Gujarat High Court
M/S Balaji Indane Gramin Vitarak vs Indian Oil Corporation Ltd. on 9 July, 2021
Author: Ashutosh J. Shastri
Bench: Ashutosh J. Shastri
C/SCA/9652/2021 ORDER DATED: 09/07/2021
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 9652 of 2021
==========================================================
M/S BALAJI INDANE GRAMIN VITARAK
Versus
INDIAN OIL CORPORATION LTD.
==========================================================
Appearance:
MR RS SANJANWALA SR. ADVOCATE assisted by MR JF MEHTA(461) for
the Petitioner(s) No. 1
M R BHATT & CO.(5953) for the Respondent(s) No. 1
MUNJAAL M BHATT(8283) for the Respondent(s) No. 1
==========================================================
CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI
Date : 09/07/2021
ORAL ORDER
1. By way of this petition, under Article 226 of the Constitution of India, he petitioner has approached this Court for seeking the following reliefs :-
"35(a) Your Lordships will be pleased to admit this petition.
(b) Your Lordships will be pleased to issue the writ of certiorari and/ or writ of appropriate nature quashing and setting aside the issuance of the show cause notice dated 22.06.2021 by the respondent.
(c) Pending hearing and final disposal of this petition, Your Lordships will be pleased to stay the implementation of the show cause notice.
(d) Pending hearing an final disposal of the petition Your Lordships will be pleased to restrain respondent from terminating the Distributorship Agreement entered into with the respondent.
(e) Your Lordships will be pleased to grant an ex-parte ad interim relief in terms of para 35(c) and 35(d) of the petition.
(f) Your Lordships will be pleased to allow the petition.Page 1 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021
C/SCA/9652/2021 ORDER DATED: 09/07/2021
(g) .......
(h) ......."
2. The case of the petitioner is that the petitioner firm is a proprietary firm owned by Mr. Nitinkumar Jugal Kishore Sharma as a proprietor who is awarded LPG distributorship. Pursuant to following all the procedures in response to the advertisement which was issued by respondent no. 1, a letter of intent dated 19.05.2014 is issued by respondent no. 1. Having found the petitioner as suitable for such dealership, a field verification was also undertaken about location which was shown by the petitioner in application form itself and it is only after carrying out the process, LPG dealership was given to the petitioner and letter of appointment was also issued on 08.04.2015. The dealership agreement has also been entered into simultaneously on the same day.
2.1. It is further the case of the petitioner that after issuance of appointment letter, the petitioner was required to get necessary various permissions to start the dealership from various authorities and upon due verification, various authorities have granted licence to the petitioner as the petitioner is fulfilling strictly all criteria fixed by the said authorities. It is further the case of the petitioner that the petitioner owned one plot no. 9 at Vadpada, Taluka Uchchal, but since the petitioner was not residing at the said place for about more than 25 years and was residing at Village Tokarwa, Taluka : Uchchal, he requested to the Deputy Collector, Rehabilitation and Special Land Acquisition Officer, Ukai Yojna Scheme- 2 to allot a plot at Tokarwa in exchange of plot at Vadpada by way of applications dated 30.05.2008 and 10.03.2010 respectively. The said applications were granted by the authority on 03.12/01.2011 and accordingly, name was entered into 7/12 extract. It is further the case of the petitioner that the petitioner offered the said allotted plot to respondent Page 2 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 no. 1 for the purpose of godown. After the appointment as distributor of LPG, the petitioner also constructed godown on the said allotted plot which according the petitioner was inspected by various authorities for complying the safety measures. The petitioner thereafter started to store the LPG cylinder in the said godown on the said land. After the construction of said godown the same was also inspected by the Explosive Department (PESO - Petroleum and Explosive Safety Organization) and approved it to be capable of storing 5000 Kgs. of LPG. It is submitted that till the impugned suspension order which was issued by Mamlatdar, Uchchal, the said godown was utilized for the purpose of storage of LPG cylinders without any interruption. According to the petitioner storing of such LPG cylinder at the godown was approved by various authorities like Civil Supplies and Explosive Department along with respondent no. 1 and sizable number of customers have been enrolled. The petitioner simultaneously applied for NA permission to the Collector, Tapi and on verification by the Collector, Tapi, it was found that the possession of the plot which is occupied by the petitioner over which the godown is setup is not of plot no. 82/55, but possession which is held by the petitioner is that of plot no. 82/60. Accordingly, possession is held of plot no. 82/55 and under the bona fide belief, since no other plot in allotted to the petitioner in lieu of exchange of plot at Vadpada.
