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Kerala High Court · body

2008 DIGILAW 768 (KER)

Johny Thomas v. The Union of India

2008-12-05

V.GIRI

body2008
Judgment : The validity and enforceability of the Kerala Petroleum Products Dealers Licensing Order, 1981 {hereinafter referred to as the "State Order"}, is the crucial question for consideration in these writ petitions. The petitions have been filed by dealers of Motor Spirit, High Speed Diesel and Liqueified Petroleum Gas. All of them are licensed under different orders issued by the Central Government, under the provisions of the Essential Commodities Act, 1955 [for short 'the Act']. 2. The petitioners contend that since they are governed by the provisions of orders issued by the Central Government under Section 3 of the Act, their activities cannot, again, be regulated by the State Government by recourse to the provisions of the State Order. I will refer to W.P.(C)No. 14350/08 as the leading case. W.P.(C).No.14350/08 3. The first petitioner is an association of Retail Dealers of LPG, appointed by the Bharat Petroleum Gas. The second petitioner is one of the distributors of LPG. The petitioners refers to the LPG (Regulation of supply and Distribution) Order, 2000 issued by the Central Government under Section 3 of the Act seeking to regulate the supply and distribution of LPG. It seems that the dealers of LPG in the State are licensed under the provisions of the LPG under 1993 or its successor the Liquefied Petroleum Gas (Regulation of supply and Distribution) Order, 2000. The 2000 order is produced along with the writ petition and marked as Ext.P5. The petitioners referred to the enactment of the Petroleum Act, 1934 and the Petroleum and Natural Gas Regulatory Board Act, 2006 {hereinafter referred to as the "Board Act"} intended to regulate the transportation, storage and sale of petroleum products, including LPG. In substance, the stand taken by the petitioners is that the Central Government has issued Orders in 1988, 1993 and 2000, the latest one being the Order issued in 2000, regulating the distribution and supply of LPG. The petitioners have submitted themselves to the provisions of the 2000 order, which they do not dispute, is binding on them. They also refer to the Board Act which the Parliament has issued in 2006 to contend the Central Government has, as recently as, in 2006 enacted a legislation, comprehensively covering all areas dealing with the manufacture, transportation, storage and distribution of petroleum products including LPG. These are the provisions, which according to the petitioners, that alone can currently regulate their activities. 4. These are the provisions, which according to the petitioners, that alone can currently regulate their activities. 4. Similar are the contentions raised by the petitioners in the other cases, who are either dealers of Motor Spirit or High Speed Diesel. Dealers of MS and HSD refer to the provisions of Motor Spirit and High Speed Diesel (Regulation of Supply and distribution and Prevention of Malpractices) Order, 1998 and its successor Motor Spirit and High Speed Diesel (Regulation of Supply and distribution and Prevention of Malpractices) Order, 2005, which prevails as on date. The 2005 Order has repealed the 1998 Order. It is contended that comprehensive provisions brought into force by the Central Government in exercise of its powers under Section 3 of the Act dealing with the licensing of Dealers of the said commodity, also provide the manner in which the said petroleum products are to be transported, sold or distributed. The contentions raised by the LPG distributors qua the enforcement of the 2006 Board Act are also reiterated by the petitioners in these cases, who, as stated above, are dealers of MS & HSD. 5. It is, in this background, that the petitioners contend that an order issued by the State Government, as the Kerala Petroleum Products Licensing Order 1981 {hereinafter referred to as "the State Order"}, will have to be understood. The aforementioned State Order, though issued by the State Government in the year 1981, was brought into force only on 22.1.2008 as per S.R.O.No.140/08. The State Order is issued by the State Government in exercise of the powers conferred on it by Section 3 of the Act, read with an order of delegation of powers issued in that behalf by the Central Government, produced and marked as Ext.P2 in W.P..(C) No.12380/08. 6. I have learned Senior counsel M/s. N.N. Sugunapalan, Govind Bharathan, and Mr. Ashok Shenoy, Mr.Jaju Babu, Mr.B. Suresh Kumar, Mr. Jayachandran, Mr.Alias Cherian, learned counsel for the petitioners and learned Senior Government Pleader Sri.P.K.Babu. I think, it is appropriate to refer to the relevant provisions of the State Order, at this juncture. 7. Clause 3 of the State Order reads as follows: "(1) No person shall commence or carry on the business of storage or sale of any petroleum product in the State except under and in accordance with the terms and conditions of licence issued in this behalf by the licensing authority. 7. Clause 3 of the State Order reads as follows: "(1) No person shall commence or carry on the business of storage or sale of any petroleum product in the State except under and in accordance with the terms and conditions of licence issued in this behalf by the licensing authority. (2) No exisiting dealer shall continue the business of storage or supply of any petroleum products without obtaining a licence from the licensing authority within 30 days from the date of receipt of a copy of this judgment commencement of this Order. Provided that an existing dealer who has applied for a licence on payment of the requisite fee within 15 days of the commencement of this Order, shall be entitled to continue his business notwithstanding the expiry of the 30 days specified in this subclause until a decision rejecting his application is communicated to him. (3) No person shall after the commencement of this Order possess, store or transport motor spirit or high diesel oil in excess of thirty litres and cooking gas in excess of ten cylinders of sixteen kilograms each except in accordance with the provisions of subclause (1) or sub-clause(2): Provided that such limits shall not apply to carriers of petroleum products and to petroleum products in a tank fixed permanently to a vehicle owned or controlled by an Oil Company. (4) Any appointment or change of any dealer made by any oil company shall be reported to the Collector. Such dealers will be given licences by the Collector. Pending issue of such licences, the dealer will be entitled to carry on his trade". 