Research › Search › Judgment

Allahabad High Court · body

2019 DIGILAW 1540 (ALL)

Agarwal Brothers Throu. Prop. Smt. Manju Devi Agarwal v. Indian Oil Corporation Ltd. Throu. Executive Director

2019-06-24

ANIL KUMAR, YOGENDRA KUMAR SRIVASTAVA

body2019
JUDGMENT : 1. Heard Sri N.K. Seth, learned Senior Counsel assisted by Amrendra Singh, learned counsel for the petitioner and Sri Manish Jauhari, learned counsel for opposite parties/ Indian Oil Corporation. 2. By means of present writ petition, the petitioner has prayed for quashing of the order dated 24.5.2019 (Annexure no.1) terminating the dealership of the petitioner together with the fact finding letter dated 1.6.2017 (Annexure no.8) and show cause notice dated 6.11.2017 (Annexure no.10). 3. Sri N.K.Seth, learned Senior Counsel appearing for the petitioner submits that petitioner had been granted dealership by Indian Oil Corporation for running the retail outlet of petroleum products at Jiyamau, Lucknow and the same is being operated in the name and style of M/s Agarwal Brothers. 4. On 1.5.2017, an inspection was made of the retail outlet of the petitioner at Jiamau, Lucknow and an inspection report was prepared wherein it is stated that in Machine No.2 Pulsar soldering of nozzle no.3 was not proper. However, in the inspection neither any short supply was found nor seals on the machines were reported to be broken nor any chip was reported to be installed. 5. Sri N.K. Seth, learned counsel for the petitioner further submits that prior to the inspection on 1.5.2017, on 13.4.2017 in the presence of the officials of the Weights and Measurement Department as well as OEM (Original Equipment Manufacturer) Service Engineer during 'STAMPING' procedure no irregularity was found in the Dispensing Unit 6. Thereafter, on the basis of the inspection report dated 1.5.2017, the Corporation issued a fact finding letter dated 1.6.2017 to the petitioner that he has committed violation of the Marketing Disciplinary Guidelines, 2012 and the dealership agreement. 7. After receiving the same, the petitioner submitted his reply on 19.6.2017 inter alia stating therein no extra chip were found in any of the machines, seals of all machines were found in-tact, delivery was checked and was found in order. 8. Thereafter, on 6.11.2017, a show cause notice (Annexure no.10) was served on the petitioner calling for his explanation as to why action be not taken against him for breach of the terms and conditions of the dealership agreement and for causing prejudice to the interest and good name of the Corporation. An addendum to the show cause notice was served on the petitioner on 14.11.2017. An addendum to the show cause notice was served on the petitioner on 14.11.2017. As the petitioner was not feeling well so he wrote a letter on 18.12.2017 seeking time to submit reply. 9. Sri N.K. Seth, learned counsel for the petitioner further submits that on the basis of the inspection report dated 1.5.2017, a complaint was also lodged under Section 200 Cr.P.C. and under Section 26 of the Legal Metrology Act, 2009 against the petitioner's firm before A.C.J.M.-1 Lucknow. On 25.10.2017, the petitioner moved an application before A.C.J.M.-1 Lucknow praying that the pulsar/device obtained from the retail outlet of the petitioner should be got tested by an independent agency approved by the State. The A.C.J.M.-1 Lucknow vide order dated 18.1.2018 directed that pulsar in question should be sent to Forensic Science Laboratory U.P. Lucknow (herein after referred to as the 'FSL') for testing. On 23.8.2018, the FSL gave its report inter alia stating therein that no electronic device or tampering has been found in the said pulsar. The said fact was intimated by the petitioner vide letter dated 28.8.2018 to the Corporation. However the respondent was adamant to terminate the dealership of the petitioner without taking into consideration the report dated 23.8.2017 submitted by FSL. 10. In view of the aforesaid factual background, the petitioner approached this Court by filing Writ Petition No.34846 (MB) of 2018 (M/S Agarwal Brothers Vs. Indian Oil Corporation and others), and after hearing learned counsel for the parties, vide order dated 4.12.2018 the said writ petition was disposed of. The relevant portion of the order reads as under:- "Considering the peculiar facts and circumstances of the case, it is hereby provided that while passing final order pursuant to the show cause notice dated 06.11.2017, the respondents shall also take into account the report of Forensic Science Laboratory, Uttar Pradesh Lucknow dated 23.08.2018, referred to above. It is clarified that while passing the order, the respondents shall follow the due procedure and principles of natural justice." 11. The impugned order terminating the dealership was thereafter issued on the petitioner on 24.5.2019. 12. It is clarified that while passing the order, the respondents shall follow the due procedure and principles of natural justice." 