ORDER : The petitioner, a proprietorship firm was allotted dealership for a retail petroleum outlet at Dumka. A Dispensing Pump and Selling Licence Agreement was executed on 10.10.2013 for sale and supply of petroleum products for 15 years. The petitioner is aggrieved by order dated 23.02.2015 whereby, the agreement dated 10.10.2013 has been terminated with immediate effect. 2. The brief facts of the case are summarized thus, An inspection was carried on 09.07.2014 at petitioner’s outlet by Quality Control Cell Team when it was found that density register was not updated for MS and HSD since 25.06.2014 and the stock register/DSR was not updated since 20.06.2014. Accordingly, the QCC Team tested the density of petroleum product with reference to last invoice of the product. The QCC Team found variation in density in MS sample much beyond permissible limits. In MS stock and HSD stock, abnormal stock variation was detected and accordingly, samples were drawn for clinical tests. When the QCC Inspection Team asked to handover Tank Lorry (TL) samples of the last and second last load of MS and HSD, it was informed that TL samples for MS are not available and TL sample of HSD was available only for the last load. The outlet's representative was instructed to suspend sales of all petroleum products till, further instruction from the Team Manager (Retail), Ranchi. A show-cause notice was issued to the petitioner on 02.08.2014 and a direction for further suspension of sales and supplies of petroleum products was issued. The petitioner submitted detailed reply on 13.08.2014. A notice for personal hearing on 17.09.2014 was given and the petitioner's representative appeared and filed further reply. The petitioner approached this Court in W.P.(C) No. 5788 of 2014 which was disposed of vide order dated 30.01.2015 directing the respondent-BPCL to pass final order keeping in view Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 and the findings recorded in order dated 30.01.2015. Aggrieved by the direction of the Writ Court, L.P.A. No. 105 of 2015 was preferred by M/s Bharat Petroleum Corporation Limited against the said order and the Letters Patent Court vide order dated 12.02.2015 interfered with the findings of the Writ Court vis-a-vis adulteration of MS samples drawn from the retail outlet and directed the appellant-BPCL to pass a speaking order within three weeks. 3. Heard the learned counsel for the parties. 4. 3. Heard the learned counsel for the parties. 4. Mr. Mrinal Kanti Roy, the learned counsel for the respondent-BPCL raises a preliminary objection to maintainability of the writ petition and submits that Clause 8.9 of Marketing Discipline Guidelines (MDG) provides a right of appeal to the dealer against order passed in cases of critical irregularity and therefore, the petitioner must, first avail the remedy of appeal under Clause 8.9. Resisting the preliminary objection, Mr. Ajit Kumar, the learned Senior Counsel for the petitioner submits that the provision for appeal under MDG-2012 is not a statutory appeal. It is only a guideline to the marketing company and the retailer for conduct of business and thus, it is not mandatory. It is further submitted that Clause 8.9 of MDG-2012 does not lay down precondition for preferring appeal and therefore, it cannot be contended that, to avoid the conditions for filing appeal, the petitioner has short-circuited the said provision by filing the writ petition. 5. I find that when the petitioner approached this Court in W.P.(C) No. 5788 of 2014, the respondent-BPCL had raised similar objection which was rejected by this Court. In the present proceeding, the petitioner has challenged order dated 23.02.2015 which has been passed pursuant to order passed by the Hon'ble Division Bench. The respondent-BPCL has filed detailed counter-affidavit and supplementary counter-affidavit and the petitioner has filed rejoinder affidavit. The matter has been listed on as many as 9 occasions and the counsel for the parties have argued the case at length. Today, senior official of the respondent-BPCL is also present in the Court and he has rendered assistance to the Court. Considering the aforesaid facts, I am not inclined to relegate the petitioner to first avail the remedy of appeal under Clause 8.9 of MDG-2012 and accordingly, the objection to maintainability of the writ petition is answered in negative. 