Apex Lubes And Fuels INDIA PVT. LTD. vs. The State Of Telangana

Facts

The petitioners, Apex Lubes and Fuels India Pvt. Ltd. and JSAS Fuel Jenie India Pvt. Ltd., filed a writ petition challenging proceedings initiated under Section 6-A of the Essential Commodities Act, 1955, and an order dated January 9, 2025, passed by the Collector and District Magistrate, Ranga Reddy District. The order confiscated 12,000 liters and 29.920 metric tonnes of distillate base oil and imposed a penalty of Rs. 1,00,000/- on each of three tankers. The petitioners contended that distillate base oil is not an essential commodity and does not fall under the Telangana State Petroleum Products (Licensing and Regulation of Supplies) Order, 1980. The seizure occurred based on a complaint alleging illegal storage of diesel, leading to an FIR and subsequent confiscation and penalty. The petitioners argued the action was arbitrary, illegal, and without jurisdiction.

Held

The Court held that the distillate base oil seized and confiscated does not fall within the purview of the Essential Commodities Act, 1955. The Court noted that the petitioners consistently claimed they were transporting distillate base oil, and the respondents did not present any evidence to the contrary or suggest that the petitioners claimed the stock was petroleum product or diesel which was later found to be distillate base oil. The Court found that distillate base oil is admittedly not an essential commodity and does not fall within the definition of 'petroleum product' under the Telangana State Petroleum Products (Licensing and Regulation of Supplies) Order, 1980. Consequently, the provisions of the Essential Commodities Act were not applicable. The allegation of adulteration of diesel was not supported by any material on record or mentioned in the order under Section 6-A. Therefore, the order passed under Section 6-A of the Essential Commodities Act was without jurisdiction. The ratio decidendi is that if the seized commodity is not an essential commodity and does not fall under relevant regulations, proceedings under the Essential Commodities Act are without jurisdiction. The Court allowed the writ petition and directed the release of the seized stock and tankers.

Key Issues

1. Whether the distillate base oil seized and confiscated by the authorities is an essential commodity under the Essential Commodities Act, 1955, thereby invoking the jurisdiction of the authorities under Section 6-A of the Act? Petitioner's contention: The distillate base oil is not an essential commodity, and therefore, the provisions of the Essential Commodities Act cannot be invoked. The order passed by the respondent is without jurisdiction. The lab reports confirm the material is not high-speed diesel, and the petitioner is merely a trader, not involved in manufacturing. Respondent's contention: The first petitioner is using the distillate base oil for adulteration of diesel, bringing the issue within the purview of the Essential Commodities Act. Furthermore, the 6-A proceedings are appealable under Section 6-C of the Act, making the writ petition not maintainable at this stage.