2.2. It is the case of the petitioner that upon such fact having been noticed, the Collector, Tapi issued letter on 27.10.2016, inter alia informing that the godown is constructed on Survey No. 82/55, whereas, licence is obtained at Survey No. 82/60 and as such, there appears to be clear breach of the terms of licence, committed by the petitioner. Hence, the storage of LPG cylinder since are in unauthorized premises, the same were ordered to be removed within a period of three days with the consultation of respondent or else appropriate action will be initiated.
Page 3 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021C/SCA/9652/2021 ORDER DATED: 09/07/2021 According to the petitioner, the Collector, Tapi has straightway passed the order without extending any opportunity to the petitioner, the said action was unwarranted. According to the petitioner as a matter of fact the needy village people were in requirement to refill the LPG cylinders, but the Collector, Tapi by virtue of that drastic step has made the dealership of the petitioner to a standstill. Simultaneously, the Mamlatdar, Uchchal passed suo moto order dated 22.11.2016, suspending the licence for a period of 90 days without issuing show cause notice or without extending opportunity. It is the say of the petitioner that there was no fault on the part of the petitioner as the land having Survey No, 82/60 was in exchange of his earlier land and the petitioner was under bona fide belief that he is in possession of the land bearing Survey No. 82/55. The said order thereafter was challenged before the Collector, and the Collector was pleased to set aside the order dated 12.04.2019 as the petitioner purchased the said plot from the erstwhile owner. Aggrieved by the earlier action of the respondent authority, the petitioner preferred Special Civil Application No. 4643 of 2017, but during the pendency of the said petition, the respondent authorities were pleased to recall the suspension of dealership without prejudice. As a result of which, the petition came to be withdrawn on 16.10.2019.
2.3. It is the case of the petitioner that in the month of March, 2021, the respondent called upon the petitioner for execution of the new agreement as he has crossed the permissible limit and he will not be termed as Gramin Vitrak, but to the surprise, instead of such communication, in the form of show cause notice dated 22.06.2021 came to be issued by the respondent authority which is received by the petitioner on 26.06.2021 calling upon the petitioner as to why the petitioner's dealership should not be cancelled as information/declaration given by the petitioner in an application for award of RGGLV is found to be incorrect and as such, by Page 4 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 invoking powers under Clause 27(1) of the Dealership Agreement, the said show cause notice came to be issued, which has given rise to the present petition under Article 226 of the Constitution of India.
3. Learned Senior Advocate Mr. R.S. Sanjanwala assisted by Mr. J.F. Mehta, learned advocate appearing on behalf of the petitioner has contended that the petitioner, as stated above, is under the bona fide belief that his Survey No. is 82/55, but has emphatically submitted that the dealership which has been granted to the petitioner was after due verification of godown as well as House No. 436 in which the dealership business is setup. It has been contended that the show cause notice issued by the respondent is reflecting an arbitrary exercise of power which suffers from non- application of mind as well. It has been submitted that at the time when the application was submitted, house number was very much written and a specific area is also mentioned, which is well within permissible criteria fixed by the respondent authority and it is only after such examination of material, the dealership was given.
