C. M. Nayar,j. ( 1 ) THIS judgment will dispose of two petitions, C. W. P. No. 2876/ 1998 and C. W. P. No. 5753/1998 as common questions arise for consideration in these petitions. ( 2 ) THE first petition, C. W. P. No. 2876/1998 impugns the revised Marketing Discipline Guidelines which became effective from 12th May, 1998 and the second petition C. W. P. No. 5753/1998 challenges the same guidelines as well as the earlier guidelines issued in the year 1995. ( 3 ) PETITIONER No. 1 in the first petition is stated to be an Association of about 300 persons who are running petroleum products retail outlets commonly known as petrol filling-cum-service stations. There are four Oil Companies which are under the control of the respondent, namely. Ministry of Petroleum and Oil and Natural Gas, Government of India. These companies are as follows : (A) Indian Oil Corporation Ltd. (b) I. B. P. Company Ltd. (e) Bharat Petroleum Corporation Ltd. (d) Hindustan Petroleum Corporation. ( 4 ) IT is next stated that all the above four Government companies are under the control of Ministry of Petroleum and Oil and Natural and have been given the responsibility for sale and distribution of motor spirit commonly known as high speed diesel and other petroleum products through retail outlets. The said respondent is empowered to take the decision for opening of new retail outlets and the proportionate allocation of the above mentioned four Oil Companies. The Oil Companies, on the basis of the allocation made by the respondent Ministry appoints dealers for the opening of new retail outlets, inmost of the cases, by developing and employing all the necessary infrastructure, plant and machinery etc. at the retail outlets. Thereafter the Oil Companies enter into a dealership agreement with the concerned person for running the retail outlets. As such all the members of petitioner No. 1 are operating retail outlets with a dealership agreement with the aforesaid Oil Companies. The agreement incorporates in detail the terms and conditions on which members of petitioner No. 1 are under an obligation to run their retail outlets. Their activities are governed and regulated by those terms and conditions which form part of the dealership agreement. A specimen copy of the dealership agreement is tiled as Annexure-P1 to the writ petition. The agreement incorporates in detail the terms and conditions on which members of petitioner No. 1 are under an obligation to run their retail outlets. Their activities are governed and regulated by those terms and conditions which form part of the dealership agreement. A specimen copy of the dealership agreement is tiled as Annexure-P1 to the writ petition. It is next submitted that the field relating to import, transport, storage, production, reviving and blending of petroleum is governed by the provisions of Petroleum Act, 1934 and also Petroleum Rules, 1976 as made under the Act. A perusal of the Act and the rules will show that the Legislature has laid down effective mechanism and control relating to supply of petroleum products, maintenance of the quality during the distribution thereof. The petroleum retail outlets are also subject to the provisions of the Weights and Measures Act. The application of the enactments as referred to above is elaborated in paragraphs 9, 10 and 11 of Civil Writ Petition No. 2876/1998 which read as follows : "9. That the petitioners respectfully reiterate that all the oil dispensing units which are installed at the petroleum pump are installed and maintained by the respective Oil Companies. These dispensing units are continuously managed by the Oil Companies with the co-operation of the officers under the Weights and Measures Act. In fact, it is the officers who work under the Weights and Measures and who calibrate and seal these dispensing unit which has been installed at the petroleum retail outlets by the respective oil industries. 10. That the petitioners respectfully submit that for proper supply, distribution and maintaining the quality, these legislative provisions provide a complete and self-contained code and does not require the invocation of any other legislative provision. In view of these specific legislation provided by the Legislature, it is respectful submission of the petitioner, that the respondent is not required to resort/have recourse to any other Legislature or any statutory provisions. The petitioners submit that both for the maintenance of correct quantity and quality of the petroleum products being sold and distributed from the retail outlets are governed by the abovementioned two legislations. 11. The petitioners submit that both for the maintenance of correct quantity and quality of the petroleum products being sold and distributed from the retail outlets are governed by the abovementioned two legislations. 11. That under the provisions of these enactments, namely, the Petroleum Act and Rules and the Weights and Measures Act, the officers of the Oil Companies, the Ministry and Joint Industries (of the four Oil Companies put together) functioning under the respondent Ministry, carry out for regular checks, inspection and verification with regard to the maintenance of quantity and quality for sale and distribution of petroleum products from retail outlets at different hierarchical levels. The different levels on which these officers are discharging their duties are stated as under: (a) There is an Area Sales Officer appointed by the respective Oil Companies who is charged with the obligation to carry out check, inspection and verification with regard to the quantity and quality of petroleum products sold and distributed from the petrol pumps. (b) The officers at the managerial level in all the Oil Companies are also carrying periodical checks and inspection with a view to ensure that the Area Sales Officer are doing their job effectively. (c) The joint industry namely, the officers of all the four Oil Companies jointly carry out the check and inspection of the retail outlets unit being run under the Control of other Oil Companies. (d) The officers under the Weights and Measures Act carry out their check and inspection independently through Zonal Officer, and also through joint inspection team consisting of Zonal Officers of other Oil Companies. (e) The Deputy Controller and Chief Controller under the Weights and Measures Act also carry out independent check and inspection of these petroleum products. It is submitted that almost on all the occasion the inspection and check by the senior officials are surprised inspection so as to effectively achieve the objective sought to be done under the Act. The petitioners, therefore, respectfully submit that these legislations provide for both maintenance and quantity and quality of the petroleum products to be sold from these retail outlets and as such the Legislature has provided a complete Code for achieving these purpose for these specific items. The petitioners, therefore, respectfully submit that these legislations provide for both maintenance and quantity and quality of the petroleum products to be sold from these retail outlets and as such the Legislature has provided a complete Code for achieving these purpose for these specific items. " ( 5 ) SIMILAR reference is made to the provisions of Essential Commodities Act by which in exercise of powers under Section 3, the Central Government issued an order namely Motor Spirit and High Speed Diesel (Prevention of Malpractice in Supply and Distribution) Order, 1990 which was subsequently amended in the year 1993. The main grievance of the petitioners is that the respondents can take recourse to the provisions of the above enactments and there is no need to frame the Marketing Discipline Guidelines as sufficient provisions are made to check the malpractice in the trade. Paragraphs 13, 14 and 15 of the Civil Writ Petition No. 2876/1998 read as follows : "13. That both the dealership agreement and the provisions of the control order provide that the dealer is entitled to receive petroleum product at his retail outlets in a sealed manner, seal being put by the Oil Companies. . The dealer is not responsible for the quantity and quality of the products before it is received by the dealer at the retail outlets through the transporter duly appointed by the Oil Companies. 14. That the provisions of the control order provide for products supplied and transportation, power of search and seizure, sampling of products etc. Without prejudice to the rights and contention of the petitioners that in view of the substantive Legislature, as mentioned above,already occupying the field, the Government could not have invoked the powers under Section 3 of the Essential Commodities Act. It is submitted that the powers under the Essential Commodities Act can be used sparingly for maintaining the supply and distribution of the Essential Commodities. The powers under the Essential Commodities Act is normally exercised for short duration and for dealing with a situation which arise temporarily causing prejudice to the maintenance and supply of Essential Commodities. The petitioners respectfully submit that the power under the Essential Commodities Act cannot be exercised as a permanent measures and specially in view of the fact that the field is already occupied by substantial legislation provided by the Legislature as in the present case. 15. The petitioners respectfully submit that the power under the Essential Commodities Act cannot be exercised as a permanent measures and specially in view of the fact that the field is already occupied by substantial legislation provided by the Legislature as in the present case. 15. That without prejudice to the contention of the petitioner that under the circumstances, the Central Government could not have had exercised the powers under the provisions of Essential Commodities Act, it is respectfully submitted that even if for the sake of argument it is presumed that the Control Order, 1990 as amended Order 1993 is valid and legal, it is respectfully submitted that it does not provide for any penal provisions as the same have been duly provided under the Petroleum Act and Rules and also under the Weights and Measures Act which apply with full force to the activities of the petitioners and the members of the petitioner No. 1 association. " ( 6 ) THE challenge to the guidelines is elaborately stated in paragraphs 17 to 20 which my be reproduced as follows : "17. A perusal of this order clearly shows that this order is neither issued in exercise of any statutory provision nor it has sanctity of any statutory provisions. It is, therefore, clear that the impugned order dated 12. 5. 1998 is only an executive instruction which does not have the force of law or any statutory character behind it. 18. That the petitioners respectfully submit that the provisions of this Revised Market Discipline Guidelines, 1998 are absolutely ultra vires, unconstitutional, arbitrary and irrational. The provision of these 1998 guidelines are also contrary to the terms and conditions of the dealership agreement and also to the above mentioned statutory provisions and are thus not sustainable. 19. These guidelines provided for such stringent provision including heavy amounts of penalties and automatic termination of the dealership agreement, are contrary to law and are absolutely arbitrary and irrational. 20. That the petitioners respectfully reiterate that they do not dispute the maintenance of supply of correct quality and quantity of petroleum products and making available of other basic and community facilities to the customers. The petitioners in the following paragraphs would demonstrate the arbitrariness and irrationality of these impugned guidelines. 20. That the petitioners respectfully reiterate that they do not dispute the maintenance of supply of correct quality and quantity of petroleum products and making available of other basic and community facilities to the customers. The petitioners in the following paragraphs would demonstrate the arbitrariness and irrationality of these impugned guidelines. (A) Dispensing units at the petrol pumps are owned and maintained by the Oil Company, They are calibrated and seals are put by the officers of the Weights and Measures Department. It is also admitted position that despite certification by the Oil Companies and the manufacture of these dispensing units, these machines are capable of and erratic delivery at different temperature at different condition etc. In any case the complete mechanism to deal with any deliberate short supply of the petroleum products has been provided for under the Weights and Measures Act. (B) In so far as the quality of the petroleum products is concerned, it is respectfully submitted that the dealers are entitled to receive petroleum products through sealed tanker provided by the Oil Companies at their retail outlets. The quality of the petroleum products as being received at the retail outlets is tested by way of checking the density of the petroleum products as mentioned on the invoice issued by the Oil Companies. It is submitted that it is the only test which can be carried out at the retail outlets. Under the provisions of the impugned order every dealer is required to maintain density record register wherein the density of every supply received from the Oil Companies depot is to be mentioned on receipt of the products and the density of the products in the tank in the morning everyday is to be recorded there. The dealer is therefore under an obligation to sell the petroleum product of such density which had received from the Oil Company. It is only in the case any variance beyond a permissible limit in the density of the petroleum products that the officers of the Oil Company also are entitled to take sample from the retail outlets for further investigation and suitable action is also provided in the dealership agreement. It is only in the case any variance beyond a permissible limit in the density of the petroleum products that the officers of the Oil Company also are entitled to take sample from the retail outlets for further investigation and suitable action is also provided in the dealership agreement. (C) It is respectfully submitted that the dealer is obliged to ensure that it is selling the petroleum products at such density which it had received from the Oil Company and maintained the density record on the daily base as per the format provided by the Oil Company. If the dealer is able to show that it is selling the petroleum products at the same density level as it has received the same from the Oil Company neither the dealership agreement nor any of the provisions of law occupying the field as enumerated above, provided any penal action against the dealer. Earlier also when the respondent had tried to impose arbitrary provisions for taking samples despite the density being found in order the Ministry by its office order dated 12. 