JUDGMENT : 1. Heard Mrs. Darshana Poddar Mishra, counsel appearing on behalf of the petitioner. 2. Heard Mr. Mrinal Kanti Roy, counsel appearing on behalf of the respondents. 3. This writ petition was originally filed for the following reliefs:- (a) For a direction upon the concerned respondent to forthwith start the supply of the Motor Spirit and High Speed Diesel Oil (MS & HSD) to the petitioner as per the Dispensing Pump and Selling Licence dated 24.05.2005 (Annexure-1) executed by and between the petitioner and the Respondent Company for a period of 15 years there from i.e. till 23.05.2020, which was suo-moto illegally stopped by the Respondent Company in the month of April, 2013 without any reasons and without any intimation to the petitioner, though the explanation/letter dated 25.04.2013 (Annexure-5) filed by the petitioner in pursuance to show-cause notice dated 11.04.2013 (Annexure-4) was never rejected by the Respondents (b) For a direction upon the respondents to make good the huge loss suffered by the during the period for which supply of Motor Spirit and High Speed Diesel Oil 9MS & HSD) was illegally stopped by the Respondent without any rhymes, reasons and without any intimation to the petitioner; During pendency of this writ petition the agreement ‘Dispensing Pump and Selling Licence’ (DPSL) was terminated by the respondents vide order dated 31.07.2017 which was challenged by the petitioner vide I.A. No. 7104 of 2017 and the said I.A. was allowed vide order dated 26.02.2018. The further prayer of the petitioner as per amended writ petition is as follows:- (c) For quashing and setting aside the Letter dated 31.07.2017 issued by the Respondent Company in quite malafide manner and without considering the fact, that the instant writ petition is pending before this Hon’ble Court whereby and whereunder, the Respondents have restrained the petitioner to deal with the customers and suppliers of the Respondent and further, the petitioner was also restrained to deal with any of the products of the Respondent and neither the petitioner will be able to claim itself to be dealer of the Respondent Company under any circumstances whatsoever.” 4. Counsel for the petitioner submits as under:- a. The respondent no. 1 is state within the meaning of Article 12 of the constitution of India . Counsel for the petitioner submits as under:- a. The respondent no. 1 is state within the meaning of Article 12 of the constitution of India . She submits that vide agreement dated 24.05.2005 entered into between the petitioner and the respondent company, the petitioner entered into agreement for purchasing, receiving, storing and selling of motor spirit and high speed diesel oil (MS & HSD) from the respondent known as “Dispensing Pump and Selling License” for a period of 15 years i.e. till 23.05.2020. b. The petitioner vide letter dated 23.02.2013 informed the Inspector, Weight and Measures Department, Ghatsila, East Singhbhum that one of the dispensing unit being DU No. BY L & T 9299 at its retail outlet was giving excess delivery and accordingly request was made for re-verification of the said unit. Immediately upon submission of this letter, an endorsement was made on the said letter by the officer of the Department of Weight and Measures, asking the petitioner not to use this dispensing unit. By referring to this letter the petitioner further submits that at the bottom portion of this letter it appears that information was also sought to be given to the Sales Officer and Engineer Officer. c. On 26.02.2013, an inspection was carried out in the premises of the petitioner by the Officers of the respondent company and in the inspection report (annexure-3) it was observed that sealing wire on metering unit of one DU No. By L&T 9299 is found broken and the inspecting team sealed the DU with plastic seal and it was observed that sale from said DU remain suspended till further advice from the territory. d. Counsel for the petitioner further submits that in view of the application having been filed before the Weight and Measures Department on 23.02.2013, the necessary fee for inspection was deposited on 27.02.2013 and thereafter the authorities came to the unit of the petitioner and rectified the metering unit and the seal was again put on 01.03.2013. e. Vide Annexure-4 to the writ petition, a show cause notice dated 13.04.2013 was issued to the petitioner wherein following allegation was made:- 4. e. Vide Annexure-4 to the writ petition, a show cause notice dated 13.04.2013 was issued to the petitioner wherein following allegation was made:- 4. During surprise inspection carried out by the team of Quality Control Cell, East on 26.02.2013 at the retail outlet site, At & Post Anishwarpur, NH-6, East Singhbhum in presence of your authorized representative following irregularities were observed during the inspection: (i) In DU No. BY L &T 9299, the sealing wire on metering unit is found broken (ii) MS & Hi-Speed Diesel were dry at the time of inspection. Photographs enclosed which were taken at the time of inspection on 26.02.2013 in presence of your authorized representative showing discrepancies (i) as mentioned aforesaid. 