8. It may be noted here that 'petroleum products' are defined in Clause 2 as to mean motor spirit, high speed diesel oil petroleum-based lubricants and cooking gas. Clause 4 of the State order, refers to the carriers of petroleum products and their obligation to obtain licences. The same reads as follows: "4. Carriers of petroleum products to obtain licences:- (1) Every carrier of petroleum products shall apply to the Collector for the licence in respect of each vehicle intended to be used for the purpose of transporting products, in Form 'A' along with a Court fee stamp worth Rupees two affixed thereto and a chalan receipt in proof of remittance of licence fee of Rs.30.00 (Rupees thirty only) under the relevant head of account. After such verification as is found necessary by the Collector and if the applicant is found eligible to be used a licence, he shall be required to furnish a security deposit of Rs.5000/- (Rupees five thousand) in cash or in a deposit with Post Office Savings Bank endorsed in favour of the Collector. On furnishing such security, the applicant shall be issued a licence, in form 'B'. Application for renewal of licences shall also be made in Form 'A". Provided that the above provision shall not apply in respect of vehicles owned by an Oil Company. (2) Every carrier of petroleum products existing immediately before the commencement of this Order shall be entitled to be issued licence from Collector, provided that a security deposit of rupees five thousand in cash or in a deposit with Post Office Savings Bank endorsed in favour of the Collector is submitted to the Collector. He shall also be entitled to carry on his business until such licences are issued to him, provided that the application for the licence with the security deposit has been submitted within 15 days of the commencement of this Order". 9. Clause 11 of the State Order provides for the manner in which a person will have to apply for a dealer's licence in terms of Clause 3. Clause 17 provides that no dealer shall sell or store and no carrier of petroleum products shall possess or transport adulterated petroleum products. Adulterated petroleum products are defined in Clause 2(a) as follows: "2(a) "Adultered petroleum products" means petroleum products which do not conform to the specifications of "petroleum class A" as defined in Clause (b) of Section 2, of the petroleum Act, 1934 (Central Act 30 of 1934) or which do not conform to the quality prescribed by the Indian Standards Institution". 10. In effect, the State Order, therefore, provides that any person, who wants to deal with any petroleum product will have to obtain a licence in that behalf from the competent authority under the State Order. Form E to the order provides for the licence, which is to be issued by the competent authority under the 1981 order. 10. In effect, the State Order, therefore, provides that any person, who wants to deal with any petroleum product will have to obtain a licence in that behalf from the competent authority under the State Order. Form E to the order provides for the licence, which is to be issued by the competent authority under the 1981 order. It also envisages a situation where directions could be issued by the State Government or any other competent authority to any dealer licensed in that behalf under the 1981 order, in the matter of regulating the supply and distribution of the licensed products. 1981 order also provides for the standards of the products that could be sold. Contravention of the provisions of 1981 order would amount to a contravention within the meaning of the Essential Commodities Act followed by penal consequences as contemplated by Section 7 of the Act. 11. It is in this context that the petitioners are aggrieved by the 1981 order. They contend that all of them are licensed or authorized, as the may be, under the provisions of 2005 order issued by the Central Government regulating the supply and distribution of MS and HSD, or the LPG order, 2000, insofar as it relates to LPG. They have applied for and obtained licences adhering to the standards prescribed in that behalf under the Orders issued by the Central Government. They are vulnerable to the conditions of 2005 order in the case of MS and HSD and 2000 order in the case of LPG. Therefore, there is an order in force; a comprehensive statutory instrument regulating the dealership for MS, HSD and LPG and prescribing the standards, which have to be maintained in the storage, transportation and distribution of such products. Those orders are also issued under Section 3 of the Act. The challenge against 1981 order is mounted by the petitioners, essentially on the following points: (A) Certain provisions contained in the state order are clearly inconsistent with the provisions of Petroleum Act, 1934 and the Board Act 2006. A subordinate legislation cannot contravene the provisions of a plenary law. In this view of the matter, the provisions of the State Order will, therefore, have to be treated as void or unenforceable to the extent of their inconsistency with the provisions of the aforementioned plenary legislations. A subordinate legislation cannot contravene the provisions of a plenary law. In this view of the matter, the provisions of the State Order will, therefore, have to be treated as void or unenforceable to the extent of their inconsistency with the provisions of the aforementioned plenary legislations. (B) The Essential Commodities Act 1955, insofar as it comprehends petroleum and petroleum product, as an Essential Commodity, should be treated as having been implied repealed by the provisions of the Petroleum and Natural Gas Regulatory Board Act, 2006. (C) The provisions of the Central Orders and the State Order, give rise to different consequences and are not capable of resolution. In fact, there is a conflict between the provisions of these two. Consequently, the provisions of the State Order will have to be considered as repugnant and void to the extent of inconsistency. The principles underlying cases of repugnancy under Article 245(1) of the Constitution of India are applicable to orders issued by the Central Government and State Government under the Essential Commodities Act, 1955. (D) Statutory instruments have been brought into force by the Central Government specifically to deal with petroleum products. The Central Government has, therefore, exercised its power under Section 3 of the Essential Commodities Act. If that be so, the field is not available to be occupied by the State Order, which, though issued in 1981, was enforced only in 2008, w.e.f. 22.1.2008, during the currency of the Central Orders issued in 2000 and 2005, as the case may be. 12. I will consider these points. Point No.(A): Whether the provisions of the State Order 1981 are invalid and unenforceable for the reason that they are inconsistent with the provisions of 1934 Act or the Board Act, 2006? 13. Section 7 of the Petroleum Act, 1934 provides that no licence is required for transportation and storage of limited quantities of Petroleum. Clause (b) deals with petroleum gas. Section 8 of the Petroleum Act, 1934 provides that no licence is needed for import and transport of small quantities of petroleum A provided, the quantity does not exceed 30 litres. An exemption is granted in respect of stationary engines under Section 9 of the Petroleum Act. Detailed provisions are contained in the Petroleum Rules, 2002 dealing with the storage and transportation of petroleum products. An exemption is granted in respect of stationary engines under Section 9 of the Petroleum Act. Detailed provisions are contained in the Petroleum Rules, 2002 dealing with the storage and transportation of petroleum products. The provisions contained in the State Order would require a person to obtain a licence under Clause 3 of the State Order for storage or sale of any petroleum product in the State. The Licensing Authority under the Order, 2003 is different from the Licensing Authority under the State Order. The standards to be maintained in relation to the same product are different and are specifically mentioned in the Petroleum Rules, 2002. 