Calcutta High Court (Appellete Side)
The General Manager vs Sri Sisir Kumar Pramanik & Anr on 24 December, 2010
Author: Bhaskar Bhattacharya
Bench: Bhaskar Bhattacharya
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Form No. J(2)
IN THE HIGH COURT AT CALCUTTA
Appellate/Revisional/Civil Jurisdiction
Present:
The Hon'ble Mr. Justice Bhaskar Bhattacharya
And
The Hon'ble Mr. Justice Sambuddha Chakrabarti
M.A.T. No. 1382 of 2010
With
C.A.N. No. 9040 of 2010
The General Manager, Indian Oil Corporation Ltd. & Ors.
Versus
Sri Sisir Kumar Pramanik & Anr.
For the Appellants: Mr. Prodash Kumar Mallick,
Mr. Tapan Kumar Mitra,
Mr. Farhan Gaffar.
For the Respondents: Mr. Ratnanko Banerjee,
Ms. Lopita Banerjee,
Mr. Avijit Chakraborty.
Heard on: 25.11.2010 & 30.11.2010.
Judgment on: December 24, 2010.
Bhaskar Bhattacharya, J.:
This Mandamus-Appeal is at the instance of the Indian Oil Corporation and is directed against an order dated 13th July, 2010, passed by a learned 2 Single Judge of this Court, by which His Lordship disposed of a writ-application filed by a Dealer of the Indian Oil Corporation Ltd. challenging the order of termination of the dealership by virtue of the order dated January 07, 2008 on the allegation of failure on his part to maintain the requisite standard in respect of Motor Spirits.
By the said order, the learned Single Judge quashed the order of termination with liberty to the Indian Oil Corporation to conduct a fresh hearing after making available the opinion of the concerned Officer, if any, in not retesting the sample retained by the writ-petitioner. His Lordship also directed restoration of supply to the writ-petitioner with further direction of revoking the order of suspension within a period of three weeks from the date of supplying the certified copy of the order.
Being dissatisfied, the Indian Oil Corporation has come up with the present Mandamus-Appeal.
The case made out by the writ-petitioner may be summed up thus:
a) The writ-petitioner was, the sole proprietor of 'M/s. Biswakarma Filling Station' at Kuli Chowrasta, P.O.- Kuli-Kandi in the district of Murshidabad and is a dealer of the Indian Oil Corporation Limited, Eastern Region.
b) The Assistant Sales Manager, Indian Oil Corporation Limited (Marketing Division), Eastern Region, inspected the retail outlet of the writ-petitioner 3 on 5th November, 2004 and he drew nozzle sample of Motor Spirit, High Speed Diesel and Lubricant Oils in three separate sealed containers for each product from which he kept one container at the writ-petitioner's retail outlet and took away the other two containers of sample.
c) By a letter dated 23rd November, 2004, the Indian Oil Corporation Limited informed the writ-petitioner that the sample from the retail outlet taken on 5th November, 2004, had failed the laboratory test and the writ-petitioner was asked to stop the sales and supplies of all the products until further advice. It was further pointed out that further communication would be conveyed to the writ-petitioner and the writ-petitioner was required to explain within 5 days why such thing had occurred in the outlet.
d) On the selfsame day, i.e. November 23, 2004, the writ-petitioner had written back to the Indian Oil Corporation, thereby praying for retesting of the sample retained by the writ-petitioner.
e) Long thereafter, on 16th February, 2006, a show cause notice was issued upon the writ-petitioner. In the said show cause notice, a past incident on 20th March, 2003 when the writ-petitioner failed to pass the laboratory test was indicated and he was also reminded of the earlier penalty of Rs.
20,000/- imposed upon the writ-petitioner for the said incident. In the selfsame show cause notice, the Indian Oil Corporation further informed that on further inspection held on 5th November, 2004, after testing, vide a report dated 9th November, 2004, the MS Sample was found to have failed 4 in meeting the specification in respect of the final boiling point and on the request of the writ-petitioner, the retention sample of Tank Truck was also tested for full specification, which was found to have met the specification as per test report dated 15th December, 2004. According to the said show cause notice, it was clearly evident that the writ-petitioner failed to perform in terms of the Marketing Discipline Guideline, 2001, which had tarnished the image of the Corporation and as such, the writ-petitioner was called upon to show cause within 30 days from the date of receipt of the notice as to why his dealership should not be terminated.