11. The impugned order terminating the dealership was thereafter issued on the petitioner on 24.5.2019. 12. Sri N. K. Seth, learned counsel for the petitioner submits that although in the impugned order there is narration in respect to order passed by this Court and it is also mentioned that as far as report dated 23.08.2018 of FSL is concerned, report of OEM has been taken as per MDG, 2012 which provides that in case of tampering with dispensing units, views and independent opinion of the original equipment manufacturer would be obtained. 13. It is submitted that despite the specific directions given by this Court vide its order dated 4.12.2018 to take into account the report dated 23.8.2018 submitted by FSL, no reasons have been assigned by opposite party no.2 as to under what circumstances he disagreed with the report of FSL. It is further submitted that impugned order dated 24.5.2019 is non-speaking and the same is in violation of principles of natural justice as well as in contravention with the direction given by this Court vide order dated 4.12.2018 passed in Writ Petition No.34846 (MB) of 2018 and as such the same is liable to be set aside. 14. The relevant portion of the impugned order reads as under:- "Your reply to the fact finding letter and the FSL report has been carefully considered, however, the same has not been found satisfactory by the Competent Authority due to the reasons given below : 1. During inspection, in the pulsar unit of Nozzle No.3 of Midco DU Number 11 GC 2165V, abnormal soldering was found. This irregularity has been recorded in the inspection report on 01.05.2017 duly signed by your representatives. OEM lab report dated 25th September 2017 has corroborated the same and confirmed that the pulsar is not found as per MIDCO standard design and has been visibly tampered. Therefore, your submission at point no.a above is not tenable. 2. As per the provisions of the dealership agreement, dealer is required to ensure that any repair/maintenance of the outfit at the RO premises is carried out either in his presence or his authorized representative. Therefore, your submission at point no.a above is not tenable. 2. As per the provisions of the dealership agreement, dealer is required to ensure that any repair/maintenance of the outfit at the RO premises is carried out either in his presence or his authorized representative. Since the RO premises are in the custody of the dealer, any tampering with the pulsar unit is not possible without the knowledge and involvement of the dealer. Certainly none other than the dealer is going to be benefited by the tampering with the pulsar. This irregularity of tampering in pulsar has been done without any permission and knowledge of the Corporation. Therefore, your submission of not having any technical knowledge of the soldering in pulsar at b above is not acceptable. 3. Even though the W&M seal was found intact and the delivery was found to be correct, matter of the fact is that since soldering in the pulsar was found which was not part of original equipment as confirmed by OEM in the inspection and the same has been recorded in the inspection report duly signed by your representative. Even though the W&M seal was found intact and the delivery was found to be correct, the soldering in pulsar was found during inspection as per OEM test report dated 25.09.2017. It has been confirmed that the Pulsar is not found as per Midco standard design and has been visibly tampered. Therefore, your submission that W&M seat and delivery was found ok. At C is not tenable. 4. DSR of 2016-17 could not be produced by the staff available at the RO during the inspection and therefore your submission at d is incorrect. 5. As far as report of Forensic Science Laboratory, Uttar Pradewsh (FSL), dated 23.08.2018 is concerned, report of OEM has been taken as per MDG, 2012 which provides that in case of tampering with dispensing units, views and independent opinion of the original equipment manufacturer would be obtained." 15. Sri Manish Jauhari, learned counsel for the opposite parties, at the very outset has raised a preliminary objection that against the impugned order dated 24.5.2019 petitioner has got two remedies, namely; (1) he may file an appeal under clause 8.9 of the Marketing Disciplinary Guidelines (2) he may file an application for arbitration. 16. Sri Manish Jauhari, learned counsel for the opposite parties, at the very outset has raised a preliminary objection that against the impugned order dated 24.5.2019 petitioner has got two remedies, namely; (1) he may file an appeal under clause 8.9 of the Marketing Disciplinary Guidelines (2) he may file an application for arbitration. 16. Accordingly, it is submitted by Sri Manish Jauhari, learned counsel for the opposite parties that the writ petition is liable to be dismissed. 