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2014 DIGILAW 602 (PAT)

Prem Petroleum v. Indian Oil Corporation Ltd.

2014-05-13

RAMESH KUMAR DATTA

body2014
ORDER : Ramesh Kumar Datta, J. 1. Heard learned counsel for the petitioner and learned counsel for the respondent Indian Oil Corporation. The petitioner after the amendment of the prayer through an interlocutory application seeks quashing of the order dated 21.3.2013 passed by the respondent Indian Oil Corporation by which the dealership of the petitioner has been cancelled, whereas the writ application had been filed against the show cause notice for termination of the dealership. 2. The petitioner was originally a proprietorship firm of one Sri Yamuna Raman Chaudhary who was awarded the dealership of Kisan Seva Kendra for the location of Sarisabpahi in the District of Madhubani under the Freedom Fighters Category by letter of appointment dated 31.3.2007, pursuant to an advertisement dated 8.12.2005 and interview held on 2.8.2006 followed by field verification. Subsequently on account of his old age the said Yamuna Raman Chaudhary inducted Smt. Neera Devi as a partner after following the due procedure and obtaining the permission of respondents on 29.11.2009 for which a certificate dated 30.11.2009 was issued by the respondents stating that the petitioner firm M/s. Prem Petroleum which was a proprietorship firm was reconstituted as a partnership with effect from 21.11.2009 giving the name of the said Yamuna Raman Chaudhary and Smt. Neera Devi as the partners of the firm. It may here be pointed out that along with the application the said Yamuna Raman Chaudhary had filed an experience certificate dated 1.2.2006 issued by M/s. Abhilasha Oil Centre which was signed by one Naveen stating that he had worked with the said firm as a Manager from 1.4.2003 to 31.3.2005. 3. The said Yamuna Raman Chaudhary after the reconstitution of the partnership firm died on 4.2.2010. 3. The said Yamuna Raman Chaudhary after the reconstitution of the partnership firm died on 4.2.2010. More than two and a half years after his death a show cause notice dated 31.10.2012 was issued by the respondent Indian Oil Corporation addressed to the said Sri Yamuna Raman Chaudhary and Smt. Neera Devi, partners of the partnership firm M/s. Prem Petroleum, stating that on receipt of a complaint after the reconstitution of the firm an enquiry was carried out during which it was established that the experience certificate submitted by the said Yamuna Raman Chaudhary was fake/forged and during the course of investigation the proprietor of M/s. Abhilasha Oil Centre had categorically stated that the letter head on which the certificate was issued is not of his retail outlet and he had not authorized any one to issue any such certificate on his behalf and Sri Yamuna Raman Chaudhary had never worked as Manager at his retail outlet and he has never seen Sri Yamuna Raman Chaudhary in his life. It was further stated in the said show cause notice that in view of the said statements it was clearly established that the experience certificate submitted by the said Yamuna Raman Chaudhary along with his application for dealership is fake/forged and, therefore, in terms of Clause 19(iv) of the Letter of Intent dated 22.9.2006 read with Clause 45(i) of the Dealership Agreement dated 29.11.2009, on account of the suppression and/or misrepresentation of the material facts in the application submitted for award of dealership, the show cause notice was issued as to why the dealership should not be terminated. 4. Pursuant to the said show cause notice since the said Yamuna Raman Chaudhary was dead and the other partner Smt. Neera Devi was not aware about what had happened at the time of application for dealership, the reply to the said show cause was filed by Munna Raman Chaudhary, son of Yamuna Raman Chaudhary, stating that issuance of the said show cause was per se illegal and not valid in the eye of law, inter alia, on the ground that the enquiry had been conducted behind the back of his father who was already dead and no such proceeding could have been initiated against his dead father on the basis of false and fabricated allegations. It was further stated in the said show cause that he personally contacted the Proprietor of M/s. Abhilasha Oil Centre, Shri Pradeep Thakur, who was then residing at Pune and tried to gather the truth from him and the Proprietor has stated that the sales and supply of his retail outlet was suspended and as such he was called by the authorities of the Corporation assuring him to resume the sales and supply of his retail outlet if he assisted them and gave the statements as per their instructions and accordingly under pressure he had stated the aforesaid fact which have been mentioned in the show cause notice. It was further stated in the said reply to show cause that the proprietor of M/s. Abhilasha Oil Centre had given his statement on 4.12.2012 referring to the show cause letter dated 31.10.2012 which was duly notarized by a Notary Public in which he had categorically stated that due to pressure he had given false written statement with respect to the experience certificate dated 1.2.2006 issued by Naveen Kumar Jha in favour of Yamuna Raman Chaudhary and the statement was not true and correct. It was further stated in the said affidavit of the proprietor of M/s. Abhilasha Oil Centre, Pradeep Thakur that the experience 'certificate dated 1.2.2006 issued by Sri Naveen or Naveen Kumar Jha on 1.2.2006 that Yamuna Raman Chaudhary was working as Manager in his petrol pump from 