5. As mentioned aforesaid the inspection was carried out at the retail outlet on 26.02.2013 and the same was done in presence of your authorized representative and on the spot inspection report dated 26.02.2013 was prepared which was duly signed by the inspecting team mentioning the aforesaid irregularities. The inspection report dated 26.02.2013 was given to your authorized representative who had acknowledged the same. In the said inspection report your were advised to stop sales from the said DU till further advice from the territory. We are once again enclosing photocopy of the inspection report dated 26.02.2013 for your ready reference. 6. Moreover, it was also found that there was no stock of Motor Spirit and Hi-Speed HSD in the retail outlet site.” f. She submits that although as per the provision of the agreement, show cause notice after inspection has to be issued within a period of one month but this show cause notice was issued beyond the prescribed period on one month. g. Pursuant to this show cause notice a reply was filed by the petitioner on 25.04.2013 wherein wherein following response were given:- “4(i) That on 23rd Feb 2013 we had requested Weights and Measure Inspector to reverify the respective DU no. BY L &T 9299 with fees receipt no. 726085 and the same has been verified on dated 28-02-2013 by W & M Inspector as mentioned in the certificate. Since 24th Feb 2013 the sale from respective DU was suspended by us as advice by Weights & Measure Inspector. 4(ii) That it is well known fact the sale of Hi-SPEED diesel is almost nil in most of the RO due to huge gap in pricing with HSD. Since 24th Feb 2013 the sale from respective DU was suspended by us as advice by Weights & Measure Inspector. 4(ii) That it is well known fact the sale of Hi-SPEED diesel is almost nil in most of the RO due to huge gap in pricing with HSD. As far as MS is concerned the potential is about 3kl to 4 kl a month but we can assure you that we will sale the Quantity at par in future.” h. On the same day the petitioner filed further explanation dated 25.04.2013 giving clarification regarding sealing wire and metering unit and it was clarified that the sealing wire was found broken and it might be purely due to heavy rust and force used by the Inspecting Officers. In the said letter dated 25.04.2013 following explanation was given:- “This is with reference to verbal query from Deputy Manager Sales on our reply letter dated 25th April 2013 regarding irregularities quoted in point 4 (i) In this regard we would like to further clarify that if in DU No. BY L &T 9299 sealing wire was found broken it might be purely due to heavy rust and force used by the inspection officers. We would also like to bring to your kind notice that normally we check delivery on daily basis not seal or wires. On 23/02/2013 during routine delivery check we found erratic delivery from above said machine immediately we had informed the Eng. Officer (BPCL) and W &M Inspector for the re-verification of said machine (letter to W & M Inspector for re-verification is attached).” i. Thereafter the respondent called for an explanation from the petitioner as to why the letter which was addressed to Weights and Measures Department was not produced before the Inspecting team on the date of inspection and in response to this, the petitioner responded vide Annexure-9 of the writ petition that during the inspection the person present was not aware about the letter addressed to Weights and Measures Department who was just an employee of the petitioner. j. In the meantime, the respondents in order to verify the genuineness of the letter dated 23.02.2013 said to have been filed by the petitioner before the Weights and Measures Department issued a letter to the Inspector, Weights and Measures Department, Ghatshila requesting the said authority to inform the respondent about the genuineness of the said letter and their observation during the visit of the retail outlet for inspection. This letter is dated 07.05.2013. k. In response to this letter, the Weights and Measures Department vide letter dated 16.08.2013 did not dispute the filing of this letter dated 23.02.2013 by the petitioner with Weights and Measures Department and further made observation that dispensing units are outdated and are in dilapidated condition and repeatedly they have to visit for the purpose of rectification. Officers of the Weights and Measures Department observed that dispensing unit are required to be changed. l. Counsel for the petitioner while referring to another inspection report of the Weights and Measures Department, submitted that no irregularity was found by the Weights and Measures Department during their inspection. m. Thereafter when the matter was not being disposed of, the writ petition was filed. n. However, during the pendency of the writ petition, the impugned order dated 31.07.2017 was passed wherein dealership of the petitioner was cancelled and the same has been challenged by filing petition for amendment of the writ petition, which has been allowed. o. By referring to the impugned order, counsel for the petitioner submits that the impugned