Hindustan Petroleum Corporation Ltd. v. Kanta Garasiya
2022-09-30
KULDEEP MATHUR, SANDEEP MEHTA
body2022
DigiLaw.ai
JUDGMENT Sandeep Mehta J. - The instant intra court appeal has been preferred by the appellant Hindustan Petroleum Corporation Ltd. being aggrieved of the order dated 21.02.2022 passed by the learned Single Bench accepting S.B. Civil Writ Petition No.10115/2019 and restraining the appellants from terminating the retail petrol and diesel outlet dealership allotted to the writ petitioner (respondent in this appeal) by the appellant Corporation. 2. Brief facts relevant and essential for disposal of the appeal are noted hereinbelow :- 3. The respondent writ petitioner was awarded dealership of Hindustan Petroleum Corporation Ltd. for retail petrol and diesel outlet vide dealership agreement dated 31.12.2007 and was operating the same in the name and style of Akshay Automobile at location Navania, Udaipur. 4. An inspection was conducted by the company officers at the outlet of the respondent writ petitioner on 27.06.2017, during the course whereof, it was found that six out of eight nozzles were releasing lesser quantity of fuel in the range of 30 ml to 60 ml in both Motor Spirit (MS) and High Speed Diesel (HSD). The inspection team prepared a report and forwarded the dispensing unit to the O.E.M., i.e. Moderate Insightful Disciplined Congenial Opinionated (for short, hereinafter referred to as 'MIDCO') for technical assessment. Panchnama was also prepared on the same day. The unit was examined by MIDCO, which issued a report dated 03.01.2018 indicating that : "pulsar assembly is not found in conformance with MIDCO standard design as per delivery test." 5. A show cause notice dated 08.05.2018 was issued to the writ petitioner requiring her to show cause as to why the dealership be not terminated on account of violation of clauses 4(a), 6(f), 20(a), 31(a) and 31(1) of the dealership agreement and for committing irregularities as described in the Marketing Discipline Guidelines (MDG). The respondent submitted a reply denying the allegations set out in the show cause notice and challenged the same by filing S.B. Civil Writ Petition No.3816/2019. While the said writ petition was pending, the respondent was given an opportunity of hearing and thereafter the dealership was terminated vide order dated 06.03.2019, which was assailed by the respondent writ petitioner through S.B. Civil Writ Petition No.10115/2019. The writ petition aforesaid came to be allowed by the learned Single Bench vide order dated 21.02.2022, which is assailed in this intra court appeal. 6. Mr. Manoj Bhandari, learned Senior Advocate, assisted by Mr.
The writ petition aforesaid came to be allowed by the learned Single Bench vide order dated 21.02.2022, which is assailed in this intra court appeal. 6. Mr. Manoj Bhandari, learned Senior Advocate, assisted by Mr. Govind Suthar, representing the appellants, vehemently and fervently contended that the view taken by the learned Single Bench based on the report of MIDCO that the errors found at the retail outlet of the respondent were not critical and were covered under 'major irregularities', which would have the consequence of suspension of sale and supply by 15 days only is absolutely unjustified. Mr. Bhandari submitted that the view taken by the learned Single Bench that the test report indicates lack of physical damage and interference in the external component of the hardware and thus, the deficiency would be covered by category 8.3 (Major Irregularities) is absolutely unwarranted and amounts to a misreading of the MIDCO test report. He urged that MIDCO, which is the original equipment manufacturer and an independent assessment agency, concluded in its report that the discharge from six out of eight nozzles of the outlet of the respondent writ petitioner were reduced and this conclusion by itself would give rise to a 'critical irregularity' within the meaning of Clause 8.2.iii of the Marketing Discipline Guidelines, which reads:- 8.2 Critical Irregularities: 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 5.1.2) He submitted that in addition to the fact that the discharge from six out of eight dispensing nozzles was reduced, the dealer did not report the shortfall in discharge to the company. This serious suppression would as a necessary repercussion make the dealer liable for critical irregularity by virtue of the aforesaid clause of the guidelines and the only consequence thereof would be termination of dealership. Mr. Bhandari submitted that as the circuit of the dispenser unit is electronic, it is clear that for reducing the discharge, the dealer indulged in software manipulation leading to discrepancy noticed during inspection. He referred to the following extract from report of the MIDCO Lab :- "Pulsar assembly is not found in conformance with Midco standard design as per Delivery tests." 7. Mr.