6. Mr. Ajit Kumar, the learned Senior Counsel for the petitioner submits that in the previous proceedings, the petitioner raised a specific plea that the test report of MS sample collected at retail outlet confirms to IS 2796 and IS 1460. The petitioner took similar stand before the respondent-authority who has passed order dated 23.02.2015 however, the plea raised by the petitioner has not been answered by the respondent-BPCL. The petitioner took similar stand before the respondent-authority who has passed order dated 23.02.2015 however, the plea raised by the petitioner has not been answered by the respondent-BPCL. It is submitted that past three invoices dated 30.05.2014, 14.06.2014 and 25.06.2014 were not considered and this has caused serious prejudice to the petitioner. Referring to definition of “adulteration” in Section 2(a) of Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 and Clause 1.2(iv) in MDG-2012, the learned Senior Counsel for the petitioner submits that the test report clearly discloses variation in density within permissible limits. In the present case, the respondent-BPCL has alleged adulteration which is a critical irregularity under Clause 8.2 however, once it is found that variation in sample drawn from the retail outlet is within permissible limit of IS 2796 or IS 1460, the product cannot be said to be adulterated and thus, no action under Clause 8.2 can be taken by the respondent-BPCL under the said clause. 7. As against the above, the learned counsel for the respondents submits that the limit prescribed under IS 2796 is the permissible limit for accepting the petroleum product by the oil companies from various sources. Clause 1.2(iv) provides variation limit of + – 3.0 Kg/M3 @ 15ºC compared to challan density for ascertaining quality of product. A dealer is mandated to sale the same product to the customers and therefore, the permissible variation limit for density in RO’s sample vis-à-vis TL’s sample is only + – 3.0 Kg/M3. The Company’s Territory Coordinator, Mr. Sanjay Anand present in the Court, has pointed out that there was abnormal stock variation and RO’s sample failed other tests such as, recovery upto 70ºC, 100ºC, 150ºC and boiling point etc. and therefore, it was a case of critical irregularity. He submits that the petroleum product is mixture of various hydrocarbons and therefore, the variation limit prescribed in 2005 Order is a guideline for the oil companies for receiving petroleum product from outside sources and it is not applicable in case of the retailer. Referring to Clause 2.3, 2.5, 5.1.9, 5.1.11 and 8.2, the learned counsel for the respondents submits that large stock variation coupled with the fact that RO's MS sample failed the lab test, leaves no room for inviting action under Clause 8.3. Referring to Clause 2.3, 2.5, 5.1.9, 5.1.11 and 8.2, the learned counsel for the respondents submits that large stock variation coupled with the fact that RO's MS sample failed the lab test, leaves no room for inviting action under Clause 8.3. It is submitted that Clause 8.3 of MDG-2012 is applicable only when the sample passes quality-check test. 8. I have carefully considered the submissions of the counsel for the parties and perused the documents on record. 9. The main issue involved in the writ petition is, “whether the sample collected at retail outlet, in view of the test report dated 16.07.2014, can be said to be adulterated”? 10. Section 2(a) of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 is reproduced below : 2(a) “adulteration” means [***] the introduction of any foreign substance into motor spirit or high speed diesel illegally or unauthorizedly with the result that the product does not conform to the requirements of the Bureau of Indian Standards specifications number, IS 2796 and IS 1460 for motor spirit and high speed diesel respectively or any other requirement notified by the Central Government from, time to time.” 11. In so far as, density of MS samples observed at laboratory is concerned, the learned counsel for the respondent-BPCL has referred to Clause 1.2(iv) of MDG-2012. The said clause provides that for ascertaining the quality of product delivered from supply location through Tank Lorry, the outlet dealer is required to compare density of the product delivered with the challan density. The permissible limit is indicated + – 3.0 Kg/M3. However, MDG2012 nowhere provides the permissible density variation for the retail outlet sample. The title of 2005 Order is indicative of the fact that it is intended to regulate supply, distribution and “prevention of malpractices”. The 2005 Order prescribes norms for ascertaining adulteration. If the product does not conform to the requirements of IS 2796 and IS 1460 it would be deemed that foreign substance has been illegally introduced in the product and thus, the product has been adulterated. The test report dated 16.07.2014 records that Supply Location (SL) sample is “meeting the requirement” of Motor Diesel (BSIII) for the “tests carried out”. It is not in dispute that the tests carried out for SL's samples and RO's samples were the same. The test report dated 16.07.2014 records that Supply Location (SL) sample is “meeting the requirement” of Motor Diesel (BSIII) for the “tests carried out”. It is not in dispute that the tests carried out for SL's samples and RO's samples were the same. Considering the fact that if the density of SL's samples observed at laboratory at 757.3 was meeting the requirement of BSIII, why the density of RO's samples observed at laboratory which was 749.5 cannot be said to be meeting the requirements of BSIII, when IS 2796 permits variation between 720-775. The learned counsel for the respondent-BPCL has relied on remarks in report dated 16.07.2014 which are as under: Remarks: 1. Corresponding Supply Location Sample (SL) is meeting the requirements of Motor Gasoline (BSIII) for the tests carried out. 2. Corresponding Tank lorry Retained Sample (TL) was not made available for testing as the same was not retained by the dealership. 