9. 1996 had clarified that the staff of the Oil Companies would not entitled to take samples in that situation. (D) These revised guidelines also provide for heavy penalty for the alleged discourteous behaviour and for non-providing first aid and toilet facility. It is submitted that all these facilities for toilet etc. are to be provided by the Oil Company. At A side namely where the retail outlets are owned by the Oil Companies, the dealer cannot be penalised for some deficiencies in this regard. The ground of discourteous behaviour empowering the authorty to impose heavy penalty and cancel the licence is absolutely arbitrary, irrational and ultra vires. The petitioners submit that no doubt that the employees of the dealers are required to maintain minimum level of courtesy to the customer. For every discourteous behaviour, when staff is dealing thousand and thousand customers a day, inviting penal measures are absolutely arbitrary, ultra vires and unsustainable. (E) That the calculation for distributing the petroleum products go even in the paise. It is a matter of common knowledge that the smaller denomination coins are not easily available. The setting of accounts with every customer in paise is not possible. At so many times the customers are required to pay a few paise more of few paise less. (E) That the calculation for distributing the petroleum products go even in the paise. It is a matter of common knowledge that the smaller denomination coins are not easily available. The setting of accounts with every customer in paise is not possible. At so many times the customers are required to pay a few paise more of few paise less. In certain events there are bona fide mistake inputting the correct number of paise in the cash memo. Even in such cases the revised guidelines proposed measure penalty termination of the dealership licence. (F) The petitioners respectfully submit that these revised guidelines provide for minor and major penalty which are without any authority and sanction of law and the guideline even do not specify what are the minor discrepancies and what are the major discrepancies including the minor and major penalties respectively. (G) That the entire infrastructure and lay out of the equipment at the retail outlets is provided by the Oil Company. The Oil Company take the permission under the explosive Act for which the dealer has no say. The guidelines now provide that if the authority under the Explosive Act find any discrepancy in the lay out and providing infrastructure and equipment, that will become a ground for the Oil Company to take penal action against the dealership to terminate the licence. (H) That the revised guidelines, without prejudice to the contention of the petitioners that it is unconstitutional, ultra vires, no where provide even a minimum semblance of reasonable opportunity to the dealer of being heard before any penal action is taken. On 31. 5. 1998, i. e. Sunday, three members of the petitioner No. 1 association have been directed to suspend their operation, in purported exercise of power under the revised guidelines and without having given any opportunity to them of hearing before they were directed to suspend their operation. (1) The guidelines provided for surprise check and in the event of non- production of record the guidelines provide for termination of the licence. It is submitted that the production of record at the surprise visit while the office of the petrol pump is closed, can never invite such drastic and penal action because the dealer can always provide the record if asked for by the inspection team within a reasonable time. It is submitted that the production of record at the surprise visit while the office of the petrol pump is closed, can never invite such drastic and penal action because the dealer can always provide the record if asked for by the inspection team within a reasonable time. The disability of the staff of the dealer at surprise visit at odd hours when the records can never be produced, cannot be the basis for any penal action including termination of the licence. " ( 7 ) FIRSTLY reference may be made to the relevant provisions of the dealership agreement which is filed as Annexure-P1 to the writ petition. Clauses 13, 25,26,30, 38, 43 and 56 of the agreement make the following reading : "13. The Corporation has installed at its own expense at and under the premises the outfit described in the Second Schedule hereunder written. The Corporation may instal at the premises such other apparatus and equipment from time-to-time as it may deem necessary for the efficient working of the retail outlet and all such other apparatus and equipment shall be deemed to be and form part of the outfit. Provided that the Corporation shall have the right to remove any particular item or items of apparatus or equipment comprised in the outfit without assigning any reason therefor. ""25. The quantities of petroleum and other allied products stated to be delivered by the Corporation as measured by the Corporation s measuring devices or means shall be final and binding upon the parties hereto. A receipt signed by or on behalf of the dealer at the time of delivery by the Corporation of petroleum products will be conclusive evidence that the petroleum products mentioned therein were in fact delivered to the dealer, that such products were in accordance with the specifications therefor mentioned hereunder and that the quantities of such products mentioned in the receipt are correct, and the dealer shall thereafter be precluded from making any claim against the Corporation for compensation of otherwise on the ground of short delivery or contamination of such products. 26. 26. The dealer shall be responsible for all loss, contamination, damage or shortage of or to the products, whether partial or entire, and no claim will be entertained by the Corporation therefor under any circumstances except in cases where the Corporation is satisfied that loss arose from leakage from underground tanks or pipes which the dealer could not reasonably have discovered and of which the dealer gave immediate notice to the Corporation on discovery. ""30. The dealer shall not make supplies of petroleum products of the Corporation to any other person/firm or company whose supplies have been stopped by the Corporation. ""38. The Corporation will be entitled at all times to enter into and inspect the management of the retail outlet by the said dealer in all respects and the dealer shall be bound to render all assistance and give all information to the Corporation and its duly authorised representatives in that behalf. " "43. The dealer undertakes faithfully and promptly to carry out, observe and perform all direction or rules given or made from time-to-time by the Corporation for the proper carrying on of the dealership of the Corporation. The dealer shall scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/state Governments and of all authorities appointed by them or either of them including in particular the Chief Inspector of Explosive, Government of India, and/or Municipal and/or any other local authorty with regard to the storage and sale of such petroleum products. ""56. Notwithstanding anything to the contrary herein contained, the Corporation shall be at liberty to terminate this Agreement forthwith upon or at any time after the happening of any of the following events, namely : (a) If the dealer shall commit a breach of any of the convenants and stipulations contained in the Agreement, and fail to remedy such breach within four days of the receipt of a written notice from the Corporation in that regard. (b) Upon (i) the death of adjudication as insolvent of the dealer, if he is an individual; (ii) the dissolution of the partnership of the dealer s firm on the death or adjudication as insolvent of any partner of the firm, if the dealer be a firm; (iii) the liquidation whether voluntary or otherwise or the passing of an effective resolution for winding up, if the dealer be a Company or Co-operation Society. (e) If any attachment is levied and continued to be levied for a period of seven days upon the effect of the dealer or any individual partner for the time being of the dealer s firm or any member of the Dealer Co-operative Society. (d) If the dealer or any partner in the dealer s firm or any member of the Cooperative Society appointed as dealer hereunder shall be convicted of a criminal offence. (e) If a Receiver shall be appointed of any property or assets of the dealer or of any partner in the dealer s firm of any member of the Dealer Cooperative Society. (f) If the licence issued to the dealer by the relevant authorities for the storage of petroleum products supplied by the Corporation is cancelled or revoked. (g) If the dealer shall for any reason make default in payment to the Corporation in full or his outstandings as appearing in Corporation s books of accounts beyond 4 days of demand by the Corporation. (h) If the dealer does not adhere to the instructions issued from time-to-time by the Corporation in connection with safe practices to be followed by him in the supply/storage of the Corporation s products or otherwise. (i) If the dealer shall deliberately contaminate or tamper with the quality of any of the Corporation s products. (j) If the dealer shall sell the Corporation s products at prices higher than those fixed by the Corporation. (k) If the dealer shall either by himself or by his servants or Agents commit or suffer to be committed any act which, in the opinion of the Executive Director of the Corporation for the time being in whose decision shall be final, is prejudicial to the interest or good name of the Corporation or its products; the General Manager shall not be bound to give reasons for such decision. (1) If any information given by the dealer in his application for appointment as a dealer shall be found to untrue or incorrect in any material respect. The Corporation s right to terminate this Agreement under the terms of this clause shall be without prejudice to any of its other rights and remedies against the dealer. (1) If any information given by the dealer in his application for appointment as a dealer shall be found to untrue or incorrect in any material respect. The Corporation s right to terminate this Agreement under the terms of this clause shall be without prejudice to any of its other rights and remedies against the dealer. In the event of the Corporation terminating this Agreement under the provisions of this clause, it shall not be liable to pay for any loss or compensation in respect of such termination provided that the supply of any petroleum products by the Corporation to the dealer, pending expiry of any notice of termination of after any act, contravention or omission by the dealer entitling the Corporation to terminate this Agreement shall have become known to the Corporation shall not in any way prejudice or affect the right of the Corporation to revoke and/or enforce the termination of this Agreement and the licence granted hereunder. " ( 8 ) THE learned Counsel for the petitioners has argued that the respondents can only act under the provisions of Clause 43 of the agreement and cannot formulate their own guidelines by introducing new set of penalties which are not prescribed in any of the Statutes such as the Petroleum Act, Weights and Measures Act and the Essential Commodities Act. The salient features of the impugned guidelines effective from 12th May, 1998 are filed as Annexure-P6 to the writ petition. The petitioners are prima facie aggrieved by the imposition of fines for major and minor irregularities as it is contended that these cannot be justified as no statutory power is vested in the Authorities to impose such