14. Petitioners contend that Clauses 3 and 4 of the State Order 1981 contravene the provisions of the Petroleum Act, 1934 and since the provisions of a subordinate legislation cannot be enforced in contravention of any plenary Statute the provisions of the State Order have to be declared void to the extent they contravene the provisions of the Petroleum Act. 15. Learned counsel for the petitioners referred to the judgments of the Supreme Court in M/s. Hoechst Pharmaceuticals Ltd. V. State of Bihar {AIR 1983 SC 1019} and Kerala Samsthana Chethu Thozhilali Union V. State of Kerala {2006(4) SCC 327} 16. It is trite law that the validity of a subordinate legislation can be challenged on all grounds available, qua provisions of a plenary statute and also on the ground that it contravenes the provisions of another Plenary Statute. This is the principle that has been laid down by the Supreme Court in the aforementioned decisions and several other decisions and therefore, the contention raised by the petitioners in this regard would have definitely merited a serious consideration. But, I take note of the serious contention raised by the learned Government Pleader, on the strength of Section 6 of the Essential Commodities Act, which reads as follows: "6. Effect of orders inconsistent with other enactments:-Any order made under Section 3 shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or any instruments having effect by virtue of any enactment other than this Act". 17. The enforcement mechanism, contemplated by the Essential Commodities Act, 1955 is not really provided in the Act itself. It is meant to be dealt with by an Order that could be issued by the Central Government under Section 3 of the Act. 17. The enforcement mechanism, contemplated by the Essential Commodities Act, 1955 is not really provided in the Act itself. It is meant to be dealt with by an Order that could be issued by the Central Government under Section 3 of the Act. In fact, the contravention of the provisions of the Act comes about by a contravention of the provisions of any of the Orders which are issued under Section 3 of the Act. The effect of Section 6 of the Act was considered by the Supreme Court in {AIR 1954 SC 465}, wherein the court dealt with the same in the following manner: "In our opinion the construction placed on Section 6 by the High Court is not right. Section 6 does not either expressly or by implication repeal any of the provisions of preexisting laws; neither does it abrogate them. Those laws remain untouched and unaffected so far as the statute book is concerned. The repeal of a statute means as if the repealed statute was never on the statute book. It is wiped out from the statute book. The effect of Section 6 certainly is not to repeal any one of those laws or abrogate them. Its object is simply to by-pass them where they are inconsistent with the provisions of the Essential supplies (Temporary Powers) Act, 1946 or the orders made thereunder. In other words, the orders made under Section 3 would be operative in regard to the essential commodity covered by the Textile Control order wherever there is repugnancy in this Order with the existing laws and to that extent the existing laws with regard to those commodities will not operate. By-passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the Order made under Section 3 it does not operate in that field for the time being. The ambit of its operation is thus limited without there being any repeal of any one of its provisions. By-passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the Order made under Section 3 it does not operate in that field for the time being. The ambit of its operation is thus limited without there being any repeal of any one of its provisions. Conceding, however, for the sake of argument that to the extent of a repugnancy between an order made under of a repugnancy between an order made under Section 3 and the provisions of an existing law, to the extent of the repugnancy, the existing law stands repealed by implication, it seems to us that the repeal is not by any act of the delegate, but the repeal is by the legislative act of the Parliament itself. By enacting Section 6 Parliament itself has declared that an order made under Section 3 shall have effect notwithstanding any inconsistency in this order with any enactment other than this Act. This is not a declaration made by the delegate but the legislature itself has declared its will that way in Section 6. The abrogation or the implied repeal is by force of the legislative declaration contained in Section 6 and is not by force of the order made by the delegate under Section 3. The power of the delegate is only to make an order under Section 3. Once the delegate has made that order its power is exhausted. Section 6 then steps in wherein the Parliament has declared that as soon as such an order comes into being that will have effect notwithstanding any inconsitency therewith contained in any enactment other than this act. Parliament being supreme, it certainly could make a law abrogating or repealing by implication provisions of any pre-existing law and no exception could be taken on the ground of excessive delegation to the act of the Parliament itself. There is no delegation involved in the provisions of Section 6 at all and that Section could not be held to be unconstitutional on that ground". 18. The overriding effect given to the provisions of the Orders issued under Section 3 of the Act, is not by reason of a clause contained in that behalf in the subordinate order, but, by reason of the declaration made by the Parliament under Section 6 of the Act. 18. The overriding effect given to the provisions of the Orders issued under Section 3 of the Act, is not by reason of a clause contained in that behalf in the subordinate order, but, by reason of the declaration made by the Parliament under Section 6 of the Act. Thus, the overriding effect, which is given to the provisions of the State Order, has sanction of a plenary legislation. It is as if for the said limited purpose, the provisions of the State Order is incorporated as part of the plenary legislation . If that be so, the question of a subordinate legislation coming into conflict with the plenary legislation really does not arise in the present case. There is an overriding effect to the provisions of an Order issued under Section 3 of the EC Act, qua any other statute. This would include any other Act passed by any other legislature. I am, therefore, not inclined to accept the contention of the petitioners that the provisions of the State Order 1981 are rendered unenforceable and therefore, void by reason of it coming into conflict with the 1981 order. 