In Re: R.S. Vatcha (President, - Court Judgment

Excerpt:
1. on 26th october, 1974, the commission started suo moto proceedings against petrol dealers in india and issued notice of enquiry against them. in the notice, it is alleged that the petrol dealers were indulging in the restrictive trade practices, inter alia, of levying compulsory service charges on the buyers of petrol on the basis of per litre of petrol purchased and unrelated and/or in disproportion to the actual services rendered to the buyers of petrol and/or selling petrol at a price higher than what may be justified. respondents nos. 7, 8 and 11 are petrol dealers from tamil nadu and respondent no. 12 is a representative of petrol dealers from india not specifically represented by other respondents. mr. a. n. rangaswami, advocate, represents these respondents. these respondents.....

Judgment:
1. On 26th October, 1974, the Commission started suo moto proceedings against petrol dealers in India and issued notice of enquiry against them. In the notice, it is alleged that the petrol dealers were indulging in the restrictive trade practices, inter alia, of levying compulsory service charges on the buyers of petrol on the basis of per litre of petrol purchased and unrelated and/or in disproportion to the actual services rendered to the buyers of petrol and/or selling petrol at a price higher than what may be justified. Respondents Nos. 7, 8 and 11 are petrol dealers from Tamil Nadu and respondent No. 12 is a representative of petrol dealers from India not specifically represented by other respondents. Mr. A. N. Rangaswami, advocate, represents these respondents. These respondents have filed their replies to the notice of enquiry wherein they have, inter alia, contended that the prices of petrol are fixed by the Government of India by gentleman's agreement and the commission allowed to them by the Government of India for sale of petrol is inadequate and unless they are allowed to levy a service charge unrelated to services rendered by the petrol dealers they would not be able to distribute petrol all over India and, therefore, under Section 38(1)(b) the removal of the restriction would deny to the public as purchasers, consumers or users of petrol substantial benefits or advantages enjoyed or likely to be enjoyed by them as such by virture of the restriction itself.

2. These respondents applied for a summons to the Director-General, National Council of Applied Economic Research, New Delhi, and the Secretary to the Government of India, Ministry of Petroleum, New Delhi, to produce or cause to be produced papers relating to the special study regarding the profitability of retail outlets made by the National Council of Applied Economic Research at the instance of the Government of India including the report of the said Council and the intensive study made by them of the working of the retail petrol outlets in India and all the enclosures and documents relied on by the said National Council of Applied Economic Research along with enclosures and annexures thereto. Accordingly at the instance of respondent No. 7, a summons was issued to these persons.

3. In response to the summons the Secretary, Ministry of Petroleum, caused to be produced before the Commission the report of the National Council of Applied Economic Research on the economics of retailing high speed diesel oil and motor spirit along with a claim of privilege under Section 123 of the Indian Evidence Act. It was stated by the officer producing the report that the Commission was at liberty to see the report for determining the claim of privilege. An affidavit was filed on 3rd January, 1976, by Mr. P. K. Dave, Secretary, Ministry of Petroleum, in which he has stated that he was the head of the department and was in control of and in charge of its records, that he had carefully read and considered the documents in respect of which privilege was claimed and had come to the conclusion that the document sought to be produced was unpublished official record relating to the affairs of the State. He has stated that he realised the solemnity and significance attached to the exercise of the power under Section 123 of the Indian Evidence Act and the privilege was not being claimed on the ground of expediency or to avoid an embarrassing or inconvenient situation or because it was apprehended that the document, if produced, would defeat the case of the State. In fact, the State is not a party to the proceedings. He has stated in the affidavit that he apprehended that the disclosure of the document would lead to injury to public interest because study was conducted at the instance of his Ministry for the purpose of finalising the policy of the Government on the subject. It, therefore, related to the affairs of the State. The study is a consultancy report containing data and calculations of strictly confidential nature and, therefore, it would not be in public interest to divulge the contents of the report as the ; disclosure would be injurious to public interest. He, therefore, objected to , the production of the report in evidence.

