# M/s ATTS Associates v. B.P.C.L. & Ors

- **Citation:** (2022) 12 ILRA 388
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-10-11
- **Case number:** Writ-C No. 16713 of 2022
- **Bench:** Manoj Misra, Vikas Bushwar
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-atts-associates-v-b-p-c-l-ors-48026
- **Pages:** 13

## Headnote

A. Constitution of India - Article 226 -
Writ - Alternative remedy - Petitioner's
firm
was
blacklisted
-
Violation
of
fundamental
right
guaranteed
under
Article 19(1)(g) as well as of principle of
natural justice claimed - Preliminary
objection of availability of alternative
remedy, how far acceptable - Whirlpool's
case relied upon - Held, since the order of
blacklisting
the
entire
fleet
of
the
petitioner firm affects the fundamental
right of the petitioner guaranteed under
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
389
Article 19(1)(g) of the Constitution of
India and it is claimed to have been
passed in violation of the principles of
natural justice, the preliminary objection
as regards maintainability of the writ
petition is liable to be overruled. (Para 5)
B. Constitution of India - Article 14 -
Principle of natural justice - Blacklisting
of the firm - Show Cause notice - Two
essential requirements of show cause
notices laid down - Gorkha Security
Services's case relied upon - In the
context
of
blacklisting
to
fulfil
the
requirements of principles of natural
justice, the show cause notice should
meet the following two requirements: (i)
It must St. the material/grounds on which
action is necessitated; and (ii) It must St.
the particular penalty/action which is
proposed to be taken - High Court found
the impugned notice fails to fulfil the
second requirement, hence set aside the
order of blacklisting the firm. (Para 13, 17
and 19)
Writ petition allowed. (E-1)
List of Cases cited:

## Text

388 INDIAN LAW REPORTS ALLAHABAD SERIES
not raising any further construction
upon the land in question, the authorities
including civil administration should
avoid taking any coercive measure
pursuant to the order appealed against
until the disposal of interim relief
application. The Appellate authority
may also consider granting interim relief
on the very first day of filing of appeal
with stay application if above conditions
are fulfilled by the appellant.

(ix) The appellate authority
should as far as possible decide the
appeal within a period of two months of
its presentation.

75. India lives largely in villages and
still by and large is an agregarian economy.
The State of Uttar Pradesh is no exception.
Accordingly, I may observe here that rules
of procedure deserve to be suitably
amended
by
the
State
Government
incorporating above guidelines for leaving
no scope for any arbitrariness that is seen
largely as influencing the decision making
process by the authority, may be for local
village politics.

76. In view of above all these writ
petitions connected together are hereby
allowed. The impugned orders passed
therein
both
by
the
Assistant
Collector/Tehsildar concerned and the
appellate authority as the case may be, are
hereby set aside. Individual cases in
petitions are remitted to the Assistant
Collector to decide afresh in the light of the
observations and guidelines made in this
judgment. The liberty also rests with the
petitioners to raise plea of 67-A if not taken
within three weeks from today, if so
advised.

77. Before parting , I must appreciate
learned Additional Chief Standing Counsel
Mr. Abhishek Shukla and the learned
Standing Counsel Sri R.S.Umrao, Sri Rahul
Malviya, Sri Anand Bhaskar Srivastava and
battery of learned Standing Counsel with
them and also learned Advocates appearing
for the respective Gaon Sabhas of the State,
as well as learned Advocates appearing for
the respective petitioners for their valuable
assistance in this matter of great public
importance.

78. Original records are returned to
the Additional Chief Standing Counsel
forthwith.
----------
(2022) 12 ILRA 388
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 11.10.2022

BEFORE

THE HON'BLE MANOJ MISRA, J.
THE HON'BLE VIKAS BUSHWAR, J.

