Punjab-Haryana High Court
M/S Star Service Station vs State Of Punjab And Others on 23 September, 2013
Author: Rameshwar Singh Malik
Bench: Rameshwar Singh Malik
CWP No.19137 of 2006 1
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH.
CWP No.19137 of 2006
Date of Decision : 23.9.2013
M/s Star Service Station .....Petitioner
Vs.
State of Punjab and others ....Respondents
...
CORAM : HON'BLE MR. JUSTICE RAMESHWAR SINGH MALIK ...
1. To be referred to Reporter or not ?
2. Whether the judgement should be reported in the Digest ?
...
Present : Mr. H.S. Hooda, Sr. Advocate with Mr. P.M. Anand, Advocate for the petitioner.
Mr. Gaurav Garg Dhuriwala, DAG, Punjab, for the State. Mr. Ashish Kapoor, Advocate for respondents no.2 and 3.
...
RAMESHWAR SINGH MALIK, J Feeling aggrieved against the impugned termination order dated 11.11.2006 (Annexure P-7) passed by respondent no.3, whereby retail outlet dealership of the petitioner was terminated, petitioner has approached this court by way of instant writ petition, under Articles 226/227 of the Constitution of India, praying for issuing a writ in the nature of Certiorari for quashing the impugned order.
Briefly put, facts of the case are that the petitioner was a dealer Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 2 for more than 30 years. Retail outlet was being operated by the petitioner successfully and to the satisfaction of the respondent authorities, without there being any complaint against it. Retail outlet of the petitioner was inspected on 27.1.2006 as per Inspection Report (Annexure P-1), wherein some discrepancies were pointed out. A show cause notice dated 31.1.2006 (Annexure P-2) was issued to the petitioner. Premises of the petitioner were also inspected by another authority on 3.2.2006 (Annexure P-3). The Inspection Report (Annexure P-3) was separate and independent of the Inspection Report (Annexure P-1). Nothing objectionable was pointed out in the Inspection Report (Annexure P-3). Petitioner submitted its reply, vide Annexure P-4 to the above said Show Cause Notice (Annexure P-2). It is further pleaded case of the petitioner that even in the earlier Inspection Report conducted on 27.12.2005 as depicted in the communication (Annexure P-6), nothing wrong was found against the retail outlet of the petitioner. However, the impugned order dated 11.11.2006 (Annexure P-7) came to be passed against the petitioner, terminating the retail outlet dealership. Hence, this writ petition.
Notice of motion was issued and pursuant thereto, written statement was filed on behalf of respondents no.2 and 3. The writ petition was admitted for regular hearing. During the pendency of the writ petition, a separate reply by way of affidavit was filed on behalf of respondent no.4. That is how, this court is seized of the matter.
Learned Senior counsel for the petitioner submits that before passing the impugned order, the respondent authorities failed to grant any opportunity of being heard to the petitioner, thereby violating the basic principles of natural justice. He further submits that the impugned order was Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 3 non-speaking, which was passed in haste. The self contained reply submitted by the petitioner was not considered properly. The impugned order was the result of non application of mind. The Show Cause Notice was issued only to show that principles of natural justice were complied with, but as a matter of fact, that proved to be a farce and an empty formality, because the reply filed by the petitioner was neither considered nor appreciated. Since the later allottee was nowhere in picture at the relevant point of time, when the impugned order (Annexure P-7) was passed, it was not obligatory for the petitioner to implead that allottee as party-respondent, because the petitioner was not claiming any relief against the later allottee. If somebody would have felt aggrieved, he would have come forward for impleadment as party- respondent before this court. Let the law take its own course, in this regard. Finally, he prays for setting aside the impugned order by allowing the present writ petition. To substantiate his arguments, learned Senior counsel for the petitioner relies upon the following judgements :-
(i) M/s Navin Filling Station, Nawabganj, Barelly Vs. Indian Oil Corporation Ltd.2006(6) Allahabad Daily Judgment 319 ;
(ii) Bharat Petroleum Corporation Ltd. Vs M/s Jagannath & Co.
(Civil Appeal No.3838-3939 of 2013) ;
(iii) Hindustan Petroleum Corporation Ltd. etc. Vs. Super Highway Services and another, (2010) 3 SCC 321 ;
(iv) Electrosteel Infrastructure Vs. Gujarat Urban Development Co. decided by Gujarat High Court on 8.1.2008 2008(2) GCD 1237
(v) Allied Motors Ltd. Vs. Bharat Petroleum Corporation Ltd., (2012) 2 SCC 1 ;
Sahni Greesh2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 4
(vi) Harbans Lal Sahnia Vs. Indian Oil Corporation (2003) 2 SCC 107.