penalties. The irregularities as referred to in the guidelines as well as the proposed punishments as stated in Chapter-6, titled "prevention of Irregularities at Retail Outlets (MS/hsd)" relating to major and minor irregularities may be reproduced as follows : "chapter 6 PREVENTION OF IRREGULARITIES AT RETAIL OUTLETS (MS/hsd) MAJOR IRREGULARITIES 1. ADULTERATION OF PRODUCT Definition; "adulteration" means the introduction of any foreign substance into motor spirit/ high speed diesel illegally or unauthorisedly with the result that the product does not conform to the requirements indicated in Appendix "b". (a) Individual Oil Company Officers should carry out density checks and furfural checks (wherever applicable) at the Retail Outlets as per the prescribed guidelines. (a) Individual Oil Company Officers should carry out density checks and furfural checks (wherever applicable) at the Retail Outlets as per the prescribed guidelines. Moreover on random basis, at the discretion of the Inspecting Officer, samples may be drawn for clinical tests/ron, even if the density matches. (b) If density check or furfural check (wherever applicable) indicates possible adulteration : Sales and supplies of all products to be suspended immediately till such time investigations are completed. Meter and dip readings should be recorded in the Inspection Report duly signed by the dealer or his representative together with rubber stamp of dealership and each page of the inspection report shall be initialled by Inspecting Officer and Dealer/ Dealer s representative. Dispensing Pumps and Tanks should be sealed. (c) Wherever samples are drawn, either pursuant to random checks or where adulteration is suspected, 3 sets of signed and sealed samples (6x1 1tr of MS and 3x1 1tr of HSD) should be collected from the RO, out of which one set should be kept with the dealer, one with the company and the third to be sent for laboratory testing within 10 days. For the sample kept with the dealer, proper acknowledgement will be obtained and the dealer will be instructed to preserve the sample in his safe custody till the testing/ investigations are completed. It is necessary that the Officer sending the sample should inform the despatching location concerned to retain the reference sample drawn from TLF of the particular date of despatch of the T/t to the concerned Retail Outlet corresponding to the sample being tested. The laboratory test will be done at any Industry Laboratory to determine variations \in any of the following parameters as compared to sample of product supplied. Reference for Density would, however, be Density of product after last receipt : TEST METHOD is: 1448 motor Spirit: Tests (1) Appearance Visual (2) Colour Visual (3) Density @ 15 C P-16 (4) Distillation P-18 ipb Degree C recovery upto 70 Degree C % B recovery upto 100 Degree C % V recovery upto 180 Degree C % V final Boiling Point Degree C residue, % V (5) Existent gum P-29 (6) RON* P-27 *refinery will cany out only Octane Number test. Wherever Octane Number test facility is available in marketing laboratory, the same shall be carried out at the marketing laboratory. Wherever Octane Number test facility is available in marketing laboratory, the same shall be carried out at the marketing laboratory. High Speed Diesel : Tests (1) Appearance , Visual (2) Colour Visual (3) Density @ 15 decree C P-16 (4) Kinematic Viscosity cs at 40 Degree C P-25 (5) Distillation, 90% volume recovery at Degree C max. P-18 The above mentioned tests will be carried out as per standard test methods as given in the Bureau of Indian Standard Specification, IS: 1448: P-Methods for respective tests. The above test-results on the sample taken from the retail Outlet/tank Truck should be within the reproducibility limits of the test-method when compared to the reference sample, at despatching location. (d) If the sample passes the lab test, including RON in case of MS, sales and supplies of all products, if suspended earlier, will beresumed to the dealer immediately. If the sample is certified to be adulterated, after laboratory test, a show-cause notice should be served on the dealer and explanation of the dealer sought within 7 days of the receipt of the show-cause notice. If the explanation of dealer is not satisfactory, the Company should take action as follows : (i) Fine of Rs. 1 lakh and suspension of sales and supplies for 45 days in the first instance. (ii) Termination in the second instance. (e) Handling of Adulterated Product. In case of proven adulteration, the product (MS/hsd) will be taken back by the concerned Oil Company to the nearest location where separate storage facilities for handling such adulterated product are available. The product will be corrected in consultation with QC Department of the Region. Entire expenses towards transportation, pumping of product, tank cleaning, incidental charges, local levies, etc. will be brone by the dealer. In cases where product is ungraded to MS or downgraded to HSD, the dealer will be paid an amount equivalent to the cost of HSD. In cases where the product is downgraded to other than HSD, the dealer will be paid an amount equivalent to the cost of downgraded product. In both the above cases, credit will be given only for the quantity actually ungraded/downgraded. Any losses, etc. will be borne by the dealer. 2. SHORT DELIVERY OF PRODUCTS When Weights and Measures seals are tampered with : (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. In both the above cases, credit will be given only for the quantity actually ungraded/downgraded. Any losses, etc. will be borne by the dealer. 2. SHORT DELIVERY OF PRODUCTS When Weights and Measures seals are tampered with : (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. 00 in the first instance. (ii) Fine of Rs. 1 lakh and suspension of sales and supplies of all products for 45 days in the second instance. (iii) Termination in the third instance. 3. STOCK VARIATION MS and HSD Stock reconciliation should be carried out and variation, if any, established after taking into account the normal variation in operational levels of +. 00 4% of tank stock and after considering the following factors : (i) Evaporation/handling losses in MS as follows : 0. 75% on quantity sold upto an annual average of 600 KLs. 0. 60% on additional quantity beyond an annual average of 600 KLs. (ii) Handling losses in HSD as follows : 0. 25% on quantity sold upto an annual average of 600 KLs. 0. 20% on additional quantity beyond an annual average of 600 KLs. (iii) Shrinkage losses on MS/hsd and temperature variation allowance (TVA) quantities on MS and HSD to be taken into account (only in those cases/ locations where and when the TVA is applicable ). In case there is variation in stocks beyond the permissible limits, sales and supplies of all products to be suspended immediately, samples to be drawn and sent for testing within 10 days as well as dealer s explanation to be called for within 7 days. If explanation is unsatisfactory : (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. 00 in the first instance. (ii) Fine of Rs. 1 lakh and suspension of sales and supplies of all products for 45 days in the second instance. (iii) Termination in the third instance. 4. UNAUTHORISED PURCHASES/sales/exchange OF MS, HSD OR ANY OTHER PRODUCT WHICH COULD BE USED AS A SUBSTITUTE FOR THESE PRODUCTS Seek dealer s explanation within 7 days. In case, the explanation is not satisfactory: (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. 00 in the first instance. (ii) Fine of Rs. UNAUTHORISED PURCHASES/sales/exchange OF MS, HSD OR ANY OTHER PRODUCT WHICH COULD BE USED AS A SUBSTITUTE FOR THESE PRODUCTS Seek dealer s explanation within 7 days. In case, the explanation is not satisfactory: (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. 00 in the first instance. (ii) Fine of Rs. 1 lakh and suspension of sales and supplies of allproducts for 45 days in the second instance. (iii) Termination in the third instance. 5. NON-AVAILABILITY OF REFERENCE DENSITY AND/or SAMPLES OF LAST SUPPLY AT THE TIME OF INSPECTION Sales and supplies of all products to be suspended immediately, samples to be drawn and sent for testing within 10 days. In case-product meets specification, sales and supplies of all products to be resumed with a warning letter. In case of product being off spec : (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. 00 in the first instance. (ii) Fine of Rs. 1 lakh and suspension of sales and supplies of all products for 45 days in the second instance. (iii) Termination in the third instance. 6. TOTALISER SEALS IF FOUND TAMPERED WITH (i) Suspension of sales and supplies of all products for 30 days alongwith a fine of Rs. 50,000. 00 in the first instance. (ii) Fine of Rs. 1 lakh and suspension of sales and supplies of all products for 45 days in the second instance. (iii) Termination in the third instance. MINOR IRREGULARITIES 1. OVERCHARGING IN AUTHORISED SELLING PRICES OF MS/hsd (a) Dealer to be advised to charge correct prices. (b) Seek dealer s written explanation within 7 days. If the explanation is not satisfactory: (i) Suspension of sales and supplies of all products for l5 days alongwith a fine of Rs. 20,000. 00 in the first instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Suspension of sales and supplies of all products for 45 days alongwith a fine of Rs. 1 lakh in the third instance. 2. SHORT DELIVERY OF PRODUCTS When Weights and Measures seals are intact but deliveries are below tolerance limit: (a) Sales and supplies should be stopped from the Dispensing unit till recalibration is carried out by Weights and Measures Department. 1 lakh in the third instance. 2. SHORT DELIVERY OF PRODUCTS When Weights and Measures seals are intact but deliveries are below tolerance limit: (a) Sales and supplies should be stopped from the Dispensing unit till recalibration is carried out by Weights and Measures Department. (b) (i) Suspension of sales and supplies of all products for 15 days alongwith a fine of Rs. 20,000. 00 in the fist instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Suspension of sales and supplies of all products for 45 days alongwith a fine of Rs. 1 lakh in the third instance. 414 (iv) In extreme cases, where it is proved that the dealer has tampered with the delivery system, termination will be considered in the fourth instance. 3. PROVISION OF UNAUTHORISED STORAGE FACILITIES In case of detection of storage facilities not approved by the Company and/or not in accordance with Explosive s approval : (a) Sales and supplies of all products to be suspended with immediate effect. (b) Show-cause notice to be issued to the dealer calling for a written explanation within 7 days. (e) If written explanation is not satisfactory : (i) Suspension of sales and supplies of all products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Suspension of sales and supplies of all products for 45 days alongwith a fine of Rs. 1 lakh in the third instance. 4. NON-OBSERVANCE OF GOVERNMENT REGULATIONS AND COMPANY s OPERATING GUIDELINES/instructions, IF ANY, ON SALE AND DISTRIBUTION OF PETROLEUM PRODUCTS For non-observance of Government regulations like Essential Commodities Act, Explosives Act, Petroleum Act and Control Orders, a written explanation is to be sought from the dealer which if found to be satisfactory, no action to be taken. However, if explanation is found not satisfactory, the following to be done : (i) Suspension of sales and supplies of all products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Suspension of sales and supplies of all products for 45 days alongwith a fine of Rs. 20,000. 00 in the first instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Suspension of sales and supplies of all products for 45 days alongwith a fine of Rs. I lakh in the third instance. 5. NOT PRODUCING FOR INSPECTION STOCK/sales REGISTERS AT THE TIME OF SUPRISE CHECK (i) Suspension of sales and supplies of all products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Suspension of sales and supplies of all products for 45 days alongwith a fine of Rs. I lakh in the third instance. 6. NON PROVISION OF FREE AIR, DRINKING WATER, RADIATOR WATER, TOILET FACILITIES, TELEPHONE (WHERE POSSIBLE), FIRST- AID, PUC (WHERE APPLICABLE) AT RO PREMISES, THE FOLLOWING ACTION TO BE TAKEN (IN EXCEPTIONAL CASE WHERE TOILET FACILITIES CANNOT BE PROVIDED BECAUSE OF MUNICIPAL AND OTHER RESTRICTIONS, SUITABLE LETTER TO BE ISSUED TO DEALER TO AVOID DISCIPLINARY ACTION ). (i) Fine of Rs. 10,000. 00 in the first instance. (ii) Fine of Rs. 30,000. 00 in the second instance. (iii) Suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh in the third instance and thereafter for every subsequent similar offence. 7. ESTABLISHED CASES OF DISCOURTEOUS BEHAVIOUR BY DEALER AND/or HIS STAFF, NON-PRODUCING OF SUGGESTION/complaint BOOK (i) Fine of Rs. 10,000. 00 in the first instance. (ii) Fine of Rs. 30,000. 00 in the second instance. (iii) Suspension of sales and supplies for 45-days alongwith a fine of Rs. I lakh in the third instance and thereafter for every subsequent similar offence. 