Karnataka High Court
M.S. Venkatesh vs Union Of India on 21 June, 2019
Bench: Alok Aradhe, Mohammad Nawaz
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF JUNE 2019
PRESENT
THE HON'BLE MR. JUSTICE ALOK ARADHE
AND
THE HON'BLE MR. JUSTICE MOHAMMAD NAWAZ
WRIT APPEAL NO.1669 OF 2018
IN
WRIT PETITION NO.13072 OF 2015 (GM-RES)
BETWEEN:
M.S. VENKATESH
S/O LATE M.S. SRINIVASA MURTHY
AGED 56 YEARS
M. S. SRINIVASAMURTHY & SONS
REP. BY M. S. VENKATESH
1142, ASHOKNAGAR
MANDYA-571 401.
... APPELLANT
(BY MR. M.S. VENKATESH, PARTY-IN-PERSON)
AND:
1. UNION OF INDIA
REP. BY MINISTRY OF PETROLEUM
SHASTRI BHAWAN, NEW DELHI-1.
2. BHARAT PETROLEUM
REP BY TERRITORY MANAGER
NO.17, 7TH FLOOR, M G ROAD
BANGALORE-1.
3. M S SATYANANDA
C/O BHARAT PETROLEUM PETROL BUNK
NEXT TO KSRTC BUS STAND
MANDYA-1.
... RESPONDENTS
2
(BY MR. TIMMANNA BHAT, CGC FOR R1
MR. M.S. NARAYAN, ADV., R2
MR. P.B. AJIT, ADV., FOR
M/S. B.M. ASSTS., ADVS., FOR R3 (ABSENT))
---
THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA
HIGH COURT ACT PRAYING TO SET-ASIDE THE ORDER PASSED
BY THE LEARNED SINGLE JUDGE IN WP 13072/15 DATED
28/5/2018, AND REMAND THE MATTER BACK TO MINISTRY FOR
FRESH CONSIDERATION, AS PER POLICY/GUIDELINES AND
MARKETING DISCIPLINE GUIDELINES AND DECIDE THE CASE ON
MERITS. SINCE TERMINATION ITSELF IS AGAINST TO THE LAID
DOWN RULES FRAMED BY MINISTRY.
THIS WRIT APPEAL COMING ON FOR HEARING THIS DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:-
JUDGMENT
Mr.M.S.Venkatesh, appellant, party-in-person. Mr.Timmanna Bhat, learned Central Government Counsel for the respondent No.1.
Mr.M.S.Narayan, learned counsel for respondent No.2.
In this intra court appeal, the appellant has assailed the validity of the order dated 28.05.2018 passed by the learned Single Judge, by which writ petition preferred by the appellant has been dismissed. 3 In order to appreciate the appellant's challenge to the impugned order, few relevant facts need mention, which are stated hereinafter:
A dealership agreement was entered into with one Srinivasamurthy on 01.04.1969 in respect of a retail outlet Petrol bunk in Mandya District by Bharat Petroleum Corporation Limited. Thereafter, a dealership agreement was executed with the father of the appellant on 06.08.1975. On demise of the father of the appellant on 07.06.1984, the appellant continued with the dealership of the retail outlet. After the death of aforesaid Srinivasamurthy on 07.06.1984, the retail outlet dealership was reconstituted and signed by the appellant on 07.10.1993. The aforesaid dealership was for a period of 15 years till 06.10.2008.
2. On 09.05.2001, Territory Manager of the Corporation (hereinafter referred to as 'the Corporation' for short) issued a show cause notice to the appellant, by which the appellant was asked to show cause as to 4 why he has kept the retail outlet dry consequent to non uplifting of 12KL full lorry load. The dealership agreement of the appellant was terminated for lapses and breach of covenants of the dealership agreement by an order dated 28.05.2001. The aforesaid order was subject matter of challenge in W.P.No.21910/2001. A Bench of this court by an order dated 28.05.2004 quashed the order of termination of the dealership of the agreement and permitted the appellant to file additional objections, if any, to the show cause notice within one month and the General Manager (South), Chennai was directed to consider the additional objection and to pass appropriate orders in accordance with law within a period of 45 days from the date of receipt of copy of the order. The appellant was permitted to continue with the business till the order was passed by the General Manager (South), Chennai. Accordingly, the writ petition was allowed. The General Manager (South), Chennai by an order dated 5 21.07.2004, passed an order terminating the dealership licence granted to the appellant.
