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2025 DIGILAW 2039 (KER)

Indian Oil Corporation Ltd. v. Controller Of Legal Metrology

2025-07-23

S.MANU

body2025
JUDGMENT : S.MANU, J. Petitioner company approached this Court aggrieved by Ext.P2 proceedings dated 16.8.2012 of the 1 st respondent. By the said proceedings the 1 st respondent authorised 2 nd respondent to file complaint before the Judicial First Class Magistrate's Court, Koothuparambu against five alleged offenders. Among them Chairman and Managing Director, Chief Area Manager and Senior Plant Manager of the petitioner company were included. 2. Petitioner is a company engaged in refining and sale of petroleum products including bottling and sale of Liquified Petroleum Gas (LPG). According to the petitioner, they don't indulge in sale of pressure regulators to the customers. Regulators are distributed through the dealers to the customers and they remain the property of the petitioner company. On termination of connection, customers are bound to return regulators to the company through the dealers. 3. Second respondent conducted inspection in the trade premises of Sri Muthappan Gas Services, M/s.Benzer Home Appliances, M/s. Brothers Novelty and M/s.Bright Metals situated at various places in Kannur on various dates. It was found that packages of LPG pressure regulators embossed with writing 'property of Indian Oil Corporation Ltd.' were found kept for sale. The packages did not bear any of the statutory declarations under Rule 6(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. The 2 nd respondent recovered documents showing sale of pressure regulators during the inspection. As the packages did not bear mandatory statutory declarations, packages were seized and cases were registered for breach of the provisions of Rule 23(1) of the above Rules as also Section 39(1) of the Standards of Weights and Measures Act , 1967 and Section 33 of the Standards of Weights and Measures (Enforcement) Act , 1985. Chief Area Manager of the petitioner company submitted Ext.P1 letter on 18.7.2011 stating that the seizure of pressure regulators from Sri Muthappan Gas Services was improper as no sale was involved in the distribution of pressure regulators. 4. Show-cause notices dated 10.2.2010 were issued to the alleged offenders and the replies were received by the concerned authority. Thereafter, Ext.P2 order was issued by the 1 st respondent on 16.8.2012 authorising the 2 nd respondent to file complaint before the jurisdictional court. 5. Petitioner thenceforth submitted Ext.P3 appeal to the 1 st respondent on 10.9.2012. 4. Show-cause notices dated 10.2.2010 were issued to the alleged offenders and the replies were received by the concerned authority. Thereafter, Ext.P2 order was issued by the 1 st respondent on 16.8.2012 authorising the 2 nd respondent to file complaint before the jurisdictional court. 5. Petitioner thenceforth submitted Ext.P3 appeal to the 1 st respondent on 10.9.2012. In the appeal memorandum it was stated that the appeal was filed under Section 81 of the Standards of Weights and Measures Act , 1976 and Section 69 of the Standards of Weights and Measures (Enforcement) Act , 1985 and the Rules framed thereunder. On 22.10.2012, the 1 st respondent issued Ext.P5 communication stating that the appeal cannot be considered and all contentions raised in the appeal can be raised in the criminal case. The 1 st respondent also stated that the Department waited for about 3 years for initiating legal proceedings and the petitioner never took any step during the said period. 6. Petitioner is assailing Ext.P2 order passed by the 1 st respondent and the proceedings initiated by the Department in this writ petition on the following grounds:- i. No sale is involved in distribution of pressure regulators to customers and therefore the proceedings initiated alleging violation of the provisions of the respective Acts and Rules are not legally sustainable. ii. No opportunity of hearing was provided to the officers of the petitioner who are chosen to be proceeded against. iii. Ext.P2 was issued in terms of Section 63 of the Standards of Weights and Measures (Enforcement) Act , repealed by Legal Metrology Act, 2009 which came to force on 1.4.2011. Therefore, Ext.P2 is not legally sustainable. iv. In an identical issue in the case of another company, 1 st respondent had taken a decision that supply of pressure regulators does not amount to sale. v. Rejection of the appeal submitted by the petitioner company by the 1 st respondent was illegal and Ext.P5 communication is not legally sustainable. vi. Prosecution proceeding against the officers of the company is not legally sustainable as long as the authorities are not proceeding against the company. 7. I shall address each of the above contentions separately. 8. Learned counsel for the petitioner submitted that the petitioner company has appointed dealers for distribution of its products. Pressure regulators are properties of the company. They are distributed to the customers through the dealers. 