8. ESTABLISHED CASES OF ISSUANCE OF FAKE PUC CERTIFICATES BY DEALERS HAVING PUC FACILITIES (i) Suspension of sales and supplies of all products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. (ii) Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. (iii) Termination in the third instance. NOTE (i) The above are general guidelines and notwithstanding what has been stated above, the Competent Authority of the concerned Oil Company can take appropriate higher punitive action against the erring dealer including termination in the first or any instance. 50,000. 00 in the second instance. (iii) Termination in the third instance. NOTE (i) The above are general guidelines and notwithstanding what has been stated above, the Competent Authority of the concerned Oil Company can take appropriate higher punitive action against the erring dealer including termination in the first or any instance. (ii) Every punitive action would be taken after show cause notice of minimum seven days. (iii) The cycle of calculating second and third instance shall be five years starting from the date of first irregularity. (iv) In case, two or more irregularities are detected at the same time at the same RO, action will be taken in line with what is listed in the MDG under the relevant category for each irregularity. (v) All irregularities established under "major" and "minor" categories will be treated separately for the purpose of imposing penalties. (vi) Field staff should ensure that samples for testing are sent to the Laboratory within 10 days of drawal of the same. Lab test reports should thereafter be made available within ten days. (vii) In case of irregularities not specifically mentioned/covered above, the competent/appropriate authority of the concerned Oil Company shall impose proper penalty and/or issue warning letter after enquiry and in accordance with the principles of natural justice. (viii) Under existing laws. Control Orders etc. , various authorities of Central Government/state Government in addition to Oil Company officers are empowered to carry out checks of the dealership for determining and securing compliance with such laws/control Order. If any "malpractice or irregularity" is established by such authorities after checking, the same would also be taken as a "malpractice or irregularity" under these guidelines and prescribed punitive action would be taken by the Oil Company, on receipt of advice from such authority. (ix) Wherever fine with suspension has been provided, fine must be paid within suspension period, failing which suspension wouldbe extended by the equivalent period. If fine is not paid even within the extended period, the dealership would be terminated. " ( 9 ) THE following grounds are urged by learned Counsel for the petitioners to assail the punishments as proposed in the guidelines and as referred to above : (I) The exercise of executive power must have a legitimate source of power which may either be contractual or statutory. " ( 9 ) THE following grounds are urged by learned Counsel for the petitioners to assail the punishments as proposed in the guidelines and as referred to above : (I) The exercise of executive power must have a legitimate source of power which may either be contractual or statutory. In the present case the Statutes provide penalties and punishments and the respondents have to move within that framework. The agreement also does not provide any imposition of fines on the members of the petitioner Association and, therefore, the guidelines cannot be sustained. (II) If there are two kinds of powers only less onerous may be applied and the petitioners are entitled to the benefit of such exercise. (III) The guidelines are arbitrary, irrational and cannot be sustained as no provision of hearing or fair procedure has been prescribed. Reliance is placed on the judgments reported as Maganlal Chhaganlal (P) Ltd. v, Municipal Corporation of Greater Bombay and Others, (1974) 2 Supreme Court Cases 402; Mis. Khernka and Co. (Agencies) Pvt. Ltd. v. State of Maharashtra, (1975) 2 Supreme Court Cases 22; Ahmedabad Urban Development Authority v. Shradkumar Jayantikumar Pasawalla and Others, (1992) 3 Supreme Court Cases 285. ( 10 ) PARAGRAPHS 6 and 14 of the judgment in the case of Maganlal Chhaganlal (P) Ltd. (supra) may be reproduced as follows : "6. The argument based on the availability of two procedures, one more onerous and harsher than the other and, therefore, discriminatory has led some High Courts to resort to various reasoning in order to get round the effect of the decision in the Northern India Caterers case (supra ). This has happened in the case of the Madras High Court in Abdul Rashid v. Assistant Engineer (Highways), the Andhra Pradesh High Court in M. Begum v. State and Meharunnissa Begum v. State of Andhra Pradesh and the Patna High Court in Bhartiya Hotel v. Union of India. The decision of the Patna High Court is one of the cases which was considered alongwith Hari Singh s case (supra ). It is rather interesting that this attack based on Article 14 of the Constitution should have led to the apparently more onerous and harsher procedure becoming the rule, the resort to the ordinary Civil Court being taken away altogether. It is difficult to imagine who benefits by resort to the ordinary Civil Courts being barred. It is rather interesting that this attack based on Article 14 of the Constitution should have led to the apparently more onerous and harsher procedure becoming the rule, the resort to the ordinary Civil Court being taken away altogether. It is difficult to imagine who benefits by resort to the ordinary Civil Courts being barred. One finds it difficult to reconcile oneself to the position that the mere possibility of resort to the Civil Court should make invalid a procedure which would otherwise be valid. It can very well be argued that as long as a procedure does not by itself violate either Article 19 or Article 14 and is thus constitutionally valid, the fact that that procedure is more onerous and harsher than the procedure in the ordinary Civil Courts, should not make that procedure void merely because the authority competent to take action can resort to that procedure in the case of some and ordinary Civil Court procedure in the case of others. That a constitutionally valid provision of law should be held to be void. because there is a possibility of its being resorted to in the case of some and the ordinary Civil Court procedure in the case of others somehow makes one feel uneasy and that has been responsible for the attempts to get round the reasoning which is the basis in the decision in Northern India Caterers cases (supra ). " "14. To summarise : Where a statute providing for a more drastic procedure different from the ordinary procedure covers the whole field covered by the ordinary procedure, as in Anwar Ali Sarkar s case and Suraj Mall Mohta s case without any guidelines as to the class of cases in which either procedure is to be resorted to, the statute will be hit by Article 14. Even there, as mentioned in Suraj Mall Mohta s case (supra) a provision for appeal may cure the defect. Further, in such cases if from the preamble and surrounding circumstances, as well as the provisions of the statute themselves explained and amplified by affidavits, necessary guidelines could be inferred as in Saurashtra case (supra) and Jyoti Pershad s case (supra) the statute will not be hit by Article 14. Further, in such cases if from the preamble and surrounding circumstances, as well as the provisions of the statute themselves explained and amplified by affidavits, necessary guidelines could be inferred as in Saurashtra case (supra) and Jyoti Pershad s case (supra) the statute will not be hit by Article 14. Then again where the statute itself covers only a class of cases as in Haldar s case (supra) and Bajoria s case (supra) the statute will not be bad. The fact that in such cases the executive will choose which cases are to be tried under the special procedure will not affect the validity of the statute. Therefore, the contention that the mere availability of two procedures will vitiate one of them that is the special procedure, is not supported by. reason or authority. " ( 11 ) REFERENCE is made to paragraph 39 of the judgment in the case of M/s. Khemka and Co. (Agencies) Pvt. Ltd. (supra) which reads as under : "39. On a consideration of the provisions mentioned above, it seems to me to be clear that whatever may be the objects of levying a penalty, its imposition gives rise to a substantive liability which can be viewed either as an additional tax or as a fine for the infringement of the law. The machinery or procedure for its realisation comes into operation after its imposition. In any case, it is an imposition of a pecuniary liability which is comparable to a punishment for the commission of an offence. It is a well settled cannot of construction of statutes that neither a pecuniary liability can be imposed nor an offence created by mere implication. It may be debatable whether a particular procedural provision creates a substantive right or liability. But, I do not think that the imposition of a pecuniary liability, which takes the form of a penalty or find for a breach of a legal obligation, can be relegated to the region of mere procedure and machinery for the realisation of tax. It is more than that. Such liabilities must be created by clear, unambiguous, and express enactment. The language used should leave no serious doubts about it effect so that the persons who are to be subjected to such a liability for the infringement of law are not left in a state of uncertainty as to what their duties or liabilities are. Such liabilities must be created by clear, unambiguous, and express enactment. The language used should leave no serious doubts about it effect so that the persons who are to be subjected to such a liability for the infringement of law are not left in a state of uncertainty as to what their duties or liabilities are. This is an essential requirement of a good Government of laws. It is implied in the constitutional mandate found in Article 265 of our Constitution: "no tax shall be levied or collected except byauthority of law". The respondents, it is contended are not empowered to levy fines and penalties when no specific provision is made in various enactments such as the Petroleum Act, Weights and Measures Act and the Essential Commodities Act. Reference is made to paragraphs 7 and 8 of the judgment in the case of Ahmedabad Urban Development Authority (supra) which read as follows : "7. After giving our anxious consideration to the contentions raised by Mr. Goswami, it appears to us that in a fiscal matter it will not be proper to hold that even in the absence of express provision, a delegated authority can impose tax or fee. In our view, such power of imposition of tax and/or fee by delegated authority must be very specific and there is no scope of implied authority for imposition of such tax or fee. It appears to us that the delegated authority must act strictly within the parametersof the authority delegated to it under the Act and it will not be proper to bring the theory of implied intent or the concept of incidental and ancillary power in the matter or exercise of fiscal power. The facts and circumstances in the case of District Council of Jowai are entirely different. The exercise of powers by the Autonomous Jaintia Hills Districts are controlled by the constitutional provisions and in the special facts of the case, this Court has indicated that the realisation of just fee for a specific purpose by the autonomous District was justified and such power was implied. The exercise of powers by the Autonomous Jaintia Hills Districts are controlled by the constitutional provisions and in the special facts of the case, this Court has indicated that the realisation of just fee for a specific purpose by the autonomous District was justified and such power was implied. The said decision cannot be made applicable in the facts of this case or the same should not be held to have laid down any legal proposition that in matters of imposition of tax or fees, the question of necessary intendment may be looked into when there is no express provision for imposition of fee or tax. The other decision in Kiwrgram Panchayat. Samiti case also deals with the exercise of incidental and consequential power in the field of administrative law and the same does not deal with the power of imposing tax and fee. 8. The High Court has referred to the decisions of this Court in Hingir case and jagannath Ramanuj case and Delhi Municipal Corporation case. It has been consistently held by this Court that whenever there is compulsory exaction of any money, there should be specific provision for the same and there is no room for intendment. Nothing is to be read and nothing is to be implied and one should look fairly to the language used. We are, therefore, unable to accept the contention of Mr. Goswami. Accordingly, there is no occasion to interfere with the impugned decision of the High Court. The appeal, therefore, fails and is dismissed with no order as to costs. " ( 12 ) ON the other hand the learned Counsel for the respondents have argued that ample power is provided to frame the guidelines in pursuance to Clause 43 of the Agreement. This clause may again be reproduced as under : "43. The dealer undertakes faithfully and promptly to carry out, observe and perform all direction or rules given or made from time-to-time by the Corporation for the proper carrying on of the dealership of the Corporation. The dealer shall scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/state Governments and of all authorities appointed by them or either of them including in particular the Chief Inspector of Explosive, Government of India, and/or Municipal and/or any other local authorty with regard to the storage and sale of such petroleum products. The dealer shall scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/state Governments and of all authorities appointed by them or either of them including in particular the Chief Inspector of Explosive, Government of India, and/or Municipal and/or any other local authorty with regard to the storage and sale of such petroleum products. " ( 13 ) THE guidelines were framed to check malpractice and to rationalise and ensure observance of quality, quantity and excellent customer service. The salient features of the guidelines are stated as follows : "3. While recommending the increase in the dealers commission recently, it was decided that to justify the higher commission, dealers should also provide better services to the customers. Accordingly, it was decided that further more stringent punishments should be provided for various types of irregularities and malpractices, in a rationalized manner to ensure observance of norms of quality, quantity and excellent customer service. Marketing Discipline Guidelines, 1998 have been prepared in accordance with this principle. 