3. Being aggrieved, the appellant filed writ petition Nos.14109/2005 and 23390/2005. A Bench of this court by an order dated 11.03.2008 disposed of the writ petition with the liberty to the appellant to initiate appropriate proceedings in the light of the observations made in the order keeping all the contentions to be urged by the parties open. The appellant thereafter submitted a representation to the Additional Secretary, Ministry of Petroleum and Natural Gas, which was rejected by an order dated 09.02.2009. The aforesaid order was challenged by the appellant in W.P.No.4890/2009 by impleading Union of India, which was dismissed. Being aggrieved, the appellant filed a W.A.No.3975/2009, which was allowed and the matter was remitted to the Additional Secretary for afresh consideration of the representation within a period of three months. Being aggrieved, the Union of India filed 6 a Special Leave Petition before the Supreme Court, which was disposed of by Supreme court by an order dated 07.12.2012 with a direction to the appropriate authority to pass an order in accordance with law after hearing the appellant within a period of three months from the date of receipt of the copy of the order.
4. The appellant filed a civil suit viz., O.S.No.1223/2010, in which the relief of quashment of order of termination dated 28.05.2001 and the subsequent order dated 21.07.2004 was sought. The Civil suit filed by the appellant was dismissed vide judgment and decree dated 20.06.2011. Being aggrieved, the appellant filed RFA No.1210/2011. A Bench of this Court, by judgment and decree dated 24.08.2011 set aside the judgment and decree of the Trial Court and remitted the matter to the Trial Court for disposal in accordance with law. Being aggrieved, the Corporation filed Special Leave petition viz., SLP No.32918/2011. The Supreme Court by an order dated 7 12.12.2012 set aside the order dated 24.08.2011 and remitted the matter to this court for decision afresh. Thereafter, by an order dated 17.06.2013, the Regular First Appeal was dismissed by a bench of this court. Being aggrieved, the appellant filed a Special Leave Petition, which was dismissed on 28.02.2014 with a liberty to file review petition as against order dated 17.06.2013 passed in RFA No.1210/2011. The appellant filed a review petition viz., R.P.No.250/2014, which was dismissed by a bench of this court by order dated 07.07.2014.
5. In compliance of the order passed by the Supreme Court the Special Secretary, Ministry of Petroleum of Natural Gas by an order dated 21.03.2013 dismissed the representation submitted by the appellant. The aforesaid order was subject matter of challenge in W.P.No.13072/2015, which is dismissed by the learned Single Judge by an order dated 28.05.2018. 8 In the aforesaid factual background, this appeal has been filed.
6. Party-in-person submitted that the learned Single Judge ought to have appreciated that the dealership agreement of the appellant is in existence and a Division Bench of this Court had issued a direction to the Ministry of Petroleum to decide the representation submitted by the appellant. However, the Ministry of Petroleum by the impugned order dated 21.03.2013 rejected the application. It is also urged that learned Single Judge failed to appreciate that the court cannot interfere with the policy decision and court can only interfere when there is violation of marketing discipline guidelines. It is also pointed out that written arguments were filed by the appellant before the learned Single Judge. However, the same were not considered. It is also contended that the matter be remitted to the Ministry of Petroleum to decide the representation submitted by the appellant in accordance with the 9 regulations and the rules. It is also submitted that there has been no independent consideration of the controversy involved in the writ petition by the learned Single Judge and the decisions relied upon by the learned Single Judge has no application to the fact situation of the case and no proper reasoning has been given by the learned Single Judge in support of the order.
7. On the other hand, learned counsel for the respondent No.1 submitted that the dispute between the parties has arisen in relation to an agreement and the impugned order has been passed by the Special Secretary, Ministry of Petroleum and Natural Gas by taking into account the material on record. The order passed by the Special Secretary, Ministry of Petroleum and Natural Gas can neither be termed as arbitrary nor perverse warranting interference of this court in exercise of powers under Article 226 of the Constitution of India. Learned counsel for respondent No.2 submitted 10 that the appellant has raised new grounds in appeal, which were never urged before the learned Single Judge and therefore, the same cannot be entertained. It is also urged that the impugned order does not call for any interference.
