2015 (2) TMI 74 - HC - Indian Laws

Non compliance of mandatory provisions of the Legal Metrology Act, 2009 - Method for quantification - Application for direction to be sought to the respondent oil companies to supply petrol/diesel to the members of the appellants on weight basis and alternatively to give temperature adjustment at the time of preparing invoice of the dealers and seeking a direction to the Ministry of Petroleum and Natural Gas to ensure compliance by the respondent oil companies of the provisions of the Legal Metrology Act. Held that - Can not issue a direction to the respondent oil companies to, under their contract, supply diesel/petrol to the appellants by weight without being satisfied that the same will not affect the other terms and conditions of the said contract and which the appellants have chosen not to place before us.Further it is find that the appellants even under the Legal Metrology Act have failed to make out any case. Rule 12 of the Legal Metrology (Packaged Commodities) Rules, 2011 which in Clause (2)(a) provides that except in the cases of commodities specified in the Fourth Schedule of the Rules, the declaration of the quantity shall be in terms of the unit of mass if the commodity is solid, semi-solid, viscous or a mixture of solid and liquid and which is again indicative of the reference to measurement in units of mass in the Act being to solids, semi-solids, viscous or mixture of solid and liquid. Rule 12(2)(d) categorically provides that the declaration of the quantity shall be in terms of the unit of volume, if the commodity is liquid or is sold by cubic measure. The Fourth Schedule to the said Rules provides that Industrial Diesel Fuel is to be measured in terms of volume, though again it does not refer to petrol and diesel or so with which we are concerned but is again indicative of the measurement in volume in litres being very much in the domain of standard units with which the legal metrology system is concerned. As far as the grievance of the appellants of use by the respondent oil companies of the dip-rod method is concerned, we find that Rule 14 of the Legal Metrology (General) Rules provides that the procedure for carrying out calibration of vehicle tanks etc. as may be specified in the Ninth Schedule thereto. The Ninth Schedule itself, while referring to maximum permissible error, refers to the capacity of vehicle tanks in litre; not only so, it also provides the detailed procedure for measurement by dip-rod method. We have wondered that when the Rules framed under the Act themselves are providing for measurement of vehicle tanks in litres, how can it be said that the unit of litre being used by the respondent oil companies is in contravention of the Act. - No merit in appeals - Decided against Appellant.

Issues Involved:
1. Non-compliance with the Legal Metrology Act, 2009 by oil companies.
2. Measurement of petroleum and diesel in litres versus kilograms.
3. Impact of temperature on volume measurements.
4. Alleged misappropriation by oil companies.
5. Arbitration clause in the agreement between appellants and oil companies.
6. Jurisdiction of the High Court.
7. Applicability of the Legal Metrology Act.

Detailed Analysis:

1. Non-compliance with the Legal Metrology Act, 2009 by oil companies:
The appellants argued that the oil companies (IOCL, HPCL, and BPCL) were violating the Legal Metrology Act, 2009 by measuring petroleum and diesel in litres instead of kilograms. They contended that "mass" should be measured in kilograms as per the Act and that volume measurements (litres) were not compliant with the Act's provisions.

2. Measurement of petroleum and diesel in litres versus kilograms:
The appellants claimed that "mass" is not equivalent to volume, and only 830 grams constitute one litre. They argued that selling petrol and diesel by volume (litres) instead of mass (kilograms) leads to inconsistencies due to temperature variations, causing financial losses. They sought a directive for oil companies to supply petroleum and diesel by weight or provide temperature adjustments in invoices.

3. Impact of temperature on volume measurements:
The appellants highlighted that the volume of petrol/diesel changes with temperature, causing discrepancies between the volume transported in lorries (exposed to heat) and the volume sold (stored in underground tanks). They argued that selling by weight would eliminate such variations.

4. Alleged misappropriation by oil companies:
The appellants alleged that by continuing to sell petrol/diesel in litres, the oil companies were misappropriating Rs. 40 to 45 crores per day. They claimed that the non-compliance with the Legal Metrology Act led to significant financial losses for their members.

5. Arbitration clause in the agreement between appellants and oil companies:
The learned Single Judge dismissed the writ petitions, stating that the dispute should be resolved through arbitration as provided in the agreements between the appellants' members and the oil companies. The court held that the writ petitions were not maintainable and directed the appellants to follow the dispute resolution mechanism in the agreements.

6. Jurisdiction of the High Court:
The respondent HPCL argued that the Delhi High Court lacked territorial jurisdiction to entertain the writ petitions, as the appellants were associations of petroleum traders from Uttar Pradesh and Haryana. They cited several cases to support their contention that the appropriate forum was not the Delhi High Court.

7. Applicability of the Legal Metrology Act:
The court examined the provisions of the Legal Metrology Act and the Legal Metrology (General) Rules, 2011. It noted that the Act and Rules did not define "metric system" or "international system of units" but referred to the International System of Units (SI) and permitted the use of non-SI units like litres. The court found that litre, as a measure of volume, was accepted internationally and under the Act.

Conclusion:
The court dismissed the appeals, stating that the appellants failed to demonstrate that the relief sought would not affect the terms of the agreements with the oil companies. The court also held that the proper forum for grievances under the Legal Metrology Act would be the authorities constituted under the Act, not the writ jurisdiction under Article 226 of the Constitution. The court found no merit in the appellants' arguments and upheld the dismissal of the writ petitions.

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