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2018 DIGILAW 272 (GAU)

Prakash Indane Agency v. Indian Oil Corporation Ltd.

2018-02-13

SUMAN SHYAM

body2018
JUDGMENT : SUMAN SHYAM, J. 1. Heard Mr. S.K. Medhi, learned senior counsel assisted by Mr. A. Das, learned counsel appearing for the writ petitioners. I have also heard Mr. D.K. Sarmah, learned Standing Counsel, IOC, appearing for respondent Nos. 1, 2 and 3. The order dated 28.07.2017 by means of which the LPG distributorship licence issued to the writ petitioner was cancelled by the IOCL authorities has been put to challenge in the instant writ petition. The facts of the case, shorn of unnecessary details, may be noticed as follows. 2. On 30.09.2013 a notice was published in the newspaper inviting applications for LPG distributorship in various locations including Hojai. As per the terms of the advertisement the successful distributors were to be chosen by means of draw of lots. Responding to the said advertisement, the writ petitioner herein had also submitted his application and on completion of the draw of lots it was the petitioner who had emerged as the successful candidate for the location "Hojai". Accordingly, his application was processed by the authorities. In the meantime, the petitioner had also obtained explosive approval for the godown from the Petroleum Explosive Safety Organisation (PESO) and NOC dated 13.05.2015 from the IOCL for setting up the godown at the location proposed by him. On completion of necessary formalities, the respondent No. 1 had entered into a Memorandum of Agreement dated 25.02.2016 with the writ petitioner for operating the LPG distributorship at Hojai pursuant whereto, the petitioner had started operation of his LPG distributorship at Hojai. 3. On 25.01.2017, the petitioner was surprised to receive a termination notice issued by the IOC authorities, inter alia, alleging that the LPG storage godown of the petitioner's distributorship is situated beyond 15 kilometers from the advertised location and therefore, it was a case of violation of Clause 27(1) of the distributorship agreement thereby inviting the termination clause. The aforesaid notice was apparently issued on the basis of a complaint received by the IOCL authorities from an un-disclosed person. The petitioner was accordingly asked to show cause within 15 days of the receipt of the notice. 4. On 06.02.2017 the petitioner replied back requesting for a copy of the complaint which had been relied upon in the termination notice dated 25.01.2017. The petitioner was accordingly asked to show cause within 15 days of the receipt of the notice. 4. On 06.02.2017 the petitioner replied back requesting for a copy of the complaint which had been relied upon in the termination notice dated 25.01.2017. But when no such copy was furnished to him, on 14.02.2017, the petitioner had submitted his show cause reply denying the allegation leveled against him. According to the petitioner, there was no change of site of the godown as represented by him at the time of submitting the application. It was also the stand of the petitioner that the location of the godown having been verified by the IOCL authorities before issuing the distributorship, there cannot be any question of petitioner violating clause 27(1) of the agreement, as has been alleged. Not being satisfied with the reply, the authorities had issued the order dated 28.07.2017 terminating the LPG distributorship licence of the writ petitioner. Aggrieved thereby, the present writ petition has been filed. 5. The respondent Nos. 1 to 3 have filed counter affidavit contesting the writ petition, inter alia, stating that acting on the complaint received by the authorities on 12.09.2016, a departmental enquiry was conducted in the matter so as to ascertain the distance between the godown and the location of the distributorship whereafter, it was found that the same was beyond the limit of 15 kilometers as prescribed by the advertisement notice. Consequently, the termination order was issued. 6. By referring to the various clauses of the advertisement notice dated 30.09.2013, Mr. Medhi, learned senior counsel appearing for the writ petitioners, submits that although it was stipulated in the said notice that the applicant must own a godown within 15 kilometers from the municipal/town/village limits of the location offered in the same State, yet, there is nothing in the said clause to stipulate that the godown should be within 15 kilometers from the location of the LPG distributorship. The learned senior counsel contends that no consumer has ever complained of any inconvenience being caused to them due to location of the godown and hence, the authorities ought not have terminated the licence on the basis of an anonymous complaint, that too, without furnishing a copy of the same to the petitioner. 7. Referring to the various sub-clauses of Clause 10 of the advertisement notice, which deals with grievance/complaint redressal system, Mr. 7. Referring to the various sub-clauses of Clause 10 of the advertisement notice, which deals with grievance/complaint redressal system, Mr. Medhi has further argued that according to the norms of the IOCL authorities a complaint can be entertained only if accompanied by a deposit of Rs. 1000/- and if received by the office within 30 days from the date of declaration of draw of lots. However, in the present case, by the own showing of the respondents, neither was the complaint accompanied by the amount of Rs. 1000/- nor was it submitted within 30 days from the draw of lots. That apart, submits Mr. Medhi, in view of clause 10(b), the authorities could not have acted on the basis of any anonymous complaint, at least not before the true identity of the signatory therein was verified. Pointing at the aforesaid anomalies, Mr. Medhi submits that this is a clear case where the authorities have acted in violation of the principles of natural justice and have also failed to follow a fair and transparent process before issuing the impugned order. Mr. Medhi submits that his client has made substantial investment for setting up the infrastructure for operating the LPG distributorship and therefore, if the impugned order is allowed to stand then the same would cause irreparable injury to the interest of his client. 