4. It was also desired that there should be an effective mechanism for redressal of grievances of consumers. It has been proposed that District Magistrate of every District will be requested to fix a day in each quarter of three months on which, he or his representative may be present in a Forum of public functionaries, dealers/ distributors and the senior officers of the Oil Companies and the consumers. The problems and grievances of consumers will be addressed on the spot and further necessary directions given to Oil Companies and dealers. " ( 14 ) FURTHER explanation for the necessity of framing the revised guidelines in 1998 is elaborately stated in additional affidavit dated 7th December, 1998 filed on behalf of the respondent by Shri H. C. Khurana, Under Secretary in the Ministry of Petroleum and Natural Gas. The purpose and the spirit behind revising the earlier guidelines as framed in 1982 and 1985 are stated in paragraphs 2,3,4,5,6 and 7 which may be reproduced as follows: "2. That Marketing Discipline Guidelines are in force for more than a decade and the same were revised from time-to-time in public interest so as to bring uniformity in guidelines of various Oil Companies, to ensure sale of correct quality and quantity of petroleum products, to bring in effective check and balance against adulteration, short supply etc. and to ensure good service to customers. 3. and to ensure good service to customers. 3. That Marketing Discipline Guidelines were first formulated in the year 1982 with an objective to bring in uniform guidelines for all the four Oil Companies as previously all the four Oil Companies were having their own guidelines. The other objectives were strict imposition of penal action and fairness in approach/dealings with dealers of various Oil Companies. Copy of the Marketirng Discipline Guidelines, 1982 is annexed hereto and marked as Annexure. 4. . That the Marketing Discipline Guidelines of 1982 were subsequently revised in 1995, the guidelines of 1982 were not effective in checking adulteration, short supply etc. Further, 1982 Marketing Discipline Guidelines contained only suspension and termination as penal action against the violation of the guidelines and dealership agreements. Therefore, keeping the public interest in view, the 1982 guidelines were revised in 1995 and fines were introduced, as suspension in the first instance even for minor penalty caused undue hardship to the consumers and such action even for minor offences may not have consumers with the action taken in the interest of petrol dealers. Copies of the Marketing Discipline Guidelines, 1995 are annexed hereto and marked as Annexure B. 5. That the Guidelines of 1982 and 1995 were not challenged by the respondent or by any other similar organisations. That the penal actions were taken against the petrol dealers and punishments were being imposed as per these guidelines which included imposition of fines. 6. That the said guidelines of 1995 were further revised in 1998 as in practice it was realised that to be a deterent higher rates of fines and more onerous conditions needed to be introduced which is being impugned by the petitioner herein. That the respondent has prepared a comparative statement of penal actions under Marketing Discipline Guidelines, 1982, 1995 and 1998 showing that only one offence has been newly introduced in the Marketing Discipline Guidelines of 1998 i. e. established cases of issuance of fake PUC certificates by dealers having PUC facilities as Minor Offences, in comparison to the Marketing Discipline Guidelines of 1995. That all other major/minor offences as provided in the 1998 guidelines were present in 1995 guidelines. However, to ensure honesty and deterrence, more onerous monetarial penalties are prescribed to deter violations. That all other major/minor offences as provided in the 1998 guidelines were present in 1995 guidelines. However, to ensure honesty and deterrence, more onerous monetarial penalties are prescribed to deter violations. Hence, the petitioner s contention that Marketing Guidelines, 1998 as being ultra vires, unconstitutional and arbitrary is untenable and the petition is liable to be dismissed forthwith. Copy of the comparative statement of penal action undei Marketing Discipline Guidelines, 1982, 1995 and 1998 are being annexed and marked as Annexure C. 7. That the respondent carried out a Special Vigilance Drive from 29. 10. 1998 to 2. 11. 1998 to check the malpractices and irregularities taking place in the retail network. Oil Company installations/departments Bottling Plants and during transportation of petroleum products. That during the said drive, total sales and supplies of 1364 retail outlets were inspected in 50 towns, throughout the country. That of the total number of retail outlets inspected 323 were detected for short supply, 68 were detected for adulteration, there were 29 cases of sample failure, and in 663 cases there were non availability of basic facilities like free air water, toilet facilities, complaint box and first aid box. That enroute checking of TTs were carried out in 1289 cases. That of the total number checked irregularities were detected in 113 cases. That 110 terminals were checked and irregularities were detected in 60 cases. That inspections were carried out for unauthorised dumps. That of the 13 cases inspected, irregularities were detected in 4 cases. That copy of the report of the Special Vigilance Drive from 29. 10. 1998 to 2. 11. 1998 is being annexed hereto and marked as Annexure D. That considering the magnitudeof irregularities detected in various retail outlets, it is necessary that the impugned guidelines of 1998 be implemented in full force, to curb further malpractices and irregularities. The 1998 guidelines merely provide more teeth to the existing guidelines to ensure greater enforceability. " ( 15 ) THE comparative statement of penal action in the three guidelines of 1982,1985 and 1998 are referred to in Annexure c filed with Additional Affidavit on behalf of the respondent. The same is reproduced as under : "comparative STATEMENT OF PENAL ACTIONS UNDER MARKETING DISCIPLINE GUIDELINES 1982, 1995 AND 1998. PUNISHMENTS EXISTING PUNISHMENTS EXBTING PUNISHMENTS EXISTING IN MDG 1982 IN MDG 1995 IN MDG 1998major OFFENCES 1. The same is reproduced as under : "comparative STATEMENT OF PENAL ACTIONS UNDER MARKETING DISCIPLINE GUIDELINES 1982, 1995 AND 1998. PUNISHMENTS EXISTING PUNISHMENTS EXBTING PUNISHMENTS EXISTING IN MDG 1982 IN MDG 1995 IN MDG 1998major OFFENCES 1. Adulteration of MS/hsd (Major Offence) Found during stock variation, Filter Paper Test (for MS), density check, Furfural check, Mobile Lab check etc. : (Furfural checks. Mobile Lab checks and Density checks were not introduced in 1982) If the sample is certified as adulterated, after laboratory test, a show cause notice should be served on the dealer. If the explanation of dealer is not satisfactory; If MS is suspected to be 1. Fine of Rs. 10,000. 00 1. Fine of Rs. 1,00,000. 00 adulterated, only sales alongwith suspension and suspension of sales and supplies of MS to be of sales and supplies and supplies of all suspended till completion of all products for products for 45 days in of investigations. The same 30 days in the first the first instance. If the is the case with HSD also. instance, fine is not paid within 2. Fine of Rs. 15,000. 00 45 days then extension alongwith suspension an of suspension for of sales and supplies another 30 days. If of all products for 60 the fine is not paid even days in the Second within the extended instance, period, then the 1. If the explanation 3. Termination of dealership will be of the dealer is not. Dealership in terminated. satisfactory, dealership third instance. 2. Termination of is to be terminated dealership in even in the first instance, the second stance. 2. If adulteration could not be established despite stock variation was found, sales and supplies of all products will be suspended for 15 days. 2. Short Delivery of Products : (Major Offence) if Weights and: Measures seals are tampered with sales and supplies of all 1. Suspension of sales 1. Suspension of sales and products is to be and supplies of supplies of all products suspended for 15 days. all products for 15 days for 30 days alongwith alongwith a fine of a fine of Rs. 50,000. 00 ks. 2,000. 00 in the first in the first instance. instance. 422 2. In the second instance 2. In the second instance, suspension of sales for dealership is to be and supplies 30 days terminated. alongwith a fine of Rs. 5,000. 00. 3. 50,000. 00 ks. 2,000. 00 in the first in the first instance. instance. 422 2. In the second instance 2. In the second instance, suspension of sales for dealership is to be and supplies 30 days terminated. alongwith a fine of Rs. 5,000. 00. 3. In the third instance, dealership should be terminated. PUNISHMENTS EXISTING PUNISHMENTS EXISTING PUNISHMENTS EXISTING in MDG 1982 IN MDG 1995' IN MDG 1998 3. Provision of unauthorised storage facility in case of detection of storage of facilities not approved by the company and/or not in accordance with Explosive approval : (Major offence) sales and supplies of all products to be suspended with immediate effect. Not included 1. Suspension of sales 1. Suspension of sales and and supplies of all the supplies of all the products for 15 days products for 15 days alongwith a fine of alongwith a fine Rs. 2. 000. 00 in the first of Rs. 20,000. 00 in the first instance, instance. 2. In the second instance, 2. In the second instance, suspension of sales suspension of sales and and supplies for 30 supplies for 30 days days alongwith a fine alongwith a fine of of Rs. 5,000. 00. Rs. 50,000. 00. 3. In the third instance, 3. In the third instance, dealership to be suspension of sales and terminated, supplies for 45 days alongwith a fine of Rs. 1 lakh. 4. Not producing for Inspection Stock/sales Registers at the time of surprise check (Major offence) 1. Warning letter to be In the first instance, 1. Suspension of sales and issued in the first suitable warning letter supplies of all the instance will be issued and products for 15 days subsequent instances, alongwith a fine of sales and supplies of Rs. 20. 000. 00 in the first all products to be instance. suspended for 15 days etc. 2. Sales and supplies of 2. In the second instance, all products is to be suspension of sales and suspended or 15 days supplies for 30 days along in the second instance, with a fine of Rs. 50,000. 00. 3. In the third instance, suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh. 5. Unauthorised purchases/sales/exchange of MS/hsd etc. (Major Offence) sales and supplies of all 1. Suspension of sales 1. 50,000. 00. 3. In the third instance, suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh. 5. Unauthorised purchases/sales/exchange of MS/hsd etc. (Major Offence) sales and supplies of all 1. Suspension of sales 1. Suspension of sales and products is to be and supplies of all supplies of all products for suspended for 15 days products for 30 days 30 days along with a fine of along with a fine of Rs. Rs. 50,000. 00 inthe 5,000. 00 in the first first instance. instance. 2. Termination of 2. In the second instance, fine dealership in the of Rs. 1 lakh and second instance, suspension of sales and supplies for 45 days. 3. In the third instance, dealership to be terminated. LUBES: 6. Established case of selling offspec Lubes, (Major Offence) sales and supplies of all Suspension of sales and 1. Suspension of sales and products is to be supplies of all products supplies of all the suspended for 15 days. for 15 days along products for 15 days with a fine of Rs. 2,000. 00 alongwith a fine in the first instance, of Rs. 20. 000. 00 in the first instance. in the second instance, 2. In the second instance, suspension of sales suspension of sales and supplies for 30 days. and supplies for 30 days alongwith a fine of alongwith a fine of rs. 50,000. 