Per contra, learned counsel for respondents no.2 and 3 submits that the respondent authorities proceeded on a factually correct and legally justified approach, while passing the impugned order, which deserves to be upheld. He further submits that at the time of inspection on 27.1.2006, seal at the retail outlet was found broken, which amounts to a mal-practice. Petitioner was found violating the Marketing Discipline Guidelines. He did not produce the complete true copy of Annexure P-1. Show Cause Notice was issued, so as to comply with the principles of natural justice. Reply of the petitioner was duly considered, but was found unsatisfactory. Thereafter, the impugned order was passed strictly in accordance with law and the same deserves to be upheld. Since there was an arbitration clause in the contract between the parties, petitioner was under legal obligation to invoke the arbitration clause before filing the present writ petition. To buttress his arguments, learned counsel for respondents no.2 and 3, relies upon the following judgments :-
(i) Munish Gupta Vs. Union of India and others, 2009(1) RCR (Civil) 365 ;
(ii) Shyam Sunder Prop. And others Vs. Union of India and others, 2010(2) PLR 725 ;
(iii) M/s Regent Automobiles Vs. Indian Oil Corporation Ltd.
and others, 2008 (3) RCR (Civil) 752 ;
(iv) Hindustan Petroleum Corpn. Ltd. Vs. M/s Pinkcity Midway Petroleums, 2003 (3) RCR (Civil) 686.
He prays for dismissal of the writ petition.
Having heard the learned counsel for the parties at considerable Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 5 length, after careful perusal of the record of the case and giving thoughtful consideration to the rival contentions raised, this court is of the considered opinion that in the given fact situation of the present case, the instant writ petition deserves to be allowed. To say so, reasons are more than one, which are being recorded hereinafter.
It is a matter of record that the petitioner has been successfully operating the retail outlet for more than 30 years. There was no complaint against the petitioner. Further, there are self contradictory inspection reports, which cannot be reconciled. Premises of the petitioner were inspected on 27.12.2005. Seal was found O.K., but an old one. However, on 27.1.2006, when the retail outlet of the petitioner was inspected, one seal was found broken. Premises of the petitioner were again inspected on 3.2.2006 and everything was found in order, which is clear from Annexure P-3. In such a situation, this court has found substance in the argument raised by learned Senior counsel for the petitioner that the punishment awarded was apparently disproportionate to the alleged mistake, if any. Having said that, this court feels no hesitation to conclude that the respondent authorities proceeded on misconceived approach, while passing the impugned order (Annexure P-7), thereby terminating the retail outlet dealership of the petitioner and the same cannot be sustained.
A bare combined reading of all the three inspection reports, show cause notice, reply of the petitioner as well as the impugned order would show that the Show Cause Notice was issued to the petitioner only for the sake of issuing it, as if it was an empty formality. While submitting his reply to the Show Cause Notice, petitioner raised very strong and valid points about the repeated inspections on 27.12.2005 as well as on 3.2.2006, pointing out the Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 6 other technical aspects of the matter. However, while passing the impugned order, respondent no.3 neither discussed nor discarded, but altogether illegally ignored the reply filed by the petitioner. Thus, it can be safely held that the impugned order was passed without any proper application of mind, without giving due regard to the principles of natural justice and the same was passed in haste, which is non speaking and cannot be sustained.
It is the settled proposition of law that whenever any administrative order passed by the executive authority entails civil consequences, principles of natural justice play an important role and the same is required to be complied with meticulously. In the present case, the respondent authorities have failed to comply with the basic principles of natural justice, while passing the impugned order. Once respondent no.3 was not satisfied with the reply filed by the petitioner, it was least expected from him to grant an opportunity of being heard to the petitioner. Since respondent no.3 did not do so, the rule of Audi Alteram Partem has been found to have been glaringly violated. In this view of the matter, it is unhesitatingly held that the impugned order has been found to be suffering from vice of arbitrariness and the same cannot be sustained.