Writ-C No. 16713 of 2022

M/s ATTS Associates ...Petitioner
Versus
B.P.C.L. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Udit Chandra

Counsel for the Respondents:
Sri Puneet Agarwal

A. Constitution of India - Article 226 -
Writ - Alternative remedy - Petitioner's
firm
was
blacklisted
-
Violation
of
fundamental
right
guaranteed
under
Article 19(1)(g) as well as of principle of
natural justice claimed - Preliminary
objection of availability of alternative
remedy, how far acceptable - Whirlpool's
case relied upon - Held, since the order of
blacklisting
the
entire
fleet
of
the
petitioner firm affects the fundamental
right of the petitioner guaranteed under
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
389
Article 19(1)(g) of the Constitution of
India and it is claimed to have been
passed in violation of the principles of
natural justice, the preliminary objection
as regards maintainability of the writ
petition is liable to be overruled. (Para 5)
B. Constitution of India - Article 14 -
Principle of natural justice - Blacklisting
of the firm - Show Cause notice - Two
essential requirements of show cause
notices laid down - Gorkha Security
Services's case relied upon - In the
context
of
blacklisting
to
fulfil
the
requirements of principles of natural
justice, the show cause notice should
meet the following two requirements: (i)
It must St. the material/grounds on which
action is necessitated; and (ii) It must St.
the particular penalty/action which is
proposed to be taken - High Court found
the impugned notice fails to fulfil the
second requirement, hence set aside the
order of blacklisting the firm. (Para 13, 17
and 19)
Writ petition allowed. (E-1)
List of Cases cited:
1. Whirlpool Corporation Vs Registrar of Trade
Marks; (1998) 8 SCC 1
2. Radha Krishan Industries Vs St. of H.P.;
(2021) 6 SCC 771
3. Gorkha Security Services Vs Government
(NCT of Delhi); (2014) 9 SCC 105
4. UMC Technologies Pvt. Ltd. Vs F.C.I. & anr.;
2021 (2) SCC 551
(Delivered by Hon'ble Manoj Misra, J.
&
Hon'ble Vikas Budhwar, J.)

1. We have heard Sri Udit Chandra
for the petitioner and Sri Puneet Agarwal
for the respondents 1 to 5.

2. At the outset, the learned counsel
for the petitioner invited our attention to
paragraph no.1 of the writ petition to
indicate that first petition on the present
cause of action was withdrawn with liberty
to file a fresh petition therefore, the second
petition is maintainable. It be observed that
the first petition i.e. Writ C No. 34659 of
2021 was pending when this second
petition was filed, however, by the time this
second petition was filed, an application
had already been filed to withdraw the
previous petition and this fact was
disclosed
in
this
petition.
In
these
circumstances, we deem it appropriate to
address this petition on merit as any view
to the contrary may render the petitioner
remediless.

3. The relevant facts of the case are as
follows: The petitioner is a firm engaged in
the business of transportation of petroleum
products. On an invite by Bharat Petroleum
Corporation Ltd (for short the Corporation)
to settle a contract for transportation of its
products, the petitioner submitted a bid and
was declared successful. Pursuant to which,
an agreement was entered into between the
petitioner
and
the
Corporation
on
16.01.2018,
initially,
in
respect
of
engagement of 5 vehicles, which was
subsequently enhanced to 14, for a period
of
5
years.
During
the
period
of
engagement, on 03.10.2021 a vehicle (Tank
Lorry No. UP 85 BT 6975) was seized by
the police on charge of pilferage of
petroleum products. An FIR was also
lodged, followed by impugned notices
dated 3.10.2021 (Annexure no.1 to the
petition) and 6.10.2021 (Annexure no.2 to
the petition), which culminated in passing
the impugned order dated 9.12.2021
(Annexure 3 to the petition). The petitioner
seeks quashing of the notices dated
03.10.2021 and 06.10.2021; and the order
dated 09.12.2021 by which, for breach of
the terms and conditions of the agreement
between the petitioner and the corporation,
390 INDIAN LAW REPORTS ALLAHABAD SERIES
the petitioner has been visited with penal
action as enumerated below:-

"1. Damages of Rs. 1 lac.

2. Forfeiture of Security deposit
of all tank lorries amounting to Rs. 5 lacs.

3.
Termination
of
Transport
Agreement BPCL/ NR/ POL/ BULK/ 201621/ Mathura dated 16.01.2018, with
immediate effect, including blacklisting the
entire fleet along with crew of following
14 tank lorries on Industry basis for a
period of 5 years. The period of
blacklisting
shall
be
effective
from
03.10.2021 to 02.10.2026.

