Andhra Pradesh High Court - Amravati
Bhavya Sri Transport, vs Bharat Petroleum Corporation Limited, on 28 September, 2021
THE HONOURABLE SRI JUSTICE A.V.SESHA SAI
WRIT PETITION No.12832 OF 2021
ORDER:
In the present Writ Petition, challenge is to the order passed by 3rd respondent-Divisional General Manager (Retail) (South), Bharat Petroleum Corporation Limited ('BPCL', for short), vide SR.DGM.TPT.4, dated 09.06.2021. By way of the said order, the respondent-Corporation terminated contract with the petitioner and blacklisted as many as 6 tank lorries and also forfeited security deposit + GST @ 18% on S.D.
2. Briefly stated, the facts and circumstances leading to filing of the present Writ Petition are as infra :
The respondent-Corporation, by way of a Tender Notification dated 06.03.2017, invited sealed tenders from the interested tank lorry owners for award of contract for road transportation of bulk petroleum products from various storage points to customers/other storage points for a period of five years. In response to the said Tender Notification, petitioner herein also offered its tender and emerged as successful tenderer, and an agreement was also entered into, in furtherance of the same, for a period of five years commencing from 09.10.2017 to 08.10.2022.
Petitioner herein provided 6 tank lorries bearing Nos.AP 31 2 TF 4588, AP 16TW 9287, AP 36Y 0741, AP 16TW 6583, AP 31TG 9888 and AP 31TG 9288. While the things being so, Respondent No.2 issued a show cause notice vide No.VI.RET.TPT, dated 02.03.2021 to the petitioner herein, alleging violation of a number of clauses of Oil Industry Transport Discipline Guidelines ('ITDG', for short), and informed the petitioner that vehicle bearing Registration No.AP16TW 9287 was being blocked and would be blacklisted under clauses 8.2.1 and 8.2.2.5 of the ITDG and called upon the petitioner to submit written explanation. In response to the show cause notice, petitioner herein submitted an explanation on 23.03.2021, stating inter alia that when the petitioner came to know of the incident, the petitioner removed driver of the vehicle from the job and also indicated therein that he could not bear such kind of unlawful acts with the company.
Thereafter, 3rd respondent herein-Divisional General Manager (Retail) (South), BPCL, passed the impugned order dated 09.06.2021, terminating the contract and blacklisting all the six tank lorries apart from forfeiting security deposit + GST @ 18% on S.D. This Writ Petition, filed under Article 226 of the Constitution of India, challenges the validity and legal sustainability of the said order.3
3. This court, at the stage of admission, on 07.07.2021, passed an interim order, directing the respondents herein to maintain status quo as on the said date as regards the other vehicles of the petitioner herein for a period of four weeks from the said date.
4. A counter affidavit has been filed by the respondents, denying the averments and the allegations made in the affidavit filed in support of the Writ Petition.
5. Heard Sri G.Venkata Reddy, learned counsel for the petitioner and Sri O.Manoher Reddy, learned Standing Counsel for the respondents, apart from perusing the material available on record.
6. It is submitted by the learned counsel for the petitioner that the impugned action on the part of the respondents is highly illegal, arbitrary, unreasonable, violative of Article 14 of the Constitution of India and principles of natural justice and contrary to the ITDG. It is further contended by the learned counsel that the respondents herein did not make any allegations in the show-cause notice against the other vehicles and the crew attached to the said vehicles; that in the show-cause notice, proposed action was only against one tank truck i.e. vehicle bearing Registration No.AP16TW 9287, and having 4 proposed so in the show cause notice, it would not be open for the respondents herein to impose multiple punishments, touching the other vehicles also; that the said action on the part of the respondents is violative of principles of natural justice and also the doctrine of proportionality; that in the complaint, dated 12.02.2021, made by BPCL COCO outlet, Anakapalli, with regard to the alleged incident on 10.02.2021, only the involvement of the driver was pointed out; that even in the show cause notice, the respondent-authorities only mentioned about the attempt of the driver of the said vehicle and no allegation was made that the commodity was pilferaged; that having specified in the show cause notice, only a particular clause, the respondent-authorities ought not to have resorted to the impugned action of blacklisting all the tank lorries. It is further contended by the learned counsel that the respondents also thoroughly went wrong in blacklisting the petitioner, without indicating the period of such blacklisting, and the same is contrary to the ITDG.