4. Mr. Vasudevan, respondent No. 7, filed an affidavit-in-reply in which he has stated that the disclosure of the report containing the cost study and enclosures thereto will not be prejudicial to public interest and that on the contrary public interest would be well and usefully served by its disclosure and it will definitely facilitate the enquiry and enable the Commission to decide upon the issues involved by saving lot of judicial time in collecting the data and examination of witnesses. He has also stated that the report and the cost study had been the subject-matter of a discussion in Parliament and the then Hon'ble Minister of Petroleum had also stated in Parliament in the course of the debate with reference to the claim for higher commission made by the retail outlet operators in India that the said report was discussed by the Government with the representatives of the oil companies. Mr. Vasudevan contended that there was no secrecy or confidentiality about the report left.

5. When the matter came up for hearing on 22nd March, 1976, Mr.

Ganpule, the learned counsel appearing for the Ministry of Petroleum, applied for an adjournment to enable him to consult the department as to whether they wished to file a further affidavit. The proceedings were accordingly adjourned. On 19th April, 1976, Mr. B. B. Vohra, the new Secretary to the Ministry of Petroleum, filed a further affidavit in support of the claim of privilege in which it is further stated that the disclosure of the contents of the report was likely to jeopardise the process of decision making on the subject and was bound to affect adversely collection of data for future enquiries and, therefore, the disclosure would not be in public interest and until the final decision was reached on the report the disclosure would be injurious to the public interest. Mr. A. R. Damodaran, respondent No. 11, has filed an affidavit on 5th May, 1976, in reply to the aforesaid affidavit of Mr.

Vohra.

6. At the hearing both parties relied on the judgment of the Supreme Court in the case of the State of U.P. v. Raj Narain, AIR 1975 SC 865.

It has been held in this case by the Supreme Court that the foundation of the law behind Sections 123 and 162 of the Indian Evidence Act is the same as in English law. It is that injury to public interest is the reason for exclusion from disclosure of documents whose contents, if disclosed, would injure public and national interest. Public interest which demands that evidence be withheld is to be weighed against the public interest in the administration of justice in that courts should have the fullest possible access to all relevant materials. When public interest outweighs the latter, the evidence cannot be admitted. To illustrate, the class of documents would embrace Cabinet papers, foreign office despatches, papers regarding the security of the State and high level inter-departmental minutes.

7. These objections are raised by affidavits affirmed by the heads of the department. If the court is satisfied only with the affidavit that the document should be protected in public interest from production the matter ends there. If the court would yet like to satisfy itself the court may see the document. This will be the inspection of the document by the court. Objection as to production as well as inadmissibility contemplated in Section 162 is decided by the court in the enquiry.

8. It is an admitted fact, that the report which is the subject-matter of the claim of privilege was submitted to the Government in 1972. It is based on data collected prior to and pertains to the period prior to 1972. After that date, there has been an oil crisis, the prices of petroleum and petroleum products have risen by about 400% while the commission payable to retail outlets is based on quantum of goods and not on the varying price. The cost of maintenance of retail outlets has also increased" considerably. The impact of phenomenal rise in the price of petroleum and petroleum products has been the reduced use of motor vehicles and retardation in the growth of motor vehicle production and consequent reduction in the quantum of petroleum and petroleum products sold. In our opinion, data pertaining to cost of maintaining these retail outlets and the adequacy or otherwise of the commission paid to the retail outlets prior to 1972 is to-day obsolete and irrelevant and if it is irrelevant it is consequently inadmissible in evidence under Section 162, This is a fact to be taken into consideration in determining even the question of privilege under Section 123 according to the above judgment of the Supreme Court.

9. The evidence with regard to the economic situation for retail distribution of petroleum and petroleum products in 1974 and to-day would be material and relevant. This evidence is in the possession of the respondents themselves, they being the retail outlets. It is for them to produce this evidence before the Commission.

10. Coming to the other consideration of the con6dential nature of the document, it is true that we are not bound by the opinion of the Secretary to the department and we have to come to our own conclusion with regard to public interest and injury to public interest. We think that there is substance in the contention of the Secretary to the department that disclosure of the data which was collected for the purpose of decision making and on which no decision had yet been taken would make collection of further data in future extremely difficult.

This would not serve public interest.

11. In our opinion, on the whole, consideration of public interest in this case requires that there will be injury to public interest by the disclosure of the documents objected to while the disclosure will not be of any help in the administration of justice, the report having become obsolete and irrelevant and, therefore, inadmissible. We, therefore, uphold the claim of privilege and order that the report of the National Council of Applied Economic Research on the "Economics of retailing High Speed Diesel Oil and Motor Spirit" be not admitted in evidence.