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2009 DIGILAW 256 (BOM)

Sopanrao Laxmanrao Mhaske v. Union of India

2009-02-24

K.K.TATED, P.V.HARDAS

body2009
K.K. TATED, J.:- Rule. Rule made returnable forthwith. Mrs. A.B. Dube, learned Counsel accepts notice on behalf of respondent No.2. With the consent of learned Counsel for the parties this petition is heard finally at the stage of admission. 2. The present petition filed by the petitioners under Articles 14, 19, 21, 300-A read with 226 of the Constitution of India seeking writ of certiorari or any other appropriate writ, order or direction for quashing and setting aside the entire action initiated by respondent No.2 on the basis of inspection carried out on 22-06-2007. 3. It is the case of the petitioners that they entered into agreement dated 02-07 -1983 with respondent No.2. By the said agreement, respondent No.2 appointed the petitioners as their dealer for the retail sale or supply of petrol/diesel/motor oils/Greases and such other products as may be specified by respondent No.2 from time to time. It is specifically stated in the agreement that the said agreement will remain in force for 15 years from 04-07-1983. It is the case of the petitioners that on or about 22-06-2007 the Officers of respondent No.2 visited the petrol pump of the petitioners situated at Bhabaleshwar, Tal.-Rahata, District Ahmednagar and carried out the inspection. At the time of carrying out inspections, Officers of respondent No.2 have taken samples of the petrol i.e. Motor Spirit and High Speed Diesel. Thereafter, respondent No.2 by their letter dated 26-06-2007 called upon the petitioners to explain the irregularities found by respondent No.2' s Officers at the time of inspection and as per result of the inspection. In the said letter dated 26-06-2007 respondent No.2 pointed out to the petitioners that they found variation beyond permissible limits for MS and HSD, totaliser seals found tampered with, MS sample failed in density, non provision of Free Air and Non maintenance of Stock/Sales records. Therefore, respondent No.2 called upon the petitioners to submit their explanation in respect of these irregularities within seven days of the receipt of the said letter. It is the case of the petitioners that without giving any opportunity to explain the irregularities as pointed out by respondent No.2 by their letter dated 26-06-2007, they issued show cause notice towards irregularities detected during the inspection of the petitioners' retail outlet on 22-06-2007 by letter dated 02-08-2007. It is the case of the petitioners that without giving any opportunity to explain the irregularities as pointed out by respondent No.2 by their letter dated 26-06-2007, they issued show cause notice towards irregularities detected during the inspection of the petitioners' retail outlet on 22-06-2007 by letter dated 02-08-2007. It is submitted by the petitioners that in the said show cause it is stated that the petitioners' retail outlet has failed to meet the specifications in the following parameters: 1. Research Octane Number (RON) 2. Distillation Test. 3. Sulphur content. 4. Along with the said show cause notice respondent No.2 forwarded the Laboratory Test Report bearing Lab Serial Nos.595, 587, 596, 588 and other documents. Thereafter, respondent No.2 also issued show cause notice dated 17-08-2007 to the petitioners for not carrying on business as per terms and conditions of Dealership Agreement dated 02-07-1983. In the said show cause notice, respondent No.2 alleged that the petitioners committed various malpractices and irregularities and gross violation of the terms and conditions of the said Dealership Agreement specifically in respect of poor sales performance and not maintaining the standard of outlet sale. Respondent No.2 called upon the petitioners to show cause within ten days of the said show cause notice as to why the suitable action against the petitioners should not be taken for gross violation of Clauses 9, 16, 26, 38, 47 and 55 (i) of the Dealership Agreement dated 02-07 -1983. It is specifically stated in the show cause notice that if the petitioners failed to reply within stipulated time or cause shown by the petitioners is not satisfactory, it would be assumed that the petitioners have no satisfactory explanation to show cause and respondent No.2 will constrain to take necessary action as per terms and conditions of the Dealership Agreement dated 02-07 -1983. The petitioners further submitted that by their letter at Page 44 of the petition called upon respondent No.2 to provide specific documents in respect of inspection carried out by respondent NO.2's Officers. Thereafter, the petitioners replied respondent NO.2's show cause notice by their letter dated 01-09-2007 and denied all the allegations against them. The petitioners specifically stated in the said reply that the agreement dated 02-07-1983 has already expired and therefore, there is no question of any binding nature of the said agreement on the petitioners. Thereafter, the petitioners replied respondent NO.2's show cause notice by their letter dated 01-09-2007 and denied all the allegations against them. The petitioners specifically stated in the said reply that the agreement dated 02-07-1983 has already expired and therefore, there is no question of any binding nature of the said agreement on the petitioners. Not only that the petitioners alleged in the said reply that respondent NO.2's Officers failed and neglected to carry out the inspection as per rules and regulations. On the basis of these