A recent case before the Supreme Court has once again highlighted the issue of judicial decisions potentially replacing/ amending legislation enacted by Parliament.  The case importantly pertains to the judiciary’s interpretation of existing law concerning itself.  The eventual outcome of the case would presumably have important implications for the way the higher judiciary interprets laws, which according to some amounts to the judiciary “legislating” rather than interpreting laws.   This assertion has often been substantiated by citing cases such as Vishaka v. State of Rajasthan (1997) where the Supreme Court actually laid down the law pertaining to sexual discrimination at workplaces in the absence of a law governing the same.  In numerous other cases, courts have laid down policy guidelines, or have issued administrative directions to governmental departments.   In the recent case of Suraz India Trust v. Union of India, a petition has been filed asking the court to reconsider its own judgements regarding the manner of appointment and transfer of judges.  It has been contended that through its judgements in 1994 and 1998 (Advocate on Record Association v. Union of India and Special Reference No. 1 of 1998) the Supreme Court has virtually amended Constitutional provisions, even though amendments to the Constitution can only be done by Parliament.  This question arises since the Constitution provides for the appointment and transfer of judges by the government in consultation with the Chief Justice of India.  The two Supreme Court judgements however gave the primary power of appointment and transfer of judges to the judiciary itself.   Importantly, one specific question which has been raised is whether the judgements referred to above really amount to amending the relevant provisions of the Constitution.  Another question raised which is relevant to this discussion is whether the interpretation by courts can actually make provisions in the Constitution redundant.   In its judgement on the 4th of April, the Supreme Court referred this case to the Chief Justice of India for further directions.  The outcome of this judgement could potentially require the Supreme Court to define the circumstances when it interprets law, and when it “legislates”.  An indication of the Supreme Court's attitude concerning this issue may be gleaned from the recent speech of the Chief Justice of India, Justice S.H. Kapadia at the M.C. Setalvad lecture.  The CJI unambiguously stated that: "...In many PILs, the courts freely decree rules of conduct for government and public authorities which are akin to legislation. Such exercises have little judicial function in them. Its justification is that the other branches of government have failed or are indifferent to the solution of the problem. In such matters, I am of the opinion that the courts should be circumspect in understanding the thin line between law and governance..."    

Government owned Oil Marketing Companies (OMCs) raised the price of petrol by Rs 6.28 per litre on May 23, 2012.  After the inclusion of local taxes, this price hike amounts to an increase of Rs 7.54 per litre in Delhi.  India met 76 per cent of its total petroleum requirement in 2011-12 through imports.  Petrol prices have officially been decontrolled since June 2010.  However, it has been argued by experts that prices of petroleum products have not been increased sufficiently in order to pass on cost increases to consumers.  The inability to pass on international crude prices to consumers has affected OMCs more in recent months due to the depreciating rupee, which has further increased their losses.  The total under recoveries faced by OMCs for diesel, PDS kerosene and domestic LPG for 2011-12 stands at Rs 138,541 crore.  It was recently announced that the OMCs will receive Rs 38,500 crore from the Ministry of Finance to partially compensate for the high under recoveries. The prices of diesel, LPG and kerosene, which are responsible for the large under recoveries, are unchanged.  Experts suggest that the price hike would have a limited impact on inflation, since petrol has a weightage of around 1 per cent on the Wholesale Price Index, whereas diesel has a weightage of around 4.7 per cent.  The petrol price hike is unlikely to have an impact on the fiscal deficit, since petrol prices are technically deregulated.  Reports suggest that a panel of ministers is due to meet on Friday to discuss diesel, kerosene and LPG prices. In a 2010 report, the Expert Group on "A Viable and Sustainable System of Pricing of Petroleum Products" (Kelkar Committee) observed that given India’s dependence on imports and rising oil prices, domestic prices of petroleum products must match international prices.  It stated that price controls on diesel and petroleum in particular had resulted in major imbalances in consumption patterns across the country.  This had also led to the exit of private sector oil marketing companies from the market, and affected domestic competition.  Its recommendations included the following:

  • Since petrol and diesel are both items of final consumption, their prices should be market determined at both the refinery gate and the retail level.
  • An additional excise duty should be levied on diesel cars.
  • A transparent and effective distribution system for PDS kerosene and domestic LPG should be ensured through UID.
  • Price of kerosene and domestic LPG should be increased by Rs 6/litre and Rs 100 per cylinder respectively.  The prices should be periodically revised based on growth in per capita agricultural GDP (for kerosene) and rising per capita income (LPG).

Reports suggest that a partial rollback of petrol prices might be considered soon.