Orissa High Court
Umakanta Nayak vs Indian Oil Corporation Ltd. & Others on 21 January, 2015
Equivalent citations: AIR 2015 ORISSA 57, (2015) 3 BANKCAS 353
Author: Amitava Roy
Bench: Amitava Roy
IN THE HIGH COURT OF ORISSA : CUTTACK
W.P.(C) No.18778 of 2014
In the matter of an application under Articles 226 and 227 of the
Constitution of India.
__________
Umakanta Nayak ...... Petitioner
-Versus-
Indian Oil Corporation Ltd. & Opp. Parties
and others ......
For the petitioner : M/s. G.K. Mohanty, G.P.
Panda, P.K. Panda & D Mishra
For the Opp.parties : M/s. Sreejit Mohanty &
D. Mohanty
___________
PRESENT:
THE HONOURABLE CHIEF JUSTICE MR. AMITAVA ROY
AND
THE HON'BLE DR. JUSTICE A.K. RATH
----------------------------------------------------------------------------------------------
Decided on : 21.01.2015
------------------------------------------------------------------------------------
-2-
Amitava Roy, C.J. The petitioner, a transport contractor, with the
Indian Oil Corporation Limited (for short, hereinafter referred
to as "the IOCL") seeks to impeach its decision to blacklist his
tank truck (for short, "TT") detailed for the work entrusted to
him and to realize an amount of Rs.3,06,730/- towards the
cost of pilfered petroleum product for the period from
22.1.2014 to 8.7.2014.
2. We have heard Mr G.K. Mohanty, learned
counsel for the petitioner and Mr S. Mohanty, learned
counsel for the opp. parties.
3. A brief outline of the pleaded assertions would
provide the factual background. The petitioner has claimed
himself to be the owner of three TTs bearing registration
Nos.OR-02-BS-4778, OR-02-BJ-4778 and OR-05-P-3362.
He submitted his bid in response to a process initiated by
the IOCL for transport of bulk petroleum products with
effect from 01.05.2012 for a period of two years by road from
its oil storage and handling location at Bhubaneswar depot
at Chhanaghar, Jatni to different destinations within and
outside the State of Odisha. He, in addition to the above
TTs, did also offer two more trucks bearing registration
Nos.OR-05-AA-5117 and OR-02-Z-4800. The petitioner
having been found to be suitable was entrusted with the
work following which an agreement was executed between
-3-
the parties. He also furnished the security deposit and
completed other formalities. The operations admittedly were
to be regulated by the Industry Transport Discipline
Guidelines (for short, hereinafter referred to as "the
Guidelines") to ensure flawless and timely transportation of
the petroleum products. Clause 8 of the Guidelines spells
out the consequences of penalties for
malpractice/irregularities detected in course of the
operations. Whereas Clause 8.2.1 defines
malpractices/irregularities, Clause 8.2.2 prescribes the
penalties on the detection thereof. These two provisions
being of foundational relevance are extracted herein below
for ready reference:
"8.2 Penalties for malpractices/irregularities
8.2.1 Malpractices/irregularities will cover any of the
following:
a. Unauthorized deviation from specified
route/unauthorized delay/unauthorized en-route
stoppage/not reaching destination/over speeding/en-
route switching off VMU/unauthorized removal of
VMU/use of VMU on other vehicles.
b. TT crew found in intoxicated state while on duty.
c. For not wearing seat belt while driving on road or driving
vehicle without cleaner/helper.
d. For non functioning of TT Fire Extinguisher.
e. Polluting environment due to product spillage from
tilting or leaky vehicles on road, in case of
accident/unsafe driving.
f. Accident involving injury or damages to the facilities at
the work place.
-4-
g. Fatal accident at the work place.
h. Tampering with standard fittings of TT including the
sealing, security locks, security locking system,
calibration, Vehicle Mounted Unit or its fittings/fixtures.
i. Unauthorized use of TT for products other than the
petroleum products for which it has been engaged.
j. Entering into contract based on forged documents/false
information.
k. Entering into an agreement for the same TT with other
oil companies.
l. Irregularities under W & M Act.
m. Not lodging FIR with the Police in case of accident, not
informing/submitting accident report to the Oil
Company about the accident.
n. Pilferage/short delivery of product.
o. Any act of the carrier/carrier's representative that may
be harmful to the good name/image of the Oil Company,
its products or its services.
