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2. The petitioner-firm obtained a Gas Agency from M/s. Bharat Petroleum Corpn. under scheduled caste quota and an agreement was executed for the same between Messrs Bharat Petroleum Corporation Ltd. and the petitioner on 21st March, 1983. The petitioner-firm were appointed as the distributors at Hathras in district Aligarh for the distribution of L.P.G. (Cooking Gas). Writ petition No. 7009 of 1986 arises out of a First Information Report lodged on 28-2-1986 at Police Station Hathras Gate, Hathras, District Aligarh u/S, 3/7, Essential Commodities Act, Crime Case No. 45, both as against the Proprietor Shyam Lal Maurya as well as against the Manager of the petitioner firm. The charges levelled in the FIR were that the distribution of the gas cylinders was not made to the proper persons and the names of four persons were given to show that gas was alleged to have been issued to them but they did not receive the same. Further, the rate board and stock board were not properly maintained. It referred the violation of cls. 3, 4, 5 and 8 of U.P. Essential Commodities (Display of Prices and Stocks and Control of Supply and Distribution) Order, 1977. There were some other charges also levelled in the FIR. On account of verification by the Audit Department the godown and the show-room of the petitioner was alleged to have been closed from 22nd to 27th February, 1986, and the FIR was lodged on the next day, i.e. 28th February, 1986. Both the proprietor and the Manager of the firm filed a petition in this Court u/S. 482, Cr. P.C. wherein arrest of these two persons were stayed. On the date, the raiding party reached the godown of the petitioner the District Supply Officer also ordered for the sealing of the godown. The petitioner further urged that the police investigation reached the conclusion that no case was made out against the petitioner-firm or against its Proprietor or the Manager. Further, it was alleged that the aforesaid 1977 Order does not apply to the petitioner-firm as they are neither retailer or wholesaler but they are only distributor and in any case the petitioner had not committed any offence under the aforesaid Order. Thus, they sought for quashing of the aforesaid FIR along with the quashing of orders dated 7th March, 1986 (Annexure 5), 24th March, 1986 (Annexure 6), 29th March, 1986 (Annexure 8) and 24th April, 1986. In fact, Annexure 5 is a letter dated 8th March, 1986, of the A.D.M. (Civil Supplies) directing Hathras Gas Agency to undertake the distribution of gas cylinders of the petitioner, which were seized on 28-2-1986 and thereafter this order was amended by means of order dated 24th March, 1986 (Annexure 6 to the petition). Thereafter, it was directed that the said gas cylinders of the petitioner should be distributed by the U.P. State Food and Essential Commodities Corporation Ltd. through its District Manager. Similarly, notice dated 29th March, 1986 (Annexure 8 to the petition) was issued u/ S. 3(1) of the U.P. Accommodation Requisition Act, 1947, for requisitioning the go-down, which had been sealed. This proceeding, according to the petitioner, was taken in addition so as to sustain the illegal action in case of its failure on prosecuting the petitioner under the Essential Commodities Act and finally the concerned authority passed an order dated 24th April, 1986 (Annexure 10) requisitioning the said godown u/S. 3(2) of the said Act. On 17th July, 1986, this Court stayed the operation of the three impugned orders dated 7-3-1986 (Annexure 5), order dated 24-3-1986 (Annexure 6) and dated 24th April, 1986 (Annexure 10).

It was in pursuance to this order the opposite parties released the gas cylinders worth Rs. 16,535/- to the petitioner. It is also relevant to mention here that on 2nd April, 1990, the Special Judge (B.C. Act) Aligarh in Crl. Case No. 22 of 1987 acquitted Shyam Lal Maurya, Proprietor of the petitioner, from the charges u/S. 3/7, Essential Commodities Act, but the Manager of the petitioner, Satya Pal Singh, was found guilty for violating cl. 8 of U.P. Essential Commodities (Display of Prices and Stocks and Control of supply and Distribution) Order, 1977. The Manager as against the said conviction and sentence filed Appeal No. 920 of 1990 in this Court and the appeal was admitted and the operation of the order dated 2nd April, 1990, was stayed.