3.1. Learned Senior Advocate Mr. Sanjanwala has submitted that this very controversy was raised by the respondent and ultimately after due verification, an action was recalled, which has led the petitioner to withdraw the petition as stated in the pleadings and as such, now on the basis of the very same controversy and the material, it is not open for the respondents to again take action in the direction of cancellation or suspension of dealership. Apart from that learned Senior Advocate Mr. Sanjanwala has submitted that it might be under mistaken belief that the petitioner owned Survey No. 82/55, but House No. 436 was very much existing over the said plot, which was verified by the authority upon field verification, which was done in past and only thereafter, dealership was given to the petitioner. That house is consisting of 4000 sq.mtrs., and it is Page 5 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 well within the permissible limit and hence, it is not open for the respondent authority to again precipitate the action against the petitioner on the basis of the very same material, very same controversy and if issuance of show cause notice is permitted, it tantamount to be abuse of process of law. Since show cause notice is based upon the very same material, this Court in exercise of jurisdiction under Article 226 of the Constitution can certainly interfere in view of the settled position of law. Learned Senior Advocate Mr. Sanjanwala has submitted that with further period of time the business has grown up practically. After disposal of the earlier main litigation approximately 2 ½ years have gone by and it is at such a belated stage, action is to be initiated in the form of show cause notice. The said action appears to be not fair, but smells mala fide and as such, the very act of issuance of show cause notice deserves to be deprecated and consequently, the impugned show cause notice be quashed and set aside. Learned Senior Advocate Mr. Sanjanwala has submitted that all necessary parameters are being observed by the petitioner and by now Plot No. 82/55 is also as such purchased by the petitioner, there is no germane reasons for the authority to create irreversible situation for the petitioner and hence, the show cause notice in question deserves to be quashed.
3.2. To substantiate his contention, learned Senior Advocate Mr. Sanjanwala has drawn attention of this Court to a copy of the form which has been filled in at the relevant point of time reflecting on page 66 and thereby, has requested the Court not to allow such arbitrary exercise of discretion by the authority. Learned Senior Advocate Mr. Sanjanwala has submitted that no doubt the petition is at a notice stage, but apparent exercise is ill founded, the Court can certainly exercise jurisdiction to set at naught the illegal action of the authority. No other submissions have been made.
Page 6 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021C/SCA/9652/2021 ORDER DATED: 09/07/2021
4. As against this, Mr. Munjaal Bhatt, learned advocate appearing on behalf of respondent no. 1 has opposed the petition, mainly on the ground, that the petition is at show cause notice stage and yet the petitioner has to explain his contents of the notice before the authority and as such, in absence of any mala fide or lack of authority, it is not open for the petitioner to invoke extra ordinary jurisdiction of this Court. At this stage of the proceedings to substantiate this contention, learned advocate Mr. Bhatt has relied upon the decision delivered by the Hon'ble Apex Court in the case of Union of India & Anr., v. Vicco Laboratories, reported in (2007) 13 SCC 270 and by referring to para 31 of the said decision, a request is made to dismiss the petition. It is submitted by learned advocate Mr. Bhatt that issuance of show cause notice is not on the very same circumstance, but additional material is also stated in the notice, which the petitioner is under an obligation to explain before the authority. It has been submitted that earlier action of suspension which was recalled was with a specific liberty and reserving right to examine the case as per the guidelines and the order of the Court and the said revocation/recalling was without prejudice to the rights and contentions of respondent no. 1. It is submitted that after that two member committee was formed to investigate the issue which has been cropped up and the Committee has not only made personal visit on the offered land site on 28.11.2019, and after several discussions with the petitioner as well as the then Talati, the officials found certain infirmities which are required to be explained and as such, it is not that with any mala fide intent action is sought to be initiated. The Committee has submitted its detailed report on 10.02.2020 and based upon such, a show cause notice came to be issued and hence, it is incorrect on the part of the petitioner to submit that the earlier action was based upon the very same material and very same circumstance and in any case, learned advocate Mr. Bhatt has submitted that at the stage of Page 7 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 verification of material and the examination of the explanation to be submitted by the petitioner, to invoke extra ordinary jurisdiction is not proper on the part of the petitioner. The contents of the show cause notice have been brought to the notice of this Court precisely, clause no. 11 reflecting on page 63 and thereby, has submitted that in view of the terms of the dealership/ distributorship agreement, an explanation is sought from the petitioner, which otherwise the petitioner is under an obligation to clarify and as such, at this stage of the proceedings, the petition may not be entertained.