19. Jurisprudentially, a similar contention taken as regards the provisions of the State Order, qua the provisions of the Board Act, 2006, should meet the same fate. No doubt, the 2006 Act is a subsequent legislation and is an enanctment on the subject of petroleum and petroleum products. Learned counsel for the petitioners point out that comprehensive provisions are contained in the 2006 Board Act which deal with the storage and transportation of petroleum products and the legislative coverage afforded by the 2006 Act extends from the stage of manufacture to the stage of distribution to the ultimate consumer, and therefore, the provisions of State Order to the extent to which they are inconsistent with the provisions of the 2006 Board Act, would also be rendered invalid. 20. But, as mentioned above, the overriding effect given to the provisions of the Subordinate Order issued under Section 3 of the Act, qua the provisions of any other plenary statue by reason of Section 6 of the Act, would make the State Order 1981 impervious to a challenge on the ground that it is inconsistent with the provisions of the Petroleum Board Act, 2006. Point B: Whether the provisions of the Act, 1955, insofar as it comprehends petroleum and petroleum products, stand impliedly repealed by the provisions of the Board Act, 2006? 21. This contention is pressed forth mainly by Mr. Ashok Shenoy, learned counsel for the petitioner in W.P.(C)No.14350/08. Mr. Shenoy refers to the preamble of the Board Act, 2006, which reads as follows: "An Act to provide for the establishment of Petroleum and Natural Gas Regulatory Board to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas so as to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas in all part of the country and to promote competitive markets and for matters connected therewith or incidental thereto". 22. He further refers to Section 2(zk), which defines 'retial service obligations'. Section 3 of the Board Act provides for the establishment and incorporation of a Board, called the Petroleum and Natural Gas Regulatory Board. Section 11 of the Board Act deals with the functions of the Board and this, Mr. Shenoy points out, takes in the function to provide for, by regulations, and enforce, retail service obligations for retail outlets and marketing service obligations for entities (Section 11 f(v) of the Act). Section 12 of the Board Act deals with the power of the Board to deal with complaints and resolve disputes. The Board has jurisdiction to deal with any complaint from any person and conduct any enquiry and investigation or connected with the activities of petroleum and petroleum products inter alia for enforcement of retail service obligations (12(1)(b) of the Act). 23. The remaining provisions in the Board Act are referred to by him, to contend for the position that the Act, as a whole reveals an intention of the Parliament to completely occupy the field of petroleum and petroleum products. Therefore, the legislation must be sourced to Entry of List 1 of 7th schedule of the Constitution, which reads as follows: "53. Regulation and development of oil fields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable". 24. Therefore, the legislation must be sourced to Entry of List 1 of 7th schedule of the Constitution, which reads as follows: "53. Regulation and development of oil fields and mineral oil resources; petroleum and petroleum products; other liquids and substances declared by Parliament by law to be dangerously inflammable". 24. It is contended that the Board Act, 2006 is a Special law dealing with the petroleum and petroleum products and by the enforcement of this, the same resulted in the implied repeal of the provisions of an earlier general law; Essential Commodities Act 1955 insofar as it relates to petroleum and petroleum products. He refers to the judgment of the Supreme court in Godawat Pan Masala Products I.P. Ltd Vs. Union of India {AIR 2004 SC 4057}. 25. The said decision dealt with the validity of the notification under Section 7(4) of the Prevention of Food Adulteration Act, prohibiting manufacture, sale and storage and distribution of pan masala and gutka and one of the contentions raised against the notification was that by reason of the provisions of the Special enactment brought in by the Central Government, by reason of Cigarettes and other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003, the Parliament has focused its intent to occupy the whole field to regulate the trade, commerce, production, supply and distribution of tobacco products. It was contended that the latter enactment of 2005 has impliedly repealed the Prevention of Food Adulteration Act insofar as it relatd to tobacco and tobacco products. Making an exhaustive survey of the law relating to implied repeal, which, in essence, is another facet of the doctrine of repugnancy of two competing legislations, the Supreme Court in Godawat Pan Masala's case found that there is a comprehensive legislation on tobacco and tobacco products, significantly containing provisions of law empowering the competent authority to ban the sale of tobacco products and the same must be treated as having resulted in repeal of an earlier general law, like the Prevention of food Adulteration Act, which dealt with tobacco and tobacco products as only one of the items. Mr, Shenoy contends that the principles laid down by the Supreme court applies, on all fours, to the said case. Mr, Shenoy contends that the principles laid down by the Supreme court applies, on all fours, to the said case. The Essential Commodities Act should be treated as a general law and the Board Act, 2006 could be fitted in the slot of a Special law dealing with petroleum and petroleum products. 26. I am afraid, I am unable to accept the submission made by Mr. Shenoy which I must note was put forth in a very attractive fashion, inter alia, for, the following reasons. (1) The Essential Commodities Act 1955 is an Act to provide for the control or production, supply and distribution and trade and commerce of certain commodities. The essence of the legislation is contained in Section 3 thereof. Section 3(1) reads as follows: "3(1): If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and available at fair prices, [or for securing any essential commodity for the Defence of India or the Efficient conduct of military operations], it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein". 