The conduct of the petitioner during 30 long years of successful operation of retail outlet, speaks volumes in his favour. This material fact goes to establish that the petitioner was not a habitual wrong doer. It is not even the pleaded or argued case on behalf of the respondents that the petitioner was found doing something wrong even at any earlier point of time. Further, two other inspection reports contained in Annexures P-3 and P-6 also clearly come to the rescue of the petitioner. Although the inspection report Annexure P-2 would show that one seal was found broken, yet there was no other allegation Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 7 levelled against the petitioner that he was found indulging in any mal-practice. It seems that the respondent authorities have drawn unfounded presumptions against the petitioner altogether ignoring his good conduct and performance for long 30 years. In view of this, it can be safely held that the punishment awarded to the petitioner was clearly disproportionate to the alleged mistake, if any, committed by the petitioner. Thus, the impugned order cannot be sustained for this, as well.
Genuine and justified claim of the petitioner cannot be denied by non suiting him only because of non impleadment of later allottee. It is a matter of record that at the time of passing of the impugned order, there was no other allottee. It is also a matter of record that nobody has approached this court during the pendency of this writ petition, claiming himself to be an interested party. Had the alleged later allottee found that his interest was likely to be effected by the result of this writ petition, he was always at liberty to approach this court. However, nobody has come forward.
Further, during the pendency of this petition affidavit dated 13.8.2012 of Sh. R.K. Dang, Manager (Retail Sales), Jalandhar Divisional Office was filed, in this regard. Relevant part of the affidavit, reads as under :-
" That thereafter approval was granted by the competent authority for resitement of the RO at LOI stage and a conditional LOI dated 22.1.2009 was issued to the LOI holder Sh. Ranvir Singh clearly stating the following :-
a. The subject dealership proposed to be allotted is in line with the option exercised by the candidate. b. Sh. Dhyan Singh dealer Star Station - Lachowal has filed a writ petition before the Punjab and Haryana High Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 8 Court (Court case no. 19137 of 2006) challenging the termination of his dealership and allotment of this dealership is subject to the final outcome of the said petition.
c. In the event the court holds that the termination is set aside and quashed, then the said dealership shall be terminated by giving 30 days notice without any claim for compensation, damages etc. d. LOI holder would be eligible for consideration for allotment of any other dealership only after termination of the dealership for this location for the above reasons. e. Affidavit to this effect was obtained from the LOI holder specifically mentioning the above terms and conditions.
f. That the LOI holder Sh. Ranvir Singh accepted the conditional LOI with all the terms and conditions stipulated therein on 22.1.2009. Letter of appointment (LOA) dated 31.1.2009 was issued to Sh. Ranvir Singh. It is submitted that the Adhoc dealership allotted to M/s Chadha Filling Station was terminated w.e.f. 1.2.2009."
Once the later allottee has been made to understand about the risk involved, including the fact of pendency of this writ petition, petitioner cannot be said to be at fault in this regard and the law will take its own course.
The arguments raised by learned counsel for the respondents have been duly considered, but found misplaced. So far as the availability of the Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 9 arbitration clause was concerned, it has not been held to be an absolute rule and rightly so, because each case is to be decided as per its own facts and circumstances. So far as the judgements relied upon by learned counsel for the respondents are concerned, there is no dispute about the law laid down therein. However, the judgements relied upon are of no help to the respondents, being distinguishable on facts. Further, it is the settled proposition of law that peculiar facts of each case are to be examined, considered and appreciated first before applying any codified or judgemade law thereto. Sometimes, difference of even one additional fact or circumstance can make the world of difference, as held by the Hon'ble Supreme Court in Padmausundrao Rao and another Vs. State of Tamil Nadu and others, 2002 (3) SCC 533.
The view taken by this court also finds support from the judgement of the Hon'ble Supreme Court in M/s Jagannath's case (supra). The relevant observations made by the Hon'ble Supreme Court in paras 9, 10, 13, 14 and 15 of the judgement, which can be gainfully followed in the present case, read as under :-
"9) In order to ensure fairness in testing the samples, it has been provided in clause (D) of para 2.5 of the Guidelines that in case of sample failure, in the event of request for testing by the dealer, the same shall be tested at Company's Laboratory in the presence of representative(s) of the dealer. The relevant extract of clause (D) of para 2.5 reads as under:
"In case of sample failure, in the event of request for testing by the dealer, the same to be considered on merits by the State Office/Regional/Zonal General Manager of the concerned Oil Company. If approved by GM, the sample of retail outlet retained Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 10 by the dealer alongwith the counter sample retained with the Field Officer/Oil Company are to be tested as per the guidelines, preferably in presence of the Field Officer, RO dealer/representative and representative of QC department of the Oil Company after due verification of samples."
