Bharat Petroleum Corporation Limited v. Induben Laxmanbhai Dudakhiya Proprietor of M/s. Utsav
2016-12-16
A.Y.KOGJE, ANANT S.DAVE
body2016
DigiLaw.ai
JUDGMENT : A.Y. KOGJE, J. 1. This appeal is preferred by Bharat Petroleum Corporation Limited (hereafter referred to as “the Corporation” for short) and its territorial manager against the oral judgment dated 10.05.2013 passed in Special Civil Application No.7619 of 2011. 2. By the impugned judgment, the Single Judge has allowed the petition filed by the respondent and quashed the order dated 20.08.2010 (Annexure-G), which pertains to the termination of agreement of dealership of the respondent (Original Petitioner). 3. Brief facts are that the respondent was selected by the corporation for allotment of the dealership at Harij which was reserved for the category of women of Scheduled Caste. On being selected, the respondent made necessary arrangements for developing infrastructure to facilitate the running of dealership at her own cost. The dealership agreement came to be executed between the corporation and the respondent on 15.03.2008 and thereafter, supplementary agreement which was for the period of 15 years was also executed. On 22.07.2009, the officer of the Quality Control Cell of the corporation checked and inspected petrol pump. During inspection, they found the stock to be proper, density was proper and thereafter, checked delivery of petrol and diesel from the dispensing unit, however, on rechecking, the team found shortage of 210 Ml. in its delivery. It is on account of this short-fall in delivery through the dispensing unit, a show-cause notice dated 14.09.2009 came to be issued upon the respondent to show cause within a period of 7 days against the irregularities alleged, for taking action which would include termination of dealership. A reply to the show-cause notice was given by the respondent vide her reply dated 30.09.2009 and thereafter, the respondent was communicated with decision dated 20.08.2010, under which the agreement of dealership of the respondent with the corporation was stood terminated with immediate effect. It is this decision, which was subject matter of challenge in the writ petition, which ultimately came to be quashed under the impugned oral judgment. 4. The corporation has filed the appeal challenging the findings of this Court in the impugned order contending that there is no violation of principles of natural justice as show-cause notice dated 14.09.2009 was issued for termination of the dealership of the respondent.
4. The corporation has filed the appeal challenging the findings of this Court in the impugned order contending that there is no violation of principles of natural justice as show-cause notice dated 14.09.2009 was issued for termination of the dealership of the respondent. It is further contended that it is on account of the misconduct adopted by the respondent in shortage of delivery of the fuel through its dispensing unit when the inspection team carried out the checking and inspection of the dealership premises of the respondent. It is contended that one of the dispensing unit bearing No.OE310 of MIDCO model 981C which was being used for dispensing high speed diesel when checked in “Flash Mode” of 555.55 against the delivery of 5 liters, was delivering 210 ml short which was beyond the permissible limit of 10 ml. Such shortage of delivery was observed on three consecutive occasions of deliveries made for inspection in the “Flash Mode”. It was during inspection found that when the dispensing unit switched off and restarted, then against the delivery of 5 liters, the dispensing unit was delivering 10 ml short which was within the permissible limit. It was further contended that there was a report of the company manufacturing dispensing unit, after carrying out the examination of the dispensing unit that the software in the chip regulating dispensation of the fuel was not that which was originally installed by the manufacturer of the dispensing unit on behalf of the corporation. It was further contended that the respondent had initially filed Regular Civil Suit No.06 of 2010 challenging the dealership, termination order and the said Civil Suit, came to be disposed by an order dated 21.03.2011 by the Civil Judge at Harij on the basis of arbitration clause-19 and holding that no jurisdiction was available with the Civil Court to entertain the Civil Suit on the face of arbitration clause. It is contended that in view of the order of the Civil Court, the respondent ought to have invoked the arbitration clause rather than invoking special jurisdiction of this Court under Article 226 of the Constitution of India. It is contended that the relief sought for the by respondent in the petition is arising purely out of the contractual agreements and hence, the petition itself ought not to have been entertained. 5. Heard learned senior counsel Shri Percy Kavina for learned advocate Mr.
