Calcutta High Court
Wpo 370 Of 2024 vs Indian Oil Corporation & Ors on 21 August, 2025
1
IN THE HIGH COURT AT CALCUTTA
Constitutional Writ Jurisdiction
Original Side
Present: - Hon'ble Mr. Justice Subhendu Samanta.
IN THE MATTER OF
WPO 370 of 2024
Malati Saha and Ors
Vs.
Indian Oil Corporation & Ors.
For the Petitioner : Mr. Arijit Dey, Adv.,
Mr. DR Mukherjee, Adv.
For the Respondent : Mr. Amit Kumar Nag, Adv.
Mr. Subhajit Ghosh, Adv.,
Reserved on : 12.06.2025
Judgment on : 21.08.2025
Subhendu Samanta, J.
1. Petitioner No. 1, 3 and 4 are the partners of a farm under name and style of M/s. Jiban Jyoti ( petitioner No-2) for LPG distributorship business of "Indane" under Indian Oil Corporation.
2. The brief fact of the case is that Quality Re-assurances cell (QRC) of respondent No. 1 (IOCL) took a sudden inspection at the godown of petitioner and made an inspection on 14th of July, 2023. During inspection the said team found 06 number of cylinders out of 20 are 2 in the delivery van enroute to the customers, were found underweight beyond permissible limit. One show cause was issued to the petitioner. The petitioner replied the show cause the respondent authority after hearing the petitioner vide order dated 14th September 2024 imposed penalty upon the petitioner. The imposition of penalty was upheld by the appellate authority. Being aggrieved by such action of the respondent authority the instant writ petition has been preferred.
3. It is pertinent to mention herein that the said QRC officials on 14.07.2023 at the time of inspection has detected several other irregularities. Show cause was issued upon the petitioner. At the time of passing the speaking order against the show cause vide order dated 14.09.2023, the respondent authority has imposed minor penalties for other irregularities but only in case of observation of more than 25% of filled LPG Cylinder loaded in a delivery vehicle for delivery of customers found underweight beyond permissible limit prescribed in the Legal Metrology (Packages Commodities) Rules, 2011, found to be a major 3 irregularities under Clause 2.1.2 of MDG 2022. The respondent authority has imposed the fine upon the petitioner distributorship for the reason of one major irregularities as first instance under marketing distributing guideline 2002 and petitioners advised to deposit fine amount of Rs.-1,90,566/-
4. Issue Involved- Whether imposition of penalty by the authority for alleged major irregularities by the respondent authority is an arbitrary, or unreasonable action?
5. For better understanding of the issue let me dealt with the core of the disputes.
6. On 14th of July 2023 QRC team inspected the petitioner's godown. During that inspection they found a vehicle was loaded with re-filled cylinders for distribution to the customers. They checked and weighd the re-filled cylinders, it appears that out of 20 re-filled cylinders, 06 cylinders are under weigh. According to legal metrology (Packages Commodities) Rules 2011, permissible error on net quantity by weigh is 150 Grams (+/- 10 Grams), would permit for error up to 150 to 160 Grams.
4
7. In the present case QRC team has taken tare weigh (weigh of cylinders without gas) of the cylinders thereafter taken the gross weigh of the cylinders (including gas); after subtracting to weighs actual weigh of the filled LPG would be counted.
8. The inspecting team has recorded the variance as 0.1,0.2,0.0 etc. (all in KG); consequently when variations shown to be 0.2 KG it was the variations of 200 GMS, thus beyond permissible error.
9. It is the case of the petitioner that to count maximum permissible error, which is permissible quantity of 150 Grams and +/- 10 Grams, can only be properly assessed if the weigh of the cylinders measured by two digit after decimals. It is the case of the petitioner that the QRC team has taken the tera weigh and gross weigh of the refilling cylinders and variance were recorded only after one digit of the decimal. Petitioner submits calculation up to one digit after decimal can cause huge confusion that whether the cylinders are within permissible error or not. The petitioner has demonstrated the case before this court that arithmetic calculation after two digit after decimal, if 5 recorded, there should have no variation more than 150 Gram in each cases.