8. We have considered the submissions made on both the sides and have perused the record. Before proceeding further, we may advert to certain well settled legal principles. The scope of interference with an administrative action by judicial review is well defined and an administrative decision can be interfered with only when the same suffers from illegality, irrationality and procedural impropriety. The Court cannot sit in appeal over the soundness of the decision made by the competent authority and the court can only examine whether the decision making process is fair, reasonable, transparent and bonafide with no perceptible injury to public interest. [See:'SIEMENS AKTIENGESELEISCHAFT AND SEIMENS LIMITED 11 VS. DELHI AND SEIMENS LIMITED VS. DELHI METRO RAIL CORPORATION LIMITED AND OTHERS', (2014) 11 SCC 288 : (AIR 2014 SC 1483)]. In 'CENTRE FOR PUBLIC INTEREST LITIGATION VS. UNION OF INDIA', (2016) 6 SCC 408; (AIR 2016 SC 1777) has held minimal interference is called for by the Court of Judicial Review with a decision taken by the technical experts after due deliberations inasmuch as the Courts are not well equipped to fathom into such domain which is left to the discretion of the executive. It has further been held that primary and secondary purpose of review is to ensure that administrative bodies act in efficient, transparent, fair, unbiased manner and keep in forefront public interest. Similar view has been taken in 'TANGEDCO VS. CSEPDI - TRISHE CONSORTIUM', (2017) 4 SCC 318: (AIR 2016 SC 4879) AND SAM BUILT WELL (P) LTD. VS. DEEPAK BUILDERS (2018) 2 SCC 176: (AIR 2018 SC 44).
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9. In the backdrop of aforesaid well settled legal position, the facts of the case may be examined. It is not in dispute that in the year 2001, the dealership agreement of the appellant was terminated by the Corporation. Being aggrieved, the appellant filed a civil suit, which was dismissed vide judgment and decree dated 24.10.2010, which was challenged in R.F.A No.1210/2011 by the appellant. The matter was remitted to the Trial Court for disposal afresh by judgment and decree dated 24.08.2011. Being aggrieved, the Corporation filed an appeal viz., SLP No.32918/2011. The Supreme Court vide order dated 12.12.2012 set aside the judgment and decree dated 24.08.2011 passed by this Court and directed a bench of this court to decide the appeal afresh. The appeal was thereafter dismissed vide judgment and decree dated 17.06.2013. It is pertinent to mention here that during the pendency of the appeal, the order which has been impugned in the writ petition before the learned Single Judge in W.P.No.13072/2015 had come into 13 existence on 21.03.2013. However, the appellant did not bring to the notice of this court, which heard R.F.A No.1210/2011 and decided the appeal by judgment and decree dated 17.06.2013, the order dated 21.03.2013. Being aggrieved, the appellant filed Special Leave Petition before the Supreme Court, which was dismissed on 28.02.2014 with liberty to file & a review petition against judgment and decree dated 17.06.2013. The order dated 21.03.2013, by which representation of the appellant was rejected by the Special Officer, Ministry of Petroleum & Natural Gas was not even brought to the notice of the Supreme Court. In all fairness, the appellant ought to have brought to the notice of this Court, the order which was passed on his representation on 21.03.2013. The appellant not only suffered the dismissal of the appeal without disclosing the order dated 21.03.2013, but an order of dismissal of his Special Leave Petition from the Supreme Court and thereafter, he filed a separate petition before the learned Single Judge viz., W.P.No.13072/2015, which 14 has been dismissed by the learned Single Judge vide order dated 20.05.2018, which is the subject matter of this appeal. The action of termination of dealership has already been upheld by the Trial Court as well as this court and by the Supreme Court. Besides that, the period of licence granted in favour of the appellant has already expired in the year 2008.
10. The relevant extract of the order passed by the Supreme Court dated 07.12.2012 in SLP No.2768/2012 reads as under:
"Let the appropriate authority pass order in accordance with law after hearing the respondent within a period of three months from the date of receipt of copy of this order."
11. In compliance of the direction issued by the Supreme Court, the Special Secretary, Ministry of Petroleum and Natural Gas passed an order dated 21.03.2013, the relevant extract of which reads as under:
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'I have considered the representations made by
Shri.M.S.Venkatesh, the records of the case as well as oral submissions of both the parties and find the following:
(i) The matter relates to the
termination of a commercial
agreement, namely dealership
agreement by BPCL, a public
limited company, which is
managed by its Board. It is an
independent entity and as such
there are no provisions in law or
contract that appeal shall lie
against its decision before the
Ministry of Petroleum & Natural
Gas.
(ii) However, in pursuance of the
High Court of Karnataka at
Bangalore order dated 01
December, 2011 and Supreme
Court order dated 07thDecember,
16
2012, the matter was heard by
the undersigned.
(iii) The RPO was commissioned with Shri. M.S.Srinivasamurthy as a dealer in the year 1961. On his death, the dealership was reconstituted with his son, Shri.M.S.Venkatesh as sole proprietor. A fresh dealership agreement in the standard format was signed between BPCL and Shri.M.S.Venkatesh for a period of 15 years from 7.10.1993 to 06.10.2008.