12. On 28th February, 1986, a FIR against the petitioner u/S. 3/7, Essential Commodities Act, in Crime Cas No. 45 at Police Station Hathras Gate, Hathras, District Aligarh, was lodged both against the proprietor Shyam Lal Maurya as well as against Manager of the petitioner firm S. P. Singh. On the same day, petitioner's godown was also sealed. After the sealing of godown the A.D.M. (Civil Supply) wrote a letter on 3rd March, 1986, to the Corporation for terminating the petitioner's gas agency. Further, as per para 7 of the counter affidavit in Writ Petition No. 8013 of 1987) the Corporation recived tetter dated 14th March, 1986 from the District Magistrate, Aligarh accompanied with a copy of the first information report from which the Corporation came to know about criminal proceedings initiated against the petitioner. Thereafter, on the 7th March, 1986, the A.D.M. (Civil Supply) directed the Hathras Gas Agency to undertake the distribution of gas cylinders of the petitioner, which was seized. This order was amended on 24th March for distribution through U.P. State Food and Essential Commodities Corporation. The petitioner further alleged, in the midnight of 24/25th March, 1986, Tahsildar Hathras along with a number of persons broke open the lock of the godown of the petitioner-firm without informing the petitioner and in spite of the resistence by the watchman of the petitioner. Intimation regarding this was sent by the watchman through telegram to the higher authorities including the Chief Minister, U.P. and the Petroleum Minister, Government of India. On 29th March, 1986, notice was issued u/S. 3(1) of U.P. Accommodation Requisition Act, 1947 for requisitioning the sealed godown of the petitioner and, then xx, on 24th April, 1986, final order requisitioning the said godown was passed. Finally, through letter dated 15th July, 1986, the agency of the petitioner was terminated. This letter reveals that the earlier original termination notice was sent to the petitioner on 31st March, 1986, which since returned undelivered was sent again on the 15th July, 1986. All these actions of the A.D.M. (Civil Suply) according to the petitioner was mala fide and was being taken on account of his annoyance as the petitioner did not effect free delivery and supply of gas cylinders to him and thus out of personal vendetta and annoyance passed the aforesaid several orders to dislodge the petitioner from its gas agency. Further, the termination of agency of the petitioner was on account of complaint and letter dated 3rd March, 1986, of the A.D.M. (Civil Supply) as aforesaid on account of the proceedings initiated by him under Essential Commodities Act and not an innocuous termination order under Cl. 28 of the agreement. The sequence of events according to the petitioner makes it clear that the action against the petitioner was not bona fide but was, in fact, mala fide and unsustainable in the eyes of law. In all these writ petitions except in Writ Petition No. 7009 of 1986 where a supplementary counter affidavit in reply to the supplementary affidavit has been filed on behalf of the State but no counter affidavit in spite of repeated times in other writ petitions has been filed by it. The state has denied the allegations of mala fide and has stated that the orders were passed in accordance with law and further stated that the A.D.M. (Civil Supply) was duty bound to send recommendations to the Corporation for cancellation of the distributorship of the petitioner as he was working against the provisions of the aforesaid Control Order of 1977. The Corporation in the counter affidavit filed (WP 15224/86) has taken a stand, as per agreed terms of the contract there was no question of giving any show cause notice to the petitioner before terminating the agency. However, the petitioner was earlier given opportunity to explain in respect of irregularities leading to the termination of his distributorship. Corporation further alleged the principle of natural justice cannot be applied in the realm of contractual obligation where party is governed by the terms of contract. It is alleged that the petitioner started overcharging for the refills for which the petitioner was warned on 8th November, 1983, and, in fact, he was further warned on the 11th August, 1984. Similarly, there was warning also issued on 4th March, 1985. Thereafter, audit was carried by the Divisional Manager, Bareilly and a registered warning was sent to the petitioner on 15th April, 1985. These complaints and some other have been referred in various sub-paras of para 7 of the counter affidavit. The petitioner denied each one of them in the rejoinder affidavit. According to him, most of these complaints were engineered by one Sri S. P. Bansal, one of the competitors of the petitioner. The petitioner did inadvertently calculate wrong rate of the Sales Tax on each cylinder which was collected by him, but later the same was deposited with the Sales Tax Department and the petitioner was issued receipt of the same. No irregularity was found in the audit and since only cylinder caps were found missing warning dated 18th April, 1987, was issued in this regard. Further, he sent all the moneys within time and only there was slight delay in sending monthly returns. Further, he annexed order of the S.D.M. that a direction was issued by him not to make home delivery and to make distribution from the godown itself and on this count no wrong could be attributed to the petitioner. Further, allegations made in para 7 (d) of the counter affidavit was investigated by the Senior Sales Officer and the Deputy Divisional Manager Sri V. P. Arora and it was found that the complaints were not genuine. Further, the Divisional Manager, Bareilly himself sent a detailed comments on 5th June, 1985 holding that the complaint was false. The petitioner further stated that the cylinders found under-weight as alleged in para 7(e) was not on account of petitioner's fault as when the raid was made by the Delhi Administration at Bharat Petroleum Limited L.P.G. bottling plant at Shakur Basti, seven out of twenty cylinders were found to be underweight by 150 gm. to one kg. Further, if anything wrong in addition was found by the audit party nothing was intimated to the petitioner in that regard.