7. On the contrary, Sri O.Manoher Reddy, learned Standing Counsel for respondents strenuously contends that the show cause notice dated 02.03.2021 specifically indicated all the relevant clauses under which action was proposed, and hence, the contention contra advanced by 5 the learned counsel for the petitioner is not sustainable. It is also the submission of the learned Standing Counsel that prior to issuing the show cause notice, an inspection was conducted and an investigation report on the lorry bearing Registration No.AP16TW 9287 was also submitted on 23.02.2021 by the Chief Manager, OPS I/c, Visakha Installation wherein, specific conclusions against the petitioner were recorded. It is also the submission of the learned counsel that as per the ITDG, in respect of irregularity pertaining to false/hidden compartment, unauthorized fittings or alteration in standard fittings, affecting quality and quantity, there exists a deemed presumption as to the complicity of the carrier which enables the respondent-authorities to terminate the contract in respect of all tank trucks.
8. While giving reply to the submissions of the learned Standing Counsel, learned counsel for the petitioner submits that the respondents herein did not supply copy of the investigation report dated 23.02.2021 nor they mentioned anything with regard to the same in the show cause notice dated 02.03.2021, and had the same been communicated to the petitioner herein, the petitioner herein would have submitted explanation in respect of the same also, and therefore, the said action on the part of the 6 respondents is a patent violation of principles of natural justice. It is further submitted by the learned counsel that having regard to the facts and circumstances of the case, the extreme step of terminating the contract in respect of all the tank trucks apart from blacklisting the petitioner for unlimited period, is not authorized and also runs contrary to the doctrine of proportionality.
9. In the above back ground, now, the issue that emerges for consideration of this Court in the present Writ Petition is, "Whether the order passed by 3rd respondent dated 09.06.2021, which is impugned in the present Writ Petition, is sustainable and tenable, in the facts and circumstances of the case."
10. The information available before this Court, in clear and unequivocal terms, discloses that the respondent- Corporation issued a show cause notice on 02.03.2021 alleging violation of a number of clauses of ITDG, and informing the petitioner that vehicle bearing Registration No.AP16TW 9287 was being blocked and would be blacklisted under clauses 8.2.1 and 8.2.2.5 of the ITDG. It is also not in dispute that in response to the said show cause notice, petitioner herein submitted an explanation. But the fact remains that the petitioner herein did not deny the allegations against the driver of the subject vehicle, and 7 on the other hand, stated that the petitioner herein removed the said driver and also expressed the concern about the incident. Vide impugned order dated 09.06.2021, the respondent-Corporation terminated the contract, pertaining to all the 6 vehicles and also ordered blacklisting, apart from forfeiting the security deposit + GST.
11. Copy of the complaint dated 12.02.2021 received from BPCL COCO Outlet is filed along with the counter as material paper. Paragraph No.2 of the said complaint reads as under:
"On the morning of 10 Feb 21, tank lorry driver of Tank Lorry Regd. No.AP16TW 9287 had been seen pilfering the liquid by tampering with Valve Control Box and the activity was caught on a video by our representative. The apprehension that some tank lorry drivers are playing mischief is confirmed. A closer examination of the Valve Box of the said lorry revealed that it can be tampered without breaking the seal and the compartments main valves can be accessed to drain the liquid in the pipes in fully loaded condition. In the light of the above, the said tank lorry may be subjected to fresh calibration and through internal visual examination. In the interim, it is requested that it may not be assigned any loads."8
As rightly pointed out by the learned counsel for the petitioner, in the said complaint, nothing was alleged against the contractor.
12. In this context, it may also be appropriate to refer to the relevant clauses in the ITDG. Clause 8.2.1 reads as follows:
"Malpractices/irregularities will cover any of the following:
a. ....
k. Tampering with standard fitting of TT
including the sealing, security locks, security locking system, calibration, Vehicle Mounted Unit or its fittings/fixtures.
..."
Clause 8.2.2 deals with 'Penalties upon detection of malpractice/irregularities'. According to 8.2.2.5, for the malpractice/irregularity of '(a) Established tampering/ damaging of VMU; (b) Established disconnection of power/ cable of VMU enroute; (c) Removal of VMU from original mounting', the penalty for the first instance is blacklisting of T.T.
