Jai Ambe Petroleum Kendra v. Indian Oil Corporation Limited
2021-03-10
MOHAMMAD RAFIQ, VIJAY KUMAR SHUKLA
body2021
DigiLaw.ai
JUDGMENT : Vijay Kumar Shukla, J. 1. The present intra-court appeal has been filed under Section 2(1) of the Madhya Pradesh Uchcha Nyayalaya (Khand Nyaypeeth ko Appeal) Adhiniyam, 2005, being dissatisfied with and aggrieved by the order dated 27-6-2019 passed by the learned Single Judge in WP-17088-2018 [M/s. Jai Ambe Petroleum Kendra vs. Indian Oil Corporation Limited and others]. The appellant-petitioner has called in question the legality and validity of the order dated 14-12-2017 by which dealership of the appellant was terminated and the order dated 25-6-2018 whereby the appellate authority has dismissed the appeal. The writ petition has been dismissed by the impugned order dated 27-6-2019. 2. The facts which are imperative to be stated are, that the appellant was appointed as a retail outlet dealer of the respondent, Indian Oil Corporation [for short, "the IOCL"] for sale and supply of Petrol/High Speed Diesel (HSD)/Motor Oil/Grease and other petroleum products, vide agreement dated 22-01-2009. On 10-7-2017 Sales Officer of the IOCL randomly inspected the retail outlet of the appellant and found that there was no separate toilet for men/women. He collected samples of MS and HSD of both tank lorry and nozzle and sent the same for the BIS specification test to a laboratory. As per report of the laboratory the samples of MS of both tank lorry and nozzle failed the test of the BIS specification, however, the sample of HSD of both tank lorry and nozzle passed the BIS specification. The said report was communicated to the appellant vide letter dated 01-8-2017. Pursuant to the report dated 31-7-2017, sale and supply of the outlet of the appellant was suspended and after recording meter reading of dispensing machines, the same were sealed. 3. On 24-8-2017 while conducting MDT inspection (toilet inspection) by Shri Neeraj K. Chhipa, the officer of the IOCL found that the petrol pump was operational. A report was submitted by him requesting further investigation in the case. Pursuant to which a committee was constituted and another inspection was conducted on 8-9-2017. During this inspection the outlet of the appellant was found operational, despite suspension of sale. The dispensing unit showing changed reading was video-graphed by the officers of the IOCL. 4. On 10-10-2017 a show cause notice was issued to the appellant, as to why action should not be taken against the appellant including termination of dealership.
During this inspection the outlet of the appellant was found operational, despite suspension of sale. The dispensing unit showing changed reading was video-graphed by the officers of the IOCL. 4. On 10-10-2017 a show cause notice was issued to the appellant, as to why action should not be taken against the appellant including termination of dealership. The appellant put forth its stand by way of reply dated 23-10-2017. Subsequently, the District Supply Officer, Raisen again inspected the premises of the appellant on 21-9-2017 and submitted his report. 5. Being aggrieved by the order of suspension, the appellant preferred a writ petition forming the subject-matter of WP-17462-2017. The said writ petition was disposed of with a direction to the respondent No. 1 to take a final decision on the show cause notice within two weeks. It is alleged that the respondent No. 1 instead of deciding the show cause notice, as directed by this Court on 13-11-2017, terminated the dealership of the appellant vide letter dated 27-12-2017. The order of termination, thereafter was assailed by way of writ petition (WP-604-2018) which was dismissed on 10-01-2018 with liberty to the appellant to prefer an appeal before the appellate authority. The appellant moved a review petition for recall of the order, which was dismissed as withdrawn on 28-02-2018. Pursuant to the order dated 10-01-2018 passed in WP-604-2018 the appellant filed an appeal before the appellate authority which was dismissed on 25-6-2018, which was subject-matter of challenge in the writ petition which has been dismissed by the learned Single Judge by the impugned order. 6. The respondents filed a detailed reply contending inter alia, that the Marketing Discipline Guidelines, 2012 (for brevity, "the MDG 2012") provides for termination of the dealership in case of critical (Clause 8.2) and major (Clause 8.3) irregularities by the dealer. It is stated that the appellant has violated Clauses 5.1.6, 5.1.8, 5.1.9, 5.1.12, 5.1.13 and continued sale of adulterated products even after the sale/purchase was suspended. It is further alleged that the appellant deceived the Assistant Supply Officer by fraudulently changing the reading of totalizer and also overcharged the customer and failed to maintain the records. It remained deliberately absent from the investigation and refused to sign any document. It is stated that the appellant was given a notice to show cause and afforded opportunity of personal hearing and thereafter the impugned order was passed in accordance with law.