35. In the present case, the aforesaid detailed facts reveal that during 1984-85 there seems to be some complaint against the petitioner for which inquiries were held, in some warnings were given to him and in another he was exonerated, but none of those complaints resulted into exercise of power by the Corporation under Cl. 28 for termination of his agency. The facts immediately preceding the termination of his agency are very relevant which dislose that everything started with the filing of the FIR dated 28th Feb. 1986, with sealing of the godown, communication by the A.D.M./D.M. to the Corporation for terminating petitioner's agency along with the making of alternative arrangement of the dealership with some one else. In fact, during the pendency of these proceedings in close proximity on the 29th March, 1986, notice for acquisition of petitioner's godown was issued and finally it was requisitioned on 24th April, 1986. It is this communication by the A.D.M. (Civil Supply) which triggered the Corporation for exercising power under Cl. 28 of the said agreement by terminating the agency of the petition. In the context even act of requisitioning the godown of the petitioner, which was sealed, gives colour to the happening at that time. However, it is on the record, subsequently the respondent authorities withdrew that requisition. On these facts we irresistibly come to the conclusion that the action of the Corporation was not plain and simple of exercising power under Cl. 28 but was on account of the initiation of the proceedings by the A.D.M. (Civil Supply) by lodging the FIR initiating proceedings u/S. 3/7, Essential Commodities Act. If the Corporation desired to terminate this agency on the basis of earlier complaints referred to in the counter affidavit it could have exercised that then. But we find Corporation itself, after inquiry, either exonerated the petitioner or issued warningto him. There seems to be gap between these earlier complaints and initiation of proceedings under Essential Commodities Act and the termination of the agency of the petitioner being in the immediate vicinity of proceedings under Essential Commodities Act we come to the inevitable conclusion that it was made on account of these later proceedings. It is not in dispute, in this case, after initiation of the said proceedings and before terminating the agency of the petitioner the Corporation did not confront the petitioner with the charges levelled in the FIR or the Corporation ever gave any opportunity to the petitioner to explain the allegations made as against him in the FIR. By merely filing the FIR or initiation of proceedings on the basis of FIR a contract of agency between the petitioner and the Corporation cannot be terminated unless the Corporation itself comes to the conclusion that the petitioner had committed wrong. And before coming to this conclusion fairness demands that it was incumbent on the Corporation to have at least given an opportunity to the petitioner to explain it before terminating the agency. In fact, the petitioner has shown even though serious accusations were sought to be made in the FIR by the respondent-State authority, but in the proceedings u/S. 3/7, Essential Commodities Act, the proprietor of the petitioner firm has been acquitted and only the Manager was convicted and that too confining to the violation of Cl. 8 of the aforesaid Control Order, that he did not specify the price and the details in the notice board as required under the said order. Even this conviction and sentence under cl. 8 of the aforesaid Order is subject matter of appeal pending in this Court in which order of sentence has been stated.