27. It is up to the Central Government or the State Government, if they are of the opinion that it is necessary or expedient for maintaining the supplying of any essential commodity or ensuring its availability at fair price, to issue an order under Section 3(1) of the Act providing for such provisions. An order issued under section 3 of the Act is intended as a legislative instrument to address a contingency which the Central Government or the State Government face, qua an Essential Commodity. In addressing the issue which is posed before the Central Government or the State Government, they may also provide measures for equitable distribution, of the Essential Commodity. It is beyond dispute that the Essential Commodities Act is sourced to Entry 33 of List III of the 7th Schedule providing for a law regulating trade and commerce and supply of Essential Commodities, which are declared so by the Parliament. Petroleum and petroleum products have also been treated as an Essential Commodity under the Essential Commodities Act, because the Parliament felt it be so. Petroleum and petroleum products have also been treated as an Essential Commodity under the Essential Commodities Act, because the Parliament felt it be so. But the provisions of any Order issued under Section 3, even qua petroleum and petroleum products are intended only for maintaining and securing an equitable distribution of the same. The Legislative device that any order under Section 3 of the Essential Commodities Act is intended to be, is only to meet a contingency, discerned in that regard by the Government. But as it has the prime intention of securing an equitable distribution of a commodity and its availability at fair price, the motive behind an order under Section 3 of the Act is, therefore, to see that the ultimate consumer of such commodity has a reasonable and fair access to it. 28. The Petroleum Act, 2006, as stated above, is primarily intended for the establishment of a Petroleum and Natural Gas Regulatory Board, to regulate refining, storage, transportation, distribution and marketing and sale of petroleum and petroleum products. No doubt, the Act is also intended to ensure equitable supply of Petroleum and natural gas in all parts of the country and all matters connected therewith. It provides for the establishment of regulator, in the form of a Board and even confers adjudicatory powers on the Board as such. But a reading of the provisions of 2006 Act, as a whole, shows that it is a legislative device essentially intended to address the manufacture, production, sale, storage and wholesale distribution of petroleum products. It also addresses the possibility of a dispute between the authorized entities under the Act which means the petroleum companies. It therefore, confers power on the regulatory board to decide such dispute as well. It provides a field where the Central Government can, through an instrumentality of the State, regulate the manufacture and production of petroleum products. The Central Government has the ultimate control on the manufacture, production and storage and distribution of Petroleum and Petroleum Products. The Act provides for a legislative framework to deal with the said issue. 29. The Board Act 2006 does not deal with petroleum and petroleum products as an Essential Commodity. It is a legislation, sourced to Entry 53 of List I of 7th Schedule. It is not intended to regulate the trade and commerce of an Essential Commodity. The Act provides for a legislative framework to deal with the said issue. 29. The Board Act 2006 does not deal with petroleum and petroleum products as an Essential Commodity. It is a legislation, sourced to Entry 53 of List I of 7th Schedule. It is not intended to regulate the trade and commerce of an Essential Commodity. By this, I do not mean to say that petroleum and petroleum products are not essential commodities, obviously they are, for the purpose of the Essential Commodities Act. But a reading of the Act, in its entirety, shows that it is not intended to regulate the trade and commerce or the maintenance of the supply of petroleum and petroleum products or for securing the equitable distribution and availability of such products. The enforcement mechanism provided under the Act, does not deal with the aspects relating to the grass root level distribution of a commodity, which in the opinion of the Parliament is also an Essential Commodity. A more hands-on control, by persons operating at a level proximate to the ultimate consumer is contemplated by the provision of the Essential Commodities Act. The provisions of the Essential Commodities Act are concerned with the maintenance and supply of an Essential Commodity which may include petroleum and petroleum products. But the objectives of the Board Act are reflected in the Statement of Objects and Reasons, which reads as follows: "2. These objectives are intended to be achieved by - (a) setting up of a Petroleum and Natural Gas Regulatory Board to oversee and regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas; (b) empowering the Central Government to broadly lay down policy framework; (c) making provision for the Central Government to intervene in matters adversely affecting the public interest in certain exigencies; (d) maintaining a data bank of information on activities relating to petroleum, petroleum products and natural gas to enable planning and development thereof; (e) empowering the Appellate Tribunal for Electricity established under Section 110 of the Electricity Act, 2003 to function as the Appellate Tribunal for the purposes of the proposed legislation." 30. A plea on the doctrine of implied repugnancy by reason of the enforcement of Petroleum Act, 2006 will have to be considered, qua the provisions of the Essential Commodities Act, without one's vision being clouded by the provisions of the statutory order which is issued under section 3 of the Act. No doubt, it is difficult to completely sequester one's mind from the provisions of an Order, the validity of which is being specifically dealt with, while considering this question. If the provisions of Section 3 of the EC Act are juxtaposed with the Board Act, 2006, in my opinion, it could be seen that the field occupied by the 2006 Act is not the one that the Parliament intended to occupy by the Essential Commodities Act, 1955. 31. Mr. Shenoy refers to the maxim 'generalia specialibus non derogant' to contend for the position that Essential Commodities Act is a general Act and Board Act, 2006 is a Special Act dealing with petroleum and petroleum products. As I stated above, the field occupied by the 2006 Act will definitely qualify as a Special Law dealing only with petroleum products. But the Essential Commodities Act is concerned with the maintenance and supply of any essential commodity and securing its equitable distribution. The Board Act, 2006 is concerned with larger areas; essentially dealing with the manufacture, production (including refining and processing) of petroleum and petroleum products at the macro level. No doubt, as Mr. Shenoy points out, marketing retail service obligations, as defined in Section 2 (zk) is one of the items, that could be included in the complaint going by the board framework and the substantive powers and functions of the Board. The Board constituted under the Board Act, 2006 is a regulator and its functions are discharged in close proximity to the "entities" as defined under Section 2(p) of the Act. The Board constituted under the Board Act, 2006 is a regulator and its functions are discharged in close proximity to the "entities" as defined under Section 2(p) of the Act. Section 2(p) reads as follows: 2(p) "entity" means a person, association of persons, firm, company or co-operative society, by whatsoever name called or referred to, other than a dealer or distributor, and engaged or intending to be engaged in refining, processing, storage, transportation, distribution, marketing, import and export of petroleum, petroleum products and natural gas including laying of pipelines for transportation of petroleum, petroleum products and natural gas, or laying, building, operating or expanding city or local natural gas distribution network or establishing and operating a liquefied natural gas terminal;" 32. Though they could also enforce "retail service obligations" qua retail outlets, such enforcement is only as a consequential measure of enforcement of "marketing service obligations" by entities. It really is not concerned with the equitable distribution of petroleum and petroleum products as an Essential Commodity. I am, therefore, unable to accept the contention of the learned counsel for the petitioners in this regard as well. Points C & D: Whether the State Order is rendered unenforceable by reason of the field being occupied by Central Order? 