7. I shall address each of the above contentions separately. 8. Learned counsel for the petitioner submitted that the petitioner company has appointed dealers for distribution of its products. Pressure regulators are properties of the company. They are distributed to the customers through the dealers. Regulators are never sold to the customers or any others. If any dealer distributes or sells the regulator to anyone other than a customer, the same is a serious violation of the terms and conditions insisted by the company. In other words, if any sale of the pressure regulators happened the same is unauthorized and the company is not responsible for such instances. The learned Government Pleader opposed the submission of the learned counsel for the petitioner in this regard and pointed out that on inspection conducted by the 2 nd respondent in five business establishments, packages of pressure regulators were found kept for sale. Therefore, he contended that the pressure regulators of the petitioner company are available for sale in open market and declarations as required under law were not available on the packages. Seizure of regulators from various business establishments proved that the pressure regulators of the petitioner company were available for sale. 9. It is not denied by the petitioner that inspection was conducted in the trade premises mentioned in the beginning and packages of pressure regulators of the petitioner company were seized by the 2 nd respondent. First respondent noted in Ext.P2 that a bill for sale of pressure regulator was also seized. It is also not denied that the packages did not contain declarations as required under the provisions of the relevant laws. Only one among the premises from where the regulators were seized was of an authorised dealer of the petitioner. During the hearing I had put a specific query to the learned counsel for the petitioner as to whether the petitioner company had initiated any action or legal proceedings on coming to know that pressure regulators of the company were available for sale in open market and seized from several shops other than that of approved distributors. The learned counsel submitted that according to her instructions no action was taken by the company in this regard. 10. The learned counsel submitted that according to her instructions no action was taken by the company in this regard. 10. In my considered view whether the company was involved in the sale of pressure regulators by persons other than the distributors and how the products of the company were available in open market are questions of fact which can be considered only on the basis of evidence. It cannot be conclusively decided on the basis of assertions made by the petitioner in this writ petition that they were not involved in sale or they were not responsible, if sale was actually happening. The respondents specifically denied this contention in their counter affidavit. Therefore, I conclude that the first contention of the petitioner is a matter of evidence with respect to which no conclusive findings can be given in this writ petition. Consequently, the proceedings initiated by the respondents cannot be held improper and illegal on this ground. 11. The second contention of the petitioner is that no opportunity of hearing was provided to the officers of the petitioner before the 1 st respondent authorised the 2 nd respondent to initiate prosecution proceedings. At the time of the inspection and registration of the cases the Standards of Weights and Measures Act and Standards of Weights and Measures (Enforcement) Act were in force. No provision in any of these enactments contemplated any opportunity of hearing to the persons alleged to have violated the provisions of the Act. Penal provisions were incorporated in the above enactments for prosecuting those who violate the provisions of the Act. Provisions of Part VI of the Standards of Weights and Measures Act dealt with offences and their trial. Similarly, Chapter XI of the Standards of Weights and Measures (Enforcement) Act dealt with offences and penalties. Provisions of both Acts under the above mentioned part and chapter clearly show that the competent authorities under the Act were bound to file complaints before courts concerned on detection of breach of the provisions of the Act and Rules which would attract the penal provisions. When a complaint is filed before the competent court, the court will proceed in accordance with the provisions of the procedural law governing trials. During trial the alleged offenders will get opportunities at various stages to defend themselves. When a complaint is filed before the competent court, the court will proceed in accordance with the provisions of the procedural law governing trials. During trial the alleged offenders will get opportunities at various stages to defend themselves. Seeking discharge or dropping of the proceedings is also an option available during the course of proceedings before the criminal court. Invoking the inherent powers of the High Court to quash the complaint is yet another alternative. Hence no serious prejudice will be caused or they will not be precluded from defending themselves by not providing an opportunity of hearing before issuing authorisation to file complaint. Under such circumstances, when the provisions of the Act do not contemplate any opportunity of hearing to the alleged offenders before launching of prosecution, contention that the officers of the petitioner company were entitled for a hearing cannot be accepted. 