It is contended that the relief sought for the by respondent in the petition is arising purely out of the contractual agreements and hence, the petition itself ought not to have been entertained. 5. Heard learned senior counsel Shri Percy Kavina for learned advocate Mr. Poonam Mathur, appearing for Singhi and Company, who has mainly argued on the two contentions that the respondent having once resorted to the civil remedy by filing a Civil Suit for the quashing of the same order as is prayed before this Court in writ jurisdiction and that once the Civil Court has relegated the respondent to the arbitration, it was not open for the respondent to take ‘U’ turn and approach this Court under the writ remedy. Therefore, it is submitted that the single Judge ought not to have exercised the jurisdiction under Article 226 of the Constitution of India at all. Learned senior counsel has submitted that the irregularities attributed to the respondent is of serious nature. The shortage in delivery of diesel from one of the dispensing unit which was observed at the time of inspection was enough for the corporation to initiate action against the respondent. Mr. Percy Kavina, learned senior advocate relied upon the decision rendered in the case between State of U.P. And others v/s. Bridge and Roof (India) Limited, reported in (1996) 6 SCC 22 for substantiating the ground of maintainability and where alternative remedy is available and exhausting such alternative remedy is necessary before invoking the jurisdiction under Article 226 of the Constitution of India. Learned senior advocate thereafter, has referred to unreported decision of this Court in Letters Patent Appeal No.473 of 2010 and allied matters dated 31.03.2014 referring to para 11.1, he submitted that action by the corporation in some what similar fact situation, the Court has upheld the decision of the corporation. 6. As against this, learned advocate Shri Hasit Dilip Dave, appearing on behalf of the respondent has supported the impugned oral judgment by submitting that judgment of the single Judge is a well reasoned judgment and in a given facts of the case, the single Judge has rightly exercised the jurisdiction under Article 226 of the Constitution of India. He submits that the order dated 20.08.2010 passed by the corporation is not an order which can be termed to be an order in consonance with the dealership agreement.
He submits that the order dated 20.08.2010 passed by the corporation is not an order which can be termed to be an order in consonance with the dealership agreement. He submits that it is the show-cause notice issued on alleged irregularity which has culminated into passing of the impugned order by the corporation on terminating the dealership which is not covered under any clause of dealership agreement. He further submits that the basis of instituting the action is not sufficient. The inspection carried out which would show the dispensing of the fuel from that particular dispensing unit in “Flash Mode” only. Therefore, the action is initiated largely on the presumption that every time the delivery of the fuel through that particular dispensing unit will be done only in the “Flash Mode” and not in the “Normal Mode”. This was not available to the corporation without there being any basis. He submitted that there was not a single complaint made from any consumer or public with regards to the shortage of delivery while dispensing the fuel from that particular dispensing unit. 7. He submits that there were inspections conducted in the past, but no abnormality was reported. Therefore, on the basis of this single inspection, the respondent has been victimized. He submits that even when the faulty dispensing unit was taken for inspection by the manufacturer company, it was reported that there does not appear to be any tampering with the dispensing unit. He took us through the test report (Page- 135) to indicate that the Electronic Registry Assembly was sealed and was not opened for any further analysis. Therefore, the case of the corporation that the chip is fixed inside the Electronic Registry Assembly was manipulated through the software of the chip, which caused the short delivery, cannot be believed. He has further submitted that even in their reply to the show-cause notice, it was brought to the notice of the corporation that the corporation which had installed dispensing unit under the agreement, is the responsibility of the corporation where very old dispensing units. In a short period, these units were causing technical problems as a result of which, many times complaints were made for repairing and in fact, dispensing units were required to be repaired at the cost of the respondent.
In a short period, these units were causing technical problems as a result of which, many times complaints were made for repairing and in fact, dispensing units were required to be repaired at the cost of the respondent. It was further explained that the concerned authorities from the Government have regularly been visiting and inspecting the unit, but never ever any shortage of delivery in dispensing was found as is claimed by the respondent. 8. He also contended that the manner in which the inspection was carried out was completely one sided and within short span of few minutes, deliveries during the inspection were carried out in “Flash Mode”. Admittedly, in normal mode, there was no shortage of delivery of fuel through the dispensing unit. 9. Heard learned advocates for the concerned parties. 10. In so far as the contention of the appellant regarding the respondent having filed a Civil Suit in connection with the same subject matter and that there is an adjudication of the Court and therefore, such decision would be binding to the respondent unless challenge and set aside and therefore, in the face of the such judgment, it was incumbent upon the respondent to resort to arbitration proceedings rather than filing the present petition. The judgment in the Civil Suit, which is on record at Annexure-H, perusal of which indicate that the suit was for declaration and permanent injunction against the handing over of the possession of the petrol pump to the corporation pursuant to the show-cause notice and cancellation of the dealership. In this suit vide Exh.18, an application is filed by the corporation raising preliminary objection to the filing of suit in view of the arbitration clause narrated in the dealership agreement. It was in this background, the Principal Civil Judge proceeded to hold that the Court had no jurisdiction to conduct the suit and therefore, the suit was dismissed. It is observed that there is no direction relegating the parties to the arbitration proceedings. Therefore, in absence of such direction, the argument of learned Senior Civil Judge for the corporation that the option available to the respondent after the filing of suit was to initiate arbitration proceeding only, cannot be accepted. 11.