facts, the petitioners filed present petition on 24-09-2007 for cancellation of action and setting aside the inspection report dated 2206-2007 and directing the respondents to forthwith remove the seal put up on the petrol pump of the petitioners. Thereafter, respondent No.2 by their letter dated 28-09-2007 terminated the dealership agreement dated 0207-1983 and cancelled outlet permission granted to the petitioners. The said termination letter received by the petitioners after filing the present petition in this Court. In view of these facts, the petitioners preferred Civil Application No.8409/2007 for carrying out the necessary amendment and same was allowed. As per amended petition, the petitioners challenged the cancellation order dated 28-092007 along with other prayers. Thereafter, again the petitioners preferred another C.A. No.10632/2oo7 for carrying out amendment and adding alternative prayer which reads as under: "AAA) The respondent No.2 may be directed to remove all its machinery and belongings and give vacant possession of the subject land used for this dealership within a month from date of order of this Hon'ble Court treating that the petitioners have voluntarily resigned from the dealership and to pay his dues if any within 2 months thereafter." 5. Mr. R.R. Mantri, learned Counsel appealing on behalf of the petitioners submitted that respondent No.2 failed to observe Rules 7 and 8 of Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. Rules 7 and 8 of the said Order reads as under: "7. Mr. R.R. Mantri, learned Counsel appealing on behalf of the petitioners submitted that respondent No.2 failed to observe Rules 7 and 8 of Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. Rules 7 and 8 of the said Order reads as under: "7. Power of search and seizure.- (1) Any Gazetted Officer of the Central Government or a State Government or any Police Officer not below the rank of Deputy Superintendent of Police duly authorized, by general or special order of the Central Government or a State Government, as the case may be, or any officer of the oil company, not below the rank of Sales Officer, may, with a view to securing compliance with the provisions of this Order, or for the purpose of satisfying himself that this Order or any order made there under has been complied with or there is reason to believe that all or any of the provisions of this Order have been and are being or are about to be contravened,- (a) enter and search any place or premises of a dealer, transporter, consumer or any other person who is an employee or agent of such dealer or transporter or consumer; (b) stop and search any person or vehicle or receptacle used or intended to be used for movement of the product; (c) take samples of the product and seize any of the stocks of the product and the vehicle or receptacle or any other conveyance used or suspected to be used for carrying such stocks and thereafter take or authorize the taking of all measures necessary for securing the production of stocks or items so seized before the Collector or District Magistrate having jurisdiction under the provisions of the Essential Commodities Act, 1955 and for their safe custody pending such production; (d) inspect, seize and remove with, such aid or assistance as may be necessary, books, registers, any records or documents of the dealer, transporter, consumer or any other person suspected to be an employee or agent of the dealer, transporter or consumer. (2) While exercising the power of seizure provided under sub-clauses (c) and (d) above, the authorized officer shall record in writing the reasons for doing so and a copy of such recording shall be provided to the dealer, transporter, consumer or any other concerned person, as the case may be. (2) While exercising the power of seizure provided under sub-clauses (c) and (d) above, the authorized officer shall record in writing the reasons for doing so and a copy of such recording shall be provided to the dealer, transporter, consumer or any other concerned person, as the case may be. (3)The provisions of section 100 of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure shall, as far as may be, apply to searches and seizures under this Order. 8. Sampling of Product.- (1) The authorized under clause 7 shall draw the sample from the tank, nozzle, vehicle or receptacle, as the case may be, in clean aluminums containers, to check whether density and other parameters of the product conform to the requirements of Bureau of Indian Standard specifications number IS 2796 and IS 1460 for motor spirit and high sped diesel respectively. Where samples are drawn from retail outlet, the relevant tank truck sample retained by the dealer as per clause 3(b) would also be collected for laboratory analysis. (2) The authorized officer shall take and seal six samples of 1 litre each of the motor spirit or three samples of one each of the high speed diesel. Two samples of motor spirit or one of high speed diesel would be given to the dealer or transporter or concerned person under acknowledgement with instruction to preserve the sample in his safe custody till the testing or investigations are completed. Two samples of Motor Spirit or one of High Speed Diesel shall be kept by the concerned oil company or department and the remaining two samples of Motor Spirit or one of High Speed Diesel would be used for laboratory analysis. (3) The sample label shall be jointly signed by the authorized officer who has drawn the sample, and the dealer or transporter or concerned person or his representative and the sample