S
L
TL
Regn
No.
T
L
C
ap
(K
L)
Engine
No.
Chasis No.
1
.
UP85
BT598
5
20
.0
0
41K84186
239
MAT44802
2EAN1039
1
2
.
UP85
BT543
2
20
.0
0
59180311
1L840275
99
MAT44803
0B7N53211
3
.
UP85
BT598
6
20
.0
0
41K84188
654
MAT44802
2E5N12567
4
.
UP85
BT645
5
20
.0
0
41K84187
223
MAT44802
2EAN1033
5
5
.
UP85
BT615
5
20
.0
0
41K84187
367
MAT44802
2EAN1033
9
6
.
UP85
BT697
5
20
.0
0
11C63106
431
MAT44805
0B0C05536
7
.
UP85
BT853
5
20
.0
0
91F84890
128
MAT44861
K0G09311
8
.
UP30
A8585
20
.0
697TC5M
SZ155320
444026MS
Z021199
0
9
.
UP86
T0831
20
.0
0
ZFH37663
6
ZFE80601
1
0
.
UP85
U9216
20
.0
0
697TC57
DRZ12161
8
444026DR
Z008569
1
1
.
UP14
CT26
47
20
.0
0
11D84003
889
MAT44805
0BOE0929
3
1
2
.
UP85
U9996
20
.0
0
697C58B
QZ106256
46910191D
08923
1
3
.
UP85
V9036
20
.0
0
697TC58B
QZ102603
46910BQZ
104177
1
4
.
NL01
N4181
24
.0
0
BEFZL14
675
MA1PFAL
BCF6L485
23

4. A preliminary objection has been
raised by the learned counsel for the
corporation with regard to maintainability
of the writ petition as there exists an
alternate dispute resolution mechanism
(ADR mechanism) in the agreement
between the parties. In response thereto, the
learned counsel for the petitioner submitted
that the order of blacklisting affects the
fundamental
right
of
the
petitioner
guaranteed under Article 19(1) (g) of the
Constitution of India and is in violation of
the principles of natural justice, inasmuch
as, the notices that form the basis of the
order do not conform to the requirement of
law, both in content and form, as they fail
to put the petitioner on guard that an order
of blacklisting is contemplated against it. In
such
circumstances,
it
is
contended,
existence of an alternative remedy is no bar
to the exercise of writ jurisdiction.

5. With regard to the preliminary
objection, we are of the view that since the
order of blacklisting the entire fleet of the
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
391
petitioner firm affects the fundamental right
of the petitioner guaranteed under Article
19(1)(g) of the Constitution of India and it
is claimed to have been passed in violation
of the principles of natural justice, in light
of the law laid down by the Supreme Court
in Whirlpool Corporation v. Registrar of
Trade Marks, (1998) 8 SCC 1 (followed
in Radha Krishan Industries v. State of
H.P., (2021) 6 SCC 771, paragraph 27.3),
we overrule the preliminary objection as
regards maintainability of the writ petition
to the extent it questions the order of
blacklisting. However, in respect of other
penalties, the petitioner may take recourse
to the ADR mechanism available under the
agreement. We, therefore, propose to
address only the issue of blacklisting. For
rest of the issues, the petitioner may take
recourse to other alternative remedies.

6. On the issue of blacklisting, Sri
Udit Chandra, learned counsel for the
petitioner, invited our attention to the
impugned notices dated 03.10.2021 and
06.10.2021 to demonstrate that neither of
the two notices unequivocally inform the
petitioner that if the explanation submitted
by the petitioner on the allegations made
therein is found not satisfactory, the entire
fleet of vehicles of petitioner's firm shall be
blacklisted on industry basis. On that basis,
it is urged, the order of blacklisting is bad
in law.

7. To test the aforesaid submission it
would be apposite to notice the contents of
the two notices. The relevant portion of the
notice dated 03.10.2021 is reproduced
below:-

"Sub: Tank Lorry no. UP85BT
6975 caught by police while pilfering the
product.