33. The doctrine of repugnancy, as has been enunciated by the Supreme Court in several decisions is one encapsulated under Article 254 of the Constitution. Essentially the principle is where there are two legislations, one by the Centre and another by the State, on a topic included in the concurrent list, the one enacted by the Parliament will have to prevail. The exception is provided under Article 254(2) of the Constitution, which say that where a law made by the Legislature of a State with respect to one of the matters enumerated in the concurrent list contains any provisions repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall, if it has been reserved for the consideration of the President and has received his assent, prevail in that State: Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to amending, varying or repealing the law so made by the Legislature of the State. The principles, adumbrating the doctrine of repugnancy in the context of Article 254 of the Constitution, has been laid down by the Supreme Court in several decisions. It would suffice, if one refers to the judgment of the Supreme Court in M. Karunanidhi v. Union of India (AIR 1979 SC 898). The same principles have been reiterated in M/s. Hoechst Pharmaceuticals Ltd. v. State of Bihar (1983 (4) SCC 45). 34. What is to be understood in applying the principles to the present context is that the source of power for the State Order 1981 and the Orders issued by the Central Government for LPG Distributorship viz., LPG Order, 2000 and MS & HSD Order, 2005, is the same; Section 3 of the Essential Commodities Act. 35. I am not in a position to discern any direct conflict between the State Order and the Central Order in the sense that I do not think that obedience to the provisions of the State Order would possibly deter compliance with the provisions of the Central Order. No doubt, as learned counsel for the petitioners submit, the provisions of the LPG Order 2000 and MS & HSD Order, 2005, provide for a more rigid statutory framework. They provide for a comprehensive statutory framework, dealing as it were, not only with the provisions for licensing and authorization, but also for prescribing the standards for the different class of petroleum products and therefore, in the context of maintaining an equitable distribution of an Essential Commodity like Petroleum and Petroleum Products, adherence to the rigid standards prescribed by the Central Orders should more than satisfy the requirements of any order that the State Government may issue in that regard. But that by itself is not sufficient to infer an irreconcilable conflict between the two statutory instruments, in the sense that compliance with the provisions of the Central Order would possibly deter a person from complying with the provisions of the State Order and vice versa. I am, therefore, unable to accept the submission of the learned counsel for the petitioners that the provisions of the State Order are directly in conflict with the Central Order viz., LPG Order, 2000 and MS & HSD Order, 2005. 36. I am, therefore, unable to accept the submission of the learned counsel for the petitioners that the provisions of the State Order are directly in conflict with the Central Order viz., LPG Order, 2000 and MS & HSD Order, 2005. 36. But, this by itself, does not answer the question which has been posited by the learned counsel for the petitioners, to the effect that the provisions of 1981 Order will have to be declared as unenforceable for the reason that they have been sought to be enforced, qua field which is comprehensively occupied by a statutory instrument, also issued under Section 3 of the Essential Commodities Act. 37. I heard learned counsel for the petitioners and Learned Government Pleader quite elaborately on this aspect. I consider it appropriate to encapsulate the contentions of the learned counsel for the petitioners in this regard. 38. It is contended: (1) The power under Section 3 of the Essential Commodities Act, 1955 is a power, which is essentially conferred on the Central Government inter alia, to deal with the equitable distribution of petroleum and petroleum products. No doubt, under Section 5 of the Essential Commodities Act, it is open to the Central Government to authorize the State Government or any other competent authority to issue an Order under Section 3 of the Act, but the power exercised by the State Government is only as a delegate of the Central Government. (2) The power exercisable by the Central Government, qua the power exercisable by the State Government, qua the power exercisable by the State Government, is superior in character. Where therefore, the authority exercising superior legislative power has brought into force a statutory instrument covering the field, it does not leave any residuary territory to be legislated upon by the State Government. (3) The Theory of occupied territory will have to be imported in the present context also and if it is found that the provisions of the Central Order comprehensively provides for all aspects, which are treated as relevant in the context of Section 3 of the Essential Commodities Act, then there comes into being a repugnancy not by reason of any irreconcilable conflict between the provisions of the Central Order and the State Order, but by the very existence of two statutory instruments covering the same field. 39. 39. The theory of repugnancy, even without there being any irreconcilable conflict between the provisions of two competing legislations has been considered by the Supreme Court in Deep Chand v. State of U.P. (AIR 1959 SC 648), State of Orissa v. M.A. Tulloch & Co. (AIR 1964 SC 1284), Thirumuga Kirupananda Variyar Thaathiru Sundara Swamigal Medical Educational & Chatirable Trust v. State of Tamil Nadu (1996 (3) SCC 15), Kerala Samsthana Chethu Thozhilali Union v. State of Kerala (2004 (6) SCC 327), Tata Iron and Steel Company Ltd. (1972 KLT 35 DB). 40. It will be apposite to refer to the decision in State of Orissa v. M.A. Tulloch & Co. (AIR 1964 SC 1284). The Court laid down the principles as under: "(15). But even if the matter was res integra, the argument cannot be accepted. Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one Legislature has superiority over the other, then to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the other. