JUDGMENT 1. The petitioner states that it was appointed as Distributor of L.P.G. at Bodhan, Nizamabad by M/s. Hindustan Petroleum Corporation Limited, respondent No that there were no complaints as regards its functioning and on the other hand, letters of appreciation were given on several occasions. The Distributorship entered into between the parties is being renewed from time to time and as of now, it is valid up to 2014. On 14.09.2009, an order was passed by respondent on the petitioner. W.P.No.20678 of 2009 was filed and an interim order of suspension was passed. The same was made absolute on 24.09.2009, and the writ 2. Respondent No.2 issued a show cause notice, dated 21.07.2010, to the petitioner alleging that complaints have been received from the customers of Yedpa though the petitioner is charging Rs.325/- per HP Gas Refills, it is not affecting door delivery to the customers nor is issuing bills. The matter was elaborated to have been made by the officials of the Corporation. The petitioner submitted an explanation on 03.08.2010. It made a reference to the awards or letter of appreciation given to it on earlier occasions and denying the allegations made in the show cause notice. It was also mentioned that the so-called complainants are not the customers of the petitioner. 3. Another show cause notice was issued on 27.06.2011 making reference to the show cause notice, dated 21.07.2010, and supplementing some more facts furnished. The petitioner submitted explanation on 15.07.2011 to this. It has also referred to some individual customers named in the show cause notice and offered its comment. 4. Respondent No.2 passed an order on 19.09.2011, suspending the distributorship of the petitioner, pending further investigation into the matter and initiation of suitable action in terms of the Agreement and policy guidelines of the Corporation. Extensive reference was made to the gist of investigation said to have been made, and the conclusive challenges the order, dated 19.09.2011. 5. The petitioner contends that the impugned order is contrary to the terms of the Agreement and in particular, Clause 28-A thereof. According to it, the suspe only as a substantive punishment and not as a measure, pending investigation. It is also pleaded that respondent No.2 has undertaken a roving enquiry petitioner from functioning as a distributor and in the process, the prescribed procedure was completely ignored or violated. 6. According to it, the suspe only as a substantive punishment and not as a measure, pending investigation. It is also pleaded that respondent No.2 has undertaken a roving enquiry petitioner from functioning as a distributor and in the process, the prescribed procedure was completely ignored or violated. 6. A detailed counter-affidavit is filed on behalf of the respondents. An objection is raised as to the very maintainability of the writ petition. According to them, the respondents is governed by the terms of the Agreement and any dispute that arises between them can be resolved by having recourse to arbitration Agreement. It is also stated that the petitioner was given ample opportunity before the order of suspension was passed. According to the respondents, the impugned order is passed as a measure pending further investigation and enquiry and that no exception can be taken to it. 7. Sri K.S. Murthy, learned counsel for the petitioner, submits that the petitioner had unblemished record and career and had earned encomiums from resp. submits that respondent No.2 is determined, some how to disable the petitioner from functioning. He contends that when penalty was imposed without bas and that the same was taken by respondent No.2 as an act of confrontation. He submits that once in every three months, the accounts and registers mainta the officials of the Corporation and nothing was pointed out at any stage. 8. Learned counsel further submits that it was only in the recent past that certain officials have initiated steps on the basis of nonexistent and imaginary complaints and have deviated from the prescribed procedure. He contends that according to the terms of the Agreement as well as the policy guidelines, even where a distributor is found to have restored to any violation or irregularity imposition of penalty or admonition is provided for in case it is the first instance and it is only when successive violation for four times is proved, that extreme resorted to. He submits that clause 28-A of the Agreement provides for suspension of distributorship that too for a specific period as a measure of penalty on proof of violation and not as a measure pending enquiry. 9. He submits that clause 28-A of the Agreement provides for suspension of distributorship that too for a specific period as a measure of penalty on proof of violation and not as a measure pending enquiry. 