". the relevant part of which is quoted hereunder:
“As the estimated rate is a vital element in establishing the reasonableness of prices, it is important that the same is worked out in a realistic and objective manner on the basis of prevailing market rates, last purchase prices, economic indices for the raw material/labour, other input costs, IEEMA formula, wherever applicable and assessment based on intrinsic value etc.” (emphasis supplied).
It is seen thus from the above, that for the purpose of according pecuniary favours to Respondents No. 10 and 11, Respondent No. 12 through Respondents No. 2 to 5, i.e. the 4 public sector oil companies, violated these eminent principles of purchase and also violated the CVC guidelines in this reference.
4.5 FIFTH: No Environment Impact Assessment was done for introduction an extraneous substance i.e. the marker, in petroleum products – violation of Environment Protection Act, 1986:
It is seen that the zeal of Respondent No. 12, to accord pecuniary favours to private parties was so intense, that he ordered the purchase to be effected without the matter being examined by all the concerned statutory departments.
It is apparent that the action of putting marker in the petroleum products could lead to serious consequences on the standards of emission. In order to deal with such a thing, the following action was required to have taken by Accused No. 1 before he ordered the mixing to the marker chemical in the petroleum products:
(a) To obtain an Environmental Clearance through the process of making an Environment Impact Assessment in terms of the EIA Notification of 1994 (as prevailing in the year 2005 which has been later replaced by EIA of 2006 with analogous provisions). Since the act of the introduction of marker in the petroleum product was an act of modernisation, and since it altered the earlier EIA done with reference to the chemical composition of the final products, as such an Environmental Clearance in this respect was required for modernisation and change.
This requirement is apparent form the legal provisions contained in the said Notification, which is quoted hereunder:
2) Requirements and procedure for seeking environmental clearance of projects:
It seen that entry No. 4. for “Petroleum Refineries including crude and product pipelines, isolated petroleum product storages”, an EIA and consequent Environmental Clearance was required. This however, was not done. (Emphasis supplied).
(b) To take the amended consent from the Pollution Control Board under section 21 the Air (Prevention and Control of Pollution) Act, 1981, since the addition of markers would alter the emission standards. This mandatory act however was not done.
It is also pertinent to note that there have been extensive environmental exercises conducted for the introduction of emission norms. As to how would the emission be affected by the markers, this fact was not ascertained. Obviously, if that had to be done, in that case, the conspiracy to award pecuniary favours to Accused No. 2 and 3 would have got frustrated.
4.6 SIXTH: Chemical composition of marker kept secret to suppress the real cost of the chemical vis-à-vis the price paid – criminal prosecution of the adulterators to be done on the basis of a secret chemical – no person can be deprived of his liberty based on a secret test process – violation of Article 14 and 21 of the Constitution of India:
It is submitted that Respondents No. 10 and 11 were given the tasks of sampling of the product. Without prejudice to the fact that sampling is a statutory procedure which a private party was not empowered to perform, the same notwithstanding, the chemical composition of the marker and its scientific co-relation with the testing procedure was kept as a business secret. Further, no technical evaluations were done to test the authenticity of the testing procedure.
It is also seen, that since the entire action would involve testing of the chemical composition of the marker to detect adulteration and based thereupon criminal prosecution was statutorily required to have been launched by lodging First Information Report (FIR) under section 154 Cr.P.C. for violation of Essential Commodities Act, 1955, for violation of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. As per section 10-A of this act the offences under section 7 are cognisable by the Police.
It is further submitted that as per section 7 of the Essential Commodities Act, 1955, the same entails a punishment of upto 7 years in imprisonment. If a person’s personal liberty is to be curtailed under such circumstances, this cannot be done on the basis of testing of a secret chemical.
It is vehemently reiterated that the fundamental consideration of natural justice would call for making the full process of testing the chemical presence of the marker to the person who is charged with offence and who may suffer imprisonment of upto 7 years. This is a fundamental Constitutional requirement in a liberal democratic state.
When the chemical composition of the marker was statutorily required to be known, and also that all other infrastructural requirements were also known, as such, it was required to have prepared the estimated cost of the purchase. This was all the more required because here the purchase was on the basis of a single bid.