f) Along with the suspension order or the show cause notice, the text of the test report was not supplied to the writ-petitioner and as such, by a letter dated 19th March, 2006, the writ-petitioner requested to provide him with the test report of MS sample drawn on 5th November, 2004 and such test report was, for the first time, supplied to the writ-petitioner on 30th November, 2006
g) It is indicated from the test report that the writ-petitioner could not pass the limit prescribed for the Dist. Final Boiling Point, which should be 215 CEL. at the maximum whereas, the sample of the writ-petitioner reported 246 CEL. and item No. 9 of the report, namely, Residue, was found to be 2.1 whereas the maximum permissible level is 2.0.
h) The writ-petitioner replied to the show cause notice, thereby disputing the allegations made against him in the show cause notice and pointed out 5 various irregularities of violation of Marketing Discipline Guidelines committed by the Corporation in issue of show cause notice. In the said reply, the following irregularities on the part of the Corporation were pointed out :
1) According to Marketing Discipline Guidelines, the oil company's representative should collect six samples of one liter each from each tank and two samples to be retained by the dealer, two samples by the division or regional office and the rest two samples are for Oil Industry Marketing Laboratory for testing, but such procedure had not been adhered to at the time of taking sample but only three samples were taken.
2) If the sample fails, the explanation of the dealer should be called for in writing giving the details of the failure and enclosing the copy of the test report. But in this case, while the explanation of the dealer was sought for, no copy of the test report was furnished violating the Marketing Discipline Guidelines.
3) In case of sample failure, in the event of request for retesting by the dealer, the same should be considered on merit by the State Office/Regional or Zonal General Manager of the concerned Oil Company and if approved by the General Manager, the sample of retail outlet retained by the dealer along with counter sample retained with the Field Officer/Oil Company are to be tested as per 6 guidelines, preferably in the presence of Field Officer, RO dealer/representative after due verification of the samples. Further all the three samples should be tested only in the same laboratory and if possible, by the same person. In this case, however, although the writ-petitioner made a request to test the sample which was retained at his outlet for testing and pursuant to the said request, A.S.M., Mr. Alok Kumar Dutta, collected the said retained sample from the retail outlet on the selfsame date of testing, it is established from the letter dated 23rd November, 2004 that the retained sample was collected as per the request of R.O. However, unfortunately, the dealer was not informed about the fate of the test of the sample.
4) According to the Guidelines, the test results are to be communicated to the dealer within next five days from the receipt of the test report and in the present case, the test report of sample drawn on 5th November, 2004, had been communicated after lapse of two years to the dealer.
5) Before issuing show cause notice, penal action has been taken against the dealer by suspending the sale before issuing any show cause notice and the said show cause notice was issued after lapse of 14 months from the date of draw of the sample and that too, without enclosing test report.7
i) Ultimately by a letter dated 7th January, 2008, the Indian Oil Corporation passed the order of termination with the finding that the answer to the show cause notice was not satisfactory and that on the request of the writ-
petitioner, the retention sample of the tank truck was also tested for full specification at the Regional Laboratory at Gouripur when the MS retention sample was found to have met the specification as per the test report dated December 16, 2004.
The writ-application was contested by the Indian Oil Corporation, thereby denying the material allegations made in the writ-application and according to the Indian Oil Corporation, it was not obligatory on their part to send the sample retained by the dealer for laboratory retest as the Tank Truck Retention Sample had been sent for such test. It was further contended that the writ-petitioner never asked for the test report of the Tank Truck Retention Sample from the Corporation and as regards the reason for non-furnishing of test report, it was disclosed in the affidavit that no test report was asked for by the writ-petitioner. The Indian Oil Corporation further alleged suppression of material fact to the effect that the writ-petitioner did not disclose in the writ-petition that he had asked for testing of the Tank Lorry Retention Sample by letter dated 23rd November, 2004.
As indicated earlier, the learned Single Judge, by the order impugned in this appeal, has set aside the order of termination with liberty to the Indian Oil 8 Corporation to conduct fresh enquiry after making available the opinion of the concerned Officer in not testing the sample retained by the writ-petitioner.
Being dissatisfied, the Indian Oil Corporation has come up with the present Mandamus-Appeal.
Mr. Mallick, the learned senior counsel appearing on behalf of the appellant, has laboriously criticised the order passed by the learned Single Judge on the ground that the learned Single Judge totally overlooked the fact that in this case his client had retested the tank truck sample which indicated that the oil supplied to the writ-petitioner was within the permissible limit whereas the sample taken from the nozzle of the writ-petitioner's outlet did not pass the test. By referring to the aforesaid fact, Mr. Mallick contends that the writ-petitioner has not been prejudiced in any way for not testing the retained sample from the nozzle.