9. Sri K.V. Simhadri, learned Standing Counsel for the respondents, on the other hand, submits that the writ petition is not maintainable since there exists a claus that the petitioner was given ample opportunity to prove its innocence, and it is only on being prima facie satisfied that violations of great magnitude have taken place that suspension as a measure pending enquiry was ordered. Learned counsel further submits that suspension pending enquiry is incidental to the power to cancel the licence and that the impugned order does not suffer from any legal infirmity. He has placed reliance upon certain upon certain decided cases. 10. Before the discussion on merits is undertaken, the objection raised by the respondents as to the maintainability of the writ petition needs to be dealt with. 11. It is not in dispute that respondent No.1 is a creature of a statute enacted by the Parliament and it partakes the character of State as defined under Article 12 of activity undertaken by it may be commercial in nature. All the same, being an instrumentality of the State, it is required to act in a fair and reasonable ma liable to be tested on the touchstone of the tenets referable to Article 14 of the Constitution of India. The mere fact that the activity entrusted to the petitioner is commercial in nature does not keep respondent No.1 outside the purview of judicial review. 12. As recently as in 2010, in Hindustan Petroleum Corporation Limited Vs. Super Highway Services (2010 (3) Supreme Court Cases 321), the Hon’ble Supreme of arbitration is not a bar for entertaining the writ petition to test the acts and omissions on the part of the creature under the statute made by the Parliament. 13. Learned counsel for the respondents placed reliance upon the judgments of the Hon’ble Supreme Court in Sanjana M.WIG (Ms) Vs. Hindustan Petroleum Corp. Ltd. (2) 2005 (7) SCJ 32 = (2005) 8 SCC 242 . Court Cases 242).Reference was made to the judgments of the Hon’ble Supreme Court in E. Venkatakrishna Vs. Indian Oil Corporation ( (2000) 7 SCC 764 Amritsar Gas Service ( (1991) 1 SCC 533 ). Hindustan Petroleum Corp. Ltd. (2) 2005 (7) SCJ 32 = (2005) 8 SCC 242 . Court Cases 242).Reference was made to the judgments of the Hon’ble Supreme Court in E. Venkatakrishna Vs. Indian Oil Corporation ( (2000) 7 SCC 764 Amritsar Gas Service ( (1991) 1 SCC 533 ). The same view was expressed in Empire Jute Co. Ltd. Vs. Jute Corporation of India Limited ((2007) 14 Supre judgment in Sanjana’s case, particularly para 18 thereof, discloses that it was not laid as an absolute principle that the writ petition cannot be maintained in parties in the said case have already invoked the arbitration clause and halfway through the said proceedings, the writ petition was filed. Such is not the Petroleum Corporation Limited Vs. M/s. Pinkcity Midway Petroleums (AIR 2003 Supreme Court 281) is on different facts. The distributorship therein was clauses in the Agreement, which enabled the company to stop or suspend the sales pending investigation. Against an order of stoppage of supply, the writ the High Court holding that such a power did not exist. The matter was carried to the Hon’ble Supreme Court and after referring to the clause that empowered the company to stop supplies pending enquiry, the Supreme Court reversed the judgment of the High Court. It was observed that it was very much competent for the company to suspend sales and can be the subject matter of the arbitration. 14. In the instant case, the product is L.P. Gas and the terms of the Agreement are substantially at variance. Further, the writ petition filed by the petitioner her respondents, imposing penalty is very much pending before this Court. Therefore, the objection raised by the respondents as to the maintainability of the writ petition can not be sustained. 15. Coming to the merits of the matter, this Court is very much conscious of the fact that it cannot sit as an appellate authority nor can it re-appreciate the findings is conferred with the power. The examination by this Court would be only as to whether the respondents have acted within the framework, which was created or stipulated by them to regulate the distributorship. 16. The terms of the Agreement as well as the guidelines framed by the respondents from time to time, prescribe the procedure to be followed, whenever any dealers. The examination by this Court would be only as to whether the respondents have acted within the framework, which was created or stipulated by them to regulate the distributorship. 