10. Mr. Soumya Majumder, Learned Senior Counsel for the petitioner submits that at the time of inspection as per MDG Guidelines, platform digital weighing owing scale at least count +/- 10 Grams prescribed in the legal metrology (package commodities) Rules 2011 was not used though the same was available in the godown, rather QRC team used hand held electronics device at the time of weighing the cylinders.
11. Mr. Majumder further submits that calculation recorded by the team only one digit after decimal resulted a faulty calculation. This action of the team showing systematic error during measurement.
12. Mr. Majumdar further argued that the quality control inspectors admittedly found no tampering leakage or pilferage of seals of alleged under weigh LPG cylinders, the inspector was not issued an instructions about further marketability of the alleged under weigh cylinders. In order to ascertain whether cylinders exists permissible error of 150 Grams, the weighment of the cylinders should have been with the electronics 6 platform scale available with the dealership. But they have captured/recorded weighs of each cylinders with only one digit after decimal in spite of the fact that hand held electronic device also show three digit after decimal.
13. Mr. Majumdar further argued that QRC team violated the prescribed recommendation under Clause 1.4 (c) of MDG guidelines wherein the weighment should have been done in a platform scale by least count +/- 10 Grams prescribed in LMR 2011. He submits that such show cause recording of the QRS team officials cannot be the basis of punitive action against the petitioner.
14. Mr. Majumdar further argued that the order of the appellate authority passed by the DLSHG is perverse, arbitrary erroneous and purely non-application of mind. He submits the petitioner was penalised for the cylinders being under weigh. The cylinders were not tampered, thus the underweight cylinders are delivered to the petitioner by the manufacturers. Thus the petitioners was penalised for the erroneous action of the manufacturer.
7
15. Mr. Nag Learned Counsel appearing on behalf of the respondent authority submits that the writ petitioner did not record any protest and/ or objection in the QRC report with regard to their alleged grievances for using electronics hand owning machine instead of the electronic platform owning machine. Therefore the petitioner stopped from raising the issue at the later stage. The petitioner during the course of hearing of show cause has not challenged the report of QRC. The writ petitioner or their staff not request the inspecting team for weighment cylinders on electronic platform owning machine. They were satisfied (no objection raised) with the weightment done on electronic hand owing machine. In reply to the show cause petitioner did not take the plea that weightment of the cylinders loaded on the delivery van were improperly made.
16. Mr. Nag further submits that Clause 1.4 (c) of marketing discipline guidelines cast upon the obligation on the distributor to weigh each and every cylinder on electronic platform owning machine before loading the same on the delivery van. However, such provision does not cast upon any obligation on the 8 QRC team to weigh cylinders in platform owning machine loaded on the delivery vehicle during the inspection.
17. It is the further case of QRC team that delivery van in question were enroute for delivery of cylinders to the customers and left godwon, whereas writ petitioner claimed that those delivery vans were inside the godown.
18. Mr. Nag, submits this is a disputed question of India which cannot be determined by this writ court. Moreover, such plea was not taken by the petitioner before the appellate authority; for the first time it is raised before writ court which is nothing to an afterthought.
19. Mr. Nag, submits that the weightment re-filled cylinders by the QRC team up to 1 digit after decimal can be actual weighment and the same was not disputed at the time of making weightment. Thus the writ petition is not maintainable.
20. Having heard the Learned Counsel for the parties in considering the contentions of the petitioner as well as the respondent authority let me find out the final order 9 of the respondent authority in respect of the allegation of delivery under weigh LPG cylinders to the customers beyond permissible limit.
