Allahabad High Court
M/S Radhey Shyam Vinod Kumar Dealer ... vs Executive Dir. Retail And Appellate ... on 24 May, 2013
Author: Narayan Shukla
Bench: Narayan Shukla
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Reserved
Writ Petition No. 1229 (MS) of 2008.
M/S Radhey Shyam Vinod Kumar, Dealer, Hindustan Petroleum Corporation Ltd. ............Petitioner.
Versus
Executive Director, Retail & Appellate Authority, Hindustan Petroleum Corporation Ltd. & others.
...........Opposite Parties.
Hon'ble Shri Narayan Shukla,J.
This writ petition is directed against the order dated 18.07.2007 (Annexure no.-13) passed by Regional Manager, Hindustan Petroleum, Corporation (opposite party no.3) as also the order dated 29.11.2007 (Annexure no.16) passed by the appellate authority up holding the order passed by the Regional Manager in appeal.
The petitioner is dealer of Hindustan Petroleum Corporation and is running the business under the terms of agreement entered into between him and Hindustan Petroleum as well as relevant Rules and Orders is issued therefor.
On 15.05.2007 one Mr. Indrajeet Yadav, an authorized representative of S.G.S. India Private Ltd. (opposite party no.4) purchased ½ liter of H.S.D. (Diesel) through nozzle connected with the tank no.1 through dispensing unit and performed marker test which gave pink color that means it failed in marker test. He prepared a report and took the petitioner's signature over there. After 45 minutes he again came at the retail outlet and purchased 1 liter of H.S.D. From tank no.2 through nozzle connected with the dispensing unit and again performed the same test, prepared the report and took petitioner's signature.
The learned counsel for the petitioner submits that the marker test was not performed as per the guidelines particularly Clause 2.4 and 2.4.2. It is stated that the power of sampling of the oil product and search and seizure is governed under the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005. Clause-7 of the aforesaid order empowers authorizes some officers who are the gazetted officers of the Central Government or a State Government or any police officer not below the rank of Deputy Superintended of Police or any officer of the oil company, not below the rank of Sales Officer to enter and search any place or premises of a dealer, transporter, consumer or any other person who is an employee or agent of such dealer or transporter or consumer and take sample of the product. In light of the aforesaid provision it is stated that by the learned counsel for the petitioner that the S.G.S. Officer's who claimed himself as agent of the oil company has no authority to enter and search the premises of the dealer, therefore, the action of the search and seizure of opposite party n.4 is without jurisdiction. He also raised question on the procedure adopted by the officer for sampling the oil product and submitted that Clause-8 of the Order, 2005 provides a procedure of sampling which speaks that the authorized officer shall take and seal 06 samples of 01 liter each of the motor spirit or 03 samples of the H.S.D. Two samples of the motor spirit or one of the high speed diesel would be given to the dealer to preserve it in his safe custody till the testing or investigations are completed. Two samples of motor spirit or one of high speed diesel shall be kept by the concerned oil company or department and the remaining two samples of motor spirit or one high speed diesel would be used for laboratory analysis.
The learned counsel for the petitioner submits that in the present case only 1.5 liter product was taken out of which ½ liter was utilized for testing on the spot and only 02 samples of ½ of each were taken and no sample was left for the dealer to retain. It is further stated that the samples so taken was neither properly sealed nor was numbered as required by the guidelines. Thus, it is submitted by the learned counsel for the petitioner that the actions of the respondents suffers from jurisdiction and procedural error in sampling that being so the orders impugned are liable to be quashed.
Through the counter affidavit the respondents admitted the sampling of oil product from the petitioner's outlet by the authorized representative, it is stated that the said T.T. retention sample was not in a sealed condition and only sample was pasted on the wood box which was duly signed by the petitioner's representative and T.T. Driver. It is also admitted that no seal number was mentioned on the sample label therefore it was not tested.
Mr. Sunil Sharma, learned counsel for the respondents submitted that the company can act on behalf of its agent, he just drew attention towards the memorandum of agreement entered into between the parties and submitted that under Clause-37 of the agreement provides that the corporation will entitled at all times to enter into and inspect the management of the retail outlet by the said dealer in all respect and the dealer shall be bound to render all assistance and give all information to the corporation and its duly authorized representative in that behalf and accordingly the S.G.S. Officer was empowered for search and seizure of the petitioner's outlet. So far as the manner of taking samples of the oil product is concerned, it is stated that the same has been done in accordance with law as well as in strict compliance of the provisions provided under the relevant Government Order. In support of his submissions he also placed reliance upon some judgments which are discussed herein under:-
M/s. Kishore Auto Sales and others Vs. Bharat Petroleum Corporation Ltd. Varanasi and others 2010(6) ADJ 711 (DB). In this case the petitioner's retail outlet was conducted by M/s/ S.G.S. India Private Ltd. authorized by the Bharat Petroleum Corporation for such purpose. During inspection sample of motor spirit and high speed diesel oil was collected. The marker test was conducted in which sample of motor spirit failed, therefore, a show cause notice was issued to the petitioner as to why his dealership be not terminated. He submitted a reply to the show cause notice. In this case also the question of violation of guidelines, 2005 was raised and it was submitted that M/s. S.G.S. India Private Ltd. was not authorized to inspect the retail outlet on behalf of company. In this case also there was a clause i.e. Clause No. 10(O) in the agreement entered into between the petitioner and corporation which obliged a outlet dealer to give adequate facilities to the company, its officers, agent and servants to inspect and test accuracy and general working of the pump. This Court took a note of the decision of Division Bench rendered in the case of Vindhya Service Station, Mirzapur Vs. Union of India and others 2008 (10) ADJ 663 (D.B.). The relevant observations of the Division Bench is extracted below:-
"The second argument of the petitioners is that under the Control Order, which is issued under the Essential Commodities Act, it is only the authorised officer who can carry out the taking of samples. The argument is misconceived. There is a two fold check upon adulteration : one at the level of Oil Marketing Companies and the other by the State authorities under the Essential Commodities Control Orders. In respect of the agreement between the Oil Marketing Company and their dealers the terms are governed not by the Control Order but by the agreement and the Marketing Discipline Guidelines."
