Madhya Pradesh High Court
M/S Kanhaiyalal And Company (A ... vs Indian Oil Corporation Limited on 14 August, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
-1-
IN THE HIGH COURT OF MADHYA
PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND
DHARMADHIKARI
&
HON'BLE SHRI JUSTICE DUPPALA VENKATA RAMANA
ON THE 14th AUGUST, 2024
WRIT APPEAL No. 1903 of 2023
M/S KANHAIYALAL AND COMPANY (A PROPRIETORSHIP
FIRM) THROUGH ITS PROPRIETOR SMT. KIRAN MUNDRA
Versus
INDIAN OIL CORPORATION LIMITED AND OTHERS
Appearance:
Shri Piyush Mathur Senior Advocate with Shri Madhusudan
Dwivedi, learned counsel for the appellant.
Shri Amit Agrawal Senior Advocate with Shri Yogesh Kumar
Mittal, learned counsel for the Respondent.
Reserved on : 25.07.2024
Pronounced on : 14.08.2024
__________________________________________________________ ____
ORDER
Per: Justice Sushrut Arvind Dharmadhikari Heard finally at motion stage with the consent of both the parties.
-2-The present intra Court appeal u/S 2(1) of M.P. Uccha Nyayalaya (Khand Nyaya Peeth Ko Appeal) Adhiniyam, 2005 assails the final order dated 27.10.2023 passed in W.P. No. 22645/2022 whereby the writ petition filed by the appellant herein has been dismissed.
2. Brief undisputed facts giving rise to filing of the present writ appeal are as follows:-
(i) Appellant is a proprietorship firm who is engaged in the business of Retail Sales and Supply of Petroleum Products that is Motor Spirit (Petrol) and High Speed Diesel through its filling and service Station situated at Akodia Road, Shujalpur Mandi, Shujalpur, District-Shajapur (M.P) for the last 50 years and appellant has renewed his dealership with respondents and obtained dealership from the respondents vide Dealership Agreement dated 01.07.2019 for a period of 15 years i.e. up to 30.06.2034.
(ii) On 01.12.2018, Dispensing Units manufactured by GVR bearing No. 201302001387 and 201308000035 were installed by respondent No. 1 with petitioner's aforesaid service station.
(iii) On 08.07.2021, Online complaint was uploaded by the petitioner on DU -Electronic Compliant Tracking System regarding dispensing unit no. 201308000035 complaining that there is a "point jump/meter reading jump".
(iv) On 08.07.2021 itself, another online complaint was uploaded by the petitioner on DU - Electronic Compliant Tracking System regarding dispensing unit no. 201302001387 regarding "re-calibration.".
-3-(v) On 08.07.2021 itself, another online complaint was uploaded by the petitioner on DU -Electronic Compliant Tracking System regarding dispensing unit no. 201308000035 regarding "re-calibration.".
(vi) On 09.07.2021, the complaint no. 1770549 pertaining to "point jump" w.r.t DU No. 201308000035 was attended by GVR Technician Mr. Indrajeet Singh.
(vii) On 14.07.2021, in pursuance of complaints dated 08.07.2021 pertaining to both dispensing unit no. 201302001387 and 201308000035 regarding re-calibration, re-calibration was carried out by the Inspector (W&M) in presence of petitioner, technician of GVR as also the competent officers of the IOCL.
(viii) On 11.04.2022, the Authorities of respondent No. 1 Indian Oil Corporation Limited visited the aforesaid Retail Outlet of Appellant and carried out the inspection of the Dispensing Units(Pumps) along with other services and record on the basis of authorization dated 11.04.2022 obtained by them from W & M Department, wherein three Dispensing Units(Pumps) were inspected i.e. having DU. SL No. 12 HC 0535V (Midco Make), 201302001387 (GVR-DU India Make) and 201308000035 (Gilbarco Make). As per inspection, W & M seals and totalizer seal of D.U no. 201302001387 were found intact but subjected to verification whereas with regards to Dispensing Unit No. 201308000035, the W & M seals were not found intact. It is not disputed that delivery of the aforesaid units was found correct. During inspection, coloured photographs of both the DU's were taken.