1.4.2003 to 31.3.2005 was correct and the letter head on which the said experience certificate had been issued was also of his petrol pump and Naveen was authorized to issue the said experience certificate. It was further stated that the said Yamuna Raman Chaudhary was well known to him and he was a social worker and freedom fighter. The said affidavited letter of the proprietor of M/s. Abhilasha Oil Centre which was addressed to the Deputy General Manager (RS) of the respondent Corporation was also annexed to the show cause notice. It was requested by the said Munna Raman Chaudhary to withdraw the show cause notice failing which he would be taking legal course of action against the Corporation for trying to tarnish the image, prestige and goodwill of his father who was also a renowned freedom fighter. It was requested by the said Munna Raman Chaudhary to withdraw the show cause notice failing which he would be taking legal course of action against the Corporation for trying to tarnish the image, prestige and goodwill of his father who was also a renowned freedom fighter. With the said show cause a large number of enclosures including various certificates and letters issued by the proprietor of M/s. Abhilasha Oil Centre were also annexed. 5. The respondents, however, by the impugned letter dated 21.3.2013 issued by the General Manager, IOC terminated the dealership of the petitioner for violating Clause 19(iv) of the Letter of Intent dated 22.9.2006 as also Clause 45(i) of the Dealership Agreement with immediate effect. The said action of the respondents are under challenge in this writ application. 6. Learned counsel for the petitioner submits that the aforesaid actions of the respondents are clearly illegal as essentially the proceedings have been initiated against a dead person as he alone could have properly answered the allegations made in the show cause notice. It is submitted that neither the present partner of the firm, Smt. Neera Devi, nor even the son of the ex-proprietor of the partnership firm, Yamuna Raman Chaudhary, could have effectively answered the allegations made in the show cause notice. It is further submitted by learned counsel that the respondents after the ex-proprietor was successful pursuant to the application and before issuance of letter of intent had conducted a verification of the facts and documents mentioned in the application. The inspection was carried out by the officials of the Corporation and no such adverse information was gathered by them at the relevant time against the said Yamuna Raman Chaudhary of having obtained fake and forged experience certificate from M/s. Abhilasha Oil Centre which was also a retail outlet dealership of M/s. Indian Oil Corporation located at NH-57, Manigachi, District-Darbhanga. The inspection was carried out by the officials of the Corporation and no such adverse information was gathered by them at the relevant time against the said Yamuna Raman Chaudhary of having obtained fake and forged experience certificate from M/s. Abhilasha Oil Centre which was also a retail outlet dealership of M/s. Indian Oil Corporation located at NH-57, Manigachi, District-Darbhanga. It is urged that it is not open to the respondents to take a plea that the said experience certificate was fake and forged on the ground that it had not been issued by the proprietor of M/s. Abhilasha Oil Centre or that it was issued by a person not authorized to sign by him, on the basis of certain allegations made behind the back of the said dead person by the proprietor of the said M/s. Abhilasha Oil Centre, which in fact was subsequently denied through an affidavit sworn before a Notary Public. It is further submitted that the observations made in the impugned termination letter dated 21.3.2013 that between 2003 and 2005 late Shri Yamuna Raman Chaudhary would have been about 87-89 years old and it was extremely unlikely that at the advanced age he would have worked as a Manager at a retail outlet at Manigachi, District-Darbhanga specially when he was residing at Nazirpur, District-Madhubani, is not something new and unknown to the respondents at the time when the LOI for the dealership was issued. It is submitted that in the natural course of events it would be known that any person applying under the Freedom Fighters Category would be a person around 80 or more years old and thus any experience certificate produced by such a person ought to have been rejected outright when the matter was being considered and LOI was given but no such plea is permissible at the subsequent stage in view of the fact that they had made due verification of the facts at that time before issuance of LOI. It is submitted that being a freedom fighter the said Yamuna Raman Chaudhary was very active and dedicated to his duties and thus the fact that he was working as Manager of the retail outlet at Manigachi, District-Darbhanga is probable since he intended to apply for retail outlet dealership and would have gone the extra mile to obtain necessary experience for the same. 7. 