In the case of M/s. S.K. Shenbagamoorthy & Brothers Vs. Union of India and others (Writ Petition No. 2891 of 2009 and another connected writ petitions, the Madras High Court discussed the issue and also considered the Clause-7 of Order, 2005 as well as the authority of S.G.S. Officers and held that as per Clause-7 & 8 of Order, 2005 the fourth respondent (S.G.S.) is not competent person to take sample and conduct the test. The question arose for consideration is whether the test by the fourth respondent or by the sample taken by the fourth respondent is valid and whether any action can be taken on the basis of the test conducted by the fourth respondent who is not authorized to take samples. The Court held that according to me when the fourth respondent is not authorized to take sample. Even though he has been authorized by the Petroleum Corporation, in absence of any such delegation of such power by the provision of the Act and Rule such authorization or delegation is not legal and not permissible in law.
On the other hand the learned counsel for the respondent raised objection against the maintainability of the writ petition on the ground that the question involved in the matter is based on disputed facts which cannot be adjudicated upon by this Court in exercise of power provided under Article-226 of the Constitution of India. In support of his submissions he cited following decisions:-
1.M/s. Ankur Filling Station, Hardoi Vs. Hindustan Petroleum Corporation Ltd. (Writ Petition No. 3860 (MS) of 2008.
2.M/s/ Sarvottam Seva Kendra Vs. Hindustan Petroleum Corporation and others (Writ Petition No. 8055 (MB) of 2008.
The Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 has been made by the Central Government in exercise of power conferred by Section-3 of the Essential of Commodities Act, 1995. The relevant Sections-7 & 8 which govern the power of search and seizure as well as sampling of products are extracted below:-
7.Power of search and seizure -
(1) Any Gazetted Officer of the Central Government or a State Government or any police officer not below the rank of Deputy Superintendent of Police duly authorized, by general or special order of the Central Government or a State Government, as the case may be, or any officer of the oil company, not below the rank of sales officer, may, with a view to securing compliance with the provisions of this Order, or for the purpose of satisfying himself that this order or any order made there under has been complied with or there is reason to believe that all or any of the provisions of this order have been and are being or are about to be contravened:-
(a) enter and search any place or premises of a dealer, transporter, consumer or any other person who is an employee or agent of such dealer or transporter or consumer;
(b) stop and search any person or vehicle or receptacle used or intended to be used for movement of the product;
(c) take samples of the product and seize any of the stocks of the product and the vehicle or receptacle or any other conveyance used or suspected to be used for carrying such stocks and thereafter take or authorise the taking of all measures necessary for securing the production of stocks or items so seized before the Collector or District Magistrate having jurisdiction under the provisions of the Essential Commodities Act,1995 and for their safe custody pending such production;
(d) inspect, seize and seizure with, such aid or assistance as may be necessary, books, registers, any other records or documents of the dealer, transporter, consumer or any other person suspected to be an employee or agent of the dealer, transporter or consumer;
(2) While exercising the power of seizure provided under sub - clauses (c) and (d) above, the authorised officer shall record in writing the reasons for doing so and a copy of such recording shall be provided to the dealer, transporter, consumer or any other concerned person, as the case may be.
(3) The provisions of the section 100 of the Code of Criminal Procedure, 1973 (2 of 1974), relating to search and seizure shall, as far as may be, apply to searches and seizures under this Order.
8.Sampling of Product-
(1) The authorised under clause 7 shall draw the sample from the tank, nozzle, vehicle or receptacle, as the case may be, in clean aluminum containers to check weather density and other parameters of the product conform to the requirements of Bureau of Indian Standard specifications number IS 2796 and IS 1460 for motor spirit and high speed diesel respectively. Where samples are drawn from retail outlet, the relevant tank- truck sample retained by the dealer as per clause 3 (b) would also be collected for laboratory analysis.