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for, if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation and intention to cover the whole field, the enactments of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. In the present case, having regard to the terms of S.18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession, of the State Act." 41. In the present case, having regard to the terms of S.18(1) it appears clear to us that the intention of Parliament was to cover the entire field and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession, of the State Act." 41. The gist of the law laid down by the Supreme Court in this regard is to the effect that where a field is comprehensively occupied by a legislative instrument brought into force by one legislature and there is another legislation, by a competing legislature, there arises a repugnancy, but by reason of an irreconcilable conflict between the provisions of the two legislations, but by the very existence of the two legislations, side by side. The Supreme Court further held that a detailed examination of the legislations are not necessary to infer repugnancy. The very existence of the two legislations by competing legislatures is sufficient to bring about a repugnancy between the two. The question is whether such an inference can be drawn in the present case. 42. I have already referred to Clauses 3, 4 and 7 of the State Order, 1981. It will be appropriate to refer to Clauses 3.4, 3.7 and 4.5 of the MS & HSD Order, 2005. As mentioned above, though it may not be necessary to undertake a clause by clause verification of the State Order on one hand and the MS & HSD Order, 2005 and the LPG Order, 2000 on the other, a verification of the Central Orders will show that they provide for the authorisation/licensing of wholesale/retail dealers of the concerned petroleum products. Clause 5 of the MS & HSD Order, 2005 provides for the Central Government granting an authorization to market motor spirit and High Speed Diesel. Clause 7 empowers any Gazetted Officer of the Central Government or a State Government duly authorized in that behalf to enter and conduct a search and seizure of any premises of a dealer, transporter, consumer or any other person, for the purpose of satisfying himself that the provisions of the Order are complied with. Sampling of the product is provided for under Clause 8 of the Order. Clause 9 empowers the Central Government, to issue directions, from time to time, to any dealer, transporter or consumer, regarding storage, sale, transportation and disposal of motor spirit and High Speed Diesel. Sampling of the product is provided for under Clause 8 of the Order. Clause 9 empowers the Central Government, to issue directions, from time to time, to any dealer, transporter or consumer, regarding storage, sale, transportation and disposal of motor spirit and High Speed Diesel. Clause 10 of the MS & HSD Order, 2005 is relevant in this context and is extracted hereunder: "10. Overriding effect: The provisions of this Order shall have overriding effect notwithstanding anything to the contrary contained in any Order made by a state Government or by an officer of such State Government before the Commencement of this order except as respects anything done or omitted to be done there under before such commencement." 43. Similar provisions are contained in the LPG (Regulation of Supply and Distribution) Order, 2000, providing for the regulation of the supply and distribution of Liquefied Petroleum Gas. Clause 14 of the LPG Order, 2000 provides that the provisions of the order shall have overriding effect, notwithstanding anything contained in any order made by a State Government or a Union Territory of the land. 44. A perusal of the MS & HSD Order, 2005 and LPG Order, 2000 shows that the Central Government intended to bring about a statutory framework providing for a comprehensive regulatory measure in the matter of storage, transportation and distribution of petroleum products covered by the said Order. (I have referred only to the aforementioned two Orders issued by the Central Government. But, it may be noted that there are similar Orders in respect of CNG and petroleum based lubricants as well). Control exercised by the Central Government is, inter alia, in the form of an authorization issued by the Central Government or the competent authority, which alone will enable the authorized person to transport and distribute the petroleum products in question. The dealer of the commodity in question acts as a license of the Central Government. A perusal of the Orders will lead one to the conclusion that there is not a single aspect relating to the storage, transportation and distribution of the petroleum products in question, which is not covered by the provisions of the Central Orders. These Orders evince the Central Government's intention to exercise control in the matter of supply and distribution of an essential commodity viz. Motor Spirit and High Diesel and Liquefied Petroleum Gas, three among the petroleum products. These Orders evince the Central Government's intention to exercise control in the matter of supply and distribution of an essential commodity viz. Motor Spirit and High Diesel and Liquefied Petroleum Gas, three among the petroleum products. One is also led to the conclusion that the entirety of the field regarding supply and distribution of petroleum and petroleum products, for the purpose of ensuring equitable products, for the purpose of ensuring equitable distribution of the said commodities, which obviously would be the prime justification for any statutory Order issued under Section 3 of the EC Act is comprehensively covered by the Order issued by the Central Government, viz., MS & HSD Order, 2005 and LPG Order, 2000. 45. If that be so, it could be seen that since the entirety has been dealt with by the Central Orders, there is no residuary territory to be occupied by a State Order. In other words, the State Order 1981 purports to occupy the same field, as is covered by the Central Orders issued under Section 3 of the EC Act. This, in turn, gives rise to situation where the State Order of 1981 purports to co-exist with a Central Order issued under Section 3 of the EC Act, both the statutory instruments purporting to operate qua the same subject matter. 46. The principles relating to repugnancy, underlying Article 254 of the Constitution, arising from the very existence of a State Legislation co-existing with a law passed by the Parliament on the same subject, could be legitimately be invoked and applied to a situation like the present one. Though Article 254 of the Constitution expressly comprehends a plenary law passed by a competent legislature and does not specifically refer to a subordinate legislative instrument like the Orders issued under the EC Act, the principles relating to the doctrine of repugnancy as laid down by the Supreme Court in Tulloach and in the other cases would, on a parity of reasoning apply on all fours to a situation like the present one. What is involved is the enforceability of a statutory instrument like the State Order of 1981 qua the Central Orders of 2005 and 2000 and both these statutory instruments purport to operate in relation to the same subject matter. What is involved is the enforceability of a statutory instrument like the State Order of 1981 qua the Central Orders of 2005 and 2000 and both these statutory instruments purport to operate in relation to the same subject matter. The very existence of these statutory instruments gives rise to a repugnancy and this, in turn, results in the non-enforciability of the State Order of 1981. 