3. Product, as represented by Retail Outlet (RO) Sample is meeting the requirements of Motor Gasoline (BSIII) for the tests carried out. However, the test results of Recovery upto 70 Deg C (21%). Recovery upto 100 Deg C (56%). Final Boiling Point (195 Deg C) and RON (91.7) are beyond reproducibility limit of corresponding SL Sample results. In absence of reference density, the lab density (749.5 Kg/m3) could not be compared with the same. Again there is a density variation of 6.6 Kg/m3 between lab density (749.5 Kg/m3) and invoice density (756.1 Kg/m3). The product is not the same as supplied by our supply location. Moreover, variation in density, distillation and RON results indicates introduction of some hydrocarbon into RO tank.” Notes: 1. The sample is drawn by the client and results relates to the sample tested. 2. The certificate shall not be reproduced wholly or in part without prior written consent of the laboratory. 3. This certificate shall not be used in any advertising media or as evidence as the court of law without prior written consent of laboratory. 4. Latest version of test methods used as per latest specification. 12. The test report notices density variation between RO's lab density (749.5 Kg/M3) and invoice density (756.1 Kg/M3), and it has been concluded that the product is not the same as supplied by the supply location. 4. Latest version of test methods used as per latest specification. 12. The test report notices density variation between RO's lab density (749.5 Kg/M3) and invoice density (756.1 Kg/M3), and it has been concluded that the product is not the same as supplied by the supply location. Neither in the impugned order dated 23.02.2015 nor in the test report dated 16.07.2014 it has been disclosed how density variation of + – 3.0 Kg/M3 would not indicate introduction of hydrocarbon in Tank Lorry. It is a matter of record that the invoice no. 1511131279 dated 30.05.2014 for 3.6 KL records MS density at 736.4 whereas, the other two invoices recorded MS density in the range of 754 which indicates wide variation in the density of Motor Spirit decanted at petitioner's outlet. Moreover, once the test report considers invoice density for MS sample dated 28.06.2014 (756.1 Kg/M3) to conclude that the product is not the same as supplied by the Supply Location (SL), there is no reason not to consider other three invoices. The average density from invoices dated 30.05.2014 (736.4 Kg/M3), dated 14.06.2014 (754.2 Kg/M3) and 25.06.2014 (754.5 Kg/M3) would be 748.36 Kg/M3 and since the density of RO's sample at lab was found 749.5 Kg/M3, even if it is assumed that Clause 1.2(iv) of MDG2012 which permits density variation + – 3 Kg/M3, is applicable for retail outlets' sample, the density variation between TL's sample and RO's sample is within permissible limit. The petitioner has contended that the conclusion that the product is not the same as supplied by the supply location on the ground of variation in density, distillation and RO results is completely erroneous. In so far as, stock variation is concerned, the learned Senior Counsel for the petitioner submits that it may occur due to electrical/mechanical failure in totaliser reading, mistaken entry in sales register, mistakes due to undercasting and overcasting and therefore, a confirm conclusion can be arrived only after proper reconciliation. The above stand of the petitioner in paragraph no. 22 in the writ petition has been answered by the respondents merely by stating that dispensing unit reading could not be taken even with the D.G. set. The petitioner has asserted that though, the respondents have alleged that no density record was maintained since 25.06.2014 nonetheless, the density was compared with invoice dated 28.06.2014. The assertion in paragraph no. 22 in the writ petition has been answered by the respondents merely by stating that dispensing unit reading could not be taken even with the D.G. set. The petitioner has asserted that though, the respondents have alleged that no density record was maintained since 25.06.2014 nonetheless, the density was compared with invoice dated 28.06.2014. The