8.2.2 Penalties upon detection of
malpractice/irregularities: The carrier shall attract
penalties for the malpractice/irregularities as given below and
the TT mentioned in the following instances shall be suspended
/blacklisted along with TT crew. However, an investigation
shall be conducted and if the malpractice/irregularity is
established then penal actions stipulated as under shall be
taken.
SR. NO. TYPE OF MALPRACTICE/
IRREGULARITY NUMBER OF
MALPRACTICE/IRREGULARITY
First Second Third Fourth
8.2.2.5 Pilferage of product, TT not Be
reaching destination, Fatal blacklisted
accident resulting in death at on
industry
the work place, Irregularities basis.
under W & M Act, Tampering
with standard fittings of TT
including the sealing, security
locks, security locking system,
calibration, VMU or its fittings/
fixtures, Unauthorized removal
of VMU, Use of VMU on other
vehicles, Unauthorized use of TT
for products other than the
petroleum products, Entering
into contract based on forged
documents/ false information,
-5-
Entering into an agreement for
the same TT with other oil
companies, Not lodging FIR with
the Police in case of accident,
not informing/ submitting
accident report to the Oil
Company about the accident.
However, if the complicity of the carrier is detected in
case of occurrence of any of above
malpractice/irregularity or incident of
malpractice/irregularity stipulating into blacklisting of
second TT of the carrier (during the tenure of the
contract), the whole contract comprising of all the TTs
belonging to the concerned carrier shall be terminated
and the concerned carrier & their all TTs shall be back
listed on industry basis."
4. The petitioner has averred that in course of the
contract, his TT bearing registration No. OR-02-BS-4778
was loaded with petroleum and diesel on 7.7.2014 at 7 PM
at the Bhubaneswar Depot of the IOCL and his driver was
asked to effect delivery thereof to OM Sai Karuna KSK
under work order No.OSO/POL/BULK/PT-02/2012-
15/72/66 vide challan no. 671664993. It has been stated
that when the said petroleum product was unloaded at the
filling station, the proprietor thereof raised doubt following
which the contents were measured in presence of the
petitioner and 23 liters of petroleum product was found
short in the TT. In view of this disclosure, the Senior Depot
Manager IOCL (MD), Bhubaneswar Depot, Chhanaghar,
Dist. Khurda, issued a notice to the petitioner alleging that
an arrangement had been made in the third compartment of
-6-
the TT involved controlled by a wire to conceal the product
in the chamber after decantation. It was alleged that by the
said arrangement, 23 liters of the petroleum product was
concealed in the third chamber of the TT resulting in short
delivery thereof to the customer concerned thus tarnishing
the image of the IOCL. The petitioner was thereby advised to
explain as to why action would not be taken as per Clause
8.2.2.5 of the Guidelines for tampering with the standard
fittings and having spurious fittings inside the third
chamber of the TT.
5. According to the petitioner, he submitted a reply
dated 22.7.2014 categorically stating that he was ignorant of
the misdeed of his driver and the helper of the TT for which
irregularities detected had occurred. He stated further that
on being confronted, the driver and the helper had confessed
their guilt even before the authorities of the IOCL. He
asserted in clear terms that he had no complicity in the
incident. By the impugned decision contained in the letter
dated 4.9.2014 under Annexure-6 to the writ petition, the
IOCL while rejecting the explanation furnished, penalized
the petitioner as hereunder:
"1. Black listing of the TT No. OR-02-BS-4778 along
with the TT crew (Drivier-Sh Bhajamana Nayak and
Helper Sh Sudhir Patra) permanently.
-7-
2. Black listing of other four TTs (OR02BJ-4778,
OR05P3362, OR05AA5117 & OR02Z4800) for two
years w.e.f. 27.08.2014.
