Government policy on diesel prices upheld, subsidies not reviewable. Bulk consumers to follow non-subsidized pricing.

The court upheld the validity of the Government of India's policy decision to deregulate diesel prices for bulk consumers and withdraw subsidies. It ruled that subsidies are privileges that can be withdrawn and are not subject to judicial review. The court dismissed the writ petitions challenging the policy, directing bulk consumers to comply with non-subsidized pricing. Specific interim orders were addressed, with the State of Kerala agreeing to reimburse the deficit amount if the petition was dismissed. Appeals and transferred cases were disposed of without costs awarded.

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Issues Involved:
1. Validity of the policy decision by the Government of India regarding diesel price hike and dual pricing policy.
2. Allegations of arbitrariness, illegality, and unconstitutionality of the diesel price hike.
3. Claim for exemption from bulk consumer category and refund of excess diesel charges.
4. Judicial review of policy decisions and the right to subsidy.

Detailed Analysis:

1. Validity of the Policy Decision by the Government of India:
The central issue is the validity of the Government of India's policy decision to deregulate diesel prices for bulk consumers and to withdraw subsidies. The Ministry of Petroleum and Natural Gas issued a directive on 17th January 2013, mandating that diesel sold to bulk consumers be priced at non-subsidized, market-determined rates. This decision was challenged on grounds of discrimination and arbitrariness, particularly by the Kerala State Road Transport Corporation (KSRTC), which claimed significant financial losses due to the policy.

2. Allegations of Arbitrariness, Illegality, and Unconstitutionality:
The petitioners argued that the diesel price hike and dual pricing policy were arbitrary, illegal, and violated Articles 12 and 14 of the Constitution of India. They contended that the policy discriminated against bulk consumers like KSRTC, which provided essential public services and operated without profit motives. The petitioners highlighted the financial burden imposed by the policy, including substantial losses and difficulties in paying salaries and pensions.

3. Claim for Exemption from Bulk Consumer Category and Refund of Excess Diesel Charges:
The petitioners sought an exemption from the bulk consumer category, requesting to be treated as retail customers for diesel purchases. Additionally, they demanded a refund of the excess diesel charges collected under the new policy, with interest. The petitioners emphasized their role in providing public services and argued that the government should extend subsidies to support their operations.

4. Judicial Review of Policy Decisions and the Right to Subsidy:
The court examined whether the policy decision was subject to judicial review and whether the petitioners had a right to claim subsidies. The judgment reiterated that subsidies are a matter of privilege and fiscal policy, which the government can withdraw at any time. The court cited precedents, including State of Rajasthan v. J.K. Udaipur Udyog Ltd., to emphasize that exemptions and subsidies are privileges, not enforceable rights. The court concluded that the government's decision to withdraw subsidies for bulk consumers was based on rational considerations, including fiscal consolidation and reducing the subsidy burden.

Conclusion:
The court upheld the validity of the government's policy decision, stating that it was neither arbitrary nor discriminatory. The court emphasized that subsidies are privileges that can be withdrawn and are not subject to judicial review. The court dismissed the writ petitions, affirming the government's right to implement the policy and directing bulk consumers to comply with the non-subsidized pricing. The court also addressed specific interim orders, noting that the State of Kerala had undertaken to reimburse the deficit amount if the writ petition was ultimately dismissed, while other states had no interim orders or liabilities. The appeals and transferred cases were disposed of, with no costs awarded.

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