10) It is rightly pointed out that the samples were not tested in any government laboratory and these tests were conducted in the company's laboratory itself. Therefore, in order to satisfy the conscience of the dealer about the authenticity of the tests so conducted, it has been contemplated in the Guidelines that on the request of the dealer, the test(s) could be conducted in his presence. In Hindustan Petroleum Corporation Ltd. & Ors. vs. M/s Super Highway Services & Anr., (2010) 3 SCC 321, this Court held that the Guidelines being followed by the Corporation require that the dealer should be given prior notice regarding the test so that he or his representative also can be present when the test is conducted. The said requirement is in accordance with the principles of natural justice and the need for fairness in the matter of terminating the dealership agreement and it cannot be made an empty formality. Notice should be served on the dealer sufficiently early so as to give him adequate time and opportunity to arrange for his presence during the test and there should be admissible evidence for such service of notice on the dealer. Strict adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer. It was further held that the cancellation of Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 11 dealership agreement of a party is a serious business and cannot be taken lightly. As pointed out in the said decision, in order to justify the action taken to terminate such an agreement, the authority concerned has to act fairly and in complete adherence to the rules/guidelines framed for the said purpose.
13) Though the appellant-BPCL protested the said application contending that the said provision in the Petroleum Act, 1934 is not applicable and the very same objection was raised by learned senior counsel for the appellant before us, it is relevant to quote clause 10(k) of the Dealership Agreement with which the parties are bound is as under:
"10(k) - To abide by the Petroleum Act, 1934 and the rules framed hereunder for the time being in force as also in other laws, rules or regulations either of the Government or any local body as may be in force."
In view of the Dealership Agreement, particularly, clause 10(k) referred above, the contention of learned senior counsel for the BPCL is liable to be rejected. In terms of Section 20 of the Petroleum Act, 1934 the contesting respondents had a right to have fresh samples drawn and get the same re-tested within seven days of intimation of the test results. It is the assertion of the contesting respondents that the test reports were intimated to them only upon filing of a suit before the trial Court. After getting the above reports, on 02.09.2005, the contesting respondents moved an application before the trial Court in the said suit for fresh sampling/retest of the products. Though an objection was raised Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 12 for filing counter statement in the said application, it is brought to our notice that in spite of several opportunities given by the Court, no such objection was ever filed. It was further pointed out by learned counsel for the contesting respondents that they timely exercised their right available in law. In view of the application filed by the contesting respondents on 02.09.2005 and in the light of Section 20 of the Petroleum Act, 1934 as well as the terms of Dealership Agreement, the objection raised by learned senior counsel for the BPCL is liable to be rejected.
14) It is also pointed out that it was respondent No.6 herein who made the inspection, collected the samples, issued show cause notice and passed an order of cancellation of the Dealership Agreement/Licence. By impleading him as one of the respondents
- respondent No.4 in the High Court - specific allegations were made against him that he acted mala fidely in cancelling the same and those assertions cannot be lightly ignored.
15) The High Court, after considering all the above specific claims of the contesting respondents, rightly interfered with the order of termination of the dealership agreement/licence dated 18.01.2006 and quashed the same. We are in entire agreement with the said conclusion. In view of the same, the appellants are directed to implement the directions given by the High Court in the impugned judgment dated 09.10.2009 within a period of four weeks from the date of receipt of this judgment.
16) In the light of the above discussion, the civil appeals are dismissed with no order as to costs."
Sahni Greesh2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 13 Similar view was taken by the Hon'ble Supreme Court in Super Highway Service's case (supra), which aptly applies in the present case. Paras 31 and 33 of the judgement, read as under :-
"31. The cancellation of dealership agreement of a party is a serious business and cannot be taken lightly. In order to justify the action taken to terminate such an agreement, the authority concerned has to act fairly and in complete adherence to the rules/guidelines framed for the said purpose. The non-service of notice to the aggrieved person before the termination of his dealership agreement also offends the well established principle that no person should be condemned unheard. It was the duty of the petitioner to ensure that respondent no.1 was given a hearing or at least serious attempts were made to serve him with notice of the proceedings before terminating his agreement.
33. The guidelines being followed by the Corporation require that the dealer should be given prior notice regarding the test so that he or his representative also can be present when the test is conducted. The said requirement is in accordance with the principles of natural justice and the need for fairness in the matter of terminating the dealership agreement and it cannot be made an empty formality. Notice should be served on the dealer sufficiently early so as to give him adequate time and opportunity to arrange for his presence during the test and there should be admissible evidence for such service of notice on the dealer. Strict Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 14 adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer."