3. Recovery of Rs.306730/- towards the cost of
product shoten during every load starting from
22.01.2014 till 08.07.2014."
6. By a subsequent letter dated 19.9.2014, the IOCL
after adjusting the amount of Rs.1,72,460/- payable to the
petitioner on its transportation bills, required of him to pay
the balance amount of Rs.13,4,270/-. He seeks judicial
intervention in this factual premise.
7. The IOCL in its counter affirmed by the Deputy
General Manager (Operations) while admitting that the
transaction between the parties was subject to the terms and
conditions contained in the Bulk Petroleum Products Road
Transport Agreement dated 29.5.2012 as well as the
Guidelines has asserted that on the detection of the
irregularities/malpractice vis-à-vis the petitioner's TT bearing
registration No. OR-02-BS-4778 and the receipt of the
complaint from M/s. Om Sai Karuna KSK at Mahana,
Japakuda, Salepur, Dist. Cuttack, an investigation was
carried out by the officials of the IOCL and on the basis of
the findings a notice dated 16.7.2014 was issued to the
petitioner seeking explanation as to why action would not be
taken as per Clause 8.2.2.5 of the Guidelines. According to
-8-
the answering opp. party, after the petitioner had submitted
his reply on 22.7.2014 inter alia attributing the
malpractice/irregularities detected solely to the driver of the
TT and contending that he had no knowledge of the
tampering of the standard fittings and that he had no
complicity in the episode, he was given a personal hearing on
26.7.2014. The answering opp. party has maintained that
the explanation of the petitioner and his version in course of
personal hearing were not found to be convincing and it was
concluded that the irregularities/malpractice as detected
could not have been possible without his complicity and
consequently it was decided to blacklist him in accordance
with Clause 8.2.2.5 of the Guidelines and to recover the price
of pilfered product ascertained to be Rs.3,06,734/-.
Accordingly, the decision to that effect was communicated to
him. That the contract between the parties being non-
statutory in nature is not amenable to writ jurisdiction has
also been underlined.
8. No rejoinder has been filed by the petitioner.
9. Mr G.K. Mohanty, learned counsel for the
petitioner has assiduously urged that even assuming that
Clause 8.2.2 of the Guidelines was invocable, in the facts
and circumstances of the case, the TT involved only could
have been blacklisted and thus the blacklisting of the
-9-
petitioner's other TTs was grossly illegal and sans any
authority of law. Referring to the provision contemplating the
eventualities in which the whole contract was permissible to
be terminated by blacklisting carrier and all its TTs on
industry basis, the learned counsel has argued that such a
consequence in terms thereof would ensue only in the event
of the complicity of the carrier in two
malpractices/irregularities involving its TTs being proved and
not otherwise. As admittedly, in the facts of the present case,
there is no instance of double involvement of the TTs of the
petitioner, the impugned decision of blacklisting all his TTs
and directing recovery towards the cost of stolen petroleum
product is patently unsustainable in law and on facts, he
maintained.
10. Per contra, Mr J. Mohanty, learned counsel for
the opp. parties, has insisted that as the involvement of the
petitioner's TT bearing registration No.OR-02-BS-4778 in the
malpractice/irregularities contemplated in Clause 8.2.2.5
stood proved, the impugned decision is valid and does not
merit any interference by this Court.
11. The learned counsel has maintained that to
attract the consequence of blacklisting of the carrier and all
its TTs along with termination of the contract on industry
basis, complicity of the carrier in any one instance of
-10-
malpractice/irregularities is sufficient and thus the decision
taken is in consonance with Clause 8.2.2 of the Guidelines.
12. We have analyzed the pleaded facts and
documents on record and have consciously weighed the rival
arguments. That the transaction apart from being governed
by the stipulations in the agreement executed by/and
between the parties is also regulated by the Guidelines is a
matter of record. The pleaded averments in the writ petition
do attest the acceptance of the petitioner about the
involvement of his TT bearing registration No.OR-02-BS-
4778 in the malpractice/irregularity as contemplated in
sub- clause (h) of Clause 8.2.2.5, i.e., tampering with
standard fittings of the TT etc. entailing the penalty of
blacklisting of the said TT on industry basis.