label shall contain information as regards the product, name of retail outlet, quantity of sample, date, name of the authorized officer, name of the dealer or transporter or concerned person or his representative. (4) The authorized officer shall forward the sample of the product taken within ten days to any of the laboratories mentioned in Schedule III or to any other such laboratory when it may be notified by the Government in the Official Gazette for this purpose, for analyzing with a view to checking whether the density and other parameters of the product conform to the requirements of Bureau of Indian Standard specifications number IS 2796 and IS 1460 for motor spirit and high speed diesel respectively. (5) The laboratory mentioned in sub-clause (4) shall furnish the test report to the authorized officer within twenty days of receipt of sample at the laboratory. (6) The authorized officer shall communicate the test result to the dealer or transporter or concerned person and the oil company, as the case may be, within five days of receipt of test results from the laboratory for appropriate action." 6. Mr. R.R. Mantd, learned Counsel appearing on behalf of the petitioners submitted that it is mandatory on the part of respondent No.2 to follow Rules 7 and 8 of the said Order 2005. The petitioners contended that while exercising power of seizure, Officers of respondent No.2 failed to record in writing reasons for doing so and not only that they failed to provide copy of the same. Not only that, the Officers of respondent No.2 failed to follow the procedure as prescribed under Section 100 of the Code of Criminal Procedure relating to search and seizure. Therefore, the action taken by respondent No.2 is illegal and same is liable to be set aside directing respondents to remove the seal and allow the petitioners to carryon their retail outlet business. Mr. R. R. Mantri, learned Counsel appearing on behalf of the petitioners submitted that the petitioners are owners of the land on which outlet is constructed and therefore, this Court be pleased to direct respondent No.2 to remove all machinery and belongings and give vacant possession of the subject land within a particular time from the date of order passed by this Court. 7. Mrs. A.B. Dube, learned Counsel appearing on behalf of respondent No.2 raised objection about maintainability of the present petition under Article 226 of the Constitution of India. Mrs. 7. Mrs. A.B. Dube, learned Counsel appearing on behalf of respondent No.2 raised objection about maintainability of the present petition under Article 226 of the Constitution of India. Mrs. A.B. Dube, learned Counsel for respondent No.2 submitted that the petition is not maintainable under Article 226 of the Constitution of India for enforcing terms and conditions of the contract. It is the case of respondent No.2 that they entered into dealership agreement with the petitioners on 02-07-1983 and as the petitioners failed and neglected to comply the terms and conditions of the said agreement, respondent No.2 cancelled dealership by their letter dated 2809-2007 after following due process of law and therefore, the present petition is not maintainable under Article 226 of the Constitution of India for enforcing terms and conditions of the dealership agreement dated 02-07-1983. It is further submitted by Mrs. A.B. Dube, learned Counsel for respondent No.2 that the petitioners have not been able to make out a case of infringement of any right either statutory or contractual. No case has been made out for grant of relief for restoration of dealership. It is the case of respondent No.2 that in fact the petitioners have committed malpractices and irregularities including adulteration of petrol as detailed in termination letter dated 28-09-2007. It is the case of respondent No.2 that when inspection was carried out at the petitioners' outlet after due inquiry, they found that the petitioners committed adulteration and not only that the petitioners violated several terms and conditions of the agreement dated 02-07 -1983. It is the case of respondent No.2 that the petitioners failed to maintain sale performance as per agreement dated 02-07-1983. Not only that the petitioners violated Clauses - 9 16 26,38,47 and 55(i) of the dealership agree; dated 02-07-1983. After considering the laboratory report and performance of the petitioners, they terminated the dealership by their letter dated 28-09-2007. In any case, the present writ petition is not maintainable to enforce the contractual rights between the parties. 8. Mr. R.R. Mante, learned Counsel appearing on behalf of the petitioners submitted that the action taken by respondent No.2 is contrary to law and the same is not maintainable and therefore, this Court be pleased to direct respondent No.2 to remove the seal and hand over the possession of outlet i.e. petrol pump to the petitioners. 