13. While referring to clause 8.2.2.5, it is submitted by Sri G.Venkata Reddy, learned counsel for the petitioner that the authorities are empowered to blacklist only the tank truck vehicle in respect of which the allegations 9 cropped up. It is also the submission of the learned counsel that as per the said guidelines, since the present incident is the first incident, apart from blacklisting the subject vehicle, Rs.1.00 lakh towards damages can be imposed. Relevant paragraph of the said guidelines reads as under.
"During the validity of transportation contract, in the first instance of blacklisting for a transporter, as per the above provisions, damage of Rs.1 Lakh will be imposed on the Transporter apart from blacklisting of the involved TT. In second instance of blacklisting, a damage of Rs.3 Lakhs will be imposed and the involved TT will be blacklisted. In third instance of blacklisting, a damage of Rs. 5 Lakhs will be imposed and 25% of the remaining TTs will be blacklisted along with the involved TT. In fourth instance, a penalty of Rs.8 Lakhs will be imposed and 50% of remaining TTs will be blacklisted along with involved TT. In case of any further incident of malpractice, the entire fleet will be blacklisted and the SD will be forfeited and the transportation contract will be terminated. The percentage of TT blacklisted will be in proportion of own and attached offered and will be rounded off to the higher numeral."
It is very much clear from a reading of the above that in respect of the first incident, apart from blacklisting, 10 damages of Rs.1.00 lakh can be imposed on the Contractor in respect of the vehicle involved in irregularity.
14. Learned Standing Counsel for the respondent- Corporation seeks to justify the impugned action by referring to the following portion of the guidelines.
"In the following irregularities, the complicity of the carrier shall be deemed to be existent and the whole contract comprising of all the TTs belonging to the concerned carrier shall be terminated, security deposit forfeited and the concerned carrier & their all TTs shall be blacklisted on industry basis.
1. False/hidden compartment, unauthorized fittings or alteration in standard fittings affecting Quality and Quantity.
2. Illegal/unauthorized duplicate keys of security locks.
3. Duplicate dip rod/calibration chart."
15. On the other hand, Sri G.Venkata Reddy, learned counsel for the petitioner, strenuously resisting the said contention, submits that since the respondents herein have completely given a go-by to the principles of natural justice, the respondents cannot invoke the said portion of the guidelines for terminating the entire contract. It is also the submission of the learned counsel that in the show cause notice also, the respondents indicated that driver 11 had only attempted to pilfer the product and never alleged that he committed pilferage.
16. There is also nothing on record to show that the respondent-authorities communicated investigation report dated 23.02.2021 to the petitioner herein, and the fact remains that the same was also not referred to, in the show cause notice. Having regard to the reasons mentioned supra, the respondents cannot take shelter under the Disciplinary Guidelines to resort to the impugned action in respect of the other five vehicles.
17. It is also significant to note in this context that in the impugned order, the respondents herein also did not indicate the period of blacklisting. According to clause 8.2.3 of the ITDG, blacklisting period shall not exceed 5 years and cannot be perpetual. On this ground also, the impugned action cannot sustain.
18. In the considered opinion of this court, the mode and manner in which the respondents herein dealt with the matter is highly illegal, arbitrary and violative of Article 14 of the Constitution of India, besides being opposed to the principles of natural justice.
19. For the aforesaid reasons, Writ Petition is partly allowed, setting aside the Order passed by 3rd respondent 12 vide SR.DGM.TPT.4, dated 09.06.2021, to the extent of the tank lorries bearing Nos.AP 31 TF 4588, AP 36Y 0741, AP 16TW 6583, AP 31TG 9888 and AP 31TG 9288, except the tank lorry bearing Registration No.AP16TW 9287. It is further directed that the respondents shall issue necessary clarification about the period of blacklisting for the vehicle bearing registration No.AP16TW 9287 as per clause 8.2.3. of the ITDG.
No order as to costs of the Writ Petition.
As a sequel, interlocutory applications pending, if any, in the Writ Petition shall stand closed.
__________________ A.V.SESHA SAI, J 28.09.2021 DRK 13 THE HONOURABLE SRI JUSTICE A.V.SESHA SAI WRIT PETITION No.12832 OF 2021 28.09.2021 DRK