12. The third contention is with regard to repeal of Standards of Weights and Measures (Enforcement) Act with effect from 1.4.2011. It is true that Ext.P2 order was issued after the Standards of Weights and Measures (Enforcement) Act was repealed. However, as on the date of inspection and seizure of pressure regulators the said Act was in force. Hence, the offence attracted is governed by the provisions of the said Act. In view of Section 57 of the Legal Metrology Act, 2009, the proceedings initiated under the Standards of Weights and Measures Act as well as Standards of Weights and Measures (Enforcement) Act are saved. Hence, there is nothing wrong in the 1 st respondent issuing Ext.P2 order under Section 63 of the latter Act. This contention of the petitioner is also therefore liable to be rejected. 13. Petitioner pointed out that in the case of another petroleum company the 1 st respondent had taken the view that no sale was involved and hence there was no reason to prosecute the company. According to the petitioner, the 1 st respondent took a different stand in the case of the petitioner company. The learned counsel for the petitioner submitted that none of the petroleum companies sell pressure regulators and this was accepted by the 1 st respondent in the case of Hindustan Petroleum Company Ltd. She handed over a copy of the order passed by the 1 st respondent on 25.3.2010 in the case of Hindustan Petroleum Company Ltd (HPCL). The learned counsel for the petitioner submitted that none of the petroleum companies sell pressure regulators and this was accepted by the 1 st respondent in the case of Hindustan Petroleum Company Ltd. She handed over a copy of the order passed by the 1 st respondent on 25.3.2010 in the case of Hindustan Petroleum Company Ltd (HPCL). The learned Government Pleader pointed out that the 1 st respondent in his counter affidavit has explained this issue. He submitted that in the case of HPCL the regulators were not available for sale in open market anywhere in the State. This was verified by the Department. Therefore, the 1 st respondent decided that the said company was involved only in distribution of regulators which did not involve sale. I have perused the copy of the order dated 25.3.2010 passed by the 1 st respondent in the case of HPCL handed over by the learned counsel for the petitioner. In the case of HPCL the Assistant Controller concerned had inspected the outlets of the distributors appointed by the company and alleged that the company was involved in the sale of pressure regulators without following the provisions of the relevant laws. The company explained that its regulators were being distributed to the consumers and taken back when the connections are terminated. The company convinced the Department that no sale was involved. There was no case that the regulators were found kept for sale anywhere else. First respondent had stated in the order that reports were obtained from Assistant Controllers of all Districts and there were no affirmative reports that the regulators of HPCL were available in market for sale. In the case at hand regulators of the petitioner company were seized from various trade premises other than that of the dealers/distributors. Therefore, claim of the petitioner for an identical treatment by the 1 st respondent cannot be accepted. Hence, I find that the petitioner is not entitled to contend that Ext.P2 order is liable to be declared illegal relying on the order passed by the 1 st respondent in the case of another company. 14. Next contention to be considered is as to whether the1 st respondent went wrong in rejecting Ext.P3 appeal submitted by the petitioner company. Hence, I find that the petitioner is not entitled to contend that Ext.P2 order is liable to be declared illegal relying on the order passed by the 1 st respondent in the case of another company. 