17. Sri N.K. Seth, learned counsel for the petitioner while rebutting the aforementioned contention submits that since the impugned order is contrary to the directions issued by this Court vide order dated 4.12.2018 with regard to consideration of the report dated 23.8.2018 of FSL and also the impugned order having been passed in violation of principles of natural justice, the alternative remedy of filing of appeal under clause 8.9 of the Marketing Disciplinary Guidelines would not be a legal impediment so as to bar the filing of present writ petition. 18. It is further submitted that so far as the arguments raised by learned counsel for opposite party that petitioner has got remedy by way of arbitration, the same is not an efficacious remedy in view of the judgment dated 30.1.2019 delivered by a Division Bench of this Court in Writ Petition No.27043(MB) of 2018 (M/S Chaudhary Filling Point, Kazipur and another Vs. State of U.P. and others). 19. We have heard learned counsel for the parties and gone through the record. 20. So far as the arguments raised by Sri Manish Jauhari, learned counsel for the opposite parties that the petitioner has got remedy to file an appeal under Clause 8.9 of the Marketing Disciplinary Guidelines is concerned, from a bare perusal of the impugned order the position which emerges is that while passing the impugned order, the opposite party no.2 although has taken note of the fact that this Court vide its order dated 4.12.2018 had directed the Corporation to consider the report dated 23.8.2018 of FSL which is an independent agency; however, while passing the order impugned no adequate reason has been assigned as to under what circumstances the authority disagreed with the report dated 23.8.2018 of FSL as such the impugned order is clearly in contravention of the order dated 4.12.2018 passed by this Court. 21. 21. It is well settled that all the subordinate courts, tribunals and authorities are bound by the decisions and directions of this Court. In this regard reference may be had to the judgment of Hon'ble the Apex Court in the case of M/s. East India Commercial Co. Ltd. Calcutta and another vs. Collector of Customs, Calcutta ( AIR 1962 SC 1893 ), wherein it has been held as under : "Under Art. 215, every High Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself. Under Art. 226, it has a plenary power to issue orders or writs for the enforcement of the fundamental rights and for any other purpose to any person or authority, including in appropriate cases any Government, within its territorial jurisdiction. Under Art. 227 it has jurisdiction over all courts and tribunals throughout the territories in relation to which it exercise jurisdiction. It would be anomalous to suggest that a tribunal over which the High Court has superintendence can ignore the law declared by that court and start proceedings in direct violation of it. If a tribunal can do so, all the subordinate courts can equally do so, for there is no specific provision, just like in the case of Supreme Court, making the law declared by the High Court binding on subordinate courts. It is implicit in the power of supervision conferred on a superior tribunal that all the tribunals subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working : otherwise there would be confusion in the administration of law and respect for law would irretrievably suffer. So the law declared by the highest court in the State is binding on authorities or tribunals under its superintendence, and that they cannot ignore it either in initiating a proceeding or deciding on the rights involved in such a proceeding. If that be so, the notice issued by the authority signifying the launching of proceedings contrary to the law laid down by the High Court would be invalid and the proceedings themselves would be without jurisdiction." 22. Further, in the case of Sher Bahadur Singh Vs. If that be so, the notice issued by the authority signifying the launching of proceedings contrary to the law laid down by the High Court would be invalid and the proceedings themselves would be without jurisdiction." 22. Further, in the case of Sher Bahadur Singh Vs. U.P. Forest Corporation Lucknow and others, 2010 (28 ) LCD 1752 has held as under:- "So far as the submission of respondents counsel that the writ petition is not maintainable, I do not find any reason to relegate the matter to Labour Court keeping in view the previous litigations in this Court as well as the Apex Court. According to petitioners counsel, the judgment has been affirmed by Hon'ble Supreme Court. Once the litigants approach this Court with the allegation that the judgment of this Court has not been complied with in letter and spirit, then it shall neither be just and proper to relegate the matter to Labour Court. By catena of judgment of Hon'ble Supreme Court, it has been held that the alternative remedy is not bar and Court in appropriate cases, may entertain the writ petition to impart justice to litigants. Keeping in view the earlier litigation, adjudicated or pending in this Court, it shall not be appropriate to relegate the matter to Labour Court. Accordingly, the objection of respondents with regard to maintainability is rejected." 