Mr. Mallick next contends that in the past, the writ-petitioner was found guilty in the year 2003 and was inflicted penalty of Rs. 20,000/- and from the aforesaid fact it would be apparent that his client did not commit any illegality in imposing the punishment of termination of dealership after second default in the year 2004.
Mr. Mallick further contends that the various alleged irregularities pointed out by the learned Single Judge including the one regarding the failure 9 on the part of his client in not taking six samples have not affected the merit of investigation and, thus, there was no justification of a fresh enquiry after considering the question of retesting.
Mr. Mallick, therefore, prays for setting aside the order impugned and maintaining the order of termination of dealership passed by his client.
Mr. Banerjee, the learned advocate appearing on behalf of the writ- petitioner, has, on the other hand, supported the order impugned and in addition to that, pointed out that the appellant, in this case, even did not communicate to the writ-petitioner, the result of the inspection on the basis of which the show cause notice was issued and the suspension order was passed before issue of such show cause notice. Mr. Banerjee further submits that it is only on the prayer of his client for supply of test report that the same was supplied after service of show cause notice in the year 2006 after the lapse of about two years. Mr. Banerjee further contends that when his client, immediately after receiving the order of suspension, prayed for retesting of both nozzle sample and tank truck sample, there was no justification of refusing the prayer for retesting of the sample retained by his client. Mr. Banerjee submits that in this case, the appellant deliberately did not communicate the decision and even took no decision on the prayer of retesting within 30 days for the purpose frustrating the prayer as retesting cannot be effectively done after the lapse of 30 days from the date of taking sample.
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In support of such contention, Mr. Banerjee relies upon two decisions, one of the Supreme Court in the case of Harbanslal vs. Indian Oil Corporation reported in (2003) 2 SCC 107 and the other, of a Division Bench of this Court in the case of M/s. Friend's HP Station & Anr. vs. The Senior Regional Manager (Retail), Hindustan Petroleum Corporation Ltd. & Ors. reported in (2010) 3 WBLR (Cal) 350. According to Mr. Banerjee, the appellant, in this case, failed to take even any decision as to whether payer for retesting of the sample should be allowed or not. Mr. Banerjee, therefore, prays for dismissal of the appeal.
After hearing the learned counsel for the parties and after going through the materials on record, we find that although sample was taken on 5th November, 2004 till 30th November, 2006, more than two years thereafter, the adverse report of testing, which is the cause of termination of dealership, was not supplied to the writ-petitioner.
It appears that on 23rd November, 2004, while issuing the suspension order, it was merely indicated that the sample taken from retail outlet had failed laboratory test and that further communication of actions that would be taken would be made, but the extent of the failure or the exact result of test was not conveyed to the writ-petitioner by the said letter of suspension dated 23rd November, 2004.
It appears that on the selfsame date, the writ-petitioner made request for retesting of not only of the nozzle sample but also of the tank truck sample by 11 two separate letters. It appears that for the reason best known to the appellant, it did not even think it fit to inform the writ-petitioner that his prayer for nozzle sample test had been refused nor did the Corporation invite the writ-petitioner to be present for the alleged retesting of the Tank Truck sample by communicating that his prayer for retesting of Tank Truck sample had been allowed and that his prayer for retesting of the nozzle sample had been refused.
We have already indicated that in this case, the show cause notice for termination was given on 16th February, 2006 about one year three months after the issue of suspension order and even by that show cause notice, the writ- petitioner was not communicated the result of testing. It was merely indicated that the writ-petitioner failed in meeting specification in final boiling point but to what extent the writ-petitioner failed was not indicated. The Corporation even did not mention that the item of residue also could not pass the test having exceeded the maximum limit by 0.1% which would appear from the alleged test report.
As pointed out by the Supreme Court in the case of Harbanslal vs. Indian Oil Corporation (supra), the strength/frictions of petrol and diesel change after ten days and therefore a time-limit of ten days is fixed for testing of such products and that the time gap between the sample taken and the laboratory test carried out in that case was of about a month which was capable of causing marginal variation as detected. In the case before us, although the writ- petitioner prayed for retesting of the sample taken from nozzle which was 12 retained by the dealer, the appellant did not feel the necessity of answering the said prayer.