14. Next contention to be considered is as to whether the1 st respondent went wrong in rejecting Ext.P3 appeal submitted by the petitioner company. Petitioner stated in Ext.P3 that the appeal was filed under Section 81 of the Standards of Weights and Measures Act , 1976 and Section 69 of the Standards of Weights and Measures (Enforcement) Act , 1985. Section 81 (1) of the Standards of Weights and Measures Act , 1976 reads as under:- “ 81. Appeals – (1) Subject to the provisions of sub-section (2), any person aggrieved by an order made under section 30 or section 36 may prefer an appeal against such order to the Director, or where the order has been made by the Director, to the Central Government.” 15. Appeal under the above provision would lie only against orders made under Sections 30 or 36 of the Act. Ext.P2 order was not issued under any of those provisions. Section 30 dealt with forfeiture and Section 36 dealt with approval of models. Therefore, the petitioner could not have invoked provisions of Section 81 of the Act of 1976 for filing the appeal. The other provision invoked for filing the appeal was Section 69 of the Standards of Weights and Measures (Enforcement) Act , 1985. Relevant provision is sub-section (1) of Section 69. It reads as under:- “ 69. Appeals.- (1) Subject to the provisions of sub-section (2), an appeal shall lie,- (a) from every decision given or order made under Chapter V, Chapter VI, Chapter VII, Chapter VIII, Chapter IX or Chapter X of this Act, by- (i) an Inspector, or (ii) an Additional Controller, to the Controller; and (b) From every decision given or order made by the Controller under Chapter V, Chapter VI, Chapter VII, Chapter VIII, Chapter IX or Chapter X of this Act, not being a decision made in appeal under clause (a), to the State Government or any officer specially authorised in this behalf by that Government.” Appeals, as provided under Section 1A to the Controller, were provided from the decisions or orders made by an Inspector or an Additional Controller. Appeals under sub-section (1)(b) against every decision or order made by the Controller under Chapters V, VI, VII, VIII, IX and X would lie to the State Government or any officer specially authorised in this behalf by that Government. Ext.P2 was an order passed by the Controller under Section 63 of the Act falling within Chapter XI. No right of appeal is available under Section 69 against decisions or orders made under the provisions of Chapter XI of the Act. Moreover, Ext.P2 being an order issued by the Controller no appeal would lie to any authority other than the State Government or any officer specially authorised in this behalf by that Government. In the case at hand, the petitioner submitted appeal against Ext.P2 issued by the Controller to the same authority. Therefore, Ext.P3 appeal was thoroughly misconceived. Hence, the contention of the petitioner that the appeal was not properly considered is also not sustainable. However, a perusal of Ext.P5 shows that the 1 st respondent Controller did not understand that the appeal was not maintainable and he rejected it by stating some reasons. Any how, the appeal being not maintainable under the provisions of any of the relevant enactments, merits of Ext.P5 need not be analysed further. 16. The last contention of the petitioner was that the 1 st respondent went wrong in granting sanction for prosecuting the officers of the company as the officers were not liable to be proceeded against in view of Section 74 of the Standards of Weights and Measures Act and also Section 62 of the Standards of Weights and Measures (Enforcement) Act , 1985. The learned counsel for the petitioner relied on a judgment of the Karnataka High Court in W.P.(C)No.51116/2017 and connected cases rendered on 26.8.2021. The Karnataka High Court in the said judgment referred to the judgment of the Hon'ble Supreme Court in Anita Hada v. Godfather Travels and Tours Private Limited [ (2012) 5 SCC 661 ] and held that the company ought to have been brought on record as an accused in view of the provisions of Legal Metrology Act. The Karnataka High Court considered identical provisions of the Legal Metrology Act and quashed the proceedings. Hence the learned counsel submitted that the prosecution proceedings will be improper only as against the officers of the company. The Karnataka High Court considered identical provisions of the Legal Metrology Act and quashed the proceedings. Hence the learned counsel submitted that the prosecution proceedings will be improper only as against the officers of the company. She submitted that the 1 st respondent has granted sanction to prosecute the officers without referring to the above said provisions of the Standards of Weights and Measures Act as well as the Standards of Weights and Measures (Enforcement) Act . 