7. Learned counsel further relies upon the fact that on an inspection of the retail outlet, an analysis report dated 18.8.2006 was submitted with respect to M/s. Abhilasha Oil Centre, Manigachi which has been signed by Naveen on behalf of the Dealer. He also relies upon the enquiry which had been conducted by the respondents as in the enquiry report brought on the record by the respondents it has been mentioned that the retail outlet inspection reports of M/s. Abhilasha Oil Centre dated 13.12.2005, 18.8.2006, 25.11.2004 and 4.9.2004 had been signed by a person "Naveen" and inspection report dated 23.5.2003 by "Naveen Kr. Jha". It is thus submitted that the respondents were fully aware of the fact that Naveen was an authorized person on behalf of the Dealer as he was signing practically each and every inspection report of the said retail outlet which was being made for the period from 2003 till at least 2006. It is pointed out that the inspection and analysis report dated 18.8.2006 of M/s. Abhilasha Oil Centre was carried out by the same officer who has given the field inspection report and thus the said officer was fully aware of the fact that Naveen was an authorized person of the said dealer to issue such experience certificate and had stated in his Field Inspection Report' that no variance was found with respect to any documents given in the application. 8. Learned counsel further submits that it is evident from the show cause-reply of the said Munna Raman Chaudhary, son of late Yamuna Raman Chaudhary, that he had personally contacted the proprietor of M/s. Abhilasha Oil Centre Sri Pradeep Thakur, who informed that the sales and supply of his retail outlet was suspended and he was called by the authorities of the Corporation and on the assurance that the sales and supply of his retail outlet would be resumed if he assisted them, he gave the statements on the basis of which the show cause notice was issued. 9. 9. Learned counsel also submits that the respondents have in fact not issued a show cause notice but asserted in the show cause notice dated 31.10.2012 that all the allegations made therein have been established by the aforesaid statements which shows that they had practically made up their minds and the result of the said proceedings was known before the issuance of the show cause, which vitiates the said show cause notice and makes it illegal. In support of the same learned counsel relies upon a decision of the Supreme Court in the case of Oryx Fisheries Private Limited v. Union of India and Others, (2010)13 SCC 427 , in paragraphs 27, 31 & 32 of which it has been held as follows: "27. It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge-sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show-cause notice gets vitiated by unfairness and bias and the subsequent proceedings become an idle ceremony. 31. It is of course true that the show-cause notice cannot be read hypertechnically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show-cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. 32. 32. Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice." 10. Learned counsel also refers to the fact that while termination of the dealership has been made on the ground mentioned in the impugned letter dated 21.3.2013, the respondents have sought to raise various other issues and grounds in the counter affidavit which is not permissible as the termination can only be justified on the grounds mentioned in the show cause notice and reiterated in the termination letter. In support of the same learned counsel relies upon a decision of the Supreme Court in the case of State Government Houseless Harijan Employees' Association v. State of Karnataka and Others, (2001)1 SCC 610 : 2001(2) PLJR (SC) 139, in paragraph-49 of which it has been observed as follows: "49. The basis on which the learned Single Judge dismissed the appellant's writ petition was that there was no approval of the appropriate Government to the acquisition, namely, the absence of the third factor noted above. This was not the ground on which withdrawal from the acquisition had been made and it was not open to the State Government to justify its decision on any other ground. As held by this Court in Mohinder Singh Gill v. Chief Election Commr.: (at SCC p. 417, para 8) "When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out." 11. Learned counsel for the Indian Oil Corporation, on the other hand, has supported the action of the respondents on the basis of the allegations made in the show cause, which, according to learned counsel, stands proved and also certain additional facts stated in the counter affidavit and supplementary counter affidavit. Learned counsel for the Indian Oil Corporation, on the other hand, has supported the action of the respondents on the basis of the allegations made in the show cause, which, according to learned counsel, stands proved and also certain additional facts stated in the counter affidavit and supplementary counter affidavit. It is submitted that in the course of enquiries it was found that the said Naveen Kumar Jha and his brother Rajiv Jha had indulged in malpractices at the relevant period of time in granting LOI for the Kisan Sevi Kendra dealership, to Sri Yamuna Raman Chaudhary as also issuance of experience certificate. It is submitted that during the course of investigation it was found that the said Naveen was merely a nozzle man he was not authorized to issue experience certificate as has been produced by the said Yamuna Raman Chaudhary along with his application, which, prima facie, shows the forged and fake nature of the experience certificate as the said Naveen not being a Manager but a. nozzle man could not be expected to have any authority to issue any such certificate. It is submitted by learned counsel that the fact of Naveen being a nozzle man as stated in paragraph-9 of the counter affidavit has not been denied by the petitioner in its reply and once the said fact stands proved everything is false and the cancellation of the dealership is justified. 