It is further submitted that the report of testing shall be reckoned as an opinion of experts in terms of section 45 of the Indian Evidence Act, 1872. As per section 51 of this Act, the following is stipulated:
“51.Grounds of opinion, when relevant: Whenever the opinion of any living person is relevant, the grounds on which such opinion is based are also relevant.
An expert may give an account of experiments performed by him for the purpose of forming his opinion.”
It is seen that it is a statutory requirement that if any testing is done of a chemical product complete details of such testing is required to be given as per the provisions of the Indian Evidence Act, 1872, quoted above. However, in this case, the chemical composition of the marker and its scientific nexus with the results of testing has not been made specific. In fact, much of the chemical properties of the marker have been kept as a business secret. Obviously, this is against the statutory requirement.
It is thus seen that for highly suspicious reasons, Respondent No. 12, ordered the purchase to be made of a secret chemical based on which people would have got subjected to gruelling criminal prosecutions. It is needless to add that for an efficient administration of the State criminal prosecutions would have to be necessarily done on right persons for the right reasons and right evidence. Unfortunately, because of this statutory infringement, the critical problem of fuel adulteration has turned haywire and the "Rule of Law" in this sphere has suffered a substantial jolt.
In sum, laws were violated to accord a pecuniary advantage to private persons by a public servant. This thus constitutes an offence under section 13(1) (d) of the Prevention of Corruption Act, 1988.
4.7 SEVENTH: Statutory procedure for testing given in Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, - statutory procedure bypassed and replaced by the procedure imposed by a private company:
The Petitioner humbly submits that it is a settled position in law that if there is a prescribed statutory procedure, in that case, it is that procedure alone which has to be followed. No self-devised procedure can be erected, howsoever plausible it may be, to replace such statutory procedure. The correct way to do so has to be by making an amendment to the statutory procedure.
It is seen that the procedure followed by Respondents No. 10 and 11 in this case would require sampling of the impugned product. However, as per Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 it is the authorised officer alone who can conduct sampling. This is apparent from Clause 7 and 8 of the said Order that the authorised officer is the Sales Officer of a Government Oil Company who can take samples. The statutory provisions in this respect are quoted hereunder:
8. Sampling of Product :-
(1) The authorized officer under clause 7 shall draw the sample from the tank, nozzle, vehicle or receptacle, as the case may be, in clean aluminum containers, to check whether density and other parameters of the product conform to the requirements of Bureau of Indian Standard specifications number IS 2796 and IS 1460 for motor spirit and high speed diesel respectively. Where samples are drawn from retail outlet, the relevant tank-truck sample retained by the dealer as per clause 3(b) would also be collected for laboratory analysis.
(2) The authorized officer shall take and seal six samples of 1 litre each of the motor spirit or three samples of 1 litre each of the high-speed diesel. .......
(3) The sample label shall be jointly signed by the authorized officer who has drawn the sample, and the dealer or transporter or concerned person or his representative and the sample label shall contain information as regards the product, name of retail outlet, quantity of sample, date, name of the authorized officer, name of the dealer or transporter or concerned person or his representative;
(4) The authorised officer shall forward the sample of the product taken within ten days to any of the laboratories mentioned in Schedule III or to any other such as laboratory when it may be notified by he Government in the Official Gazette for this purpose,for analysing with a view to checking weather the density and other parameters of the product conform to the requirements of Bureau of Indian Standard specifications No. IS 2796 and IS 1460 for motor sprit and high speed diesel respectively.
(5) The laboratory mentioned in sub -clause(4) shall furnish the test report to the authorised officer within twenty days of receipt of sample at the laboratory.
(6) The authorised officer shall communicate the test result to the dealer or transporter or concerned person and the oil company, as the case may be, within five days of receipt of test result from the laboratory for appropriate action.” (Emphasis supplied).
From the aforesaid statutory provisions, it is clear that it is the “AUTHORISED OFFICER” alone who can take samples. It is also seen that it is the authorised laboratories alone which can test such samples.
Notwithstanding such statutory stipulations, yet Respondent No. 12 went ahead and conferred statutory authority to draw and test samples to private persons have no authorisation despite the fact that the law provided for otherwise. In this way, Respondent No. 12, by abusing his official position and by violating express provisions of law accorded a pecuniary favour to Respondents No. 10 and 11.