17. It is relevant to note that the averments of the petitioner in the writ petition and contentions raised during the course of hearing was on the premise that Ext.P2 was a sanction order issued by the 1 st respondent to prosecute the officers of the company along with some others. It appears that the petitioner was misguided in this regard by a mistake committed by the 1 st respondent in stating the subject in Ext.P2 order. First respondent has mentioned in Ext.P2, the subject of the proceedings as under:- “Sub:-L.M.D offence committed by M/s Indian Oil Corporation Limited, under the standards of weights and measures (packaged Commodities) Rules, 1977 r/w the standards of weights and measures Act 1976 and the Standards of Weights and Measures (En) Act 1985-Prosecution Sanction- Orders-issued-reg-” (Emphasis added) 18. However, the operative portion of the proceedings, the order issued, clearly shows that it was an authorisation given under Section 63 of the Standards of Weights and Measures (Enforcement) Act , 1985. Section 63 of the said Act reads as under:- “ 63. Cognizance of offences. - Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),- (a) no court shall take cognizance of an offence punishable under this Act except upon a complaint, in writing, made by- (i) the Controller; (ii) any other officer authorised in this behalf by the Controller by general or special order; (iii) any person aggrieved; or (iv) a recognised consumer association whether the person aggrieved is a member of such association or not. Explanation.- For the purposes of this clause "recognised consumer association" means a voluntary consumer association registered under the Companies Act, 1956 (1 of 1956), or any other law for the time being in force. (b) no court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class shall try any offence punishable under this Act.” 19. Explanation.- For the purposes of this clause "recognised consumer association" means a voluntary consumer association registered under the Companies Act, 1956 (1 of 1956), or any other law for the time being in force. (b) no court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the first class shall try any offence punishable under this Act.” 19. Section 63 or any other provision of the Act do not contemplate requirement of sanction for prosecution. Under Section 63 (a) it was provided that no court shall take cognizance of any offence punishable under the Act except on a complaint by the persons mentioned under clauses (i) to (iii) and associations mentioned under clause (iv). Under clause (i) controller is competent to file a complaint. Any other officer can file a complaint, if the Controller authorises the officer by general or special order to file a complaint. Therefore Ext.P2, as evident from its operative portion, was only an authorisation given to the 2 nd respondent by the 1 st respondent under Section 63 (a)(ii) of the Standards of Weights and Measures (Enforcement) Act , 1985. Petitioner is thus misguided in portraying it as an order of sanction. 20. Ext P2 is only an order of limited scope. Controller who is the competent authority to file complaint has delegated the 2 nd respondent to file it invoking the provision under the Act. It cannot be equated to orders of sanction for prosecution contemplated under the BNSS or in many special statutes. Required degree of application of mind in issuing an authorisation and granting sanction cannot be the same. Undertaking a scrutiny of sustainability of the prosecution authorised to be initiated in order to decide the validity of an order of authorisation issued under Section 63 (a)(ii) of the Standards of Weights and Measures (Enforcement) Act may not be justified in the normal course. However, there is substance in the contention of the petitioner that prosecution may not lie against the officers of the company as the company has not been proposed to be proceeded against. It is evident from Ext P2 that the Controller had not kept in mind S.62 of the Enforcement Act and S.74 of the Standards of Weights and Measures Act 1976 while issuing the order. So also, as noted supra, the authority made a mistake by describing the order as an order of sanction. It is evident from Ext P2 that the Controller had not kept in mind S.62 of the Enforcement Act and S.74 of the Standards of Weights and Measures Act 1976 while issuing the order. So also, as noted supra, the authority made a mistake by describing the order as an order of sanction. Therefore non application of mind by the1 st respondent is evident. 21. In view of the foregoing discussion I find it appropriate to set aside Ext P2. The 1 st respondent shall take a fresh decision in the matter keeping in mind the observations in this judgment within a period of two months from the date of issuance of a copy of this judgment. 22. Learned counsel for the petitioner submitted that the then Chairman and Managing Director of the company named in Ext.P2 order is no more and the other officers have retired. It will be open to the 1 st respondent to take note of the same while taking fresh decision regarding authorisation. It is made clear that the observations made by this Court in this judgment are only for the purpose of disposal of the writ petition and it will be open to the parties to raise all available contentions at appropriate stages of the proceedings. Writ Petition is disposed of as above.