4.1. Learned advocate Mr. Bhatt has submitted that even the Committee has found that the area which is being shown is also not as per the requirements stipulated in the guidelines and as such, the petitioner is called upon to explain not only on the issue of survey numbers, but also on the basis of the fact whether requirement is falling within the eligibility criteria of RGGLV and as such, it is not correct on the part of the petitioner to indicate that show cause notice is bad in law, in fact, the guidelines are requiring the criteria to be observed as on date of the application and hence in absence of challenge to the same, the parties are under an obligation to observe such guidelines and to verify such factual details and scrutiny of requirement of eligibility criteria, the show cause notice has been issued. Hence, in view of the law laid down by the Hon'ble Apex Court, at this stage of the proceedings, the petition may not be entertained. There is no mala fides alleged nor any lack of authority is visible. Hence, the petition deserves to be dismissed.
5. Having heard the learned advocates appearing for the respective parties and having gone through the material which has been brought to the notice of this Court, prima facie, it appears that the show cause notice impugned in the petition is based upon not the only circumstance as is Page 8 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 tried to be agitated in respect of plot numbers, in fact, the very show cause notice is indicating that some personal visit made by the members of the Committee, several discussions took place and thereafter, a report came to be submitted by two members Committee of respondent no. 1 in which it is found by the authority that the petitioner is required to explain the circumstances which are mentioned in the notice and as such, it appears to this Court that there is neither any lack of authority nor any exact similarity for which the case is put up before the Court. Since this petition is at the notice stage, the Court would like to just merely incorporate para 11 of the said notice without opining anything further on merit since the petitioner is yet to explain before the authority and the authority is yet to take independent decision on it.
"11. Considering that there was a lot of ambiguity created on account of the ownership of the land offered by you for LPG godown, the dimensions of the land offered vis-a-vis, the details of the land on which godown was constructed by you, we formed a two members Committee to investigate the aforesaid issues. The Committee submitted its report on 10.02.2020 under which they stated that the said Committee members carried out a personal visit on the offered land site on 28.11.2019. They had several discussions with you, the then Talati Officials as well as the relevant revenue officials post which the Committee inter alia has observed and concluded as under :
(i) The land offered by you towards LPG godown under your application dated 26.12.2013 was House No. 436, Village Tokarva. Upon verification, it was found that the said land was located on Revenue Survey No. 82/60/Paiki/G1 and as per 7/12 extracts, the said land was admeasuring only 152 sq.mtrs., which is less than the area required for the godown and does not meet the minimum size requirement for construction of godown which is one of the eligibility criteria for RGGLV.
(ii) As per the Allotment Letter dated 03.01.2011 under rehabilitation scheme for Ukai Dam Project, Plot No. 7 having an area of only152 sq.mtrs., land was allotted to you in Village Tokarva Dist. Tapi.Page 9 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021
C/SCA/9652/2021 ORDER DATED: 09/07/2021
(iii) The land on which you have constructed the godown and showroom at S. No. 82/55 (Now 628/2 was not owned by you on the last date of submission of application i.e. 27.12.2013 and as purchased subsequently vide Regd. Sale Deed dated 05.01.2019.
(iv) Since the information/declaration given by you in your application for the award of RGGLV is found to be incorrect, Corporation is well within its rights to terminate the Distributorship.
It can be certainly said that you did not have adequate land for godown at the time of submission of application. It is also a fact that you were storing LPG products at a different location which was not owned by y9u at the time of submitting application."