4.8 EIGHTH: Petroleum Planning & Analysis Cell, whose job was only to conduct a study and to frame specifications, was made to exceed its brief and thereby recommended the names of Accused No. 2 and 3 for the contract:
It is submitted that the job assigned to the Petroleum Planning & Analysis Cell was only to conduct a study with reference to markers. However, instead of doing this study and to examine if there are resources available in India in this reference, and also if it can be locally manufactured, without looking into such comprehensive factors, the said Cell straightway recommended the name of Respondent No. 10 for awarding contract.
Thus, when the brief of the Cell was only to conduct a technical study, the act of this Cell in exceeding its brief for according pecuniary favours of a huge nature, becomes clearly an act of criminal misconduct. Obviously, as apparent from the circumstances, it is Respondent No. 12, which was the ‘invisible hand’ directing the entire sequence of actions. The exact nexus in this respect shall become apparent during the course of statutory investigation in terms Chapter XII of the Code of Criminal Procedure, 1973.
4.9 NINTH: No Approval was taken from the state authorities under the Standards of Weights and Measures Act, 1976:
It is apparent that through the process of introduction of the markers in the petroleum products, the consumers would be getting effectively less net quantity of the chemical product which they would be buying from petroleum products dispensing outlets. Since this would have implications with reference to the weight of the net product, as such, it was required that approval be taken from the Department of Legal Meteorology for the introduction of an extraneous element in the petroleum products. This legal requirement, however, was not fulfilled. Obviously, it was done to accord pecuniary favours to private parties.
4.10 THIRD: The credentials of the Mssrs. SGS was not ascertained before order was given:
It is the basic requirement of approval of any tender that the credentials of the parties be ascertained in a proper manner. In this respect, the background of the promoters and of the management team of the company/firm be found out. In such purchases, several other documents would be required to be submitted. In this case, no such requisite exercise was done and a contract having a pecuniary value of about Rs. 200 crores was awarded on the basis of a single offer and without conducting any mandatory exercise of preparing the cost estimates.
4.11 ELEVENTH: No approval of Finance Ministry was taken:
Without prejudice to the fact that marker is not a proprietary product since there are several manufacturers, yet, if at all a single tender had to be called presuming that this marker was a proprietary product, in that case, the following conditions were required to be satisfied:
(a) To first ascertain it was a proprietary product.
(b) To make an estimate of the value through cost break-up.
(c) To justify the entire action for dispensing with tenders.
(d) To take approval of the Finance Department.
(e) To take specific approval of the Competent Authority.
The aforesaid is substantiated from the CVC instructions in this reference the text of which has been in the foregoing and which for the sake of convenience is once again quoted below:
6.3 …………. In case of proprietary purchases, the detailed justification for purchase from a single vendor is not being placed on record. As by issuing single tender, the competition is totally eliminated and the possibility of paying higher prices cannot be ruled out.
• It is imperative that the purchase on Single tender basis be made with the detailed justification in its support and with the approval of Competent Authority, including associated finance. (Emphasis supplied).
It is seen that notwithstanding the instructions issued by the CVC, and by violating the established procedures of purchase and by sacrificing the eminent canons of financial propriety, the said pecuniary favours were bestowed by Respondent No. 12, with the help of Respondents No. 2 to 5, to Respondents No. 10 and 11.
4.12 TWELFTH: Renewal of contract done by repeating the violations of laws detailed herein:
It is further submitted that the contract was initially awarded for a value about Rs. 100 crores for one year. Once that period was over, it was required that fresh tenders be called for effecting further purchases of goods and services. However, it seems that the rules in this respect were given a complete go-by and the contract was arbitrarily extended by a further period of one year. In this way the quantum of the scam increased from the initial Rs. 100 crores to Rs. 200 crores.
4.13 THIRTEENTH: Private parties made to perform statutory functions without their being made public servants – such persons getting immunity from corruption laws:
It is submitted that for the reason of the impugned contract, private parties have been given statutory functions of conducting seach and sampling action in the petrol pumps. This work is generally done by statutory functionaries who are governed by the provisions of Prevention of Corruption Act, 1988.