12. Learned counsel further submits that the respondents have acted on the basis of detailed enquiry conducted in the matter, which enquiry report has been brought on the record as Annexure-F and he refers to various paragraphs of the said enquiry report in support of the allegations. It is submitted by learned counsel that the said Naveen Kumar Jha in conspiracy with Yamuna Raman Chaudhary had issued the said fake and forged experience certificate in order to grab the Kisan Seva Kendra outlet of his family within a short time of the issuance of the LOI with an intention to induct the wife of his brother Rajiv Jha as a partner of the said firm. After the death of Yamuna Raman Chaudhary there was no reconstitution of the partnership firm and his brother's wife continues as a sole partner of the firm. 13. After the death of Yamuna Raman Chaudhary there was no reconstitution of the partnership firm and his brother's wife continues as a sole partner of the firm. 13. Learned counsel further submits that fraud vitiates any right accrued in favour of the person and mere passage of time of five or six years between grant of LOI and the discovery of the fact of fraud cannot defeat the right of the respondents to take action in the matter as there is no such limitation in a matter where fraud has been found and in support of the same learned counsel relies upon a decision of the Supreme Court in the case of A.V. Papayya Sastry & Ors. v. Government of A.P. & Ors., AIR 2007 SC 1546 : 2007(2) PLJR(SC) 201 in paragraphs 38 and 39 of which it has been held as follows:- "38. The matter can be looked at from a different angle as well. Suppose, a case is decided by a competent court of law after hearing the parties and an order is passed in favour of the plaintiff applicant which is upheld by all the courts including the final court. Let us also think of a case where this Court does not dismiss special leave petition but after granting leave decides the appeal finally by recording reasons. Such order can truly be said to be a judgment to which Article 141 of the Constitution applies. Likewise, the doctrine of merger also gets attracted. All orders passed by the courts/authorities below, therefore, merge in the judgment of this Court and after such judgment, it is not open to any party to the judgment to approach any court or authority to review, recall or reconsider the order. 39. The above principle, however, is subject to exception of fraud. Once it is established that the order was obtained by a successful party by practising or playing fraud, it is vitiated. Such order cannot be held legal, valid or in consonance with law. It is nonexistent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as a nullity, whether by the court of first instance or by the final court. It is nonexistent and non est and cannot be allowed to stand. This is the fundamental principle of law and needs no further elaboration. Therefore, it has been said that a judgment, decree or order obtained by fraud has to be treated as a nullity, whether by the court of first instance or by the final court. And' it has to be treated as non est by every court, superior or inferior." 14. Learned counsel also relies upon another decision of the Supreme Court in the case of Secretary, A.P. Social Welfare Residential Educational Institutions v. Pindiga Sridhar & Ors., AIR 2007 SC 1527 , paragraph-8 of which is quoted below:- "8. The High Court on the basis of the erroneous view upset the well-merited judgment of the learned Single Judge. By now, it is well settled principle of law that the principles of natural justice cannot be applied in a straightjacket formula. Its application depends upon the facts and circumstances of each case. To sustain the complaint of the violation of principles of natural justice one must establish that he was prejudiced for non-observance of the principles of natural justice. In the present case, the fact on which the appellant terminated the services of the respondent appointed on compassionate ground was admitted by the respondent himself that when he applied for the post on compassionate ground by its application dated 6.5.1996, his mother was in service. So also when he secured the appointment by an order dated 22.11.2002 his wife was in service since 3.8.1997 as Extension Officer in Rural Development and later on promoted as Mandal Parishad Development Officer at the time when he was appointed on compassionate ground. These facts clearly disclose that the appointment on compassionate ground was secured by playing fraud. Fraud clocks everything. In such admitted facts, there was no necessity of issuing show cause notice to him. The view of the High Court that termination suffers from the non-observance of the principles of natural justice is, therefore, clearly erroneous. In our view, in the given facts of this case, no prejudice whatsoever has been caused to the respondent. The respondent could not have improved his case even if a show cause notice was issued to him." 15. The view of the High Court that termination suffers from the non-observance of the principles of natural justice is, therefore, clearly erroneous. In our view, in the given facts of this case, no prejudice whatsoever has been caused to the respondent. The respondent could not have improved his case even if a show cause notice was issued to him." 15. Learned counsel for the petitioner in reply submits that the very enquiry report brought on the record shows that the firm of Pradeep Thakur, namely, Abhilasha Oil Centre was facing an enquiry from the respondent Corporation and thus the facts stated in the show cause reply by the son of Yamuna Raman Chaudhary are in fact corroborated and it was only at the instance of the respondents that the plea regarding illegal experience certificate having been filed by Yamuna Raman Chaudhary has come up. 16. I have considered the submissions of learned counsels for the parties. It is evident that the termination of the dealership is solely on account of the fact that the experience certificate has been stated to be forged to have been issued from the letter head which is not of the concerned dealership and further it had been issued by a person who was not authorized by the proprietor to issue such experience certificate. 