Research › Search › Judgment

Telangana High Court · body

2023 DIGILAW 795 (TS)

Chairman and M. D. v. Ram Lal Agarwal

2023-12-22

ALOK ARADHE, ANIL KUMAR JUKANTI

body2023
JUDGMENT : (Anil Kumar Jukanti, J.) 1. This intra court appeal is filed challenging the order, dated 25.03.2014, passed by the learned Single Judge in Writ Petition No. 30227 of 2013. 2. Heard Mr. Deepak Bhattacharjee, learned Senior Counsel for the appellants and Mr. V. Ravinder Rao, learned Senior Counsel for the respondent. 3. Brief facts: Respondent was a dealer of Indian Oil Corporation (herein after referred to as 'Corporation') for more than 45 years. Initially his father was a proprietor and managed the retail outlet of Burmah Shell. Subsequently, Burmah Shell was taken over by the Corporation. As on the date of writ petition, agreement dated 28.06.2005 was in vogue. Periodical inspections were carried out by officers of the Corporation for accuracy of the delivery and quality, as per the Marketing Discipline Guidelines (herein after referred to as "MDG") of the appellant outlet and that there were no complaints. 3.1. That retail outlet had three dispensing units of Larsen and Toubro and one dispensing unit of MIDCO. On 13.02.2013, officials and staff of Corporation inspected retail outlet at 9.40 A.M. to 10.40 A.M. The inspecting team checked the deliveries from the nozzles of High Speed Diesel (hereinafter referred as "HSD") dispensing unit. They opened the dispensing unit and found a double gear assembly in the gear train in one of the metering unit of MIDCO HSD DUO. The Corporation passed an order dated 27.09.2013 stating that the dealer committed irregularities and that as per the MDG the dealership agreement was terminated. 3.2. Learned Single Judge having extracted the clauses of MDG and taking into consideration the facts on record, gave a finding that no variation was noticed in the quantity of fuel discharged from the dispensing unit and that it was not proved about insertion of double gear in the dispensing unit. It is also observed by the learned Single Judge that the order of the termination did not record a finding of deliberate insertion and actual manipulation of delivery of fuel. That the termination order proceeded on mere existence of double gear in dispensing unit as sufficient enough for termination of the dealership. 3.3. Learned Single Judge held that as per clause 5.1.4 of MDG, existence of a double gear is a critical irregularity, if there was an intention to manipulate the delivery, but no such variation was noticed in dispensing of fuel. 3.4. 3.3. Learned Single Judge held that as per clause 5.1.4 of MDG, existence of a double gear is a critical irregularity, if there was an intention to manipulate the delivery, but no such variation was noticed in dispensing of fuel. 3.4. The dealer made serious allegations against two officers of Corporation, who were part of inspection team and that views of the officers were obtained by the Corporation and the allegation of the dealer was not believed and the version of two officers obtained were relied on. On this issue, the learned Single Judge held that this amounted to prejudging the issue and also a biased decision and that the officers were not subjected to examination by the petitioner which adversely affected the defence of the petitioner which amounted to denial of reasonable opportunity. Learned Single Judge held that penal consequences should not be inflicted without observing procedural formalities. It is also recorded by the learned Single Judge that two reports were prepared and first report was at variance with that of the second and it was the second report which was acted upon for initiating action against the dealer. 4. Learned Senior Counsel appearing on behalf of the Corporation/appellants contended that the very presence of double gear in the dispensing unit itself is a critical irregularity and for such critical irregularity, the Corporation has rightly terminated the dealership of the respondent. Our attention is invited to clause 54 of the agreement which discloses that on happening of any of the events mentioned in clause 54 of the agreement, the Corporation was at liberty to terminate the agreement. Our attention was further invited to inspection report to buttress the contention that the double gear assembly in gear train of one of the meter units of HSD, MIDCO mechanical dispensing unit with meter reading 2133459, was noticed. 4.1. It is pertinent for us to state here that, in the inspection report, it is observed that the delivery was found to be "ok" from the HSD nozzles. 4.2. It is submitted that the allegations against the two officers made were only with a view to intimidate the officers and that the officers have not been cross examined is also a factor which was not considered by the learned Single Judge. 4.3. 