order is perverse and contention of the petitioner has been rejected without application of mind. She submits that the reason mentioned in the impugned order for cancellation of dealership are two folds, firstly, the petitioner has not produced any documentary proof to prove that DU was not in use as on the date of inspection, and, secondly, that the petitioner had deposited the required fee for inspection by Weights and Measures Department on 27.02.2013 i.e. one day after the inspection was conducted by the respondents and when seals were found broken. p. Counsel for the petitioner also submits that reasons assigned in the impugned order are beyond the show cause and the fact that the petitioner had intimated the Weights and Measures Department on 23.02.2013 regarding excess delivery from the concerned DU has not been disputed in the impugned order. p. Counsel for the petitioner also submits that reasons assigned in the impugned order are beyond the show cause and the fact that the petitioner had intimated the Weights and Measures Department on 23.02.2013 regarding excess delivery from the concerned DU has not been disputed in the impugned order. He submits that the respondents have made all the necessary queries from the Weights and Measures Department to find the genuineness of the claim of the petitioner regarding filing of the letter dated 23.02.2013 and also regarding condition of the DU which are available in the petitioner’s pump, but no adverse report was received from the Weights and Measures Department. Accordingly, the answers to queries made by the respondents directly from the weights and measures department was out and out in favour of the petitioner. But in spite of that, the impugned order dated 31.07.2017 has been passed on the allegation that “Using the DU/Running the RO with DU having a broken W &M seal is a serious offence/omission from your part considering the nature of the product supplying through the said DU”. She submits that there is no allegation in the show cause notice that the petitioner was found using the DU involved in this case, rather, the only allegation which was made is seal of the DU was found broken. Accordingly she submits that the reason for termination of licence is beyond the show cause issued and accordingly on this score alone the impugned order of termination is fit to be set-aside. 5. Counsel for the respondents on the other hand submits as under:- i. He has argued on the point of maintainability of the writ petition by referring to Clause-8.9 of the Marketing Discipline Guidelines which provides for appeal against the order of termination of the agreement. ii. Counsel for the respondents has also submitted on merit and has submitted that although the petitioner claims that the information regarding excess delivery from the concerned DU was given to the Weights and Measures Department on 23.02.2013, but as per the Marketing Discipline Guidelines, the petitioner was under obligation to inform this to the respondent and having not done so, the petitioner has violate the terms and conditions of the agreement. iii. iii. He further submits that the letter dated 23.02.2013, which the petitioner claims to have submitted before the Inspector, Weights and Measures Department read with act of depositing fee for the inspection by Weights and Measures Department on 27.02.2013, is an afterthought as the inspection was carried out by the respondent on 26.2.2013 ,and accordingly the claim of the petitioner is not genuine. iv. He submits that from perusal of the inspection report it appears that the number of DU pumps have been mentioned and against two of them it has been mentioned as non-operational, but against DU involved in this case, there is no clear indication. Therefore it has to be inferred that was found operational during the time of inspection. v. He further submits that statement of the petitioner that the seal must have been broken by the officers of the respondents during the course of inspection is an allegation which is far from truth because officers of the inspecting team are technical persons and if such step was taken, then the representative of the petitioner ought to have been mentioned it at the time of inspection itself but no such grievance was made, therefore it cannot be said that seal was broken at the instance of the officers of the department. He also submits that the seal is put every year and there is no occasion for suo moto breaking of seal. vi. He also referred to another letter which was issued to the Weights and Measures Department dated 19.10.2015 wherein an information was sought for from the Weights and Measures Department in connection with broken seal and in response to this letter Weights and Measures Department issued letter dated 30.11.2015 wherein it is mentioned that opinion regarding tampering and broken of seal has to be taken only in cases after 14.09.2015. So far as cases prior to 14.09.2015 is concerned, respondents are free to take steps as per its marketing discipline guidelines. vii. Accordingly, he submits that the action which has been taken by the respondents is in accordance with law and