17. The very reliance by the respondent Corporation on the fact that the said Naveen being a nozzle man and not a Manager, which has not been denied by the petitioner, does not appear to be correct and such statements made in the counter affidavit are in fact proved to be false on the basis of the enquiry report dated 5.9.2011 (Annexure-F) which has been brought on the record by them. The said enquiry report clearly mentions the fact that Naveen Kumar Jha had worked as a nozzle man/counter man at various ROs in Darbhanga District till the year 2002 and after the commissioning of RO M/s. Abhilasha Oil Centre, Manigachi, Darbhanga, the said Naveen Kumar Jha became its Manager. In the said circumstances, it appears that the respondents have taken recourse to false statement in the counter affidavit in order to justify their stand and also in the submissions made in Court on the basis of the said counter affidavit. In the said circumstances, it appears that the respondents have taken recourse to false statement in the counter affidavit in order to justify their stand and also in the submissions made in Court on the basis of the said counter affidavit. Once the said fact is accepted by the respondents themselves in the enquiry report that the said Naveen Kumar Jha was a Manager at the said RO then the very basis of their case against the petitioner's Kisan Seva Kendra retail outlet is disproved. 18. The said fact is further supported by the information in the said enquiry report itself that inspection reports dated 13.12.2005, 18.8.2006, 25.11.2004, and 4.9.2004 as also 23.5.2003 had been signed by the said Naveen/Naveen Kumar Jha and at no stage the respondents had taken the plea that Naveen Kumar Jha was not authorized to sign the inspection reports. Thus at a belated stage it is not open to the respondents to say that the experience certificate issued by the said Naveen Kumar Jha was fake and false and unauthorized as evidently the said Naveen at all times was acting on behalf of M/s. Abhilasha Oil Centre. 19. Moreover, this Court finds that the Field Inspection Report was made by the same officer of the respondent Corporation who had made the inspection of the retail outlet of M/s. Abhilasha Oil Centre at least on 18.8.2006 which was also signed by the said Naveen and it is to be presumed that the verifying officer found nothing unusual in the issuance of experience certificate on behalf of the firm by Naveen and there is thus no reason to disbelieve the experience certificate as invalid or unauthorized. 20. This Court also finds that the show cause notice is contrary to the principles of law laid down by this Court from time to time, including the decision in Oryx Fisheries Private Limited case (supra), that a show cause is merely an intimation of prima facie allegations to be answered and not a finding of the authority, whereas the show cause notice in the present matter is vitiated on that count. 21. However, the most important issue against the respondents is that the show cause notice itself has been issued more than two and a half years after the death of the said Yamuna Raman Chaudhary against whom essentially the allegation of having produced fake/forged experience certificate has been made. 21. However, the most important issue against the respondents is that the show cause notice itself has been issued more than two and a half years after the death of the said Yamuna Raman Chaudhary against whom essentially the allegation of having produced fake/forged experience certificate has been made. Since the said Yamuna Raman Chaudhary was dead, hence no such allegation is permissible against such a dead person especially when field inspection and verification of such documents was earlier made at the relevant time before issuance of LOI of retail outlet. 22. Moreover, the respondents have done so against a dead person whose retail outlet is for the category of Freedom Fighters and it is not open to them to damage the reputation of a dead person who was a freedom fighter by their action. The respondents have acted in a most arbitrary and unconscionable manner in this respect. As a matter of fact the observations made in the impugned letter of termination dated 21.3.2013 that Yamuna Raman Chaudhary would be aged 87-89 years old at the time mentioned in his experience certificate appears to be completely uncalled for, as the said fact was known at the time even before issuance of LOI that it was under Freedom Fighters Category and any such experience certificate ought to have been thoroughly verified at that stage itself since any freedom fighter at the time of such application was bound to be a person above 80 years of age and it is not open to the respondents to take any such plea after so many years, that too when the person concerned is dead. In the light of the aforesaid discussions, the writ application is allowed and the impugned letter dated 21.3.2013 is quashed.