00. Rs. 5,000. 00. Dealership to be terminated 3. In the third instance, in the third instance, dealership to be terminated. 7. Unauthorised purchases/sales/exchange of Lubes etc. (Major Offence) sales and supplies of all 1. Suspension of sales 1. Suspension of sales and products is to be and supplies of all supplies of all the suspended for 15 days. products for 15 days products for 15 days alongwith a fine of alongwith a fine rs. 5,000. 00 in the of Rs. 20,000. 00 in first instance, the first instance. 2. Termination of 2. In the second instance, dealership in the suspension of sales and second instance, supplies for 30 days alongwith a fine of Rs. 50. 000. 00. 3. In third instance, dealership to be terminated. PUNISHMENTS EXISTING PUNISHMENTS EXISTING PUNISHMENTS EXISTING in MDG 1982 IN MDG 1995 IN MDG 1998 8. 00 in first instance, the first instance. 2. Termination of 2. In the second instance, dealership in the suspension of sales and second instance, supplies for 30 days alongwith a fine of Rs. 50. 000. 00. 3. In third instance, dealership to be terminated. PUNISHMENTS EXISTING PUNISHMENTS EXISTING PUNISHMENTS EXISTING in MDG 1982 IN MDG 1995 IN MDG 1998 8. Non-availability of reference density at the time of inspection : Sales and supplies of all products to be suspended immediately, samples to be drawn and sent for testing within 24 hrs. In case product meets specification, sales and supplies of all products to be resumed with a warning letter (Major Offence ). Density test was not In case of product being In case of product being introduced, off-spec off-spec: hence not applicable. 1. Fine of Rs. 5,000. 00 1. Fineofrs. 50,000. 00 alongwith suspension alongwith suspension of of sales and supplies sales and supplies of all of all products for 30 products for 30 days in days in the first instance, the first instance. 2. Termination of 2. Fine of Rs. 1 lakh along dealership in the with suspension of sales second instance, and supplies for 45 days. 3. Termination of dealership in third instance. 9. Mobile Lab Inspection: Clinical tests will be conducted even though the density is in order. In the event of Density passing but failing in Clinical test, (Major Offence) Mobile Lab was not Sales/supplies to be Action to be takne by the Oil introduced. Hence suspended after recording Co. proposed for established not applicable, of tank dips/pump as adulteration. meter reading etc. 1. Sales and supplies are to concerned Oil Co. will be suspended by Mobile have to replace the Lab in the event of failure off-spec product before of sample in lab test. sales are resumed. 2, SLC and concerned Oil Co. to be advised.- (State Level Coordinators ). PUNISHMENTS EXISTING PUNISHMENTS EXISTING PUNISHMENTS EXISTING IN MDG 1982 IN MDG 1995 IN MD G1998minor OFFENCES 1. Overcharging (Minor Offence) sales and supplies of all 1. Suspension of sales 1. Suspension of sales and products to be suspended and supplies of all the supplies of all the for 15 days. products for 15 days products tor 15 days alongwith a fine of alongwith a fine of rs. 2,000. 00 in the Rs. 20. 000. 00 in the first instance, first instance. 2. Suspension of sales 1. Suspension of sales and products to be suspended and supplies of all the supplies of all the for 15 days. products for 15 days products tor 15 days alongwith a fine of alongwith a fine of rs. 2,000. 00 in the Rs. 20. 000. 00 in the first instance, first instance. 2. In the second instance, 2. In the second instance, suspension of sales and suspension of sales Mvi supplies for 30 days supplies for 30 days alongwith a fine of alongwith a fine of rs. 5,000. 00. Rs. 50,000. 00. 3. In the third instance, 3. Suspension of sales and dealership to be supplies for 45 days terminated along with a fine of Rs. 1 lakh in the third instance. 2. Non observance of Government Regulations (Minor Offence) for non observance of Government Regulation sales and supplies of Sales and supplies of 1. Suspension of sales and all products to be suspended all products to be supplies of all products for l5 days. suspended for 15 days. for l5 days along with a fine of Rs. 20,000. 00 in the first instance. 2. In the second instance suspension, of sales and supplies for 30 days along with a fine of Rs. 50,000. 00 - 3. Suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh in the third instance. 3. Non Provision of Free Air, Drinking Water, Radiator Water, Toilet facilities, telephone, first aid, PUC (where applicable) at RO premises, following action to be taken (Minor Offence) a warning letter to be 1. In case facilities are not 1. Suspension of sales and issued to the concerned provided within 60 supplies of all the be given time to provide days of written advice, products for 15 days the same. In case the there will be a fine alongwith a fine of dealer fails to provide of Rs. 2. 000. 00 and 15 Rs. 20,000. 00 in the first the facilities within the days suspension of sales instance. stipulated time sales and and supplies of all supplies of all products to products. be suspended for 15 days. 2. If facilities are still not 2. In the second instance, provided, a warning suspension of sales and letter is to be issued supplies for 30 days alongwith a fine alongwith a fine of ofrs. 5,000. 00 and Rs. 50,000. 00. stipulated time sales and and supplies of all supplies of all products to products. be suspended for 15 days. 2. If facilities are still not 2. In the second instance, provided, a warning suspension of sales and letter is to be issued supplies for 30 days alongwith a fine alongwith a fine of ofrs. 5,000. 00 and Rs. 50,000. 00. 30 days suspension of sales and supplies of all products. 3. Inspite of the above 3. Suspension of sales and if the facilities are still supplies for 45 days not provided the alongwith dealership should be fine of Rs. 1 lakh in the terminated, third instance. 4. Short Delivery of products if Wandm seals are intact but deliveries are below tolerance limit (Minor Offence) sales and supplies should be Sales and supplies should Sales and supplies should be stopped from the Dispensing be stopped from the stopped from the Dispensing unit till re-verification Dispensing Unit till Unit till re-verification is is carried out by re-verification is carried carrie out by Weights weights and Measures Dept. out by Weights and and Measures Dept. Measures Dept. If deliveries are proved to be below tolerance limit: 1. Suspension of sales and supplies of all products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. 2. Suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00 in the second instance. 3, Suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh in the third instance. 5. RUDE BEHAVIOUR established cases of discourteous behaviour by dealers and/or his staff, non producing of complaints register, (Minor Offence) this cause was not introduced. Penalty of Rs. 2. 000. 00 1. Fineofrs. 10,000. 00 in the for the first offence, and first instance. Rs. 5,000. 00 for every 2. Fineofrs. 30,000. 00 in the subsequent offence, second instance. Besides, a suitable 3. Suspension of sales and warning letter will be supplies for 45 days issued to the dealer by alongwith a fine of Rs. 1 the concerned Oil Co. lakh in the third instance. 6. Established cases of issuance of fake PUC certificates by dealers having PUC facilities (Minor Offence) not available. Not available. 1. Suspension of sales and supplies of all the products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. 2. 1 the concerned Oil Co. lakh in the third instance. 6. Established cases of issuance of fake PUC certificates by dealers having PUC facilities (Minor Offence) not available. Not available. 1. Suspension of sales and supplies of all the products for 15 days alongwith a fine of Rs. 20,000. 00 in the first instance. 2. In the second instance, suspension of sales and supplies for 30 days alongwith a fine of Rs. 50,000. 00. 3. In the third instance, dealership to be terminated. 7. Sale of LVI (Low Viscosity Index) Lubes from Retail Outlets (Minor Offence) if the dealer is found stocking/selling LVI Lubes at/through the retail Outlet if the explanation of the 1. Fine of Rs. 5,000. 00 1. Suspension of sales dealer is not satisfactory, alongwith suspension supplies of all the sales and supplies. of sales and supplies of products for pies of of all products to be all products for all theproducts for l5 days suspended for 15 days 15 days in the first alongwith a fine of and the dealer should be instance. Rs. 20,000. 00 suitably cautioned through in the first instance. a warning letter. 2. Termination of 2. In the second instance, dealership in the suspension of sales and second instance, supplies for 30 days alongwith a fine of Rs. 50,000. 00. 3. In the third instance, dealership to be terminated. 8. Overcharging in authorised selling prices of Lubes (Minor Offence) dealer to be advised to charge correct prices sales and supplies of all 1. Suspension of sales 1. Suspension of sales products to be suspended and supplies of all and supplies of all for 15 days. products for 15 days products for 15 days alongwith a fine of alongwith a fine of Rs. 2,000. 00 in the first Rs. 20,000. 00 in the first instance, instance. 2. In the second instance, 2. In the second instance, suspension of sales and suspension ofsales and supplies for 30 days supplies for 30 days alongwith a fine of alongwith a fine of Rs. Rs. 5. 000. 00. 50,000. 00. 3. In the third instance, 3. In the third instance, dealership to be dealership to be terminated terminated. 9. Sale of Lubes through Non calibrated measures (Minor Offence) not included 1. Suspension of sales 1. Rs. 5. 000. 00. 50,000. 00. 3. In the third instance, 3. In the third instance, dealership to be dealership to be terminated terminated. 9. Sale of Lubes through Non calibrated measures (Minor Offence) not included 1. Suspension of sales 1. Suspension of sales and supplies of all and supplies of all products for 15 days products for 15 days alongwith a fine of alongwith a fine of Rs. 2,000. 00 in the Rs. 20,000. 00 in. the first instance. first instance. 2. In the second instance, ' 2. In the second instance, suspension of sales and suspension of sales and supplies for 30 days supplies for 30 days alongwith a fine of alongwith a fine of Rs. Rs. 5. 000. 00. Rs. 50,000. 00. 3. In the third instance, 3. In the third instance, dealership to be dealership to be terminated, terminated. 10. Violation/non observance of Government Regulations and operating guidelines/instructions if any, on sale and distribution of SKO. For non observance of Government Regulation. (Minor Offence) sales/supplies of SKO to Sales and supplies to Sales/supplies of SKO to be be suspended be suspended for 15 days, suspended (if necessary (if necessary in consultation on each occurrence, in consultation with with local Civil Supplies local Civil Supplies authorities) Authorities) suspension of sales and 1. Suspension of sales and supplies of SKO for 15 suppliesofskofor30days days alongwith a fine of Rs. 50,000. 00 in the first instance. 2. In the second instance suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh. 3. In the third instance, dealership to be terminated. 11. Overcharging (Minor Offence) dealer to be advised to charge correct price sales/supplies of SKO to 1. In the first instance, 1. Fineofrs. 50,000. 00 be suspended (if necessary 'sales and supplies of alongwith suspension of in consultation with all products to be sales and supplies of all local Civil Supplies Authorities) suspended for 15 days products for 30 days in suspension of Sales and alongwith a fine of the first instance. supplies of SKO for 15 days. Rs. 2,000. 00. 2. In the second instance, 2. In the second instance, sales and supplies of suspension of sales and all products to be supplies for 45 days suspended for a period alongwith a fine of of 30 days alongwith Rs. 1 lakh. a fine of Rs. 5,000. 00. 3. In the third instance, 3. Rs. 2,000. 00. 2. In the second instance, 2. In the second instance, sales and supplies of suspension of sales and all products to be supplies for 45 days suspended for a period alongwith a fine of of 30 days alongwith Rs. 1 lakh. a fine of Rs. 5,000. 00. 3. In the third instance, 3. In the third instance, the dealership should dealership to be beterminated, terminated. 12, Short Delivery (Minor Offence) sales/supplies of SKO to Sales/supplies of SKO Sales/supplies of SKO to be be suspended (if necessary to be suspended (if suspended (if necessary in in consultation with local necessary in consultation consultation with local authorities) Suspension with local Civil Supplies Civil Supplies of sales and supplies Authorities) for 15 days. Authorities ). of SKO for 15 days. 1. Suspension of sales and suppliesofskofor30days alongwith a fine of Rs. 50,000. 00 in the first, instance. 2. In the second instance, suspension of sales and supplied for 45 days alongwith a fine of Rs. 1 lakh. 3. In the third instance, dealership to be terminated. 13. Unauthorised purcahse/sales/exchange of SKO or any product which could be used as a substitute for this product. Sales and supplies of all 1. Fine of Rs. 25,000. 