(iv) As per Clause 13(a)(v),(vi) and
(vii) of the DPSL agreement entered into by Shri.M.S.Venkatesh, the company will be at liberty to terminate the agreement forthwith upon or at any time on the happening of (a) if the licensee for any reasons other than due to the company's failed to maintain supply to the public through the RO for any 17 period exceeding 24 hours (b) if the licensee failed to make payment of their outstandings and (c)if the licensee is found guilty of a breach of any of the covenants and stipulations on their part contained in this DPSL agreement respectively.
(v) During hearing Shri. M.S.Venkatesh had alleged that non-supply of POL products intentionally by BPCL led to dry out of his pump which was the main cause for termination. After scrutiny of various correspondences entered into between BPCL and Mr.M.S.Venkatesh it emerged that dry-outs was not the only ground for termination BPCL informed that instances of excess stock variation beyond permissible limit (in MS and HSD) were noticed on 11.08.1996 and again on 07.01.2000, these were 18 communicated in writing to the dealer.
BPCL had on several occasions detected that the dealer was selling other oil company brand lubricants from his RO (in violation of clause 5 of DPSL agreement) and warning letters were issued in April and May 1986. The dealer had admitted the charges in his reply dated 31.05.1986. But BPCL officers found similar violation on at least three more occasions when written explanation was sought between September - December 2000 which was not furnished.
MS Venkatesh has been
found to be a defaulter in making
timely payments for products
uplifted. BPCL produced written
documents dated 01.03.1999,
27.04.1999 and 31.05.1999
wherein they have cautioned the
dealer due to persistent violation 19 of payment terms on at least 6 occasions. Also, vide letter dated 31.05.1999 BPCL withdrew the 'DD at site' facility for M/s M.S.Srinivasamurthy & Sons and revised the payment terms to 'DD in advance' BPCL also furnished written documents dated 7.11.1998, 19.12.2000, 21.12.2000 and 11.04.2001 vide which the dealer was warned by them for misbehaving/non-cooperation with company's official/inspection team while carrying out inspection and collecting samples.
In view of the above mentioned irregularities, BPCL has taken action as per provisions of DPSL agreement in terminating the Dealership Agreement signed with Mr.M.S.Venkatesh.
(vi) The representation of the petitioner stands dismissed.
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12. From perusal of the aforesaid relevant extract, it is evident that the action has been taken against the appellant for committing breach of terms and conditions of the covenant. The appellant has admitted in his reply dated 31.05.1986 that he was selling other oil company brand lubricants from his retail outlet in violation of clause 5 of the agreement. However, even thereafter, the Corporation has found similar violations on atleast three more occasions when written explanation was sought from the appellant between September-December, 2000, which was not furnished. The appellant has been found to be a defaulter in making timely payments for products, which were supplied to him. On account of the defaults committed by the appellant on six occasions, by a communication dated 31.05.1999, the Corporation has withdrawn 'DD at site' facility and revised payment terms to DD and advance. By communications dated 07.11.1998, 19.12.2000, 21.12.2000 and 11.04.2001, 21 the appellant has been warned for misbehaving/non- cooperation with the officers of the company/inspection team while carrying out inspection and collecting samples. Thus, for the aforementioned reasons, the Special Officer, Ministry of Petroleum and Natural Gas has recorded the conclusion that the appellant is guilty of committing breach of the terms and conditions of the dealership agreement and therefore, the action for termination of his dealership agreement has rightly been taken. The aforesaid order by no stretch of imagination can be said to be either perverse or arbitrary, so as to call for interference from this Court in exercise of powers of judicial review in exercise of extraordinary discretionary jurisdiction of this court. So far as submission made by party-in- person that his lease is still in existence, the aforesaid submission is required to be stated as rejected as the term of dealership agreement of the appellant has already expired in the year 2008. Similarly, the contention that the instant case is a fit case for remand to the Special 22 Officer, Ministry of Petroleum and Natural Gas does not deserve acceptance as well reasoned order has been passed by the Special Officer, Ministry of Petroleum and Natural Gas.
In view of preceding analysis, we agree with the conclusion of the learned Single Judge, but for different reasons assigned in the preceding paragraphs. In the result, we do not find any merit in the appeal. The same fails and is hereby dismissed. However, there shall be no order as to costs.
Sd/-
JUDGE Sd/-
JUDGE SS