(ix) After conducting inspection on 11.04.2022, certain parts of DU No. 2013078000035 and 201302001387 ( 10 in number) were seized for analysis by the original equipment manufacturer (OEM) i.e. M/s GVR.
-4-(x) On 18.04.2022, M/s GVR opened the sealed boxes pertaining to both the DU's in online presence of the petitioner's representative.
(xi) On 28.04.2022, a letter was sent by Respondent No. 1 IOCL to Inspector (W & M), Shajapur alongwith original seal of CPU of DU No. 201302001387 and photograph of display card of DU No. 2013078000035 was printed in the letter seeking his opinion upon which on 18.05.2022, Inspector (W & M), Shajapur opined that W & M Seal on CPU card was tampered and it was opined that permission for removal of seal of main display card on DU No. 2013078000035 was never given by the office of W & M to the petitioner.
(xii) On 18.05.2022, Analysis report of OEM - M/s GVR was issued showing that the DUs were found to be manipulated on account of soldering rework on certain parts of Dispensing units.
(xiii) On the basis of inspection report dated 11.04.2022, Show-cause Notice was issued on Dt. 18.05.2022 by the respondent No. 2 Divisional Retail Head, Indore Division Office of respondent Oil Company mentioning therein that the IOCL had issued a Fact Finding Letter to petitioner on the date of inspection i.e. 11.04.2022. Show-cause Notice Dated 18.05.2022 stated that the reports of sampling and dispensing units cards and W & M confirmation etc. have come, wherein the Technology Audit and Compliance Cell (TACC) of M/s Gilbarco Veeder Root (GVR) (ie. Original equipment manufacturer (OEM)) has submitted its report with respect to sealed electronic cards of two dispensing Units i.e. DU No. 201302001387 and 201308000035 and it was found that there was tampering as the "Soldering rework" has been observed near by the JTAG connector on the back side of CPU card and on FRAM and EEPROM IC 7"pin on the back side of the CPU card in -5- DU No. 201302001387 and 201308000035. Additionally, R-201 and 202 resistors were physically removed on the front side of the CPU Card in DU No. 201308000035. Furthermore, explanation was sought regarding DU No. 2013078000035 regarding absence of W & M Seals on main display card and regarding DU No. 201302001387 in which non-standard seal impression was found as opined by Inspector (W & M) On 18.05.2022. In the aforesaid Show-cause Notice some other irregularity of Major and Minor in nature has also been found.
(xiv) On 21.06.2022, petitioner submitted Reply to show cause notice dated 18.05.2022 stating that the D.Us were installed at petitioner's Retail Outlet by IOCL and belonged to IOCL and no tampering has been done by Petitioner.
(xv) On 28.07.2022, a detailed show cause notice was issued to the petitioner as per Clause 8.5.6 of the MDG and it was alleged that manipulation of both the DUs as per the test report of OEM - M/s GVR was mentioned as critical irregularity under Clause 5.1.4 and 8.2 (iv) of the Market Disciplinary Guidelines. It was further alleged that absence of seals on DU No. 2013078000035 was a critical irregularity as per clause 5.1.2./5.1.3 and 8.2(iii) and (iv) of MDG. It was further alleged that tampering of W & M non-standard seal regarding DU No. 201302001387 was mentioned as a critical irregularity under Clause 5.1.2, 5.1.3 and 8.2 (iii) and (iv) of MDG.