23. For the aforesaid reasons, the contention of learned counsel for the opposite parties that petitioner has got an alternative remedy to file an appeal under clause 8.9 of the Marketing Disciplinary Guidelines would not be a bar in the way of the petitioner in approaching this Court by filing the present writ petition 24. So far as the other argument raised by learned counsel for the opposite parties that petitioner has got the remedy by way of arbitration is concerned, the same also has no force in view of the decision of coordinate Bench of this Court passed in Writ Petition No.27043(MB) of 2018 ( M/S Chaudhary Filling Point, Kazipur and another Vs. State of U.P. and others) wherein it has been held as under:- "As regard the Arbitration, it has rightly been asserted that the Arbitrator has no power to restore the distributorship, in the event the termination is found unlawful. The Apex Court in the case of IOCL vs. Amritsar Gas Service (1991) 1 SCC 533 ; E. Venkat Krishna Vs. State of U.P. and others) wherein it has been held as under:- "As regard the Arbitration, it has rightly been asserted that the Arbitrator has no power to restore the distributorship, in the event the termination is found unlawful. The Apex Court in the case of IOCL vs. Amritsar Gas Service (1991) 1 SCC 533 ; E. Venkat Krishna Vs. IOCL and anor (2000)7 SCC 764 and Sanjana M. Wig Vs. HPCL; (2005) 8 SCC 242 has held in explicit words that an arbitration forum does not have the jurisdiction for the restoration of dealership, which was earlier terminated. All that the arbitrator could do, if he found that the termination of the distributorship was unlawful, was to award damages, as any civil court would have done in a suit. In Civil Misc. Writ Petition No. 51972 OF 2008 M/s Navin Filling Station vs. Indian Oil Corporation Ltd & Ors, this court observed as under: "The presence of the arbitration clause, is not to drive away a genuine grievance arising out of disproportionate action of the Corporation, to the arbitral tribunal which in any case will not have the authority to give an award to restore the dealership. In the present case the Indian Oil Corporation terminated the agreement relying upon the clauses, which were not attracted and on the Marketing Discipline Guidelines framed for facilitating the marketing of the petroleum products on the principles of good governance and excellent customary service. The preamble to the guidelines itself provide that the guidelines need to be constantly updated to meet the customer satisfaction and to the discipline dealership network and for preventing malpractices in the sale of petroleum products." In these circumstances, we find force in the arguments advanced by the learned Counsel for the petitioner that Arbitration between the parties is not an efficacious and proper remedy in such cases." 25. For the foregoing reasons and also the law laid down by Hon'ble Apex Court in the case of IOCL vs. Amritsar Gas Service (1991) 1 SCC 533 ; E. Venkat Krishna Vs. IOCL and anor (2000)7 SCC 764 and Sanjana M. Wig Vs. HPCL; (2005) 8 SCC 242 which have been followed by a coordinate Bench of this Court in its order dated 30.1.2019 passed in Writ Petition No.27042 (MB) of 2018 ( M/S Chaudhary Filling Point, Kazipur and another Vs. IOCL and anor (2000)7 SCC 764 and Sanjana M. Wig Vs. HPCL; (2005) 8 SCC 242 which have been followed by a coordinate Bench of this Court in its order dated 30.1.2019 passed in Writ Petition No.27042 (MB) of 2018 ( M/S Chaudhary Filling Point, Kazipur and another Vs. Stat of U.P. and others), the objections in questions raised by learned counsel for opposite parties are hereby rejected. 26. Sri Manish Jauhari, learned counsel for the opposite parties has not disputed the fact that no reasons have been given by opposite party no.2 in the impugned order dated 24.5.2019 as to under what circumstances he disagreed with the report dated 23.8.2018 of FSL which is an independent agency. 27. Accordingly in view of the aforestated reasons, the writ petition deserves to be allowed. 28. The order dated 24.5.2019 (Annexure no.1) passed by opposite party no.2 is hereby quashed and the matter is remanded to said authority to decide a fresh with a direction that the petitioner after receiving a certified copy of this order shall submit his reply within a period of two weeks raising all pleas which he has raised in the present writ petition against the impugned order dated 24.5.2019, and after receiving the same the opposite party no.2 shall decide the same within a further period of four weeks keeping in view of the directions given by this Court in the order dated 4.12.2018 passed in Writ Petition No.34846 (MB) of 2018. The respondent shall also take into account the report of FSL dated 23.8.2018 and pass a speaking order after giving personal hearing to the petitioner. 29. For a period of eight weeks or till passing of the fresh order whichever is earlier the petitioner's supply and operation of petrol pump shall be restored. 30. With the above directions, the writ petition is allowed.