8. Mr. R.R. Mante, learned Counsel appearing on behalf of the petitioners submitted that the action taken by respondent No.2 is contrary to law and the same is not maintainable and therefore, this Court be pleased to direct respondent No.2 to remove the seal and hand over the possession of outlet i.e. petrol pump to the petitioners. The petitioners submitted that at the time of carrying out search and seizure, respondent No.2 failed and neglected to follow Rules 7 and 8 of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. The petitioners submitted that at the time of search and seizure, Officers of respondent No.2 failed to record in writing reasons for doing so and also failed to provide copy of the same to the petitioners. On these grounds, the action taken by respondent No.2 is liable to be quashed and set aside. It is the case of the petitioners that laboratory report relied by respondent No.2 for cancellation of dealership agreement cannot be considered because same were obtained without following procedure as prescribed in Order, 2005. It is further submitted that the dealership agreement dated 02-07- I 983 was only for IS years and the same was expired long back and therefore the terms and the conditions of the said agreement are not binding on the petitioners. Therefore, whatever action taken by respondent No.2 on the basis of agreement dated 02-07-1983 is against justice, equity and good conscience and the same is liable to be quashed and set aside. In the alternative, two other prayers are claimed. 9. Mr. R.R. Mantri, learned Counsel for the petitioners submitted that the petitioners are owners in respect of land on which the petrol pump is constructed. As agreement for dealership dated 02-07-1983 is terminated by respondent No.2, in that case, the petitioners are entitled for vacant possession of the said land. Mrs. A.B. Dube, learned Counsel appearing on behalf of respondent No.2 submitted that till the date of termination of the dealership agreement they supplied goods to the petitioners as per the terms and conditions of agreement dated 0207 -1983 and same were accepted and acted upon by the petitioners. Therefore, it is deemed that the said agreement is being acted upon by the parties, Mrs. Therefore, it is deemed that the said agreement is being acted upon by the parties, Mrs. A.B. Dube, learned Counsel appearing on behalf of respondent No.2 submitted that the dealership agreement dated 02-07-1983 is cancelled not only on the ground of adulteration but also on other grounds i.e. for violation of clauses 9, 16,26,38,47,55 (i) of the dealership agreement dated 02-07-1983. Therefore, the petitioners are not entitled to any relief in the present writ petition. 10. It is crystal clear from the show cause notice dated 17-08-2007 issued by respondent No.2 to the petitioners for calling upon them to explain as to why the dealership agreement dated 02-07-1983 should not be cancelled on the ground of poor sale performance and for violation of other terms and conditions. Therefore, these facts are disputed question of facts and the same cannot be decided in writ petition under Article 226 of the Constitution of India. 11. In the present petition, as per amended prayers, the petitioners are seeking the direction from this Court to direct respondent No.2 to remove all its machinery and belongings and give vacant possession of the subject land used for petrol pump. In any case, the petitioners cannot claim the present prayer under Article 226 of the Constitution of India because there is a separate lease agreement between the petitioners and respondent No.2. 12. Mrs. A.B. Dube, learned Counsel appearing on behalf respondent No.2 relied on the decision of the Apex Court in the matter of State of Jammu and Kashmir V s. Ghulam Mohd. Dar and another, reported in 2003(8) Supreme 351 , where it is specifically held that - "it is also well settled that the High Court would not entertain a writ petition involving disputed questions of fact. Keeping in view the aforementioned well settled principles of law, the impugned judgments cannot be sustained. " Mrs. A.B. Dube, learned Counsel appearing on behalf of respondent No.2 also relied on the decision of Apex Court in the matter of Shanti Devi Vs. State of Sikkim and another, reported in 2008 AIR sew 1044 for the proposition that writ petition under Article 226 of the Constitution of India is not maintainable for enforcing terms and conditions of the contract between the parties. Paragraph Nos.21 and 22 of the said Judgment reads as under: "20. State of Sikkim and another, reported in 2008 AIR sew 1044 for the proposition that writ petition under Article 226 of the Constitution of India is not maintainable for enforcing terms and conditions of the contract between the parties. Paragraph Nos.21 and 22 of the said Judgment reads as under: "20. Having regard to the aforesaid facts, the order passed on the contempt application directing possession to be taken by the Police Authorities and to make over the same to the respondent No.2, appears to be in gross abuse of the due process of law which cannot at all be sustained. 21. What is of grave concern is the fact that the learned Judges completely disregarded the civil law relating to eviction and directed the writ petitioner on her writ petition for different reliefs to hand over possession of the tenanted premises to the respondent No.2. The case in hand is an example how the writ courts have in recent times either forgotten or ignored the line between the reliefs which could be given by the Civil Courts and the Constitutional Courts. The learned Judges appear to have lost sight of the fact that they were deciding a writ petition for reliefs prayed for by the writ petitioner and not a civil suit for eviction against her and that in such a proceeding no mandatory order of eviction could be passed and certainly not against a writ petitioner herself. In fact, after imposing the cost of Rupees one lakh while dismissing the writ petition, the learned Judges added insult to injury by directing the writ petitioner to also vacate the premises, where she was running her business for about thirty years, within a week from the date of the order." 