(xvi) On 30.08.2022, Petitioner gave reply to show cause notice dated 28.07.2022 stating that in furtherance to online complaints uploaded by the petitioner on 08.07.2021 bearing no. 1779551 and 1779552, on 08.07.2021, OEM Technician, Mr. Indrajeet Singh visited the RO of the petitioner who did some repairs on both the DU's and their control cards -6- regarding which Mr. Indrajeet Singh had sworn an affidavit dated 30.07.2022.
xvii) On 30.07.2022, a communication was sent to petitioner for providing personal hearing before the head of the state office, scheduling the hearing on 06.09.2022 upon which petitioner was afforded a personal hearing before State Head and Executive Director on 06.09.2022.
xviii) On 13.09.2022, affidavit of GVR technician, Mr. Indrajeet Singh was sent for comments of OE, - M/s GVR and comments were received highlighting that the affidavit is false and as per the SOP, the alleged soldering work said to have been done by Indrajeet Singh on 09.07.2021 was false.
xix) On 20.09.2022, an order of termination of dealership was issued by Respondent No. 2 after obtaining approval of State Head as per Clause 8.6 and 8.8 (i) of the MDG in accord with Clause 45(o) of the dealership agreement containing "facts finding analysis" regarding tampering of both DU's amounting to "critical irregularity". xx) Petitioner being aggrieved of dealership termination order dated 20.09.2022, filed petition before this court being W.P No. 22645/2022 which came to be dismissed vide order dated 13.10.2022 on the ground of availability of alternative efficacious remedy which was set aside vide order dated 11.01.2023 passed in W.A 1326/2022 remanding the matter back for hearing the case on merits. Thereafter, again the writ petition of the petitioner has been dismissed vide order dated 27.10.2023, aggrieved thereof the present appeal has been filed by the appellant.
3. Learned Senior Counsel for the appellant has made the following submissions taking exception to the impugned order dated 27.10.2023 :-
-7-(i) It has been submitted that respondents have conducted inspection on 11.04.2022 in absence of officers of Weights and Measures department and hence the said inspection is illegal on the basis of which no action could have been taken by the respondents. It is argued that as per the provisions of Legal Metrology Act, 2009 and rules made thereunder, particularly Section 15, inspection, search and seizure can only be done by legal metrology officer and not by any other person including officers of oil company and hence no inspection could have been carried out by respondent No. 1 in absence of officers from W & M department. Furthermore, in order to justify absence of W & M Officer, the respondents have filed a copy of a letter dated 11.4.2022 whereby Inspector, W & M, Shajapur had authorized the Assistant Manager, Retail Sales to remove the seal for inspection of Pulser and Card. This letter was never communicated to the petitioner along with the show-
cause notice. The petitioner submitted an application under the Right to Information Act on 17.4.2023 to obtain a copy of a letter dated 11.4.2022. The Public Information Officer vide reply dated 9.5.2022 has stated that the said letter was never given from the office as the same was not entered into the Inward Register. It is filed as Annexure P/23 along with the rejoinder. It is submitted while relying on letter dated 15.11.2006 issued by the Secretary, Food & Civil Supply & Consumer Protection that the officers of the supplying company do not have the authority to search and seizure with regard to weights and measure and powers of the officers of W&M Department. The power of inspection is conferred on the Director, Controller and Legal Metrology Officer. Even if they have delegated the powers to the Inspector, the Inspector cannot further delegate the powers to the officers of the IOCL. Hence, the entire -8- inspection was carried out without any authority which cannot be the basis for the termination of the dealership of the retail outlet.
(ii) It is further submitted that as per Clause 5.1.2 of MDG, views and opinion of W & M Authorities are required to be obtained in case W & M Seals are found to have been tampered and admittedly, such opinion dated 18.05.2022 has not been given in the present case on the basis of physical verification by W & M Officer but from mere photographs and hence the process adopted for obtaining opinion is arbitrary and in violation of Article 14 of Constitution of India. Hence, opinion given by W & M department vide letter dated 18.05.2022 could not have formed basis for reaching any conclusion by respondents for terminating dealership of the petitioner.