21. The show cause on the point is reflected as follows:
More than 25% of filled LPG cylinders loaded in a delivery vehicle for delivery to customers found underweight beyond permissible limit prescribed in the Legal Metrology (Packaged Commodities) Rules, 2011 as amended from time to time. MDG CLAUSE NO. (2.1.2) Enroute SQC was conducted in the Distributor's 2 delivery vans (Two nos - 10 nos 14.2 kg cylinders in each van) Van No. 1 Name of Delivery Boy/Vehicle No: Nand Kishore Singh No. of filled cylinders in vehicle: 10 nos (14.2 Kg) No. of filled cylinders found underweight beyond permissible limit: 4 Nos (14.2 Kg) Van No. 2 Name of Delivery Boy/Vehicle No: Radheshyam Mahato No. of filled cylinders in vehicle: 10 nos (14.2 Kg) No. of filled cylinders found underweight beyond permissible limit: 2 Nos (14.2 Kg) Total No. of filled cylinders found underweight beyond permissible limit for 20 nos filled 14.2 kg cylinders:
4+2=6 Nos (14.2 Kg) i.e. 30% (>25%) Distributor Reply: A few were borderline cases but more importantly the vanmen were only preparing to load vans, when the SQC team arrived, they had NOT yet left godown with the cylinders, when the inspection happened. See also point 5.10
Date: 14.09.2023 Ref: KIDO/QRC/Jiban Jyoti Sub-Show cause as per the provisions under MDG 2022 against irregularity detected by QRC inspection dated 14.07.2023 IDO Remarks:
As per MDG guidelines 2022, under the clause No.
1. PROCEDURE FOR HANDLING OF LPG CYLINDERS BY DISTRIBUTORS -
1.4 QUALITY/QUANTITY CONTROL MEASURES Clause no. 1.4 (c) and 1.4 (d) 1.4 (c) All the cylinders taken out for delivery should be checked for correctness of net weight on the platform type digital weighing scale of least count +/- 10 gms prescribed in the Legal Metrology (Packaged Commodities) Rules, 2011 as amended from time to time. Cylinders that have net weight beyond permissible limit prescribed in the Legal Metrology (Packaged Commodities) Rules, 2011 as amended from time to time should be segregated and returned to concern Bottling Plant 1.4 (d) Cylinder with correct net weight only should be taken out for delivery to the customers.
Hence, before loading cylinders in delivery vehicle, all cylinders should be checked for correct weight. As per Inspection by QRC, more than 25% of filled cylinders loaded in a delivery vehicle for delivery to customers found underweight beyond permissible limit prescribed in the Legal Metrology (Packaged Commodities) Rules, 2011. As such distributor's reply is not found to be satisfactory. Thus, as recommended by FO, Major irregularity under clause no. 2.1.2 of MDG 2022 is established.
11
22. After reply to the said show cause the impugned order of the respondent authority is as follows- In view of the aforesaid, one Major irregularity as 1"
instance, under Marketing Discipline Guidelines-2022 have been found to be established against your Distributorship as mentioned in detail above. Vide this letter you are advised to deposit the fine amount Rs. 190566/- (Rs. One Lac Ninety thousand Five hundred Sixty Six only) through e-Pay portal -
https://epayone.indianoil.in/ to Indian Oil Corporation Ltd. (M.D.). Your payment must reach this office within 30 days from the date of this letter.
23. It appears that in reply to the show cause the petitioners has admitted that few under weight cylinders were borderline and they have specifically stated that the van men were only prepared to load vans when the QRC team arrived and they have not yet left godown. The respondent authority showing Clause 1.4 (c) and 1.4 (d) of MDG guidelines 2022 found that more that 25% filled cylinders loaded in delivery vehicle for delivery to customers found underweight 12 beyond permissible limit. Thus it is crystal clear that the petitioner/ distributors never raised any objection of erroneous recording of weightment of the cylinders by the QRC team. Entire report of QRC team is placed with the writ petition (being annexure 42), it appears that the distributor has written objection in the inspection report itself on the allegation of missing cylinders and also on other points but in the report of weightment the distributor signed the said report but has not made any objection/comments by endorsing therein. Moreover, at the time of filing appeal the petitioner has also not raised any objection of defective weightment taken by the QRC team at the time of inspection. Thus it is clear that the point which is raised before this writ, never raised before the concerned authority not only for the first time but also in the appellate stage. Moreover, this writ court is not the appellate authority to ascertain the correctness of action/order of the statutory respondent authority. In MP Power Management company Ltd. Jabalpur Vs Sky Power South East Solar India Private Limited and Ors. Reported in 2023 (2) SCC 703 wherein the 13 Hon'ble Apex Court has categorically observed how the decision of the authority may be termed as arbitrary under the following circumstances An order or decision would be arbitrary under the following circumstances: (i) if it is not based on any principle, (ii) if it shows caprice or whim without any reasonable rationale, (iii) if it is actuated without good faith with an oblique motive, (iv) if there is total non-application of mind without due regard to rights of parties and public interest, and (v) if it is wholly unreasonable, which is little different from a perverse decision under the Wednesbury doctrine Words and Phrases "Arbitrariness"