00 Unauthorised purcahse/sale/ products to be suspended alongwith suspension exchange of SKO or any for 15 days of sales and supplies product which could of all products for be used as a substitute for this 15 days in the first product or diversion or stock instance, variation. Seek dealer's explanation within 7 days. In case the explanation is not satisfactory: 2. Termination of 1. Fine of Rs. 50,000. 00 dealership in the alongwith suspension of second instance, sales and supplies of all products for 30 days in the first instance. 2. In the second instance, suspension of sales and supplies for 45 days alongwith a fine of Rs. 1 lakh. 3. Termination of dealership in the third instance. ( 16 ) THE final report of Special Vigilance Drive from 20. 10. 1998 to 2. 11. 1998 is also filed alongwith the affidavit which may also be quoted asunder: "final REPORT ON SPECIAL VIGILANCE DRIVE FROM 29. 10. 1998 TO 2. 11. 1998 1. As directed by the Hon ble Minister (Pandng), a Special Vigilance Drive was launched throughout the country from 29. 10. 1998 to 2. 11. 1998. 10. 1998 to 2. 11. 1998 is also filed alongwith the affidavit which may also be quoted asunder: "final REPORT ON SPECIAL VIGILANCE DRIVE FROM 29. 10. 1998 TO 2. 11. 1998 1. As directed by the Hon ble Minister (Pandng), a Special Vigilance Drive was launched throughout the country from 29. 10. 1998 to 2. 11. 1998. Prelude to the drive, a meeting of CMDs, Directors (Marketing) and Executive Directors (Vigilance) of Oil Companies, RLCs and SLCs was convened by Additional Secretary (MOP and NG) on 26. 10. 1998 and the detailed action plan was given to them for conducting this Special Drive. 2. All Chief Secretaries and Police Chiefs of States and Union Territories were requested to provide necessary assistance in conducting the raids. 3. During the drive surprise checks/raids were conducted at Retail Outlets, LPG Distributor ships, SKO Dealerships, Oil Company Terminals/depots, LPG Bottling Plants, enroute checking of Tank Trucks and at unauthorised dumps. The drive was conducted in 50 towns throughout the country. 4. Due to various Court cases pending in various High Courts against the Marketing Discipline Guidelines, 1998, it was decided to take action against the erring Dealers/distributors in line with the previous Marketing Discipline Guidelines (MDG 1995 ). 5. The salient features of the drive are as under : Retail Outlets (a) Total No. of ROs inspected 1364 (b) No. of cases of short delivery detected 323 (e) No. of cases of suspected adulteration detected 68 (excluding 8 sample failures) (d) No. of cases of sample failures 29 (e) Non provision of air facility despite warning I (f) Non availability of basic facilities : (i) Free air 158 (ii) Water 21 (iii) Toilet facilities 209 (iv) Complaint Book 148 (v) First Aid Box 127 Action Taken 1. Sales and supplies of all products were suspended in line with Marketing Discipline Guidelines (MDG), 1995 where product adulteration was suspected. 2. Delivery through dispensing pumps were suspended where short delivery was detected, till re-verification. 3. Oil Companies were advised by SLCs for issuing warning letters to the dealers for providing the basic facilities. 4. State-wise list of irregularities detected and non availability of facilities is also enclosed as Annexures-I and II. 5. The details of sales and supplies suspended for suspectedadulteration is as under: State/ut IOC BPC HPC IPB Total andhra Pradesh 5 1 6 assam 1. 4. State-wise list of irregularities detected and non availability of facilities is also enclosed as Annexures-I and II. 5. The details of sales and supplies suspended for suspectedadulteration is as under: State/ut IOC BPC HPC IPB Total andhra Pradesh 5 1 6 assam 1. 1 bihar 115 7 delhi 1 1 goa 415 gujarat 5 1 1 3 10 haryana 1 1 2 karnataka 5 3 5 1 14 madhya Pradesh 4 3 3 1 11 maharashtra 43 29 nagaland 1 1 orissa 1 1 punjab 2 22 1 7 sikkim 1 1 1 3 tamilnadu 1 3 9 2 15 uttar Pradesh 2 1 3 west Bengal 2 2 total 29 30 28 11 98 ii LPG Distributorships ; total number of LPG Distributors inspected : 626 irregularities detected: diversion of domestic LPG Cylinders : 61862 defective cylinders noticed : 2438 action Taken 1. Action in line with MDG was taken against the erring LPG Distributors. 2. All the defective cylinders were sent back to the Bottling Plants for rectification. 3. State-wise details of irregularities detected is enclosed as Annexure-III. III. SKO Wholesalers: no. of inspections carried out : 430 no of cases where irregularities were detected : 16 no. of dealers found not adhering to upliftment schedule : 225 action Taken 1. Sales and supplies were suspended for 15 days in line with MDG for irregularities detected. 2. Warning letters were issued to the dealers for adhering to upliftment schedule. 3. A State-wise list of SKO/ldo dealers where irregularities were detected is enclosed as Annexure-IV. IV. Enroute Checking of TTs total number of TTs checked : 1289 number of irregularities detected : 113 during the enroute checking of TTs, irregularities like improper sealing of ITs, improper fittings, non welding of domes and seal Nos. not tallying with invoice etc. were detected. Action Taken: the matter was reported to the concerned Oil Company Depots/terminals for corrective action. State-wise details of enroute checks carried out is enclosed as Annexure-V. V. Checks at Terminals : no. of inspections carried out : 110 no. of irregularities detected : 60 no. of cases of improper/loose sealing : 47 no. of cases of over/under filling : 12 no. of cases of improper fitting : 1 action Taken all Location Incharges were advised to take corrective action. State-wise list of Terminals/depots where raids were conducted and irregularities detected is enclosed as Annexure-VI VI. of irregularities detected : 60 no. of cases of improper/loose sealing : 47 no. of cases of over/under filling : 12 no. of cases of improper fitting : 1 action Taken all Location Incharges were advised to take corrective action. State-wise list of Terminals/depots where raids were conducted and irregularities detected is enclosed as Annexure-VI VI. Checks at LPG Bottling Plants no. of Bottling Plants inspected : 40 no. of cylinders checked : 13420 no. of defective cylinders found. : 701 percentage of defective cylinders : 5. 2% action Taken all the defective cylinders were sent back for refilling/proper sealing. The details of LPG Plants inspected and irregularities detected is enclosed as per annexure-VII. VII. Checks at Unauthorised Dumps : Total number of inspections carried out : 13 irregularities detected : 4 In all the cases, FIRs were registered. Details of raids carried out at Dumps is enclosed as Annexure-VIII. To conclude, it can be observed from the SLCs reports that more number of irregularities were detected wherever SLCs were enthusiastic and fully committed for the cause of the drive. The enthusiasm evinced by SLCs Maharashtra, Goa, Gujarat, Madhya Pradesh, Tamil Nadu, Kamataka, Andhra Pradesh, Bihar and Sikkim needs to be commended. sd/- (M. S. Ramachandran) Executive Director" ( 17 ) THE reading of the above will lay down the principles which necessitated the framing of the guidelines of 1982,1995 and 1998 respectively. There is no challenge to the guidelines of 1982 though the challenge is made to 1995 guidelines alongwith 1998 guidelines in these two petitions. The purpose of framing the guidelines was to put an end to malpractice and remedy the breaches which were detected from time-to-time and are referred to in the vigilance report which has already been reproduced. It was considered imperative on the basis of the facts as enumerated above that the guidelines had to be framed to check malpractice and there is no arbitrary exercise of power. The State Machinery is provided ample discretion in the matter and Clause 43 of the agreement vests in the Authorities powers to remedy breaches and there is no violation of the same. In Peerless General finance and Investment Co. The State Machinery is provided ample discretion in the matter and Clause 43 of the agreement vests in the Authorities powers to remedy breaches and there is no violation of the same. In Peerless General finance and Investment Co. Ltd. and Another v. Reserve Bank of India, AIR 1992 SC 1033 , the Supreme Court considered the powers of Reserve Bank of India in issuance of directions providing for manner in which the deposits received by the residuary non-Banking companies were to be deposited by them and manner in which such deposits are to be disclosed in their balance sheet or books of account and whether such directions were covered undersection 45-K (3) of the Reserve Bank of India Act. Paragraphs 37,68,72 and 73 read as follows : "37. Paragraph 5 of the directions rates to the minimum rate of return fixed at 10% per annum for a deposit with a maturity of 10 years. It is a matter of common knowledge that in the present times even the public sector corporations and Banks and other financial and non-financial companies pay interest at much more higher rates ranging from 14 to 18%. Thus according to the above scheme the respondent companies and the other doing such business can easily earn a profit of 4 to5% on their investments. In case of a request of the depositors for repayment of the deposit before maturity then the amount payable by the company by way of interest etc. , shall be 2% less than what could have been ordinarily paid by the company by way of interest if the deposit had run the full contractual period. However, the question of repayment before maturity or after how many years will depend entirely on the terms and conditions of the contract of such deposit. Paragraph 12 of the directions of 1987 enjoins upon the company to disclose as liabilities in its books of accounts and balance sheets the total amount of deposits received together with interest, bonus, premium or other advantage, accrued or payable to the depositors. Under Clause (a) to the explanation to Clause 3 of paragraph "6' "aggregate Amounts of Liabilities" shall mean total amount of deposits received together with interest, premium, bonus or other advantage by whatever name called, accrued on the amount of deposits according to the terms of contract. Under Clause (a) to the explanation to Clause 3 of paragraph "6' "aggregate Amounts of Liabilities" shall mean total amount of deposits received together with interest, premium, bonus or other advantage by whatever name called, accrued on the amount of deposits according to the terms of contract. Thus the company is required to deposit or invest the aggregate amounts of its liabilities having accrued on the amount of deposits according to the terms of contract. Without going into the figures shown in the various charts, it is clear that if the directions contained in paragraphs 6andl2ofthedirectionsof 1987 are to be carried out, the companies are not left to utilise any amount out of the deposits as working capital to meet the expenses. In our view the Reserve Bank is right in taking the stand that if these companies want to do their business, they should investtheir own working capital and find such resources elsewhere with which the Reserve Bank has no concern. If we look at the Annual Report and Accounts of Peerless for the years 1988, 1989 and 1990 it is clear that it had conducted its business following the impugned directions of 1987 and still had earned substantial profits in these years. It is clear that Peerless is a company having established as back as in 1932 and had substantial funds to invest the entire amount of deposits and had met the expenses out of its accumulated profits of the past years. This shows that the business can be run and profit can be earned even after complying with the impugned directions of 1987 issued by the Reserve Bank. It is not the concern of this Court to find out as to whether acturial method of accounting or any other method would be feasible or possible to adopt by the companies while carrying out the conditions contained in paragraphs 6 and 12of the directions of 1987. The companies are free to adopt any mode of accounting permissible under the law but it is certain that they will have to follow the entire terms and conditions contained in the impugned directions of 1987 including those contained in paras 6 and 12. It is not the function of the Court to amend and lay down some other directions and the High Court was totally wrong in doing so. It is not the function of the Court to amend and lay down some other directions and the High Court was totally wrong in doing so. The function of the Court is not to advise in matters relating to financial and economic policies for which bodies like Reserve Bank are fully competent. The Court can only strike down some or entire directions issued by the Reserve Bank in case the Court is satisfied that the directions were wholly unreasonable or violative of any provisions of. the Constitution or any statute. It would be hazardous and risky for the Courts to tread an unknown path and should leave such task to the expert bodies. This Court has repeatedly said that matters of economic policy ought to be left to the Government. While dealing with the validity of an order passed on September 30,1997 fixing a retail price of mustard oil not exceeding Rs. 10. 