(iii) It has been further submitted that in light of MDG dated 08.03.2013, no order of termination of dealership could have been passed as no critical irregularity can be said to have been committed in purview of the aforesaid guidelines as it is nowhere alleged that there was short delivery or there was any issue with the delivery on account of alleged tampering. On the contrary, delivery was found to be proper and there was no stock variation between physical stock and book stock. Hence, in light of Chapter 5 r/w Chapter 8 of the aforesaid guidelines, it is only when the seals are tampered or there is tampering with the dispensing unit coupled with the fact that there is short delivery, that a critical irregularity can be said to be made out which could have enabled the respondents to terminate the dealership as per the aforesaid guidelines. Furthermore, in Calibration Report nothing has been mentioned about missing of seal in the Dispensing Units. Only one Seal was not found i.e. in the Display Card which is not mandatory as per -9- Marketing Discipline Guidelines though the Display Card is working well as per the Report provided by TACC. Meter Unit and Control Card (Totalizer) are only required to be mandatorily sealed. In fact there is no penalty prescribed for missing seal on the display card as the same is not a critical or major irregularity.
(iv) It is further submitted that the impugned termination order has been passed in violation of principles of natural justice and in violation of "official notice doctrine" as on the date of personal hearing i.e. on 06.09.2022, the petitioner herein relied upon sworn affidavit dated 30.07.2022 of Mr. Indrajeet Singh who had deposed that in furtherance to online complaints uploaded by the petitioner on 08.07.2021 bearing no. 1779551 and 1779552, on 08.07.2021, OEM Technician, Mr. Indrajeet Singh visited the RO of the petitioner who did some repairs on both the DU's and their control cards. Thereafter, behind the back of the petitioner on 13.09.2022, affidavit of GVR technician, Mr. Indrajeet Singh was sent for comments of OEM, M/s GVR and comments were received highlighting that the affidavit is false and as per the SOP, the alleged soldering work said to have been done by Indrajeet Singh on 09.07.2021 was false. Respondents without communicating about the said letter of the OEM to petitioner and without rendering opportunity to give explanation, straightaway passed impugned termination order which cannot sustain judicial scrutiny. In support of this submission, learned senior counsel for the petitioner has relied upon the judgment Singrauli Super Thermal Power Station Vs. Ashwani Kumar Dubey (2023) 8 SCC 35.
v) It is further submitted that impugned Termination of Dealership Order Dated 28.09.2022 has been passed by the Divisional Retail Head, -10- who has no power, authority or jurisdiction to pass the same, since hearing of the case has been made before the Executive Director (Retails Sales) and the Executive Director has not approved the Impugned Termination Order though he was a member of the Hearing Committee, but he has not passed the Impugned Termination Order.
4. Per Contra, learned Senior Counsel for the Respondents has made the following submissions:-
(i) It is submitted that the scope of interference with the decision taken by the experts, by the High Court in a writ petition filed under Article 226 of the Constitution of India, is very limited. The Writ Court can only exercise certiorari jurisdiction but not as an appellate Court to reverse the findings given by the experts. The judicial review is confined to examining the decision-making process adopted by the competent authority but not the decision itself. In support of his contention, learned senior counsel placed reliance on the judgments of Apex Court passed in the case of Hari Vishnu Kamat V/s. Ahmed Ishaque : AIR 1955 SC 233; Sangram Singh V/s. Election Tribunal Kotah : AIR 1955 SC 425;
H.B. Gandhi, Excise and Taxation Officer V/s. M/s. Gopi Nath & Sons : 1992 Supp. (2) SCC 312; Union of India V/s. LT. Gen. Rajendra Singh Kadyan : (2000) 6 SCC 698.
(ii) It is been further submitted that so far as the contention of the petitioner that inspection and search could not have been carried out in absence of Legal Metrology Officer is concerned, it is submitted that the power of search and seizure is derived under Schedule II of the dealership agreement r/w Clause 43 of the dealership agreement. It is submitted that under various provisions of law such as Motor Spirit and High Speed Diesel (regulation of supply and distribution and prevention -11- of malpractice) Order, 1998 confers power of search and seizure upon the officers of the oil company not below the rank of sales officer. Furthermore, authorization dated 11.04.2022 had duly been obtained for conducting inspection and such authorization is a "non-essential function" and are capable of being performed by a third person in light of the law laid down by Hon'ble Apex Court in Siddhartha Sarawgi Vs. Board of Trustees for the Port of Kolkata and Ors. 2014 (16) SCC 248.