13. A plain reading of the letter dated 16.7.2014 also
highlights the offending arrangement in deviation of the
standard fittings of the said TT with the motive of effecting
short delivery of the petroleum product to the consumer.
Thereby the petitioner was asked to explain as to why action
would not be taken as per Clause 8.2.2.5 of the Guidelines
for tampering with the standard fittings and having spurious
fittings inside the chamber of the said TT.
14. In his reply, the petitioner did not deny the
detection of the unauthorized arrangement in the third
-11-
chamber of the TT bearing registration No. OR-02-BS-4778.
He, however, stressed that he was not involved in the
incident and that the driver was solely responsible therefor.
He clarified that the driver had confessed to have committed
the mischief. The petitioner thus specifically denied his
complicity in the incident.
15. The text of the letter dated 4.9.2014 carrying the
impugned decision is extracted herein below:
"WO Ref: OSZO/POL/BULK/PT-2/2012-15/72/66 DT:
06.06.2012 was placed on you for transportation of POL
Product Ex-Bhubaneswar Depot as per the terms and
conditions of Public tender ref:OSO/POL/BULK/PT-
02/2012-15. Vide show cause notice Ref:BBSR/S&D/02
dated 17.07.2014 it was brought to your notice that (1)
abnormal shortage observed during decantation of
product at dealer's premises on 08.07.2014 (2)
Arrangements were made inside the third compartment
to conceal the product after decantation and removing
the same by pulling a wire. Physical inspection of the TT
was carried out at Depot by officers in your presence on
16.07.2014 and it was found that a container of 50 liter
capacity was fitted in the third compartment to steal the
product. Joint inspection report was prepared and the
same was signed by you. You have appeared for personal
hearing at 1300 hrs on 26.07.2014 and offered you
views and comments. The minutes of the meetings were
prepared and signed by you along with IOC officials.
Competent authority has approved the
following as your reply to show cause notice and views
expressed by you during personal hearing are not
convincing, hence not acceptable:
1. Black listing of the TT No. OR-02-BS-
4778 along with the TT crew (Driver-Sh
Bhajamana Nayak and Helper Sh Sudhir
Patra) permanently.
2. Black listing of other four TTs (OR02BJ-
4778, OR05P3362, OR05AA5117 &
OR02Z4800) for two years w.e.f.
27.08.2014.
-12-
3. Recovery of Rs.306730/- towards the cost
of product stolen during every load
starting from 22.01.2014 till 08.07.2014."
16. Reading between the lines, it is not discernible
that any finding had been reached by the IOCL in clear terms
about the complicity of the petitioner either in the alleged act
of tampering with the standard fittings of the TT involved or
in planting spurious fittings in the third chamber thereof.
The petitioner was, however, visited with the penal
consequences, as adverted to herein above, on the ground
that the explanation offered and his version in course of the
personal hearing was unconvincing. The report of the
Inspection Team of the IOCL (Annexure-B to the counter),
which investigated into the incident on 9.7.2014 as well as
the report of the Committee following an elaborate inquest of
the TT though had detected the tampering with the standard
fittings and incorporation of spurious fittings in the third
chamber of the TT involved, however, noticeably did not even
suggest that these violations were caused with the complicity
of the petitioner in any manner. Neither the counter filed by
the IOCL nor any document appended thereto discloses any
basis for the conclusion that he indeed had the complicity
and/or any kind of collaboration in the act of tampering with
the standard fittings of the TT or installation of spurious
fittings. There is no unimpeachable evidence as well that
-13-
such deviations had been either within his knowledge or
approval or consent. The conclusion with regard to his
complicity forming the basis of the impugned action of
blacklisting of all his TTs thus, when judged on the basis of
the materials on record, is thus wholly inferential. Having
regard to the serious detrimental consequences that had
ensued, in our opinion, in absence of any irrefutable proof of
his complicity, the IOCL could not have proceeded on mere
assumptions or surmises
17. Vis-à-vis the competing interpretations accorded
to the provision permitting the termination of the whole
contract and blacklisting of the carrier and all its TTs on
industry basis, we are of the view that such a consequence
would ensue, if the complicity of the carrier is detected qua
any of the malpractices/irregularities set out in Clause 8.2.2
of the Guidelines or in the event of involvement of the second
TT of the carrier in such incident of
malpractice/irregularities during the tenure of the contract.