It is submitted that in case the officers of this private company while performing their functions indulge in corruption, in that case there will be no remedy before the affected parties to seek a redress from Anti-Corruption agencies. Had it been otherwise, the public servants performing statutory functions would have got governed by the provisions of Prevention of Corruption Act, 1988.
The Petitioner humbly submits that this situation is illogical and becomes discriminatory and is against the principles enshrined in Article 14 of the Constitution of India.
4.14 FOURTEENTH: Clear-cut offence of criminal misconduct by public servant made out against public servants:
The Petitioner humbly submits that the aforesaid affords a reasonable opportunity to suspect that an offence under section 13(1)(d) of the Prevention of Corruption Act, 1988, has taken place. This is apparent from the said provisions from this Act which is quoted hereunder:
“13 . Criminal, misconduct by a public servant- (1) A public servant is said to commit the offence of criminal misconduct, --
(d) if he, --
(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or
(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public, interest; or”
From the legal provisions quoted above, it is clear and apparent that the public servants have abused their official position by awarding contract on a single offer basis without preparing any previous cost estimates by flouting CVC Manual which they otherwise were obliged to follow. The said public servants have also acted in a manner which is contrary to law. That being so, there is a clear-cut case made out for registering FIR under these cognisable sections of law for the purpose of conducting investigation as per the provisions contained in Chapter XII of the Code.
5. The Petitioners humbly submit that for the reasons cited in the foregoing paras, particularly the violations of laws catalogued with precise specifics, in para 4.1 to para 4.14 above, relief including interim relief may be granted to the Petitioners as is prayed hereunder.
6. The Petitioners further submit that a substantial cause of action has arisen within the jurisdiction of the
7. The Petitioners further submit they have no other remedy but to approach this
8. The Petitioners has not filed any other Petition in respect of the subject matter of this Petition in any Court in
9. That Petitioners will rely on documents a list whereof is annexed hereto as also other documents which are in the exclusive possession of the Respondents.
10. The Petitioners further submit that there is no delay or latches that may be attributed in the filing of this Petition.
11. The Petitioners submit that the prescribed Court fees have been paid.
For the specific reasons cited in the foregoing, the Petitioners pray for the issuance of appropriate Writs under Article 226 of the Constitution of
(A) THAT Respondent No. 1 to 5 be directed to cancel the orders given to a private company to perform statutory functions which only statutory functionaries can perform.
(B) THAT Respondent No. 1 to 5 be directed to cancel the contract given to Mssrs. Authentrix and its Indian subsidiary, namely, SGC (India) Ltd. since the same violates a host of laws including the Essential Commodities Act, 1955, Environment Protection Act, 1986 and the express instructions issued by the Central Vigilance Commission.
(C) THAT the Central Bureau of Investigation be asked to register a Regular Case in the matter against the accused persons without delay and to conduct proper investigation under Chapter XII of the Cr.P.C.
(E) THAT during the tenure of pendancy of this Petition, personnel of private company, namely, SGS (India) Ltd. be asked not to perform any statutory functions under the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, issued under section 3 of the Essential Commodities Act, 1955.
(F) That the cost of this Petition may be awarded.
(G) Any other relief order which this
Petition Drafted by: Y.P. Singh, Advocate
ADVOCATE FOR THE PETITIONERS
We, the Petitioners above-named, solemnly declare that what is stated in paragraphs Nos. 1 to 5 of this Petition is true to the best of my knowledge and what is stated in remaining paragraphs is stated on information and belief and I believe the same to be true.
Solemnly affirmed on
This ______ day of December, 2007.
BEFORE ME BEFORE ME
4.1 FIRST: Statutory functions conferred on private
Contract awarded without preparing specifications:
One of the basic rules for effecting any purchase is that detailed specifications for the product have to be determined. It is only after such specifications are made that they form the basis of the issuance of global tenders.
It is apparent from the enclosed papers that no attempt was made at all to first define the specifications of the product solicited for purchase. Obviously, the intention of omitting this procedure was to accord favour to this private party. Had the specifications been made precise, in that case, several parties would have come forward to making their offers for the supply of the solicited items.