00 per kilogram in exercise of powers conferred by Sec. 3 of the Essential Commodities Act, a Bench of 7 Judges of this Court in M/s. Prag Ice and Oil Mills v. Union of India and Nav Bharat Oil Mills v. Union of India, (1978) 3 SCC 459 : ( AIR 1978 SC 1296 ) observed as under (para 23 of AIR) : "we have listened to long arguments directed at showing us that producers and sellers of oil in various parts of the country will suffer so that they would give up producing or dealing in mustard oil. It was urged that this would, quite naturally, have its repercussions on consumers for whom mustard oil will become even more scarce than ever ultimately. We do not think that it is the function of this Court or of any Court to sit in judgment over such matters of economic policy as must necessarily be left to the Government to the day of decide. Many of them, as a measure of price fixation must necessarily be, are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide the without even the aid of experts. " "68. Many of them, as a measure of price fixation must necessarily be, are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide the without even the aid of experts. " "68. Looking from operational pragmatism, the restrictions though apparently appears to be harsh in form, in its systematic working,, it would inculcate discipline in the business management, subserve public confidence in the ability of the company to honour the contractual liability and assure due repayment at maturity of the amount deposited together with interest etc. without any impediment. In other words, the restrictions in paragraph 6 of the directions intended to elongate the twin purposes,viz. habit of thrift among the needy without unduly je opardising the interest of the employees of the companies and the R. N. B. Cs. working system itself in addition to safety and due payment of depositor's money. True as contended by Shri Chatterji that there arises corresponding obligation to pay higher amount of commission to its agents and the commitment should be kept performed and the confidence enthused in the agents. But it is the look out of the businessman. The absence of ceiling on the rate of commission would give choice between the company and its agents to a contract in this regard and has freedom to manage its business. The R. N. B. Cs. are free to incur such expenses and organise their business as they desire including payment of commission as they think expedient. But the subscribers/depositors liability, under no circumstances, would be injeopardy and the directions were designed to ensure that the interest of the subscribers/depositors is secuted at all times, prescribing investment of an equal sum to the total liability to the subscribers/depositors. Paragraph 12 is only a bridge between the depositors and the promise held out and the contract executed in furtherance thereof as a monitoring my ocardium to keep the heart in paragraph 6 functioning without any hiatus. It is settled law that regulation includes total prohibition in a given case where the mischief to be remedied warrants total prohibition. Vide Narendra Kumar v. Union of India, (1960) 2 SCR 375 : ( AIR 1960 SC 430 ). But the directions do not do that but act as a siphon between the subscriber/depositor and the business itself. It is settled law that regulation includes total prohibition in a given case where the mischief to be remedied warrants total prohibition. Vide Narendra Kumar v. Union of India, (1960) 2 SCR 375 : ( AIR 1960 SC 430 ). But the directions do not do that but act as a siphon between the subscriber/depositor and the business itself. Therefore, they are neither palpably arbitrary not unjust nor unfair. The mechanism evolved in the directions is foolproof, as directed by this Court in first Peerless case, to secure the interest of the depositors as well capable to monitor the business management of every R. N. B. C. It also, thereby, protects interest of the employees/field staff/commission agent etc. as on permanent basis overcoming initial convulsions. It was intended, in the best possible manner, to subserve the interest of all without putting any prohibition in the ability of a company to raise the deposit, even in the absence of any adequate paid up capital or reserve fund or such pre-commitment of the owner, to secure such deposits. " "72. Para 19 of the directions empowers the RBI to extend time for compliance or to exempt a particular company or a class thereof from ail or any of the provisions, either generally or for a specified period subject to such conditions as may be imposed. Power to exempt would include the power to be exercised from time-to-time as exigencies warrant. An individual company or the class there of has to place necessary and relevant material facts before the R. B. I, of the hardship and the need for relief. A criticism of arbitrariness or unreasonableness may not be a ground to undo what was conceived best in the public interest. What is best is not always discernible. The wisdom of any choice may be disputed or condemned. Mere errors of Government are not subject to judicial review. The legislative remedy maybe ineffective to mitigate the evil or fail to achieve its purpose, but it is the price to be paid for the trial and error inherent in the economic legislative efforts to grapple with obstinate social issues. It is proper for interference injudicial review, only, when the directions, regulations or restrictions are palpably arbitrary, demonstrably irrelevant or discriminatory. Exercise of power then can be declared to be void under Article 13 of the Constitution. It is proper for interference injudicial review, only, when the directions, regulations or restrictions are palpably arbitrary, demonstrably irrelevant or discriminatory. Exercise of power then can be declared to be void under Article 13 of the Constitution. So long as the exercise of power is broadly within the zone of reasonableness, the Court would not substitute its judgment for that of legislation or its agent as to matters within their prudence and power. The Court does not supplement the feal of the experts by its own values. 73. It is settled law that so long as the power is traceable to the statute, mere omission to recite the provisions does not denude the power of the Legislature or rule making authority to make the regulations, nor considered without authorty of law. Sec. 114 (h) of the Evidence Act draws a statutory presumption that official acts are regularly performed and reached satisfaction on consideration of relevant facts. The absence of reiteration of objectives satisfaction in the preamble as of one under Sec. 35l does not denude the powers, the R. B. I. admittedly has under Sec. 45l, to justify the actions. Though Sec. 45l was neither expressly stated nor mentioned in the preamble of the directions of the required recitation of satisfaction of objective facts to issue the directions from the facts and circumstances it is demonstrated that the R. B. I. had such satisfaction in its considerations of its power under Sec. 45l, when the directions were issued. Even otherwise Sec. 45k (3) itself is sufficient to uphold the directions. " ( 18 ) THE Court held in paragraph 73 as referred to above that so long as the power is traceable to the statute, mere omission to recite the provision does not denude the power of the Legislature or rule making authority to make the regulations and as such the impugned directions were held to be within the powers of Reserve Bank of India to provide tardy, stable, identifiable and monitorable method of operations by Residuary Non-Banking Companies. ( 19 ) IN the present case it is contended by the petitioners that no such power is provided in any of the statutes controlling the sale and distribution of petrol products but at the same time one does not have to look to the statutes particularly when the parties have chosen to enter into contractual obligations. ( 19 ) IN the present case it is contended by the petitioners that no such power is provided in any of the statutes controlling the sale and distribution of petrol products but at the same time one does not have to look to the statutes particularly when the parties have chosen to enter into contractual obligations. The power has to be traced from the agreement executed between the parties. Clause 43 of the agreement clearly spells out that the dealer shall observe and perform all directions or rules given or made from time- to-time by the Corporation for the proper carrying on of the dealership of the Corporation. Similarly, Clause 56 provides more powers for action when there is a breach of any of the convenants and stipulations contained in the agreement and there is failure to remedy such breach within the period of receipt of the notice by the Corporation in this regard. In the subsequent judgment between the same parties in Reserve Bank of India and Others v. Peerless General Finance and Investment Company Ltd. and Another, (1996) 1 Supreme Court Cases 642, the Supreme Court further elaborated the law on the subject and reiterated the findings earlier recorded that the Reserve Bank was within its powers to issue d irections and the same were not ultra-vires the powers conferred on the Bank by Section 45-K (3) of the Reserve Bank of India Act. ( 20 ) THE learned Counsel for the petitioners have not denied that directions could be issued provided the powers are vested in the authorities in terms of the Agreement entered into between the parties. Clause 43, it is contended, does not confer any such powers to impose major and minor penalties particularly when such action violates the rule of law and principles of natural justice as no opportunity is provided to the petitioners to show cause. This argument is misconceived as more drastic remedy such as termination is provided in the various statutes and the various clauses of the agreement such as Clauses 43 and 56 provide ample powers in the respondents to frame the guidelines as have been framed in the present case. The reading of the punishments as prescribed for major and minor penalties could also show that the explanation of the dealer is always called for and action is only taken when it is not found to be satisfactory. The reading of the punishments as prescribed for major and minor penalties could also show that the explanation of the dealer is always called for and action is only taken when it is not found to be satisfactory. In appropriate cases the members of the petitioner association can also ask for a personal hearing and the same cannot be denied. The mere absence of the quantum of fines in various statutes will not make the agreement between the parties redundant on the ground that no. power is vested in the authorities to frame such guidelines. The guidelines of 1982 and 1995 have operated satisfactorily and no one came forward on an earlier occasion to impugn those guidelines as the basic purpose for framing of the guidelines was to check adulteration, provide better service to the customers, to check violation of environmental health and safety regulations. ( 21 ) THE writ petition under Article 226 of the Constitution of India is an extraordinary remedy and cannot be used for enforcement of contractual disputes and remedies which can be resorted to on the basis of the agreement executed between the parties. Paragraph 67 of the agreement may be reproduced as under: "67. Any dispute or difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this Agreement shall be referred to the sole arbitration of the Director Marketing of the Corporation, or of some Officer of the Corporation who may be nominated by the Director Marketing. The dealer will not be entitled to raise any objection to any such Arbitrator on the ground that the Arbitrator is an officer of the Corporation or that he has to deal with the matters to which. the contract relates or that in the course of his duties,or difference. In the event of the Arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason the Director Marketing as aforesaid at the time ofsuchtransfer,vacationofofficeorinabilitytoact,shalldesignateanotherperson to act as Arbitrator in accordance with the terms of the Agreement. Such person, shall be entitled to proceed with the reference from the point at which it was left by his predecessor. Such person, shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also at term of this contract that no person other than the Director Marketing or a person nominated by such Director Marketing of the Corporation as aforesaid shall act as Arbitrator hereunder. The award of the Arbitrator so appointed shall be final, conclusive and binding on all parties to the Agreement, subject to the provisions of the Arbitration Act, 1940, or any statutory modification of or re-enactment thereof and the rules made there under and for the time being in force shall apply to the arbitration proceedings under this clause. " ( 22 ) THE above provision clearly stipulates that in case there is any dispute or difference arising between the parties regarding any right, liability or in relation to the agreement shall be referred to arbitration. The petitioners are at liberty to take recourse to this remedy and cannot impugn the guidelines which admittedly are framed on the basis of the powers vested in the respondents by the agreement entered into between the parties and which are framed for public good. For the aforesaid reasons there is no merit in the writ petitions. The same are, accordingly, dismissed. Rule is discharged. There will be no order as to costs.