It remained deliberately absent from the investigation and refused to sign any document. It is stated that the appellant was given a notice to show cause and afforded opportunity of personal hearing and thereafter the impugned order was passed in accordance with law. 7. The learned counsel for the appellant before the learned Single Judge argued that the show cause notice was not as per the provisions of the MDG 2012. It is argued that the suspension order itself was arbitrary and malafide, as the Authority itself found the adulteration not proved, as both the retail outlet sample as well as TL sample for MS failed and hence, the dealer cannot be held responsible for adulteration. It is further argued that the termination letter is based on allegations, which were not part of the show cause notice, therefore, cannot be made basis for termination of the dealership. It is strenuously urged that there was no evidence to demonstrate that the appellant was involved in unauthorized sales/purchase nor is there an evidence that it overcharged the customer. 8. Learned counsel appearing for the respondents submitted that the appellant is bound by the terms and conditions of the MDG 2012. It is submitted that the final termination of dealership was not on the ground of adulteration, but due to critical irregularities committed by the appellant. It is put forth that a detailed show cause notice was served on the petitioner with all Annexures including bill books, photos and videos. Once the sale was suspended the appellant was required to comply with the directions, however, it was caught in operation by the Committee on 8-9-2017 and by the transporter on 10-9-2017, who also video-graphed the operation. It is further argued that bill books seized from the appellant on 8-9-2017 show that the sales continued even after the order of suspension dated 3-8-2017. 9. Learned counsel for the appellant assiduously urged that two major critical irregularities were alleged against the appellant, adulteration of MS/HSD (5.1.1), whereas the adulteration was not found to be proved in the present case. It is further submitted that in regard to other irregularities regarding unauthorized sale/purchase of product (5.1.6) after the suspension order, was also not found proved by the appellate authority. It is argued that the learned Single Judge has failed to appreciate operation of the order of the appellate authority. 10.
It is further submitted that in regard to other irregularities regarding unauthorized sale/purchase of product (5.1.6) after the suspension order, was also not found proved by the appellate authority. It is argued that the learned Single Judge has failed to appreciate operation of the order of the appellate authority. 10. We have heard the learned counsel for the parties and bestowed our anxious consideration on the arguments advanced. 11. It is not in dispute that the appellant was appointed as retail outlet dealer by the respondents for sale and supply of Petrol/HSD/Motor Oil/Grease etc., vide agreement dated 22-01-2009. Clauses 15, 43 and 45(a)(l)(m)(n) provide procedure for initiating action against a dealer, in case of breach of terms and conditions of the agreement. Retail outlet dealership is regulated by Marketing Discipline Guidelines. Chapter 8 of the MDG 2012 provides action to be taken by the OMC under the Guidelines. Clause 8.2 postulates critical irregularities for termination of dealership at the first instance. It reads thus: "8.2. 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 5.1.20. iv. Additional/unauthorized fittings/gears/electronic component found in dispensing units/tampering with dispensing unit. [5.1.4(a), (b), (c)]. 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)." 12. Clause 8.3 provides for termination of dealership at the third instance in the case of major irregularities, which reads as follows: "8.3. Major irregularities : The following irregularities are classified as major irregularities: i. Refusal by the dealer to allow drawl of samples/carry out inspections (5.1.8). ii. Non-availability of reference density at the time of inspection (5.1.9). iii. Selling of normal MS/HSD as branded fuels. (5.1.10). iv. Stock variation beyond permissible limits but sample passing quality tests. (5.1.11). v. Non-maintenance of records since last inspection. (5.1.12). vi. Overcharging of MS/HSD/CNG/Auto LPG (5.1.13) vii. Non-provision of clean toilet facility. (5.1.14.b). viii. Automated retail outlets : 5.1.16(a), (b), (c) ix. Non-payment of salary, wages and other benefits (as per clause 5.1.18) to the manpower employed at the ROs. x. Short delivery of products with W & M seals intact. 5.1.2(a)" 13.