there is no illegality or perversity in the impugned order or the proceeding which has been followed. viii. So far as cases prior to 14.09.2015 is concerned, respondents are free to take steps as per its marketing discipline guidelines. vii. Accordingly, he submits that the action which has been taken by the respondents is in accordance with law and there is no illegality or perversity in the impugned order or the proceeding which has been followed. viii. However, during the course of argument when a query was made by the Court as to why in the show cause notice any allegation was not made against the petitioner alleging that the petitioner was using the DU pump on which sealing having been broken, Counsel for the respondents submits that there is no such specific allegation made in the show cause notice but the same has to be read along with the inspection report wherein against the entry made in this DU it has not been mentioned that the same was not been used. 6. After hearing counsel for the parties and after going through the materials available on record this court finds as follows:- (i) Firstly, On the point of alternative remedy which has been raised by the counsel appearing for the respondents this court finds that there is no dispute that respondent no 1 is state within the meaning of Article 12 of the constitution of India and are expected to act fairly and reasonably. In the case reported in (2004) 3 SCC 533 it has been held by Hon’ble the supreme court at para 27 and 28 as under:- 27. “From the above discussion of ours, the following legal principles emerge as to the maintainability of a writ petition: (a) In an appropriate case, a writ petition as against a State or an instrumentality of a State arising out of a contractual obligation is maintainable. (b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable. 28. (b) Merely because some disputed questions of fact arise for consideration, same cannot be a ground to refuse to entertain a writ petition in all cases as a matter of rule. (c) A writ petition involving a consequential relief of monetary claim is also maintainable. 28. However, while entertaining an objection as to the maintainability of a writ petition under Article 226 of the Constitution of India, the court should bear in mind the fact that the power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provisions of the Constitution. The High Court having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. The Court has imposed upon itself certain restrictions in the exercise of this power. (See Whirlpool Corpn. v. Registrar of Trade Marks 15.) And this plenary right of the High Court to issue a prerogative writ will not normally be exercised by the Court to the exclusion of other available remedies unless such action of the State or its instrumentality is arbitrary and unreasonable so as to violate the constitutional mandate of Article 14 or for other valid and legitimate reasons, for which the Court thinks it necessary to exercise the said jurisdiction.” It has been held by Hon’ble the supreme court in the case reported in (2009) SCC 150 at para 38 and 39 as follows:- “38. Although ordinarily a superior court in exercise of its writ jurisdiction would not enforce the terms of a contract qua contract, it is trite that when an action of the State is arbitrary or discriminatory and, thus, violative of Article 14 of the Constitution of India, a writ petition would be maintainable. (See ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd.3) 39. There cannot be any doubt whatsoever that a writ of mandamus can be issued only when there exists a legal right in the writ petition and a corresponding legal duty on the part of the State, but then if any action on the part of the State is wholly unfair or arbitrary, the superior courts are not powerless. Reliance placed by Mr. Divan on G.J. Fernandez v. State of Mysore 4 is not apposite. In that case itself it was held: (AIR p. 1757, para 12) “12. Reliance placed by Mr. Divan on G.J. Fernandez v. State of Mysore 4 is not apposite. In that case itself it was held: (AIR p. 1757, para 12) “12. Thus under Article 162, the State Government can take executive action in all matters in which the legislature of the State can pass laws. But Article 162 itself does not confer any rule-making power on the State Government in that behalf.” In view of the aforesaid judgments of the Hon’ble supreme court , this court finds that the power of High Court under Article 226 of the Constitution of India is plenary in nature and involvement of contractual dispute or availability of alternative remedy cannot be ipso-facto a ground for dismissal of the writ petition. In this case the court finds that public law element is involved , and the respondents are required to act fairly and reasonably and arbitrariness in state action can be examined under article 226 of the constitution of India. From perusal of the impugned order as contained in order dated 31.07.2017, prima-facie, this court finds that the reasons which have been assigned in the impugned order is beyond show cause notice which was issued to the petitioner and accordingly the reasons