47. Article 254(1) recognizes the Parliament and the State Legislature as competing legislatures in certain circumstances and also, therefore, recognizes the Parliament as a superior legislature. This is reflected in the declaration contained in Article 254(1) that the provisions in the State Legislation will have to yield to the corresponding provisions of the Central Legislation and the former, to the extent of repugnancy, will have to be treated as void. 48. The same principle would emerge in the context of two competing statutory instruments issued under Sections 3 and 5 of the EC Act, as the case may be. A parity of reasoning is not only apposite, but inescapable. The EC Act itself is sourced to Entry 33 of List III in the concurrent list of the 7th Schedule to the Constitution. The MS & HSD Order, 2005 and LPG Order, 2000 are statutory order issued by the Central Government. Purporting to cover the same field, the State Government has issued the State Order of 1981. Those principles, dealing with the doctrine of repugnancy in the context of two competing legislations as provided under Article 254(1) of the Constitution would, without any incongruity, apply to the present situation also. In the circumstances, the provisions of the State Order, 1981 will have to be treated as repugnant to the provisions of the MS & HSD Order, 2005 and LPG Order, 2000 and therefore, unenforceable void. 49. The same conclusion results from the enforceable of Clause 10 of the MS & HSD Order, 2005 and Clause 14 of the LPG Order, 2000, which, as stated above, provides for an overriding effect insofar as the provisions of the Central Orders are concerned. The said clauses ensure the prevalence of the provisions of the Central Orders over the provisions of the State Order. 50. This principle has been upheld by the Division Bench of this court, while considering two separate orders issued under Section 3 of the EC Act in Tata Iron and Steel Co. The said clauses ensure the prevalence of the provisions of the Central Orders over the provisions of the State Order. 50. This principle has been upheld by the Division Bench of this court, while considering two separate orders issued under Section 3 of the EC Act in Tata Iron and Steel Co. Ltd. v. State of Kerala reported in {1972 KLT 35) Repugnancy between the State Order was inferred in the said case not by discerning a head on collision between the two, but by the very existence of the State Order, purporting to occupy a field which is comprehensively occupied by a Central Order. 51. The principles laid down by the Division Bench in Tata's case supports the case of the petitioners. 52. Learned Government Pleader Mr. P.K. Babu refers to the decision of the Supreme Court in Ajoy Kumar Banerjee v. Union of India (1984 (3) SCC 127) that the principle that prior special law will prevail over the subsequent general law will arise only in a case where the provisions of the two enactments are inconsistent with each other. There is no express reference to the provisions of the earlier Order in the subsequent Order. He contends that the State Order 1981 does not refer to the Central Orders and clause by clause inconsistency has not been demonstrated by the petitioners. The doctrine encapsulated in the maxim 'generalia specialibus non derogant' has no application to the present case. This is a case where the State Order and the Central Orders, both purport to occupy the same field and the prevalence of the Central Orders are essentially rested on the superior powers that are vouchsafed in favour of the Central Government and by the very existence of the fact that the source of power insofar these statutory instruments are concerned, is contained in a Central Legislation. 53. One will also have to remind oneself of an obvious fact that the power available to the State Government to issue statutory instruments under Sections 3 and 5 of the EC Act is obviously as a delegate of the Central Government. Any Order issued by the State Government under Section 5 of the EC Act would by the very nature of the conferment of power under the EC Act be subjugated to a superior power available in this regard to the Central Government. Any Order issued by the State Government under Section 5 of the EC Act would by the very nature of the conferment of power under the EC Act be subjugated to a superior power available in this regard to the Central Government. It is a quintessential characteristic of any delegate that it is subject to the exercise of power by the principal authority. Where the field is comprehensively occupied by the Orders issued by the Central Government under Section 3 of the act, the State Government cannot, by resort to its delegated statutory power available under Sections 3 and 5 of the EC Act purport to occupy the same field. 54. Since I have undertaken an elaborate discussion on various aspects, I consider it appropriate to summarise my conclusions as hereunder: (1) Section 6 of the Essential Commodities Act, 1955 gives overriding effect to the provisions of any Order issued under Section 3 of the said Act and the provisions of a statutory order issued thereunder cannot be struck down on the ground that they are inconsistent with the provisions of the Petroleum Act, 1934 or the Petroleum and Natural Gas Regulatory Board Act, 2006. (2) The Essential Commodities Act, 1955 cannot be considered as having been impliedly repealed insofar as it relates to Petroleum and Petroleum Products, by the enforcement of the Petroleum Act and the Petroleum and Natural Gas Regulatory Board Act, 2006. (3) The field relating to regulation of the supply and distribution of Motor Spirit, High Speed Diesel and Liquefied Petroleum Gas, petroleum products are comprehensively covered by the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 and the Liquefied Petroleum Gas (Regulation of supply and Distribution) Order, 2000. It, therefore, follows that the State Order, 1981 cannot co-exist with the aforementioned two Central Orders and there arises a repugnancy in law. This renders the State Order of 1981 unenforceable and void. In the result, the writ petitions are allowed. It is declared that the Kerala Petroleum Products Dealers Licensing Order, 1981 is unenforceable and void. It is further declared that the petitioners cannot be subjected to any penal consequences for the infraction of the provisions of the State Order of 1981. It is needless to say that the petitioners are bound to comply with the provisions of the Central Orders, which are applicable to them. It is further declared that the petitioners cannot be subjected to any penal consequences for the infraction of the provisions of the State Order of 1981. It is needless to say that the petitioners are bound to comply with the provisions of the Central Orders, which are applicable to them. The parties shall bear their respective costs.