It is observed that there is no direction relegating the parties to the arbitration proceedings. Therefore, in absence of such direction, the argument of learned Senior Civil Judge for the corporation that the option available to the respondent after the filing of suit was to initiate arbitration proceeding only, cannot be accepted. 11. This Court is also not in agreement with the submissions made on behalf of the corporation that the respondent once having resorted to a particular nature of proceedings, the respondent ought not to have abandoned such proceedings midway and revert back to start proceedings afresh under separate jurisdiction. In the instance case, it is submitted that once the petitioner has approached the Civil Court and rightly or wrongly if the Civil Court has not entertained the suit, respondent ought to have persuaded the remedy available for challenging such order in his Civil Suit and could not file the present petition. This Court is of the view that once the Civil Court has pronounced upon the lack of jurisdiction of the Civil Court and thereafter, if the litigant chooses to file separate proceedings under different provisions of law then, such proceedings cannot be rendered vulnerable merely on this count. 12. This Court finds that in the facts of this case, no absolute bar applies to exercising the jurisdiction under Article 226 of the Constitution of India. Therefore, the Single Judge rightly entered into the merits of the case to examine the correctness of the decision of the corporation to terminate the dealership of the respondent by the impugned communication. Upon examining all the facts, the learned Single Judge has concluded that very basis for arriving at a conclusion that there is a malpractice by short delivery of the fuel by a particular unit is based on a inference because the termination of dealership is by communication dated 20.08.2010, whereas, report of the manufacturer of the dispensing unit (MIDCO) is dated 08.09.2010. Therefore, the Single Judge has rightly held that the decision to terminate the dealership was taken before the malpractice could be established. The fact that the test report not provided to the respondent and therefore, rightly held to be in violation of principles of natural justice. The Single Judge has therefore, rightly concluded that exercise of power by keeping the reasons undisclosed from the affected party leads to arbitrariness, which therefore justifies inference by the Single Judge.
The fact that the test report not provided to the respondent and therefore, rightly held to be in violation of principles of natural justice. The Single Judge has therefore, rightly concluded that exercise of power by keeping the reasons undisclosed from the affected party leads to arbitrariness, which therefore justifies inference by the Single Judge. This Court also finds that when in a facts of this case, the corporation by its impugned action is to deprive the respondent from doing a legitimate business, particular standard of certainty and conclusiveness should be attained. This Court is of the view that collecting sample three times successively and that too in “Flash Mode”, is not enough to meet the standards of certainty. There is nothing on record to establish that each time the customer arrived for fueling vehicle, delivery from the dispensing unit was made in “Flash Mode” only. In absence of any complaint from customers/general public, this Court is not ready to presume that this fact to support the conclusion of the corporation about the malpractice. Therefore, support can be drawn from the judgment of the Apex Court, reported in (1998) 8 SCC 1 in the case of Whirlpool Corporation v/s. Registrar of Trade Marks, Mumbai and others, wherein, the Apex Court has in paras-14 and 15, which read as under:- “14. The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution. This power can be exercised by the High Court not only for issuing writs in the nature of habeas corpus, mandamus, prohibition, quo warranto and certiorari for the enforcement of any of the Fundamental Rights contained in Part III of the Constitution but also for “any other purpose. 15. Under Article 226 of the Constitution of India, the High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court imposed upon itself certain restrictions one of which is that if an effective and efficacious is available, the High Court would not normally exercise its jurisdiction.