(Paras 53 to 75)
24. In Asha Sharma Vs. Chandigarh Administration and Ors. (2011) 10 SCC 86 Hon'ble Apex Court has held that Arbitrariness in State action can be demonstrated by existence of different circumstances. Whenever both the decision-making process and the decision taken are based on irrelevant facts, while ignoring relevant considerations, such an action can normally be termed as "arbitrary". Where b the process of decision making is followed but proper reasoning is not recorded for arriving at a conclusion, the action may still fall in the category of arbitrariness. Of course, sufficiency or otherwise of the reasoning may 14 not be a valid ground for consideration within the scope of judicial review. Rationality, reasonableness, objectivity and application of mind are some of the prerequisites of proper decision making. The concept of transparency in the decision-making process of the State has also become an essential part of our administrative law.
25. I have perused the observation of Hon'ble Apex Court in MP Power Management (Supra) as well as Asha Sharma (supra). The impugned order is passed by the authority duly empowered to pass the decision. The impugned decision cannot be said to be total non- application of mind by the authority concern because the point of defective weightment by the QRC team for not taking weightment two digit after decimal has never placed before the concerned authority. The petitioner has raised this point for the first time in this writ petition. The authority had no scope to decide the matter on that point. Moreover, the punishment imposed upon the petitioner is according to the MDG guidelines. Thus in my view the decision taken by the concerned authority is not appears to me arbitrary or mala fide. Merely there may have a scope of 15 respondent authority to take a different view, is not a good ground to entertain writ petition.
26. The Rules and Guidelines have been laid down by the concerned Oil Marketing Companies so that the customers may get LPG of actual weight. The guidelines are well aware by the distributor and they are under contractual liability to perform according to MDG guidelines. Refilled underweight cylinders may be supplied by the manufacturer and there may be same under weigh cylinders which is required to be segregated and return to the manufacturer by the distributor; so it is the sole duty of the distributors to supply the cylinders to the customers having LPG of exact weigh for which they have paid money. The duty of the distributor to provide LPG of correct weigh cannot be denied. Manufacturer may supply under weigh cylinders but it is the duty under contract of the distributor, to supply cylinders of actual weigh. In this case the petitioner being the distributor has failed to perform his duties and loaded under weigh cylinder in delivery van. Onus of manufacturing defect of manufacturer was properly taken care of in MDG as 16 wess as the distributor cannot claim any equity while he has agreed through contract to make good of the same. Thus in this case in my view the impugned order imposing major punishment and fine upon the petitioner is not unreasonable.
27. Under the above observations I find no justification to entertain the writ petition accordingly the writ petition is dismissed and disposed of.
28. Connected applications, if any are also disposed of.
29. Parties to act upon the server copy and urgent certified copy of the judgment be received from the concerned Dept. on usual terms and conditions.
(Subhendu Samanta, J.) Later:
The Court:- Learned counsel for the petitioner submits that there was an interim order passed by this Court till disposal of the instant writ petition. As the writ petition is disposed of automatically, the interim order is vacated. 17
He submits that the petitioner intends to prefer an appeal against the instant order. So, the interim order passed by this Court may be extended for a further period of thirty days from date, so that the petitioner may approach the appellate Court for further interim order.
Mr. Nag, learned counsel appearing on behalf of the INDIAN OIL CORPORATION AND ORS raised an objection.
Having heard the learned counsel for the petitioner and considering the entire circumstances, the prayer for extension of the interim order for a further period of 30 days is hereby considered and rejected.
(Subhendu Samanta, J.)