In other words, in the latter eventuality, if during the
execution of the contract the TTs of the carrier are found
involved in more than one malpractice/irregularities, the
whole contract comprising of all the TTs of the carrier would
be terminated and the concerned carrier and all his TTs
would stand blacklisted on industry basis. As, in the instant
-14-
case, no second incident involving any other TT of the
petitioner has been alleged or proved, his complicity in the
detected incident of malpractice/irregularities would be an
essential pre-requisite for blacklisting his other TTs. Any
other interpretation would be unintelligible, incongruent and
illogical. The plea of the petitioner that in order to terminate
the whole contract comprising of all the TTs of a carrier and
to blacklist it with all the TTs industry basis, the complicity
of the carrier in the malpractice/irregularities in both the
episodes ought to be a precondition however does not
commend for acceptance. Such an exposition would, in our
view, render the stipulation of complicity of the carrier in any
of the malpractice/irregularities de hors the number of
incidents in which its TTs are involved wholly redundant or a
surplusage, a result incomprehension by the primary
principles of interpretation.
18. Maxwell, in his celebrated work The Interpretation
of Statutes (Twelfth Edition), had enunciated at page 76 as
hereunder:
"The words of a statute, when there is doubt about
their meaning, are to be understood in the sense in
which they best harmonise with the subject of the
enactment. Their meaning is found not so much in a
strictly grammatical or etymological propriety of
language, nor even in its popular use, as in the
subject, or in the occasion on which they are used,
and the object to be attained. Grammatically, words
may cover a case; but whenever a statute or
document is to be construed it must be construed
-15-
not according to the mere ordinary general meaning
of the words, but according to the ordinary meaning
of the words as applied to the subject matter with
regard to which they are used, unless there is
something which renders it necessary to read them
in a sense which is not their ordinary sense in the
English language as so applied."
In Union of India and others v. Brigadier P.S.
Gill, (2012) 4 SCC 463, the Hon'ble Apex Court had
underlined that one of the salutary rules of interpretation is
that the legislature does not waste words that each word
used in the enactment must be allowed to play its role
however significant or insignificant the same may be in
achieving the legislative intent and promoting legislative
object. That an interpretation to advance the avowed
objective of a statute is always to be accepted than the one
which dilutes it was underscored by the Hon'ble Apex Court
in Regional Provident Fund Commissioner v. Hooghly
Mills Company Limited and others, (2012) 2 SCC 489.
19. Judged on the above expounded principles on
interpretation, we are of the comprehension that the
complicity of the carrier in any one instance of malpractice or
irregularity would act as a vitiating factor to attract the
consequence of termination of the whole contract and the
blacklisting thereof (carrier) along with all TTs on industry
basis. Understandably, this is gravely detrimental and the
-16-
penal consequence can be justified on proved culpable state
of mind of the carrier qua the assignment entrusted to it.
20. On a close consideration of the above aspects,
we are thus of the opinion that the impugned decision to
blacklist TTs bearing registration Nos.OR02BJ-4778,
OR05P3362, OR05AA5117 & OR02Z4800 of the petitioner for
two years with effect from 27.08.2014 is unsustainable in
law. However, in view of the proved facts vis-à-vis the
involvement of the TT bearing registration No. OR-02-BS-
4778 in the malpractice/irregularities of tampering with the
standard fittings etc. contemplated in Clause 8.2.2.5 of the
Guidelines, the decision to blacklist it with its crew, i.e. the
driver and the helper as per letter dated 04.09.2014 and to
recover Rs.3,06,730/- is upheld.
The petition is thus partly allowed.
..............................
Chief Justice
Dr. A.K. Rath, J.I agree.
........................... Judge Orissa High Court, Cuttack Dated 21st January, 2015/PCP