(2) The authorised officer shall take and seal six samples of 1 litre each of the motor spirit or three samples of 1 litre each of the high speed diesel. Two samples of motor spirit or one of high speed diesel would be given to the dealer or transporter or concerned person under acknowledgment with instruction to preserve the sample in his safe custody till the testing or investigations are completed. Two samples of Motor Spirit or one of High Speed Diesel shall be kept by the concerned oil company or department and the remaining two samples of Motor Spirit or one of High Speed Diesel would be used for laboratory analysis;
(3) The samples label shall be jointly signed by the authorised officer who has drawn the sample, and the dealer or transporter or concerned person or his representative and the sample label shall contain information as regards the product, name of retail outlet, quantity of sample, date, name of the authorised officer, name of the dealer or transporter or concerned person or his representative;
(4) The authorised officer shall forward the sample of the product taken within ten days to any of the laboratories mentioned in Schedule III or to any other such laboratory when it may be notified by the Government in the Official Gazette for this purpose, for analysing with a view to checking whether the density and other parameters of the product conform to the requirements of Bureau of Indian Standard specification number IS 2796 and IS 1460 for motor spirit and high speed diesel respectively.
(5) The laboratory mentioned in sub- clause (4) shall furnish the test report to the authorised officer within twenty days of receipt of sample at the laboratory.
(6) The authorised officer shall communicate the test result to the dealer or transporter or concerned person and the oil company, as the case may be, within five days of receipt of test results from the laboratory for appropriate action."
Memorandum of agreement reduced in writing with the agreement of the parties also governs the functioning of the retail outlet. Clause-37 entitles the Corporation to enter into and inspect the management and retail outlet which is reproduced hereunder:-
"The corporation will be entitled at all times to enter into and inspect the management or the retail outlet by the said dealer in all respects and the dealer shall be bound to render all assistance and give all information to the corporation and its duly authorised representative in that behalf."
In the Case of Vindhya Service Station, Mirzapur (supra) this Court has considered the power of agent of Corporation for search and seizure in the light of agreement entered into between the parties and the Marketing Discipline Guidelines, whereas upon perusal of the Order, 2005, I find that it has been made in exercise of power provide under Section-3 of the Essential Commodities Act. Thus, it receives the strength from the Act that being so it is a statutory Government Order and therefore has statutory force. No doubt under the terms of agreement the Corporation has been made entitled to enter into and inspect the management of the retail outlet by the said dealer in all respect at all times. It is further provided that the dealer shall be bound to render all assistance and give all information to the Corporation and its duly authorized representative in that behalf. Thus, Clause-37 are in two different parts. In the first part it authorizes the Corporation to enter and inspect the management of the retail outlet and in the second part the dealer has been obliged to render all assistance and give all information to the Corporation and its duly authorized representative in that behalf. Thus, in the agreement also I do not find any such authorization as has been alleged by the respondents to empower the agent of the Corporation for search and seizure of the outlet. In another way Section-37 of the agreement authorizes the Corporation to inspect the management of the retail outlet, but there is no authorization to its authorized representative in clear terms to enter and search any place or premises of the dealer. Further as has been observed by the Madras High Court in the case of M/s. S.K. Shenbagamoorthy & Brothers Vs. Union of India and others (supra), in the case in hand I do not find any provision under the Order, 2005 which empowers the Corporation to delegate its power of search and seizure to its agent.
A bare perusal of Clause-7 of the Order,2005 shows that the work of search and seizure as well as taking sample of oil product has been assigned to the officers of a particular status i.e. the Government officers not below the rank of gazetted officer and the officer of a company not below the rank of Sales Officer. This assignment has been made to the particular officers keeping in view the gravity of work of search and seizure and taking samples, which cannot be permitted to be performed by the agents of the company who are not under the direct control of the government.
In the light of the aforesaid facts and law, I am of the view that the empowerment of search and seizure of the outlet has not been extended to the agents of the Corporation by the Order, 2005. Under the terms of the agreement also there is no specific provision authorizing the agent of the Corporation to enter for search and seizure of the outlet and particularly for taking samples of oil product. To some extent the functions of the authorized officer to enter into the premises of outlet for inspection of the management of outlet is different to the function of search and seizure and taking samples. The agreement empowers the Corporation as well as its agent to keep control and supervision over the outlet in general, whereas the Order-2005 apart from Corporation empowers the gazetted officers of the Central Government and State Government to enter and search any place of premises of a dealer and take samples of product and seize any of the stocks of the product in particular. Therefore, I am of the view that for particular work of taking samples of the product and seize any of the stocks of the product only the officers who are assigned under Clause-7 of Order-2005 are the authorize person.
The respondent has also not been able to justify his action of sampling successfully, thus, there was also an error in the process of sampling, therefore, the same cannot made basis for termination of petitioner licence of dealership.
Therefore, the orders impugned dated 18.07.2007 (Annexure no.-13) passed by opposite party no.3 and order dated 29.11.2007 (Annexure no.16) passed by the appellate authority are hereby quashed.
In the result the writ petition stands allowed.
24.05.2013 pp/