16. The terms of the Agreement as well as the guidelines framed by the respondents from time to time, prescribe the procedure to be followed, whenever any dealers. The nature of action that can be taken against a distributor is provided for under Clauses 28-A and B of the Agreement. It reads: “28A. Notwithstanding anything to the contrary herein contained, the Corporation shall be at liberty, upon their being satisfied of any breach of any covenant committed by the dealers of this agreement, to stop and/or suspend sales for such period or periods as the Corporation may think fit. Such right of stoppage and/or suspension shall be in ad other right or remedy available to the Corporation under this agreement. The dealer shall not be entitled to claim any compensation, or damage from the corporation on account of any such stoppage and/or suspension of supply. 28B. Notwithstanding anything to the contrary herein contained, the Corporation shall also be at liberty at its entire discretion to terminate/this agreement happening of any of the following event, namely:- (Other clauses are omitted since they are not necessary to ensure brevity). 17. From this, it is evident that the distributorship can be suspended for a specified period, which the Corporation may stipulate, only on “being satisfied of any breach of covenant committed by the dealers”. In other wards, the suspension of distributorship for a stipulated period can be ordered only after a conclusion is arrived at that the distributor has committed breach of covenant. Naturally, such conclusion must be preceded by an enquiry or a show cause notice. The suspension of distributorship for a specified period is a final measure. Nothing of the Corporation. Once the suspension is ordered for a specific period, the matter in that behalf gets closed. Nothing remains to be done after the expiry of period of suspension. 18. Termination of Agreement can also be resorted to, depending on the gravity and under the circumstances stipulated under Clause 22-B of the Agreement. 19. Nothing of the Corporation. Once the suspension is ordered for a specific period, the matter in that behalf gets closed. Nothing remains to be done after the expiry of period of suspension. 18. Termination of Agreement can also be resorted to, depending on the gravity and under the circumstances stipulated under Clause 22-B of the Agreement. 19. A clear distinction needs to be maintained between suspension pending enquiry on the one hand, and suspension as a measure of substantive penalty, on can be ordered only when the rules specifically provided for it and the language of the provision clearly suggests the same. Time and again, the Courts held that suspension pending enquiry cannot be treated as a penalty, whereas the one imposed after conducting enquiry and on the basis of findings adverse to the agency or person, is a penalty. 20. In the instant case, respondent No.2 issued two show cause notices, one on 21.07.2010 and the other on 21.06.2011. Extensive enquiry was also undertaken No.2 imposed the punishment of suspension of licence for a specified period on the basis of the conclusions arrived at by it, not much could have been said discloses that on the one hand final opinion was expressed as to the nature of violations by the petitioner and on the other hand, much is left to be investigate at a letter point of time. The order inter alia reads as under: “The above irregularities are of very serious nature and are in violation of clause Nos.5, 6, 10, 12, 15, 16, 17, 19.b, 23, 24 (a) and 25 and attracts action as per Clauses 28 of the said Distribution agreement signed between you and the Corporation. Hence, we are suspending your distributorship, pending further investigation and initiate suitable agreement and policy guidelines of the Corporation.” 21. Respondent No.2 relied upon Clause 28 of the Agreement for suspending the distributorship of the petitioner. As a matter of fact, Clause 28 of the Agreement as such does not exist in the Agreement. That respondent No.2 intended to proceed further is evident from the fact that extensive enquiry into the very allegation is undertaken even w report was prepared as recently as on 03.03.2012. The curious part of it is that when the petitioner pressed for interim orders, the respondents pleaded that the matter is under investigation and that they would need time to complete it. The curious part of it is that when the petitioner pressed for interim orders, the respondents pleaded that the matter is under investigation and that they would need time to complete it. This Court acceded to that request. Respondent No.2, however, started his report with the following passage: “This report is prepared in compliance of the directions dated 11.11.2011 of Hon’ble High Court of Andhra Pradesh in W.P.No.27107 of 2011 filed by M/s. Sri Saibaba Agency, LPA Disributor of Hindustan Petroleum HPCL Ltd., Bodhan, challenging the suspension of the Agency by M/s. Hindustan Petroleum Corporation Ltd. (HPCL). The Hon’ble Hig the investigation and enquiry by the end of February 2012 and file final report of enquiry.” 