Again, in the case of Allied Motors Limited (supra), the Hon'ble Supreme Court, in paras 59 and 60 of the judgement, laid down the law in the following terms :-
"59. In the instant case, the haste in which 30 years old dealership was terminated even without giving show cause notice and/or giving an opportunity of hearing clearly indicates that the entire exercise was carried out by the respondent Corporation on non-existent, irrelevant and on extraneous considerations. There has been a total violation of the provisions of law and the principles of natural justice. Samples were collected in complete violation of the procedural laws and in non-adherence of the guidelines of the respondent-Corporation.
60. On consideration of the totality of the facts and circumstances of this case, it becomes imperative in the interest of justice to quash and set aside the termination order of the dealership. We, accordingly, quash the same. Consequently, we direct the respondent Corporation to hand over the possession of the petrol pump and restore the dealership of petrol pump to the appellant within three months from the date of this judgment."
On the issue of maintainability of the writ petition in view of the availability of alternative remedy, including the arbitration clause, the Hon'ble Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 15 Supreme Court in Harbans Lal Sahnia's case (supra), held as under :-
" 7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, inspite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in atleast three contingencies : (i) Where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged (See. Whirlpool Corpn. V. Registrar of Trade Marks). The present case attracts applicability of the first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existence cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings."
Doctrine of proportionality was considered by the Gujarat High Court in the case of Electro Steel Infrastructure's case (supra) by observing as under :-
Sahni Greesh2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 16
" XXX XXX XXX
28. Applying the doctrine of proportionality and following CCSU, Venkatachaliah, J (as His Lordship then was) observed :
(SCC p. 620 para 25) The question of the choice and quantum of punishment is within the jurisdiction and discretion of the court martial. But the sentence has to suit the offence and the offender. It should not be vindictive or unduly harsh. It should not be so disproportionate to the offence as to shock the conscience and amounting itself to conclusive evidence of bias. The doctrine of proportionality, as part of the concept of judicial review, would ensure that even on an aspect which is, otherwise, within the exclusive province of the court martial, if the decision of the court even as to sentence is an outrageous defiance of logic, then the sentence would not be immune from correction. Irrationality and perversity are recognised grounds of judicial review.
XXX XXX XXX
34. Though agreed with the majority view, Lord Cooke expressed his reservation about law laid down in Wednesbury case in para 32 as under :-
And I think that the day will come when it will be more widely recognised that the Wednesbury case was an unfortunately retrogressive decision in English administrative law, in so far as it suggested that there are degrees of unreasonableness and that only Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 17 a very extreme degree can bring an administrative decision within the legitimate scope of judicial invalidation. The depth of judicial review and the deference due to administrative discretion vary with the subject matter. It may well be, however, that the law can never be satisfied in any administrative field merely by a finding that the decision under review is not capricious or absurd." Similarly, Allahabad High Court, in Naveen Filling Station's case (supra), observed as under :-
" 21. In Coimbatore District Central Cooperative Bank Vs. Coimbatore District Central Cooperative Bank Employees Assn. and another, (2007) 4 SCC 669, the Supreme Court held :
"19. de Smith states that "proportionality" involves "balancing test" and "necessary test". Whereas the former (balancing test) permits scrutiny of excessive onerous penalties or infringement of rights or interest and a manifest imbalance of relevant considerations, the latter (necessary test) requires infringement of human rights to the least restrictive alternative. (Judicial Review of Administrative Action (1995), PP 601-05, para 13.085; see also Wade & Forsyth : Administrative Law (2005) p. 366.)
20. In Halsbury's Laws of England (4th Edn.), Reissue, Vol.1 (1) pp. 144-45, para 78, it is stated :
"The Court will quash exercise of discretionary powers in which there is no reasonable relationship between the objective which is sought to be achieved and the means Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 18 used to that end, or where punishments imposed by administrative bodies or inferior Courts are wholly out of proportion to the relevant misconduct. The principle of proportionality is well established in European law and will be applied by English Courts where European law is enforceable in the domestic Courts. The principle of proportionality is still at a stage of development in English law; lack of proportionality is not usually treated as a separate ground for review in English law, but is regarded as one indication of manifest unreasonableness."