for cancellation of the dealership is ex-facie arbitrary and hence violative of Article 14 of the Constitution of India. Moreover, in the instant case the parties have already exchanged affidavits and all the materials are available on record. Accordingly this court is inclined to entertain this writ petition and the plea of alternative remedy as raised by the respondents is hereby rejected. (ii) From perusal of the record of the case this court finds that the petitioner had intimated the Inspector, Weights and Measures Department vide letter dated 23.02.2013 regarding excess delivery from the DU and on the same day endorsement was made directing the petitioner not to use this DU. (iii) The genuineness of this letter which the petitioner had filed before the Inspector, Weight and Measures Department was sought to be verified by the respondents from the weights & measures Department and no adverse report was received by the respondents from the said department. Even in the impugned order, the genuineness of this letter dated 23.02.2013 filed before the Inspector, Weights and Measures Department is not disputed. Even in the impugned order, the genuineness of this letter dated 23.02.2013 filed before the Inspector, Weights and Measures Department is not disputed. (iv) Admittedly thereafter the inspection was carried out on 26.02.2013 wherein specific allegation was made that the sealing wire on the metering unit of this particular DU was found broken. But in the inspection report there is no such allegation that this particular DU was being used by the petitioner in spite of sealing wire having been broken. (v) From perusal of the show cause notice only two irregularities were found in the show cause notice that “(i) in the DU No. 9299 the sealing wire on metering unit is found broken and (ii) MS(Motor Spirit) and Hi-Speed Diesel were dry at the time of inspection”. From perusal of the entire show cause notice it is nowhere alleged that the petitioner was found using the said DU whose sealing wire was found broken. (vi) Pursuant to this show cause notice, the petitioner had filed explanation and in the explanation dated 25.04.2013 the petitioner had categorically mentioned about the letter dated 23.02.2013 issued by the Weights and Measures Department. It was also mentioned in the said letter that since 24.02.2013 the sale from respective DU was suspended by the advice of Weights and Measures Inspector. On the same day another letter was also issued by the petitioner wherein the petitioner has mentioned that on 23.02.2013 during routine check up, they found excess delivery from the DU No. 9299 by L & T and thereafter they informed the engineers and officers of the BPCL and Weights and Measures Inspector. (vii) From perusal of the impugned order dated 31.07.2017 it appears that although no show cause notice was issued to the petitioner alleging that the petitioner continued to use the DU No. 9299 in spite of seals were broken, but in the said order the respondents have observed that the petitioner has not produced any documentary proof to prove that DU was not in use as on the date of inspection. This Court finds that since no allegation in this regard was made against the petitioner at the time of show cause notice, therefore there was no such occasion for the petitioner to file the said proof. This Court finds that since no allegation in this regard was made against the petitioner at the time of show cause notice, therefore there was no such occasion for the petitioner to file the said proof. The contention of the petitioner that the petitioner had informed the engineers is not disputed in the impugned order, rather in the impugned order the respondents are aggrieved by the fact that the petitioner had not informed the respondents through their online service ‘BROMA’. (viii) From perusal of the impugned order it further appears that genuineness of the letter dated 23.02.2013 is not disputed but the respondents are aggrieved by the fact that the requisite fee itself for inspection was deposited one day after the inspection i.e. 27.02.2013. Merely because fee was deposited one day after the inspection, the same cannot be used to draw any adverse inference against the petitioner. It is on record that the respondents had taken all steps to find out the genuineness of the letter dated 23.02.2013 from the Department of Weights and Measures and no adverse report was received from the said department. The reasons for termination of the agreement has been categorically mentioned as follows:- “Using the DU/Running the RO with DU having broken W& M seal is a serious office/omission from your part considering the nature of the product supplying through the said DU.” This reason having not been indicated in the show cause notice is apparently beyond the show cause issued to the petitioner and accordingly the impugned order dated 31.07.2017 cannot be sustained in the eyes of law. 7. As a cumulative effect of the aforesaid findings and under the facts and circumstances of this case, this writ petition is allowed and the order dated 31.07.2017 passed by the respondent is hereby quashed and set aside.