assertion in paragraph no. 31 of the writ petition has not been denied by the respondents rather, it is confirmed by the test report which takes note of it. 13. The test report for HSD (BS III) discloses that Tank Lorry retained sample failed to meet the requirement of HSD (BS III) with respect to total sulphur. The test results of KV at 40º C and density were found beyond reproducibility limit of corresponding SL sample. However, the test report discloses that's sample test results were found comparable to Tank Lorry sample. Thus, the retailer cannot be held responsible for adulteration. The misconduct imputed to the retailer is that he decanted the Tank Lorry inspite of noticing density variation beyond variation limit thus, violated mandate under Clause 1.2(iv) under MDG-2012. The respondents have admitted that one Tank Lorry HSD was decanted in presence of QCC Team. The petitioner has asserted that more than 92% business volume in terms of revenue from the outlet is from HSD sale. 14. Adulteration of product has been dealt with in MDG-2012 under Clause 5.1.1 which is reproduced below: “Adulteration” means the introduction of any foreign substance into Motor Spirit/High Speed Diesel illegally or unauthorizedly with the result that the product does not conform to the requirements of the Bureau of Indian Standards specifications number, IS:2796 and IS:1460 for Motor Spirit and High Speed Diesel respectively and amendments thereon, and/or If the observations on the sample under scrutiny and the reference sample do not fall within reproducibility/permissible limits of the test method for which the samples are examined, and/or Any other requirement for the purpose to identify adulteration, issued by the Competent Authority from time to time.” 15. Clause 5.1.1 provides that if the observations of the sample under scrutiny and the reference sample do not fall within “reproducibility/permissible limits” of the “test method” for which the samples are examined, the product would fall under the category of adulteration. Clause 5.1.1 provides that if the observations of the sample under scrutiny and the reference sample do not fall within “reproducibility/permissible limits” of the “test method” for which the samples are examined, the product would fall under the category of adulteration. It is not in dispute that the “test method” adopted was IS 2796 and RO's sample falls within permissible limit of IS 2796 is noticed from test report dated 16.07.2014. 16. I find that Clause 8.2 of MDG2012 classifies cases of tampered seal in the dispensing pump, tampered totaliser seal on dispensing unit, unauthorised fittings and gears inside the dispensing unit or tampering with dispensing unit etc. as critical irregularities. During inspection, none of these irregularities were detected by the Inspection Team. Critical Irregularities under Clause 8.2 of MDG-2012 are reproduced below: Critical Irregularities: The following irregularities are classified as critical irregularities: (i) Adulteration of MS/HSD (5.1.1) (ii) Seals of the metering unit found tampered in the dispensing pumps. (5.1.2 (b)) (iii) Totalizer seal of dispensing unit tampered or deliberately making the totalizer non functional or not reporting to the company if totalizer is not working. (5.1.3 read with 5.1.2) (iv) Additional/Unatuhorized fittings and gears inside the dispensing units/tampering with dispensing units. (5.1.4) (v) Unauthorized storage facilities (5.1.5) (vi) Unauthorized purchase/sales of products. (5.1.6) (vii) Tank lorry carrying unauthorized product found under decantation at the RO (5.1.7). Action: Termination at the FIRST instance will be imposed for the above irregularities. 17. Before the L.P.A. Court, the only issue debated was whether at the stage when the matter was pending before the General Manager-respondent no. 4, the Writ Court could have recorded a categoric finding that the sample test result does not disclose adulteration amounting to critical irregularities falling within Clause 8.2 of Marketing Discipline Guidelines (MDG) 2012. Holding that irregularities noticed in the inspection report may all not be critical irregularity but the entire matter was required to be looked into by the respondent no. 4 only, the Hon'ble Division Bench opined that the Writ Court should have stayed its hand from entering into the merits of the case and accordingly, the Hon'ble Division Bench ordered as under: “14. 4 only, the Hon'ble Division Bench opined that the Writ Court should have stayed its hand from entering into the merits of the case and accordingly, the Hon'ble Division Bench ordered as under: “14. Viewed thus, we hereby disturb the finding of the learned Writ Court vis-a-vis adulteration part of the sample of MS drawn from the retail outlet of the petitioner and leave this aspect open once again for the consideration of the respondent no. 4 who has to deal with other irregularities as well as pointed out in the show cause notice.............” 