21. The doctrine has its genesis in the field of administrative law. The Government and its departments, in administering the affairs of the country, are expected to honour their statements of policy or intention and treat the citizens with full person consideration without abuse of discretion. There can be no "pick and choose", selective applicability of the Government norm or unfairness, arbitrariness or unreasonableness. It is not permissible to use a "sledgehammer to crack a nut". As has been said many a time "where paring knife suffices, battle axe is precluded."
22. In the celebrate decision of Council of Civil Service Union V. Minister for Civil Service Lord Diplock proclaimed :
"Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 19 which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call `illegality', the second `irrationality' and the third `procedural impropriety'. That is not to say that further development on a case by case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of `proportionality'...." (Emphasis supplied) Hon'ble Full Bench of Delhi High Court in the case of JT (India) Exports Vs. Union of India, 2001 (94) DLT 301, while explaining the scope of principles of natural justice, held as under :-
4. The expression 'natural justice and legal justice' do not present a water-tight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice.
Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law.
5. The adherence to principle of natural justice as recognised by all civilized States is of supreme importance when a quasi-juridical body embarks on determining disputes between the parties. These principles are well-settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that none Sahni Greesh 2013.11.11 12:29 should be condemned unheard. Notice is the first limb of this I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 20 principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed against the person in absentia becomes wholly vitiated. Thus it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play.
6. Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial quasi-judicial authority while making an order affection those rights. These rules are intended to prevent such authority from doing injustice.
11. Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed there under. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the frame-work of the statue under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 21 justice. Expression 'civil consequences' encompasses in fraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. In its wide umbrella comes everything that affects a citizen in his civil life.
13. How then have the principles of natural justice been interpreted in the Courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair- play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is 'nemo judex in causa sua' or nemo debet esse judex in propria causa sua' as stated in (1605) 12 Co. Rep. 114, that is, 'no man shall be a judge in his own cause'. Coke used the form 'aliquis non debet esse judex in propria causa quia non potest esse judex at pars' (Co. Litt. 1418), that is, 'no man ought to be a judge in his own cause, because he cannot act as Judge and at the same time be a party;. The form 'nemo potest esse simul actor et judex', that is, 'no one can be at once suitor and judge' is also at times used. The second rule and that is the rule with which we are concerned in this case is 'audi alteram partem', that is, 'hear the other side'. At times and particularly in continental countries, the form 'audietur at altera pars' is used, meaning very much the same thing, A corollary has been deduced from the above two rules and particularly the audi Sahni Greesh 2013.11.11 12:29 I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 22 alteram partem rule, namely 'qui aliquid statuerit parte inaudita alteram actquam licet dixerit, haud acquum facerit' that is, 'he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right' (See Bosewell' case: (1605) 6 Co.Rep. 48-b, 52-a) or in other words, as it is now expressed, 'justice should no only be done but should manifestly be seen to be done'."
Reverting back to the facts of the present case and respectfully following the law laid down by the Hon'ble Supreme Court as well as different High Courts, referred to herein above, it is held that respondent no.3 has failed to comply with the principles of natural justice, while passing the impugned order. Reply submitted by the petitioner was not duly considered, because of which the impugned order was a non speaking order. Further, respondent no.3 has also violated the principle of proportionality, while passing the impugned order because the punishment awarded to the petitioner has been found to be totally disproportionate to the alleged mistake, particularly when nothing objectionable was found about the work and conduct of the petitioner for 30 long years, during which he had been successfully operating this very retail outlet. Thus, the impugned order cannot be sustained.
No other argument was raised.
Considering the peculiar facts and circumstances of the case noted above, coupled with the reasons aforementioned, this court is of the considered view that in the given fact situation of the present case, the instant writ petition deserves to be allowed.
Sahni Greesh 2013.11.11 12:29
Consequently, the impugned order dated 11.11.2006 (Annexure I attest to the accuracy and integrity of this document High Court, Chandigarh CWP No.19137 of 2006 23 P-7) passed by respondent no.3 is hereby ordered to be set aside. Respondents no.2 and 3 are directed to restore the retail outlet dealership of the petitioner, permitting him to operate the service station, as per law. Let respondents no.2 and 3 complete the exercise within a period of three months from the date of receipt of a certified copy of this order, passing an appropriate order, in accordance with law.
Resultantly, with the observations made and directions issued herein above, the instant writ petition stands allowed, however, with no order as to costs.
23.9.2013 (RAMESHWAR SINGH MALIK)
GS JUDGE
Sahni Greesh
2013.11.11 12:29
I attest to the accuracy and
integrity of this document
High Court, Chandigarh