4.2. It is submitted that the allegations against the two officers made were only with a view to intimidate the officers and that the officers have not been cross examined is also a factor which was not considered by the learned Single Judge. 4.3. It is submitted that the order of termination of dealership was a conditional order and that the dealer had right of appeal within 30 days of the order of rejection being communicated regardless of the irregularities committed and the agreement stood terminated upon expiry of 30 days period prescribed for filing the appeal. In all, the dealer had 60 days time to approach the appellate authority. That instead of taking recourse to the appellate remedy, the dealer approached this Court under Article 226 of the Constitution of India which is discretionary jurisdiction and summary procedure where disputed questions of facts cannot be gone into. Hence, it is a fit case to be remanded to the appellate authority. 4.4. Learned Counsel for the appellants relied on a judgment of the Hon'ble Apex Court in Indian Oil Corporation & Others Vs. Ajit Kumar Singh & Another, 2023 INSC 546 , for the proposition that writ courts under Article 226 while exercising the power of judicial review should not ordinarily interfere with the findings objectively arrived at, unless perversity or malafides are writ large. 5. Learned Senior Counsel for the respondent dealer supported the order passed by the learned Single Judge. It is submitted that a clear finding was recorded by the learned Single Judge that the quantity of fuel being dispensed from the dispensing unit was not at variance. 5.1. It is submitted that a clear finding has been given that mere presence of double gear was the reason for termination of dealership. That the order did not record the finding of manipulation of delivery of fuel and that learned Single Judge also recorded that if there was any intention to manipulate the delivery, then the existence of double gear would be termed as a critical irregularity. 5.2. It is submitted that the learned Single Judge held that the findings recorded by appellants are ex facie illegal and amounted to arbitrary exercise of power. It is also submitted that out of the four dispensing units, three were of Larsen and Toubro and one was of MIDCO. 5.2. It is submitted that the learned Single Judge held that the findings recorded by appellants are ex facie illegal and amounted to arbitrary exercise of power. It is also submitted that out of the four dispensing units, three were of Larsen and Toubro and one was of MIDCO. It is further submitted that the dealer was not given opportunity to substantiate the allegations against the officers of the Corporation, but the appellants, basing on the views obtained from the officers, held against the dealer. It was submitted that the order of the learned Single Judge does not suffer from any infirmity and no interference is necessitated. 6. Heard the learned counsels, perused the entire record and the order of the learned Single Judge. 7. It is pertinent to take note of the fact that the inspection report to which our attention was invited, has clearly recorded that the delivery was found to be "ok" from both the HSD nozzles of the dispensing unit. This fact is in consonance with the finding recorded by the learned Single Judge. 8. Learned Single Judge in his order extracted the clauses of the MDG and has reached the conclusion that mere existence of additional gears without an intention to manipulate the delivery of fuel does not amount to critical irregularity and also recorded that delivery of fuel was not at variance. These findings have not been controverted. We have stated supra that in the inspection report itself, it was stated that the delivery was "ok". Once this finding has been arrived at by the learned Single Judge on perusal of record, this Court does not find any merit in the Corporation's acts. Reliance placed on the Hon'ble Apex Court Judgment is misconceived, as there is a clear finding recorded by the learned Single Judge that the order of termination of dealership is ex facie illegal, we subscribe to the view of the learned Single Judge. We do not find any merit in the contentions advanced on the alternative remedy theory. The learned Single Judge was right in exercising the discretionary powers under Article 226 of the Constitution of India, for, the order of termination as held is ex facie illegal and is an arbitrary exercise of power. 9. For the aforesaid reasons, this Court does not find any grounds for interference in the order of the learned Single Judge. The learned Single Judge was right in exercising the discretionary powers under Article 226 of the Constitution of India, for, the order of termination as held is ex facie illegal and is an arbitrary exercise of power. 9. For the aforesaid reasons, this Court does not find any grounds for interference in the order of the learned Single Judge. The Writ Appeal is liable to be dismissed and stands dismissed. No order as to costs. Miscellaneous applications, if any pending, shall stand closed.