According to the Marketing Discipline Guidelines, as pointed out in the case of Friend's HP Station & Another Vs. The Senior Regional Manager (Retail), Hindustan Petroleum Corporation Ltd. & Ors. (supra), in the case of sample failure, in the event of request for retesting by the dealer, the same should be considered on merit and if approved by the General Manager, the sample of retail outlet retained by the dealer along with the counter sample retained with the field officer/oil company are to be tested, preferably in the presence of the field officer/RO dealer or representative and the representative of QC Department of the oil company after due verification of the sample and that all the samples should be tested in the same laboratory and if possible, by the same person.
A plain reading of the aforesaid provision makes it abundantly clear that if the result of the first test goes against the dealer, he has a right to apply for retesting and if such a prayer is made, it is the duty of the Oil Company to consider such prayer without bias and generally, not to refuse such prayer. In other words, the prayer for retesting should be allowed almost as a matter of course and only in exceptional cases, such prayer should be refused by giving sufficient reason for rejection of such prayer.
In the case before us, although prayer of retesting was made, no reason at all has been assigned by the Oil Company why the prayer for retesting of the 13 nozzle sample was not adhered to and even the fact that the prayer of retesting of the Tank Truck sample had been allowed was not made known to the dealer so that he could be present personally at the time of such retesting as per the Guidelines. The reason assigned by Mr. Mallick that the Tank Truck test was sufficient, and that too, in the absence of the dealer, is unable to convince us. By the said test all that was proved was that the sample taken from the truck which carried the oil and poured into the tanker of the writ-petitioner was tested and was found to be in accordance with the standard sample but whether the actual sample taken from the nozzle of the outlet really failed the test could be easily re-verified by allowing the prayer of the writ-petitioner. Moreover, the alleged retesting of the Tank Truck sample in the absence of the dealer frustrated the object of retesting as provided in the guidelines and casts a doubt in the mind of any reasonable person about the bona fide of the Oil Company when we find that the Oil Company did not even communicate the detailed test result in course of next two years in violation of the guidelines.
In order to terminate the dealership on the ground of impropriety, such impropriety must be satisfactorily proved after giving adequate opportunity of presenting the case of the dealer. In this case, the Dist. Final Boiling Point test could not be cleared by the writ-petitioner according to the allegation made in the show cause notice whereas subsequently when the test report was given it appeared that in respect of three different items, i.e. item Nos. 7, 8 and 9, there were deviations. The aforesaid fact also raises a doubt about the genuineness of 14 the report which was not supplied to the writ-petitioner even at the time of issuing show cause notice and in such a case, there was no justification of refusing the prayer for retesting from nozzle sample and retesting of the Tank Truck sample in the absence of the dealer and that too, from a different laboratory.
It appears that the sample test was conducted at the Indian Oil Corporation Limited, Rajbandh Terminal Laboratory, whereas the tank truck sample was allegedly tested at Gouripur Laboratory which is in violation of the Guidelines of retesting and the alleged retesting of Tank Truck sample in the absence of the dealer should be treated to be "no retesting" being in clear violation of the Guidelines which prescribe that the retesting should be done in the presence of the dealer.
Moreover, we do not approve of the conduct of the Corporation in not communicating the result of the testing in details either at the time of passing the suspension order or even at the time of issuing the show cause notice of termination which point out lack of bona fide of the Corporation.
We are immensely dissatisfied with the conduct of the Corporation, first, for not communicating the alleged result of the test which is the cause of termination of dealership within even two years of testing , secondly, for not disclosing to the dealer whether his prayer for retesting had been allowed or not, within thirty days, knowing well that the composition of the MS changes after a 15 lapse of thirty days and thirdly, by doing the alleged retesting of the Tank Truck Sample in the absence of the dealer and that too from a different laboratory, in clear violation of the Guidelines. The excuse given by the Corporation for non- supply of the test-report that the same was earlier not demanded by the dealer is a lame one as the Guidelines clearly indicate that in case of failure in the test, it is the duty of the Oil Company to communicate the result to the dealer in detail.
We, thus, find no reason to interfere with the order passed by the learned Single Judge.
The appeal is, thus, devoid of any substance and is accordingly dismissed with costs which we assess at Rs. 10,000/- payable by the appellant to the dealer.
In view of disposal of the appeal itself, the connected application has become infructuous and the same is disposed of accordingly.
(Bhaskar Bhattacharya, J.) I agree.
(Sambuddha Chakrabarti, J.) 16