Your tank lorry no. UP85BT 6975
which is in transport contract with BPCL
Mathura. This tank lorry was despatched
vide
invoice
no.
1100883752
dated
03.10.2021 to M/s Sunil Yogesh filling stn.
with 5 kl MS & 15 KL HSD.

A phone call received from mob
no. 918077105018 from police station
IOCL refinery that the subject tank lorry
caught by police while pilfering the product
from the tank lorry.

If this information is correct then
it is a violation of transport agreement and
ITDG which you had signed with the
corporation and company may take action
against the tank lorry as well as your
transport.

As per the following clauses of
ITDG

ITDG
Clause
No
Description
Penal
action as
per ITDG
8.2.2.8
Established case
of pilferage/nondelivery
of
product
TT
shall
be
blacklisted
8.2.2.16
Any act of the
carrier/carrier's
representative
that
may
be
harmful to the
good
name/image
of
the oil company,
its product or its
services
As
decided by
the
company.

Provide your explanation for
violation of your subject tank lorry."

8. The relevant portion of the second
notice dated 06.10.2021 is extracted
below:-
392 INDIAN LAW REPORTS ALLAHABAD SERIES

"Subject: Show Cause Notice-
Established Malpractrice in your Tank
Lorry no. UP 85BT 6975"

Reference: Tender Ref: BPCL
/NR /POL /BULK /2016-21/ MATHURA
AND
OIL
INDUSTRY
TRANSPORT
DISCIPLINE GUIDELINES (VER 4.0)

Dear Sir/Madam

In continuation of our mail dated
03.10.2021, when it was informed to you
that your tank lorry number UP 85 BT
6975 was caught by police wherein crew of
the tank lorry Sri Bhagwan Singh S/o Sri
Raja Ram was pilfering product at an
unauthorised stoppage. Police reported
that duplicate key also recovered from him.

This tank lorry was loaded from
Mathura installation with 5 kl MS & 15 KL
HSD on 03.10.2021 to M/s Sunil Yogesh
filling station, Bajna, District Mathura (cc
number
171590)
vide
invoice
no.
1100883752.

The following clauses of Oil
Industry Transport Discipline Guidelines
(Ver 4.0) have been violated inter alia:-

8.2.2.2 (a) :
Established
unauthorized stoppage en-route

8.2.2.8 :
Established case of
pilferage/non-delivery of product

8.2.2.11 :

Tampering
with the standard fittings of TT including
the sealing, security Locks, security locking
system.

8.2.2.16 :

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: :
llegal/
unauthorized duplicate keys of security
locks"

FIR is also lodged having the
number 0386 dated 03.10.2021 under IPC
1860, section 379, 411 and 120-B. It is
clearly mentioned in the FIR that tank lorry
was caught near gate no. 9 of IOCL
refinery and TT crew Shri Bhagwan Singh
S/o Shri Raja Ram is one of the main
accused in this case. A video also shared by
the police about this incident.

Viewing above, it is clear that
you have failed to keep your obligations
under
the
aforesaid
OITD
Guidelines/Agreement
entered
by
in
between us inter alia causing breach of the
same. You are required to submit your
reply in writing within 7 days as to why
action against you should not be taken for
the violations as per Oil Industry Transport
Discipline Guidelines under Clause 8.2.2.2
(a), 8.2.2.8, 8.2.2.11 and 8.2.2.16 and 8.2
(Point No.2)."