He referred to the following extract from report of the MIDCO Lab :- "Pulsar assembly is not found in conformance with Midco standard design as per Delivery tests." 7. Mr. Bhandari referred to Clause 5.1.3 of the MDG, which reads as below :- "5.1.3 TOTALISER SEALS FOUND TAMPERED WITH Totaliser seals will also be construed as tempered If it allows manipulation of Totaliser reading; deliberately making the totaliser non functional or not reporting to the OMC if totaliser Is not working. In such cases, views and opinion of W & M authorities would be obtained and the opinion rendered by the W&M department should be final. In case of this irregularity, sales from the concerned dispensing unit to be suspended & DU sealed. Samples to be drawn of all the products and sent to lab for testing." 8. In support of his contentions, Mr. Bhandari placed reliance on the following judgments :- 1. Natvarlal & Son through Partner v. Bharat Petroleum Corporation Ltd. through Managing Director [Letters Patent Appeal No.540/2011 decided on 19.09.2014] [Gujarat High Court] 2. M/s. Anvita Highway Services v. Bharat Petroleum Corporation & Ors. [Writ Petition No.11330/2011 decided on 19.04.2012] [Bombay High Court] He, thus, implored the court to accept the appeal, set aside the impugned order and affirm the decision taken by the company to terminate the dealership of the respondent writ petitioner. 9. Per contra, Mr. Siddharth Joshi, learned counsel representing the respondent, vehemently and fervently opposed the submissions advanced by the petitioner's counsel. He urged that admittedly, neither any physical damage was noticed on the MMS Pulsar Assembly nor any alien or external component/ hardware was found in any of the items received as per the MIDCO report. Thus, he urged that the discrepancy noticed at the retail outlet was covered under Clause 8.3 (Major Irregularities) and not under Clause 8.2 (Critical Irregularities) and hence, the consequence of termination of dealership could not have been inflicted upon the dealer. He urged that the view taken by the learned Single Bench is just and legal and does not warrant interference. 10. We have given our thoughtful consideration to the submissions advanced at bar and have gone through the material available on record. 11.
He urged that the view taken by the learned Single Bench is just and legal and does not warrant interference. 10. We have given our thoughtful consideration to the submissions advanced at bar and have gone through the material available on record. 11. Learned Single Bench, after considering the controversy held that though short delivery was noticed in the nozzles but since the weights and measures seals were intact, the irregularity was covered under Clause 8.3 (x) and not under clause 8.2 of the MDG. However, we are not in agreement with the said conclusion drawn by the learned Single Bench. It is an admitted position that Pulsar Assembly seized from the retail outlet was examined in the lab of the original equipment manufacturer MIDCO. The test report dated 03.01.2018 clearly indicates that the Pulsar Assembly was not found in conformance with MIDCO standard design as per Delivery tests. Thus, unquestionably, there was tampering with the unit. As the assembly is having electronic design, the tampering is possible through software hacks, which would not require any external tinkering. In addition thereto, it is an admitted position that the discharge of fuel from six out of eight nozzles at the retail outlet of the respondent was deficient when physical inspection was undertaken, which leads to short delivery of fuel. As per clause 8.2 (iii) referred to supra, such tampering amounts to deliberately making the totaliser non-functional. Furthermore, the respondent writ petitioner did not report the short delivery to the company, which clearly brings the mischief under the definition of Critical Irregularities, which entails the only consequence of termination of dealership. The test report dated 03.01.2018 reveals that Pulsar Assembly works on electronic circuits and as there was shortfall in delivery, it is apparent that these circuits were tampered by electronic means. It is trife knowledge that electronic circuits can be hacked/converted without changing the external design. The fact that there was shortfall in discharge, which was not reported by the respondent dealer, would lead to a direct inference of tampering by electronic means. This court is convinced that the incident of short delivery of motor spirit and high speed diesel beyond the permissible limits observed at the writ petitioner's retail outlet is a malpractice as defined under the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005.
This court is convinced that the incident of short delivery of motor spirit and high speed diesel beyond the permissible limits observed at the writ petitioner's retail outlet is a malpractice as defined under the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. Needless to say that it is the respondent writ petitioner, who would stand to gain by the short delivery, and the losers would be the public at large utilizing the services offered at the retail outlet of the writ petitioner unaware of the short delivery of Motor Spirit and High Speed Diesel by the dispensing units. MIDCO is the original equipment manufacturer and an independent agency. Thus, it would not be open for this court, while exercising the extraordinary writ jurisdiction to substitute its own wisdom over the conclusions drawn by the MIDCO in the test report. The controversy at hand is squarely covered by the judgment rendered by the Hon'ble Gujarat High Court in the case of Natvarlal & Son through Partner v. Bharat Petroleum Corporation Ltd. through Managing Director (supra). We are, therefore, of the firm opinion that the dealer tampered the Pulsar Assembly, which is covered under the definition of critical irregularity and hence, the appellant Corporation was perfectly justified in terminating the dealership of the respondent writ petitioner by order dated 06.03.2019, which does not suffer from any infirmity whatsoever. Consequently, the impugned order dated 21.02.2022 passed by the learned Single Bench is unsustainable and is hereby reversed. 12. The appeal is allowed, accordingly.