22. This is giving an indication that this Court ordered enquiry and respondent No.2 conducted the enquiry, in compliance with the direction. The impugned proceeding are in the form of show cause notice proposing to terminate the distributorship. It only means that respondent No.2 did not arrive at final conclusion as to the deviations on the part of the petitioner; by the time the impugned order of suspension was passed. 23. It is not as if there is no concept or practice of suspension pending enquiry in the functioning of the petroleum companies. In respect of the petroleum product, as distinguished from L.P.G. gas, a different set of rules are framed. The rules pertaining to petroleum products, such as Petrol, Diesel, Lubricants, the companies have reserved to them, the “pending enquiry”. The language employed in such provisions is totally distinct. For instance, Clause 30 of the Agreement relating to petroleum projects reads as under: ”30. Corporation’s right to stop/suspend Petrol/Diesel/Lubricants supply. Notwithstanding anything to the contrary herein contained the Corporation shall be at liberty upon a breach by the dealer of any covenant in this agreement of Petrol/Diesel/Lubricants and other products to the dealer and/or sales for such period or periods as the Corporation may think fit, and such right of stoppage to and/or without prejudice to any other right or remedy available to the Corporation under this agreement. The dealer shall not be entitled to claim a Corporation on account of any such stoppage and/or suspension of supply.” 24. The dealer shall not be entitled to claim a Corporation on account of any such stoppage and/or suspension of supply.” 24. A comparison of this with clause 28-A of the Agreement demonstrates that the expression “upon their being satisfied of any breach of covenant committed by 28-A is conspicuously absent in Clause 30 of the Agreement pertaining to the petroleum products. Unfortunately, the Officer who passed the impugned order, who is senior enough, did not care to understand the purport of the relevant provisions of law. 25. Even where suspension is permitted as a substantive penalty, it is required to be for a specified period. The concept of suspension of the licence for any definite enquiry is totally unknown in respect of the Agreement of L.P.G. distributorship. When a substantive punishment on facts itself is for a limited period, the s provided for under the Agreement cannot be for an indefinite period. 26. The situation is comparable with the one, of a person being kept as an under trial prisoner for a longer period than what he would have been than the period the crime alleged against him was proved. The whole exercise was untenable and is the result of either failure or refusal to understand the scope of the rules organization owned by the Government of India, respondent No.1 and its Officer, respondent No.2, were supposed to act in a fair, reasonable, and objective manner. 27. The manner in which the enquiry was conducted leaves much to be said. Time and again, the petitioner went on stating that the so-called complainants are not its dealers and requested that the particulars be furnished. Instances are also brought to the notice of this Court wherein housewives in large numbers complained about the alleged highhandedness of an officer by name Srinivasa Rao in the name of inspection. They stated that he has invaded their private life and entered their kitchen with shoes. Further, the tone and tenor other proceedings do not fit into the one that is expected from a reputed organization like respondent No.1. Even while issuing a show cause notice, respond the extent of warning the petitioner as though the dealer is his domestic servant. Even before the facts were verified, final opinion was formed. 28. The writ petition is accordingly allowed and the impugned order is set aside. 29. Even while issuing a show cause notice, respond the extent of warning the petitioner as though the dealer is his domestic servant. Even before the facts were verified, final opinion was formed. 28. The writ petition is accordingly allowed and the impugned order is set aside. 29. This Court does not absolve the petitioner, of any violations if resorted to by it. The record placed before this Court by the parties discloses that respondent No.2 by name Sri K. Srinivas Rao, either did not have the proper understanding of the relevant provisions or the procedure to be followed in matters of this nature. It is directed that in case respondent No.1 feels that the enquiry against the petitioner needs to be continued, the feasibility of entrusting the same to another officer shall be examined. Such a step shall, however, be taken, after business. 30. There shall be no order as to costs. 31. The miscellaneous petition filed in this writ petition also stands disposed of.