9. The contention of the learned
counsel for the petitioner is that admittedly
it was the first violation alleged; that
according to Clause 8.2.2.2(a) of Oil
Industry Transport Discipline Guidelines
(OITDG) in respect of first violation,
penalty prescribed is suspension of TT for
three months (Note: The term ''TT' stands
for Tank Truck/Tank Lorry vide Clause 1.1
of OITDG). Clause 8.2.2.8 of OITDG, in
case of first violation, provides for
blacklisting of TT; Clause 8.2.2.11, in
respect of first violation, provides for
blacklisting of TT; Clause 8.2.2.16 does not
specify any penalty but declares that the
penalty may be as decided by the
Corporation; and Clause 8.2.2 is non
specific in the sense that it is a general
provision describing various penalties for
malpractices/irregularities.
Consequently,
the notices did not specifically speak of
blacklisting and neither Clause 8.2.2.2 (a)
nor Clause 8.2.2.8 or Clause 8.2.2.11 or
Clause 8.2.2.16, recited in the notice,
provides for blacklisting the entire fleet of
the
transporter,
hence
the
order
of
blacklisting is in violation of the principles
of natural justice and does not meet the
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
393
requirement of a valid notice as per the law
laid down by the Apex Court in Gorkha
Security Services v. Government (NCT of
Delhi), (2014) 9 SCC 105 followed in
UMC Technologies Private Limited v.
Food Corporation of India and another,
2021 (2) SCC 551.

10. Per contra, Sri Puneet Agarwal, who
appears
for
the
respondent-corporation,
submitted that since the relevant provisions
under which penalty of blacklisting can be
imposed have been recited in the notice and
the malpractices mentioned in the notice are
such where penalty of blacklisting the entire
fleet can be imposed, the petitioner being privy
to the contract and aware of applicability of the
Oil Industry Transport Discipline Guidelines
(OITDG), no prejudice has been caused to the
petitioner for mere omission to state in the
notice that if the reply of the petitioner is not
satisfactory,
the
petitioner
would
be
blacklisted. In support of his submission, the
learned counsel for the respondent-corporation
has invited our attention to Clause 8.2 of the
OITDG which specifies the penalties for
malpractices/irregularities.
Clause
8.2
of
OITDG is extracted below:-

"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/enroute switching off VMU/unauthorized
removal of VMU/use of VMU on other
vehicles.

b. TT crew found in intoxicated
state while on duty.

c. Irregular reporting of TT at
loading location without permission of the
location.

d.
Refusal
to
carry
loads
allocated by the location.

e. Reported case of non-wearing
of retractable seat belt while driving.

f.
Driving
vehicle
without
cleaner/helper.

g.
Non-functioning
of
Fire
Extinguisher carried by TT.

h. Polluting environment due to
product spillage from tilting or leaky
vehicles on road, in case of accident/unsafe
driving.

I. Accident involving injury or
damages to the facilities at the work place.

j. Fatal accident at the work
place.

k.
Tampering
with
standard
fittings of TT including the sealing, security
locks, security locking system, calibration,
Vehicle
Mounted
Unit
or
its
fittings/fixtures.

l. Unauthorized use of TT for
products other than the petroleum products
for which it has been engaged.

m. Entering into contract based
on forged documents/false information.

n. Entering into an agreement for
the same TT with other oil companies.

o. Irregularities under W & M
Act.

p. Not lodging FIR with the
Police
in
case
of
accident,
not
informing/submitting accident report to the
Oil Company about the accident.

q. Pilferage/short delivery of
product.

r. 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
394 INDIAN LAW REPORTS ALLAHABAD SERIES
following
instances
shall
be
suspended/blacklisted along with TT crew.
However,
an
investigation,
wherever
required, shall be conducted and if the
malpractice/irregularity is established then
penal actions stipulated as under shall be
taken, including blacklisting:

Cla
use
No.
Type
of
malpractic
e/
irregularity
Penalty against number
of instance

First
Secon
d
Third
8.2.
2.1
(a)
Reported
nonwearing of
retractable
seat
belt
while
driving.
(b)
Repetitive/
Habitual
Over
speeding.
(c) Driving
vehicle
without
cleaner/hel
per.
TT
shall
be
suspe
nded
for
one
week.
TT
shall
be
suspe
nded
for 3
month
s.
TT
shall
be
blackl
isted.
8.2.
2.2
(a)Establis
hed
repetitive
unauthorized
stoppage
en-route.
(b)Establis
hed
repetitive
unauthorize
d diversion
from
specified
route.
(c)Refusal
to
carry
TT
shall
be
suspe
nded
for 3
month
s.
TT
shall
be
blackl
isted.

loads
allocated
by
the
location.
(d)Irregula
r reporting
of
TT
at
loading
location
without
permission
of
the
location.
8.2.
2.3
Short
delivery of
product for
established
malpractice
.
TT
shall
be
blackl
isted.