18. A perusal of order dated 12.02.2015 in L.P.A. No. 105 of 2015 discloses that before the Letters Patent Court it was not contended by the appellants that the findings recorded by the Writ Court that the RO's sample meets the variation limit indicated under test report dated 16.07.2014 and thus, the product was not adulterated, was wrong. Writ Court's order was before respondent no. 2 also however, he has also not dealt with the findings recorded by the Writ Court though, in view of order dated 12.02.2015 in L.P.A. No. 105 of 2015, he was not bound by the same. 19. In the impugned order dated 23.02.2015, the respondent no. 2 has recorded as under: “I have gone through the QCC report dated 09.07.2014 and MDG-2012 guidelines and note that from the QCC report that there are abnormal stock variation of MS and HSD. Since there was abnormal stock variation as per the procedure samples were drawn by the QCC Officials and thereafter sent for clinical test wherein as per the test report dated 16.07.2014 samples of both MS and HSD had failed due to introduction of some hydrocarbon into the retail outlet tank. Therefore it should not be covered under 8.3 Major Irregularities but should come under 8.2 Critical Irregularities of MDG-2012. Further just for the sake of discussion/explanation, if the dealer adds only 05 litres of kerosene with 1000 litres of MS the retail outlet sample will meet the requirements of Motor Gasoline (BSIII) for the test carried out but it will slightly vary in density, distillation and RON vis-a-vis the supply location parameters due to introduction of some hydrocarbon into retail outlet tank. As some hydrocarbon has been introduced into retail outlet tank there will be positive stock variation. As some hydrocarbon has been introduced into retail outlet tank there will be positive stock variation. From the aforesaid i.e. retail outlet sample though meeting the requirements as per IS specification but it is beyond reproducibility limit of corresponding supply location sample and stock variation, clearly indicates, introduction of some hydrocarbon into retail outlet tank, thereby product being adulterated.” 20. The respondent no. 2 has concluded that the product was adulterated because some hydrocarbon has been introduced into the retail outlet which has resulted in positive stock variation. The Motor Spirit itself is a hydrocarbon and therefore, the finding that some hydrocarbon has been introduced in RO tank is meaningless. Under MDG-2012 positive stock variation is not a major irregularity. The procedure adopted by respondent no. 2 to conclude that the product was adulterated is erroneous in as much as, variation in RO's sample with respect to density, distillation and RON has been considered a parameter for positive stock variation. There may be a case in which the test report disclosed certain variations however, there was no positive stock variation. Whether in such a case it would be a case of adulteration. From the analysis in the test report and order dated 23.02.2015, it is apparent that the answer would be “no”. Example that if 5 litres kerosene is mixed with 1000 litres Motor Spirit, the sample would meet the requirements of BS III is hypothetical, not supported by any fixed parameter. Thus, the discussion in order dated 23.02.2014, as noticed above, does not lead us anywhere. 21. The allegation of adulteration which invites cancellation of dealership agreement must be proved on the basis of materials on record. At the first instance, the variation limit under IS 2796 : 2008 appears to the variation limit for testing whether the product is adulterated or not. Test report dated 16.07.2014 makes it apparent that MS density in RO's sample and other parameters are within permissible variation limit. It has not been disputed by the respondents that Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 is applicable for retail outlets. Nowhere either in 2005 Order or in the impugned order dated 23.02.2015 it has been disclosed that the variation permissible under IS 2796 : 2008 is only for the oil companies for receiving supplies from outside. Nowhere either in 2005 Order or in the impugned order dated 23.02.2015 it has been disclosed that the variation permissible under IS 2796 : 2008 is only for the oil companies for receiving supplies from outside. Even otherwise also, MS lab density in RO's sample (749.5) is conforming to the average density in three invoices (748.36) and density measured by QCC Team on the spot (750.2). 22. Considering the above facts, I am of the opinion that termination of dealership agreement is illegal. Accordingly, impugned order dated 23.02.2015 is hereby quashed. The writ petition stands allowed. Petition allowed.