(iii) It is further submitted that there is nothing wrong in the action of the respondents. An adequate opportunity for a personal hearing was given by the competent authority on 06.9.2022 and thereafter, after its due approval, the impugned order dated 20.9.2022 was passed by the Divisional Head, Retail Sales. It is permissible under the provisions of Order 18 Rule 13 and 15 of the CPC in which the successor Judge can proceed with the suit and the progress already made in the case should not be lost. In support of his contention, he has placed reliance over the judgment of the apex Court in the case of Rasiklal Manikchand Dhariwal V/s. M.S.S. Food Products : (2012) 2 SCC 196. Once the decision has been taken by the competent authority and under his authorization the subordinate officer can issue an order by way of delegation.
(iv) It is further submitted that so far as the contention that no critical irregularity has been committed in view of MDG and hence termination order is bad in law is concerned, it is argued that in view of clause 5.1.2 and 8.2, if seals of the metering unit are found to be tampered in the dispensing pumps, then also the same would amount to critical irregularity and it is irrelevant whether that tampering resulted in short supply/delivery.
-12-5. Heard learned counsel for the parties and perused the record.
6. From the arguments advanced by the parties and upon perusal of the impugned judgment dated 27.10.2023, following issues arise for consideration before this Court:-
(i) Whether existence of tampered seal and existence of tampered dispensing unit without there being any effect on the supply/delivery of product would amount to Critical Irregularity within MDG so as to warrant termination of dealership under MDG and whether the decision of dealership termination by Respondents stands the test of "Wednesbury reasonableness" ?
(ii) Whether the decision making process adopted by Respondents while passing dealership termination order dated 20.09.2022 is arbitrary and has been passed in violation of principles of natural justice? If yes, then whether on this ground dealership termination order is liable to be set aside?
7. For the purposes of adjudication of Issue No. (i), it is apposite to take into consideration relevant chapters/clauses from Market Disciplinary Guidelines which are being reproduced as hereunder:-
"5.1.2 SHORT DELIVERY OF PRODUCTS With Weights & Measures Department Seals intact Sales through the concerned dispensing unit to be suspended forthwith and recalibration and re-stamping to be done before recommencement of sales.(Even if short/excess delivery is found within permissible limit, recalibration and re-stamping to be done before recommencement of sales).-13-
With Weights & Measures department Seals tampered W&M department seals are put on Metering unit and Totaliser unit with the help of a sealing wire and a lead seal which is embossed by W&M inspector.
The seal would be deemed tampered in the following cases also :-
1. Seal itself is missing.
2. Different seal has been put other than embossed by W&M inspector.
3. Sealing wire is broken and not in one piece.
In addition other situations which can lead to manipulation of delivery/quantity/totaliser may also be treated as tampering. In such cases, view sand opinion of W & M authorities should be final.
Based on the opinion of the W & M authorities, Penal action to be taken even if the delivery is found to be correct or excess. 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.
..........
5.1.4 'ADDITIONAL / UNAUTHORISED FITTINGS / GEARS FOUND IN DISPENSING UNITS /TAMPERING WITH DISPENSING UNIT Any mechanism / fittings / gear found fitted in the dispensing 'unit which is likely to manipulate the delivery.
Addition, Removal, replacement or manipulation of any part of the 'Dispensing Unit including any mechanism, gear, "microprocessor -14- chip / electronic parts/ OEM. Software will be deemed as tampering of the dispensing unit.
In such cases, views and independent opinion of the original equipment, manufacturer would be obtained and suitable decision taken.
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. Action to be taken by OMC under the Marketing Discipline Guidelines 8.1. All irregularities (mentioned in chapter - 5) are classified into three categories, i.e. Critical, Major and Minor.