8. Strongly refuting the arguments advanced by the petitioners' counsel, Mr. Sarmah, learned Standing Counsel, IOCL, has contended that the petitioner has not denied the distance of his godown from the distributorship as contained in the report dated 02.11.2016 (Annexure-A/0-2 of the counter affidavit). If that be so, there is no question of violation of the principles of natural justice in the present case, since even if the copy of the complaint was furnished to the petitioner, even in that case, he could not have improved upon his own case. Mr. Sarmah has further submitted that the officers who were found guilty in the matter have already been departmentally proceeded against and unless action is also taken against the petitioner the credibility of the institution will be seriously hampered. Urging as above, Mr. Sarmah has prayed for dismissal of the Writ Petition. 9. I have considered the rival submissions and have also perused the materials available on record. 10. Urging as above, Mr. Sarmah has prayed for dismissal of the Writ Petition. 9. I have considered the rival submissions and have also perused the materials available on record. 10. The undisputed factual position that emerges from the record is that the action on the part of the respondent authorities was triggered by a complaint allegedly filed by one A. Ahmed on 12.09.2016 but the copy of the complaint was never furnished to the petitioner. The learned counsel for the respondents also could not throw any light on the true identity of the complainant. It is also not in dispute that the complaint was not filed in accordance with the provisions of clause 10 of the notice dated 30.09.2013 which relates to grievance/complaint redressal mechanism. As such, it is evident that the petitioner was not aware of the exact nature of allegation brought against him in the complaint which forms the basis of the show cause notice dated 25.01.2017. 11. As noted above, the entire controversy relates to the distance of the petitioners godown from the location of the distributorship. Clause 3(a) of the notice dated 30.9.2013 stipulates the distance clause which is quoted herein below for ready reference:- "a. Godown for Storage of LPG Cylinders LPG Distributor would require a Storage Godown duly approved and licensed by Chief Controller of Explosives of Petroleum and Explosives Safety Organisation (PESO) for storage of 8000 kg LPG in cylinders. The applicant should own: A plot of land of minimum dimensions 25 M x 30 M (within 15 km from municipal/town/village limits of the location offered in the same State) for construction of LPG Godown for storage of 8000 Kg of LPG in cylinders. The plot of land for construction of godown not meeting the minimum dimensions of 25M x 30M will not be considered. Or A ready LPG cylinder storage godown (within 15 km from municipal/town/village limits of the location offered in the same State) of 8000 Kg. capacity." 12. From a bare reading of the said clause it would be apparent that the distance of 15 kilometers is the outer limit between the godown of the distributor from the municipal/town/village limits of the location offered in the same State. But in the show cause notice dated 25.01.2017 the allegation that has been brought against the petitioner is that the LPG distributorship is situated beyond 15 kilometers of the "advertised location". But in the show cause notice dated 25.01.2017 the allegation that has been brought against the petitioner is that the LPG distributorship is situated beyond 15 kilometers of the "advertised location". The notice dated 30.09.2013, in the opinion of this court, does not stipulate any condition providing that the location of the godown has to be within 15 kilometers from the LPG distributorship. If that be so, it is not understood as to on what basis such a stern action has been initiated against the petitioner which led to cancellation of the distributorship, that too, on the allegation that he has violated clause 27(1) of the agreement, which merely deals with untrue on incorrect information given by the distributor on any material particular. 13. In the above context, it would be further pertinent to mention herein that before granting the distributorship the officials of the respondent Corporation had admittedly verified the location and submitted a report, based on which, the distributorship licence was processed. It is not the allegation against the petitioner that he has shifted the godown after obtaining the distributorship or that the information furnished by him regarding the location of the godown has turned out to be untrue or incorrect. Therefore, there is serious doubt in the mind of the Court as to whether clause 27(1) of the agreement would at all have any application in this case. Under the circumstances, without dealing with all these relevant aspect of the matter, the petitioner's licence, in the opinion of this Court, could not have been terminated on an allegation simplicitor "that the LPG storage godown of your LPG distributorship is situated beyond 15 Km of the advertised location". 14. It is a matter of common knowledge that establishing an LPG distributorship involves a substantial investment and therefore, once a licence is granted, the distributor should ordinarily be allowed to operate the same without any hindrance. It is no doubt true that any malpractice or misconduct on the part of the distributor must be dealt with sternly by the authorities and the writ Court would not interfere if it is found that such discretionary power has been exercised by the authorities in a reasonable manner and on just and cogent grounds. But in the present case, as noted above, I find that there was no justifiable ground for the authorities to terminate the distributorship licence of the petitioner. But in the present case, as noted above, I find that there was no justifiable ground for the authorities to terminate the distributorship licence of the petitioner. The ground mentioned in the notice dated 25.1.17 in the opinion of this Court, could not have led to cancellation of the distributorship. That apart, by failing to produce a copy of the alleged complaint, which forms the basis of the termination notice, the authorities have acted in utter violation of the principles of natural justice thereby causing serious prejudice to the rights and interest of the writ petitioners. 15. For the foregoing reasons, this writ petition must succeed and is hereby allowed. The impugned order dated 28.07.2017 is hereby set aside. Consequently, the LPG distributorship of the petitioners be restored forthwith. Notwithstanding this order, it would be open to the respondent authorities to make a fresh enquiry against the petitioner on any issue, if the same is found to be justified under the law, rules and regulations applicable therein, subject to the condition that the distributorship is restored. The writ petition stands disposed of. No order as to cost.