(5.1.12). vi. Overcharging of MS/HSD/CNG/Auto LPG (5.1.13) vii. Non-provision of clean toilet facility. (5.1.14.b). viii. Automated retail outlets : 5.1.16(a), (b), (c) ix. Non-payment of salary, wages and other benefits (as per clause 5.1.18) to the manpower employed at the ROs. x. Short delivery of products with W & M seals intact. 5.1.2(a)" 13. In the present case, the learned Single Judge noted that sales of the KSK was suspended on 3-8-2017 with immediate effect as per provisions of MDG 2012 with the totalizer reading MS = 22905 and 6889, HSD = 311511 and 23395. However, on 8-9-2017, the Committee while inspection found different totalizer reading of 504486.220 and 155005.510 of one Dual Du, which is evident from document Annexure R-1/1 on record. As per the report, the other DU could not be checked, as power was disconnected by KSK staff. However, when the District Supply Officer inspected the retail outlet on 8-9-2017, he found the totalizer reading for MS=229051 and 6889, HSD =311511 and 23395, which was identical to the reading when the sales was suspended on 03-8-2017. The Committee further noticed that HPCL tanker standing in the premises of KSK. It also confiscated the bill book and videographed the entire operation. Copy of the bills was filed as Annexure R-1/5 which clearly reveals that the sail continued even after 3.8.2017, i.e. the order of suspension. 14. The aforesaid facts makes it clear that the sales continued even after it was suspended, but the appellant manipulated/tampered with the dispensing units, which amounts to 'critical irregularity' and as per Clause 8.2 of the MDG 2012, and provides for termination of dealership at the first instance. The learned Single Judge has rightly noted that the findings of the appellate authority that it was wrong on the part of the IOCL to suspend the sales and supplies of all products will have no effect on the termination, as the termination order was not based upon failure of MS samples to meet BIS specification but on the conduct of the appellant in unauthorizedly selling the petroleum products and manipulating and tampering with the dispensing units which falls under 'critical irregularity' provided in Clause 8.2(vi) [5.1.6] and other major irregularities mentioned in the show cause notice. 15. Before passing the order of termination of dealership, a detailed show cause notice was issued to the appellant which was replied in detail by the appellant.
15. Before passing the order of termination of dealership, a detailed show cause notice was issued to the appellant which was replied in detail by the appellant. Apart from that, opportunity of personal hearing was also afforded to the appellant and there was no violation of principle of natural justice. The learned counsel for the appellant endeavoured hard to canvass that certain parts of the order of the appellate authority have not been taken into consideration by the learned Single Judge. Those points were not argued before the learned Single Judge, therefore, in an intra-court the learned counsel for the appellant cannot be permitted to raise the aforesaid contention. Even otherwise, in para 18 of the order the learned Single Judge has taken note of the order passed by the appellate authority in proper perspective. The learned Single Judge has rightly declined to interfere under Article 226 of the Constitution of India in the administrative decision of the respondents. 16. In the case of Baddula Lakshmaiah and others vs. Sri Anjaneya Swami Temple and others, (1996) 3 SCC 52 , the Apex Court ruled, that in an intra-court appeal the appellate Court is a Court of Correction which corrects its own orders, in exercise of the same jurisdiction as was vested in the Single Bench. Such is not an appeal against an order of subordinate court. In such appellate jurisdiction the High Court exercises the powers of a Court of Error. 17. We do not perceive any illegality in the order passed by the learned Single Judge and the findings ascribed in the impugned order are impeccable and the same do not warrant any interference in the present intra-court appeal. The writ appeal, being sans merit, is dismissed. There shall be no order as to costs.