But the High Court imposed upon itself certain restrictions one of which is that if an effective and efficacious is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. There is a plethora of case-law on this point but to cut down this circle of forensic whirlpool, we would rely on some old decisions of the evolutionary era of the constitutional law as they still hold the field.” 13. The Single Judge has rightly taken into consideration the report of the manufacturer and after having done so, has rightly concluded that no evidence is there on record to hold the respondent responsible for replacing the Microchip in the dispensing unit or inserting software in the Microchip which according to the manufacturer is responsible for the short deliver. This Court has also perused the inspection report, which is on record shows that blue seal of the corporation was available on ERA to rule out tampering with the essential part of the dispensing unit. The respondent in writing has claimed that the dispensing units which were installed were not functioning and that too much prior to the date of inspection carried out by the representatives of the corporation. Moreover, the responsibility as per dealership agreement to install the dispensing unit is that off the corporation and that previous inspection of the petrol pump carried out by other authorities under the Government have not found any adverse against the respondent. This Court is unable to accept the conclusion of the corporation that the respondent has committed malpractice in short delivery of fuel from one of the dispensing units of the petrol pump. 14.
This Court is unable to accept the conclusion of the corporation that the respondent has committed malpractice in short delivery of fuel from one of the dispensing units of the petrol pump. 14. The Single Judge having been satisfied about the violation of principles of natural justice on the ground that the corporation has proceeded on presumption of short delivery and thereafter, substantiated it by inspecting and examining the dispensing unit through the report of the manufacturer, rightly entered into merits of the case as to whether such malpractice can be inferred in the given facts and therefore, after having been satisfied that the exercise on the part of the corporation is arbitrary and unreasonable, the Single Judge was justified in exercising the jurisdiction under Article 226 of the Constitution of India. 15. The Single Judge was justified in interfering even on the ground of Article 14 of the Constitution of India after applying the principles of various judgments of the Apex Court to the facts of the case. In the case of Mahabir Auto Store v/s. Indian Oil Corporation, reported in AIR 1999 SC 1031 , the Apex Court was concerned for the abrupt stoppage of supply of lubricant firm, which was carrying on the business for some long time and that such stoppage was without any prior intimation. Such action was regarded as arbitrary. The Apex Court held that Article 14 can be attributed even where the person did not have benefit of either statutory or contractual right. In the case before the Apex Court, the aggrieved party was a person who was not a dealer of the corporation, but on account of long standing relationship, claimed to be in place of dealer and therefore, the Apex Court held that though action on the part of the corporation was a administrative, it was held to be violative of Article 14 of the Constitution of India. 16. Similarly, in the present case, where the claim of the corporation is that the action of corporation is that the action of corporation is arising out of the contractual relationship, in that case, it would be useful to produce the relevant clause of the dealership agreement (Annexure-’A’), which reads as under:- “12.
16. Similarly, in the present case, where the claim of the corporation is that the action of corporation is that the action of corporation is arising out of the contractual relationship, in that case, it would be useful to produce the relevant clause of the dealership agreement (Annexure-’A’), which reads as under:- “12. This Licence maybe terminated without assigning any reason whatsoever by either party given to the other not less than ninety say notice in writing to expire at any time of its intention to terminate it and upon the expiration of any such notice this Licence shall stand cancelled and revoked. The requisite period of notice may be reduced or waived by mutual consent.” 17. Therefore, the action of the corporation in issuing the notice dated 14.09.2009 provided for a respondent to show cause within a period of 7 days on the irregularities mentioned in the notice. Such a notice in the opinion of this Court cannot be termed to be a notice arising out of the contractual relationship. The nature of notice therefore, suggest that the action was not in the realm of contractual law, but in the realm of administrative law and therefore, amenable to judicial review, which in the opinion of this Court is rightly undertaken by the Single Judge in the impugned order. The Apex Court in judgment reported in AIR 2007 SCC 119 in the case of Noble Resources Limited v/s. State of Orissa while reddressing the core question as to whether writ petition is maintainable in contractual matter has held in paras-15 and 31, which read as under:- “15. It is trite that if an action on the part of the State is violative the equality clause contained in Article 14 of the Constitution of India, a writ petition would be maintainable even in the contractual field. A distinction indisputably must be made between a matter which is at the threshold of a contract and a breach of contract; whereas in the former the court's scrutiny would be more intrusive, in the latter the court may not ordinarily exercise its discretionary jurisdiction of judicial review, unless it is found to be violative of Article 14 of the Constitution. While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part.
