Allahabad High Court: In a writ petition directed against the impugned order passed by the Executive Director, Indian Oil Corporation Ltd (‘Corporation’), by which the appeal preferred by the petitioners has been rejected, Piyush Agrawal, J., while allowing the writ petition said that the dispensing units are being sealed by the Corporation as well as by the Weight and Measurement Department, but neither any discrepancies have been pointed out at any stage with regard to any manipulation in the sealing of the dispensing unit, nor the sealing was found to be tampered or broken at any stage. Thus, no adverse inference can legally be drawn against the petitioners. Further, it has directed Corporation to resume the supply of the petitioners’ retail outlet within a period of one week from the date of the certified copy of this order.
In the present case, the petitioners were appointed as a retail outlet dealer of the Corporation in the rural area in the name of Kisan Seva Kendra and after due exercise being followed as per the procedure prescribed by the Corporation, the petitioners were given dealership on 30-11-2007. Thereafter on 18-10-2008, the dealership agreement was executed. At the retail outlet of the petitioner, two dispensing units were installed, one for petrol and other for diesel, by the Corporation. On 09-03-2017, the State as well as Corporation made inspection of the petitioners’ outlet, but no discrepancy was found as seals put by both the Departments were intact. On 06-05-2017, the Corporation again conducted a survey, in which some discrepancies were found in one of the dispensing units, like the mother board appears to be tampered. Thereafter, on 26-06-2017, a fact-finding letter was issued by the Corporation to which the petitioner submitted its reply on 29-06-2017.
Thereafter, a show cause notice was issued to the petitioners, mentioning the shortcomings and impression of extraneous fitting is in violation of Clauses 16, 44 and 58(m) of the dealership agreement in one of the dispensing units and to which they submitted its reply. Thereafter, an order was passed terminating the dealership agreement of the petitioners on the ground of violation of Clauses 16, 44 and 58(m) of the agreement. Aggrieved, the petitioner preferred a writ petition, which was dismissed in view of arbitration clause. Thereafter, arbitration proceedings were initiated, and an award was passed in favour of the petitioner.
The petitioner raised a preliminary objection about the maintainability of the writ petition by submitting that the present writ petition is arising out of non-statutory contract for which a writ petition is not maintainable, and it is not a case where this Court may exercise its extra-ordinary jurisdiction under Article 226 of the Constitution of India. He further submitted that the petitioners may be relegated to avail its alternative remedy by invoking civil jurisdiction.
The petitioner submitted that this is the sixth round of litigation, but the objection with regard to maintainability of the writ petition was never raised earlier. He further submitted that this Court on various occasions, on almost identical set of facts, not only maintained the writ petition, but also directed for resuming the supply of HSD supply to the petitioners therein.
After taking note of Chaudhary Filling Point v. State of U.P., 2019 SCC OnLine All 3620, the Court viewed that the instant writ petition is maintainable and the same is being entertained as neither any civil suit, nor other effective and efficacious remedy, as the restoration of the dealership is available to the petitioners.
Further, concerning the reliance of Corporation on Tata Cellular v. Union of India, (1994) 6 SCC 651 wherein it was held that the terms of the invitation to tender as well as allotment cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. The decision to accept the tender or award the contract is reached by the process of negotiations through several tiers and such decisions are made qualitatively by experts. The Court said that the case in hand is entirely different as it is not a case of allotment of retail outlet but running retail outlet has been terminated based on some inspection being made by the Corporation. Thus, this judgment is of no aid to the Corporation.
The Court took note of clauses 16, 44 and 58(m) of the dealership agreement, and clause 5.1.4 of the Marketing Discipline Guidelines, 2013, and said that no manipulation or tampering should be made and if any addition, removal or manipulation of any part of the dispensing unit or its mechanism like software is done, the same will be deemed to be tampering with the dispensing unit and appropriate decision will be taken accordingly.
Further, after perusing the impugned order, the Court said that it is not a case of either of the parties that any mother board of one of the dispensing units alleged to be manipulated and only impression was found. Neither any attachment, nor any extra wire or extra body was found and not a word was there in the impugned order. Only references have been made with regard to clause 5.14 of the Marketing Discipline Guidelines of 2013. Thus, it said that in absence of any extra body or wire having been found or any report submitted by the Original Equipment Manufacturer (‘OEM’), the impugned order cannot be sustained in the eyes of law.
Further, the Court noted that it is admitted to the parties that the dispensing unit was not a new unit. It is also not in dispute that the dispensing unit installed at the petitioners’ retail outlet was earlier used by Quality Retail Outlet and in the running condition, the same was installed at the petitioners’ retail outlet, which was dispensing oil till the date of survey, without any discrepancy.
The Court also said that negative onus cannot be fastened upon the petitioners as alleged by the Corporation, as it is not in dispute that at the time of survey, the dispensing unit was not in working condition or it was not dispensing oil.
Further, it said that after perusing relevant clauses of the dealership agreement and the Marketing Discipline Guidelines, the Court could make a presumption against the petitioners that some manipulation has been done, but the presumption has to be proved by the Corporation by cogent materials to show that there was irregularity in dispensing unit, but the report submitted by the OEM does not say so. Thus, it was held that the impugned termination order cannot be sustained in the eyes of law.
[Aliganj Kisan Seva Kendra v Indian Oil Corporation Ltd, 2023 SCC OnLine All 821, Order dated 04-09-2023]
Advocates who appeared in this case :
Counsel for Petitioner: Advocate Yash Padia
Counsel for Respondent: Advocate Anand Tiwari
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