6. From the aforesaid situation which is prevailing on record, the Court is of the opinion that the proposition laid down by the Hon'ble Apex Court deserves to be observed. Hence, relevant observations contained in para 31 in the case of Vicco Laboratories (supra) is reproduced hereunder:
"31.Normally, the writ court should not interfere at the stage of issuance of show cause notice by the authorities. In such a case, the parties get ample opportunity to put forth their contentions before the concerned authorities and to satisfy the concerned authorities about the absence of case for proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the concerned authorities is the normal rule. However, the said rule is not without exceptions. Where a Show Cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show cause notice. The interference at the show cause notice stage should be rare and not in a routine manner. Mere assertion by the writ petitioner that notice was without jurisdiction and/or abuse of process of law would not suffice. It should be prima facie established to be so. Where factual adjudication would be necessary, interference is ruled out."
7. Looking to the aforesaid observations in response to the show cause Page 10 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 notice, it prima facie appears that some factual details are required to be examined by the competent authority and as such, it is not possible for this Court to construe that issuance of show cause notice is abuse of process of law, more particularly, when there is no lack of authority.
8. Yet another decision which is relevant for the purpose of arriving at a conclusion is the decision of the Apex Court in the case of D.N. Jeevaraj vs Chief Sec., Govt. Of Karnataka & Anr., reported in (2016) 2 SCC 653 and the relevant observations contained in para 42 and 43, the Court deems it proper to reproduce hereunder :
"42. In Mansukhlal Vithaldas Chauhan v. State of Gujarat[9] this Court held that it is primarily the responsibility and duty of a statutory authority to take a decision and it should be enabled to exercise its discretion independently. If the authority does not exercise its mind independently, the decision taken by the statutory authority can be quashed and a direction given to take an independent decision. It was said: Mandamus which is a discretionary remedy under Article 226 of the Constitution is requested to be issued, inter alia, to compel performance of public duties which may be administrative, ministerial or statutory in nature. Statutory duty may be either directory or mandatory. Statutory duties, if they are intended to be mandatory in character, are indicated by the use of the words shall or must. But this is not conclusive as shall and must have, sometimes, been interpreted as may. What is determinative of the nature of duty, whether it is obligatory, mandatory or directory, is the scheme of the statute in which the duty has been set out. Even if the duty is not set out clearly and specifically in the statute, it may be implied as correlative to a right. In the performance of this duty, if the authority in whom the discretion is vested under the statute, does not act independently and passes an order under the instructions and orders of another authority, the Court would intervene in the matter, quash the order and issue a mandamus to that authority to exercise its own discretion.
43. To this we may add that if a court is of the opinion that a statutory authority cannot take an independent or impartial decision due to some external or internal pressure, it must give its reasons for coming to that conclusion. The reasons given by the court for disabling the statutory authority from taking a decision can always be Page 11 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021 C/SCA/9652/2021 ORDER DATED: 09/07/2021 tested and if the reasons are found to be inadequate, the decision of the court to by-pass the statutory authority can always be set aside. If the reasons are cogent, then in an exceptional case, the court may take a decision without leaving it to the statutory authority to do so. However, we must caution that if the court were to take over the decision taking power of the statutory authority it must only be in exceptional circumstances and not as a routine. Insofar as the present case is concerned, the High Court has not given any reason why it virtually took over the decision taking function of the authorities and for this reason alone the mandamus issued by the High Court deserves to be set aside, apart from the merits of the case which we have already adverted to."
9. From the aforesaid situation which is prevailing on record, since this petition is at a show cause notice, the Court is not inclined to entertain, however, it is observed that the Court has not expressed any conclusive opinion on the stand taken by the petitioner as the authority is to take appropriate decision on a show cause notice after examining the stand which may be put up by the petitioner before it and further the authority may not be influenced by the disposal of this petition for taking an independent decision in accordance with law and in view of the guidelines.
10. With the aforesaid observations and clarification, since no case is made out to interfere, the present petition stands dismissed.
(ASHUTOSH J. SHASTRI, J) phalguni Page 12 of 12 Downloaded on : Wed Sep 08 09:32:19 IST 2021