8.2 -- Critical Irregularities:
The following iregularities 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 5.1.2) iv. . 'Additional/Unauthorized fittings/gears/electronic component found in dispensing units/tampering with dispensing unit. {5.1.4
(a), (0), (c)} v. Unauthorized storage facilities (5.1.5) -
vi. Unauthorized purchase / Sales of products. (5. 1.6) .
-15-'Tank lorry carrying unauthorized product found under decantation at the RO (5. 1.7) Action:-
Termination at the FIRST instance will be imposed for the above irregularities.
..........
8.10 IRREGULARITIES / MALPRACTICES IN RESPECT OF SKO DEALERSHIPS .
In respect" of 'SKO - LDO dealerships, the following are 'the irregularities which are 'grouped under critical, major and minor. Critical Irregularities:
1. Short delivery of product (Weights & Measures seals tampered)
2. Totaliser seals found tampered.
3. Unauthorized purchases / sales / exchange' of SKO or any product which could be used as a substitute for this product 4, Stock variation between physical stock and book stock beyond permissible limits. Stock variation between physical stock and book stock beyond permissible limits as, established by an officer authorized for only search & seizure under Kerosene Control.
Order, 1993: Sales and supplies to be suspended immediately Dealer's explanation to be called for: a) If explanation is found. satisfactory, sales, / supplies to be resumed. b) If explanation is found unsatisfactory, penal action in line with unauthorized purchase/ sales.
Major Irregularities:
1. Overcharging.
2. Non-observance 'of Govt. regulations and - Company's operating.-16-
guidelines/instructions, if any, on sale and distribution of SKO. ' :
'Minor Irregularities:
1. Short delivery of products (Weights & Measures seals intact)."
Penalties in respect of SKO-LDO dealerships :-
In respect of proven critical irregularities, the dealership &be terminated at the 1st instance.
In 'respect 'of major irregularities, the dealers' allocation will be reduced by 50% for 3 calendar months after taking due approval from the State Govt.
In respect of minor irregularities, a warning letter be issued. However, any action. against a SKO-LDO dealership will be taken only in consultation 'with the local Civil Supplies Authorities as the action of OMCs should not result in disruption of supplies of PDS SKO to the common people. In case the Civil Supplies Authorities do not agree for the action, decided by OMCs which may involve suspension of supplies/reduction of allocation, a strong warning letter to be issued to the dealer.
In respect of SKO-LDO dealerships, all other provisions would apply as explained under RO dealerships as applicable."
8. Keeping in mind the nature of jurisdiction being exercised by this court which does not permit this court to enter the territory of disputed question of facts, the adjudication of the controversy will have to be done on the basis of undisputed facts between the parties. Also, the scope of judicial review that is to be exercised by this court is to be governed by Doctrine of "Wednesbury reasonableness". The famous "Wednesbury Case" Associated Provincial Picture Houses Ltd. Vs. Wednesburry Corpn., (1948) 1 KB 223: (1947) 2 All ER 680, is -17- considered to be landmark in so far as the basic principles relating to judicial review of administrative or statutory direction are concerned. In the said judgment, it has been observed by Lord Greene M.R. that "It is clear that the local authority are entrusted by Parliament with the decision on a matter which the knowledge and experience of that authority can best be trusted to deal with. The subject-matter with which the condition deals is one relevant for its consideration. They have considered it and come to a decision upon it. It is true to say that, if a decision on a competent matter is so unreasonable that no reasonable authority could ever have come to it, then the courts can interfere".
