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A partial working days bench of the Supreme Court comprising Justice M.M. Sundresh and Justice Sheel Nagu directed maintenance of status quo in the matter after hearing Attorney General R. Venkataramani, appearing for Bharat Petroleum Corporation Ltd (BPCL), and Senior Advocate Siddharth Dave for the respondents.
The Attorney General challenged a recent order of the Karnataka High Court, which had directed various Oil Marketing Companies (OMCs) to consider and decide a representation filed by a distillery seeking enhanced ethanol allocation for the 2025-26 supply year. He argued that the High Court’s order could disrupt the Centre’s policy aimed at achieving 20% ethanol blending with petrol (E20).
When the bench asked why the matter was not taken before a Division Bench of the High Court, the Attorney General submitted that ethanol supply contracts had already been finalised in October 2025 and that similar petitions were pending before several High Courts. He sought time to file appropriate transfer petitions before the Supreme Court.
After hearing the submissions, the bench issued notice and ordered status quo.
The dispute stems from a plea filed by M/s Vinp Distilleries and Sugar Private Limited, a dedicated ethanol manufacturer, before the Karnataka High Court. The company challenged the reduced ethanol allocation despite having set up a dedicated ethanol plant. According to the company, while its plant has an annual production capacity of nearly 9.90 crore litres and it had bid to supply 9.26 crore litres for Ethanol Supply Year (ESY) 2025-26, it was allocated only 3.92 crore litres.
Opposing the plea before the High Court, the Attorney General argued that preferential allocation and procurement on a best endeavour basis do not confer an enforceable right on the company to seek a writ directing OMCs to act in a particular manner under the agreement. He contended that granting the representation would effectively amount to modifying the government’s policy, which is impermissible in law.
However, the High Court allowed the petition, holding that the company had a legitimate expectation of continuation of the existing policy, arising from both the agreement between the parties and the OMCs’ consistent past conduct.
The High Court observed that dedicated ethanol plants, which exclusively supply ethanol to OMCs and are contractually barred from manufacturing other products or supplying ethanol to third parties, cannot be placed at a disadvantage in a manner that causes grave and manifest prejudice.
It further held that the petitioner was entitled to a writ of mandamus directing the concerned OMCs to act in accordance with Clause 6.8 of the agreement, particularly when the OMCs themselves had invoked the same clause to increase procurement from 1.44 crore litres to 3.92 crore litres.