13. It is clear from both the authorities that writ petition preferred by the petitioners under Article 226 of the Constitution of India for enforcing the terms and conditions of the agreement dated 02"071983 and issue arising out of the said agreement cannot be entertained in the present writ petition and the same is liable to be dismissed. 14. It is to be noted that if alternative remedy is available then writ petition should not be entertained. The Apex Court in the matter of Kerala State Electricity Board and another Vs. 14. It is to be noted that if alternative remedy is available then writ petition should not be entertained. The Apex Court in the matter of Kerala State Electricity Board and another Vs. Knrien E. Kalathil and others reported in (2000)6 S.C.C. 293 held that if alternative remedy is available in respect of dispute relating to the terms of the contract with statutory body then writ court ordinarily should not entertain the same. Relevant portion for the present petition is as under: "10. We find that there is a merit in the first contention of Mr. Raval. Learned Counsel has rightly questioned the maintainability of the writ petition. The interpretation and implementation of a clause in a contract cannot be the subject matter of a writ petition. Whether the contract envisages actual payment or not is a question of construction of contract. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement of a statutory contract. A contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. We are also unable to agree with the observation of the High Court that since the obligations imposed by the contract on the contradicting parties come within the purview of the Contract Act, that would not make the contract statutory. Clearly, the High Court fell into an error in coming to the conclusion that the contract in question was statutory in nature. 11. A statute may expressly or impliedly confer power on a statutory body to enter into contracts in order to enable it to discharge its functions. Dispute arising out of the terms of such contracts or alleged breaches have to be settled by the ordinary principles of law of contract. The fact that one of the parties to the agreement is a statutory or public body will not by itself affect the principles to be applied. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. The disputes about the meaning of a covenant in a contract or its enforceability have to be determined according to the usual principles of the Contract Act. Every act of a statutory body need not necessarily involve an exercise of statutory power. Statutory bodies like private parties, have power to contract or deal with property. Such activities may not raise any issue of public law. In the present case it has not been shown how the contract is statutory. The contract between the parties is in the realm of private law. It is not a statutory contract. The disputes relating to interpretation of the terms and conditions of such a contract could not have been agitated in a petition under Article 226 of the Constitution of India. That is a matter of adjudication by a civil court or in arbitration if provided for in the contract. Whether any amount is due and if so, how much and refusal of the appellant to pay it is justified or not, are not the matters which could have been agitated and decided in a writ petition. The contractor should have relegated to other remedies." 15. In similar way, the Apex Court in the matter of State of D.P. and others Vs. Bridge and Roof Company (India) Ltd., reported in (1996)6 SCC 22 , held that the dispute relating the terms of private contract should not be entertained if alternative remedy is available and same is exhausted. Following Paragraphs are useful for the present petition. "15. In our opinion, the very remedy adopted by the respondent is misconceived. It is not entitled to any relief in these proceedings, i.e. in the writ petition filed by it. The High Court appears to be right in not pronouncing upon any of the several contentions raised in the writ petition by both the parties and in merely reiterating the effect of the order of the Dy. Commissioner made under the proviso to Section 8-D(1). 16.Firstly the contract between the parties is a contract in the realm of private law. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. In a dispute relating to interpretation of the terms and the conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. It is not a statutory contract. It is governed by the provisions of the Contract Act or, may be, also by certain provisions of the Sale of Goods Act. In a dispute relating to interpretation of the terms and the conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That is a matter either for arbitration as provided by the contract or for the civil court, as the case may be. Whether any amount is due to the respondent from the appellant Government under the contract and, if so, how much and the further question whether retention or refusal to pay any amount by the Government is justified, or not, are all matters which cannot be agitated in all adjudicated upon in writ petition. The prayer in the writ petition viz. to restrain the Government from deducting a particular amount from the writ petitioner's bill(s) was not a prayer which could be granted by the High Court under Article 226. Indeed, the High Court has not granted the said prayer." 16. In view of the above mentioned facts and circumstances, there is no merit in the present writ petition. The present writ petition is dismissed with no order as to costs. Rule discharged. Petition dismissed.