9. In Maharashtra Land Development Corporation & Ors. Vs. State of Maharashtra & Anr., (2011) 15 SCC 616, the Supreme Court observed that the Wednesbury principle of reasonableness has given way to the doctrine of proportionality. As per the Wednesbury principles, administrative action can be subject to judicial review on the grounds of illegality, irrationality or procedural impropriety. The principle of proportionality envisages that a public authority ought to maintain a sense of proportion between particular goals and the means employed to achieve those goals, so that administrative action impinges on the individual rights to the minimum extent to preserve public interest. It was held by the Court that administrative action ought to bear a reasonable relationship to the general purpose for which the power has been conferred. Any administrative authority while exercising a discretionary power will have to necessarily establish that its decision is balanced and in proportion to the object of the power conferred. The test of proportionality is concerned with the way in which the decision -18- maker has ordered his priorities, i.e. the attribution of relative importance to the factors in the case. It is not so much the correctness of the decision that is called into question, but the method to reach the same. If an administrative action is contrary to law, improper, irrational or otherwise unreasonable, a court competent to do so can interfere with the same while exercising its power of judicial review. It was further held that, the principle of proportionality therefore implies that the Court has to necessarily go into the advantages and disadvantages of any administrative action called into question. Unless the impugned administrative action is advantageous and in public interest, such an action cannot be upheld. At the core of this principle is the scrutiny of the administrative action to examine whether the power conferred is exercised in proportion to the purpose for which it has been conferred.
10. Keeping in view the aforesaid, admittedly, the controversy in this Writ Appeal revolves around 2 dispensing Units manufactured by M/s G.V.R bearing no. D.U No. 20130780035 and DU No. 20102001387.
Admittedly, delivery of the aforesaid dispensing units were found to be correct and there exists dispute regarding tampering of seals and dispensing unit by the Petitioner on account of which dealership termination order has been passed. This court has gone through Chapter 5 and 8 of MDG in order to answer the controversy and it becomes apparent from the conjoint reading of Clause 5.1.2(b) r/w 8.2 r/w 8.10 of MDG that there are twin requirements which are required to be fulfilled for constituting critical irregularity when there is tampering of Weights and Measures Seal i.e. Firstly there should be tampering of W & M seals and Secondly, there should be Short delivery of products. Similarly, conjoint reading of Clause 5.1.4 r/w 8.2 reveals that intentionally in -19- Clause 5.1.4, it is written that "Any mechanism / fittings / gear found fitted in the dispensing 'unit which is likely to manipulate the delivery." which emphasises the fact that such extreme action of termination is liable to be taken only when alleged tampering of Dispensing Unit has led to having an impact on the delivery of the dispensing Unit which in the considered opinion of this court is rightly a relevant consideration as the purpose of MDG is to ensure that delivery of product to the customers is accurate. It is in public interest that safeguards of such nature be put in place so that delivery of product of right quality and quantity is delivered to the customers. In the case at hand there is neither any dispute regarding the quality of product supplied nor there is any dispute that the quantity of product which is supplied was short. Admittedly, in the case at hand, alleged tampering with seals and Dispensing Unit has not at all affected the delivery of Dispensing Unit and hence in the considered opinion of this court, even if it is assumed that the petitioner had tampered with the seal or with the dispensing unit, the same cannot constitute critical irregularity within MDG so as to warrant termination of dealership as the consequence of such tampering has not affected public interest as no loss has been caused to the customers. Hence in the considered opinion of this court the decision of termination cannot stand the test of judicial scrutiny in light of principle of "Wednesbury Reasonableness" as clearly tampering even if assumed to have taken place has not caused loss to customers nor does it have caused any gain to the appellants. In case of no loss to customers coupled with the fact that no critical irregularity can be said to have been committed in light of MDG, such harsh decision of -20- termination of dealership cannot be sustained as the same is extremely irrational and arbitrary.