While exercising contractual powers also, the government bodies may be subjected to judicial review in order to prevent arbitrariness or favouritism on its part. Indisputably, inherent limitations exist, but it would not be correct to opine that under no circumstances a writ will lie only because it involves a contractual matter. “31. We, however, having regard to ABL International Ltd (supra), do not accept Dr. Dhawan's contention that only because there exists a disputed question of fact or an alternative remedy is available, the same by itself would be sufficient for the High Court to decline its jurisdiction.” Therefore, when the Single Judge has on facts found arbitrariness in the action of the corporation has entered into merits of the case to scrutinize the decision and the decision making process, this Court is also satisfied on this count and therefore, refrain from interfering with the impugned judgment. In the case of State of U.P. And others v/s. Bridge and Roof (India) Limited (Supra), the fact before the Apex Court in this case was that respondent-Bridge and Roof Company (India) Limited entered in a work contract with the Government of Uttar Pradesh, by way of tender process where the tender of the company was accepted and the work had been since completed. The dispute therefore, was pertaining to certain payments with the company claims dues to it, where as Government of Uttar Pradesh claimed that the Government was entitled to retain payments. The Apex Court therefore, on the ground of existing of a arbitration clause found that there was no reason that the parties should not follow and adopt the remedy under the arbitration clause rather than invoking the extra ordinary jurisdiction under Article 226 of the Constitution of India. In the present case, however, the action called upon for the examination of this Court was cancellation of the dealership on the ground of malpractice for which the corporation was relying upon certain evidences in the form of inspection report carried out by its officer and when adverse action is based on some evidence, issue does not remain within the realm of contractual obligation.
The unreported decision of this Court in Letters Patent Appeal No.473 of 2010 will also not help the corporation as in the case before the bench, the action against the retail outlet was initiated on the ground that the sample test of the fuel was from the petrol pump did not meet with the minimum requirement of Research Obtain Number (RON), which is indicative of some adulteration and on those facts, the bench was examining the proportionality of action taken vis-a-vis the brosness of irregularity. In the case before the bench, the bench has also proceeded to set aside the cancellation of dealership and directed the corporation to restore the dealership of the petrol pump. 18. In so far as argument of the corporation regarding the alternative remedy, support can be drawn from the judgment of in the case of SJS Business Private Limited v/s. State of Bihar, reported in 2004(7) SCC 166 , wherein the Apex Court while dealing with similar contention of alternative remedy, resorted to by the litigant has held that where there is parallel jurisdiction and the order is not speaking one or that the matter has been disposed on some other ground, then, instead of dismissing the writ petition on the ground of alternative remedy availed of, the Court may call upon the party to elect whether it wishes to proceed with the alternative remedy or with the application under Article 226 of the Constitution of India. In the case before the Apex Court, where there was suit filed and withdrawn subsequently and thereafter, the party elected to pursue remedy under Article 226 of the Constitution of India and that whether writ petition was maintainable. The Court should proceed ahead with exercising its jurisdiction. In the instance case, the fact is that the respondent did file a suit before the concerned Civil Court and the Civil Court refused to exercise its power citing lack of jurisdiction to be reason, but no direction for relegating the party any other remedy is given and if at that stage, the respondent choose to approach this Court under Article 226 of the Constitution of India, then, exercise of jurisdiction under Article 226 of the Constitution of India by the Single Judge in the facts of this case is justified. 19.
19. In view of fact that there is no absolute jurisdictional bar on the Court or exercising jurisdiction under Article 226 of the Constitution of India and in a given facts of the case where the Single Judge has found sufficient cause to exercise jurisdiction and when the appellant has failed to point out any extra ordinary circumstance, the judgment 10.05.2013 passed in Special Civil Application No.7619 of 2011 does not warrant any interference. The appeal therefore, deserves to be dismissed and is therefore, dismissed. No order as to costs. Further Order:- Mr. Percy Kavina, learned senior counsel appearing for the appellants, at this stage, requests to continue the stay granted at the time of admission. However, considering the facts and circumstances of the case and the respondent original writ-petitioner is without petroleum outlet, we deem it just and proper not to accede to the request, as above, therefore, the same is rejected. Appeal is rejected.