11. So far as issue no. ii) is concerned, it is undisputed that during inspection dated 11.04.2022, weights and measures officers were not present and opinion dated 18.05.2022 of the weights and measure officer, as required under MDG for concluding that the W & M seals were tampered was based on photographs and not actual physical verification/inspection. In the considered opinion of this court, when the Calibration and fixing of seal on Dispensing Unit is done by Weights and Measures Officers, then inspection of the said seals of Dispensing Unit is also required to be done in their presence only so as to exclude any imputation of malice, as any tampering if committed with such seals invites penal consequences not only under Legal Metrology Act, 2009 but also under MDG. In the case at hand, no explanation has been given as to why the inspection was not done in the presence of Weights and Measures Officers as it is their statutory duty under Section 15 of Legal Metrology Act, 2009 to conduct inspections. Furthermore, when finding of tampering of seals results in such penal consequences, opinion of tampering cannot be obtained on the basis of photographs without physical verification/inspection as such a procedure is extremely arbitrary which in the considered opinion of this court is violative of Article 14 of Constitution of India. Hence this court cannot convince itself that the procedure adopted by Respondents in inspection and obtaining of opinion of Weights and Measure Authorities is just and fair and is not violative of Article 14 of Constitution of India. On the contrary this court firmly believes that the procedure which has been -21- adopted is extremely arbitrary which cannot in good faith be allowed to be adopted especially when penal consequences ensue.
12. This court also finds force in the contention of learned senior counsel for the petitioner that in light of "official notice doctrine"
petitioner had the right to be communicated and to be granted opportunity to rebut the comments received by Respondents on
13.09.2022, pertaining to sworn affidavit dated 30.07.2022 of Mr. Indrajeet Singh relied upon by the petitioner, who was undisputedly an employee of OEM, M/s GVR, which formed the basis of termination order dated 20.09.2022. Admittedly, the said comments were neither supplied to petitioner nor was the petitioner given the opportunity to render explanation regarding the same. Hence, such a procedure adopted is certainly in violation of principles of natural justice and "official notice doctrine" and we are of the firm view that on this ground alone the termination order dated 20.09.2022 was liable to be set aside by the Writ Court. We are fortified in our aforesaid view in light of judgment of hon'ble apex court in Singrauli Super Thermal Power Station Vs. Ashwani Kumar Dubey (2023) 8 SCC 35, in which it has been held as hereunder:-
"In this context, it would be useful to refer to what is known as the 'official notice' doctrine, which is a device used in administrative procedure. Although an authority can rely upon materials familiar to it in its expert capacity without the need to formally introduce them in evidence, nevertheless, the parties ought to be informed of materials so noticed and be given an opportunity to explain or rebut them. The data on which an authority is acting must be apprised to the party against whom the data is to be used as such a -22- party would then have an opportunity not only to refute it but also supplement, explain or give a different perspective to the facts upon which the authority relies. This has been explained by Schwartz in his work on Administrative Law. The aforesaid doctrine applies with greater force to a judicial / adjudicatory body."
13. Hence, in view of the foregoing discussion, this writ appeal deserves to be allowed and is hereby allowed. Impugned order dated 27.10.2023 passed in W.P No. 22635/2022 is hereby set aside and the writ petition filed by the petitioner is allowed. Ex Consequenti, order of termination of Dealership dated 20.09.2022 is hereby quashed and the Respondent No. 1 Indian Oil Corporation is directed to permit the appellant/Petitioner Firm to operate the Retail Outlet situated at Akodia Road, Shujalpur Mandi, Shujalpur, District Shajapur and Respondent No. 1 Indian Oil Corporation Limited is further directed to continue supplying petroleum products to the aforesaid retail outlet of the Petitioner Firm.
14. No order as to cost.
(SUSHRUT ARVIND (DUPPALA VENKATA
DHARMADHIKARI) RAMANA)
JUDGE JUDGE
sh/-
SEHAR Digitally signed by SEHAR HASEEN
DN: c=IN, o=HIGH COURT OF MADHYA
PRADESH BENCH INDORE, ou=BENCH
HASEE
AT INDORE,
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8f27da, postalCode=452001,
st=Madhya Pradesh,
serialNumber=E7DBBA955B262C04B84
N
13251CE7FB6F0B7DBA610C57F1559C0
8BF6C6F5DD40D4, cn=SEHAR HASEEN
Date: 2024.08.14 17:35:20 +05'30'