8.2.
2.4
(a)Nonavailability
/nonfunctioning
of TT fire
extinguishe
r.
(b)TT crew
found
in
intoxicated
state while
on duty.
(c)Not
wearing
uniform.
(d)
Not
wearing
PPEs
at
loading/unloading
locations.
TT
shall
be
suspe
nded
for
one
week.
TT
shall
be
suspe
nded
for 3
month
s.
TT
shall
be
blackl
isted.
8.2.
2.5
(a)Establis
hed
tampering/
damaging
of VMU.
(b)Establis
hed
disconnecti
on
of
TT
shall
be
blackl
isted.
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
395
power/cabl
e of VMU
enroute.
(c)
Removal of
VMU from
original
mounting.
8.2.
2.6
Accident at
the location
leading to
injury
of
persons or
damages to
the
facilities.
TT
shall
be
suspe
nded
for 3
month
s.
TT
shall
be
blackl
isted.

8.2.
2.7
Polluting
environmen
t
due
to
product
spillage
from TT.
TT
shall
be
suspe
nded
for 3
month
s.
TT
shall
be
blackl
isted.

8.2.
2.8
Established
case
of
pilferage/n
on-delivery
of product.
TT
shall
be
blackl
isted.

8.2.
2.9
Fatal
accident at
the
work
place.
TT
shall
be
blackl
isted.

8.2.
2.10
Irregulariti
es
under
W&M Act.
TT
shall
be
blackl
isted.

8.2.
2.11
Tampering
with
standard
fittings
of
TT
including
the sealing,
security
locks,
security
TT
shall
be
blackl
isted.

locking
system,
Calibration
.
8.2.
2.12
Unauthoriz
ed use of
TT outside
the
contract.
TT
shall
be
blackl
isted.

8.2.
2.13
Entering
into
contract
based
on
forged
documents/
false
information
.
TT
shall
be
blackl
isted.

8.2.
2.14
Entering
into
an
agreement
for
the
same
TT
with other
oil
companies.
TT
shall
be
blackl
isted.

8.2.
2.15
Not lodging
FIR
with
the Police
in case of
accident,no
t informing/
submitting
accident
report
to
the
Oil
Company
about
the
accident.
TT
shall
be
blackl
isted.

8.2.
2.16
Any act of
the
carrier/car
rier's
representat
ive
that
may
be
harmful to
the
good
name/imag
As
decide
d
by
the
comp
any.
396 INDIAN LAW REPORTS ALLAHABAD SERIES
e of the Oil
Company,
its'
products or
its services.

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 numerical.

Above damages imposed are in
addition to the recovery of the product
quantity found short or recovery due to
contaminated product involving the cost of
product, expenses and losses incurred as
determined by the company.

However, in case, complicity of
the transporter is established even in the
first instance of malpractice, the entire
fleet
will
be
blacklisted,
contract
terminated & carrier blacklisted along
with forfeiture of SD.

The blacklisting of TTs shall be
on industry basis.

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,
unauthorised fittings or alteration in
standard fittings affecting quality and
quantity

2. Illegal unauthorised duplicate
keys of security locks.

3. Duplicate dip rod/ calibration
chart"

11. Relying on the aforesaid clauses,
the learned counsel for the respondentcorporation submitted that it is clearly
mentioned in the notice that penalty
provided in Clause 8.2.2 can be imposed
and when all the penalties specified therein
are taken into account, one would notice
that it includes the penalty of blacklisting
of TTs on industries basis. Therefore, it
cannot be said that the petitioner was not
aware of the consequences that would
ensue if its reply was found nonsatisfactory. It has also been argued by the
learned counsel for the corporation that in
Gorkha Security Services v. Government
(NCT of Delhi) (supra) it has been
clarified by the Apex Court that even if it is
not specifically mentioned in the show
cause notice yet, if it can be clearly and
safely discerned that such penalty could be
imposed, it would be sufficient compliance
of the principles of natural justice. It has,
therefore, been urged that as the petitioner
was aware of the penalties which could be
imposed under various clauses of clause
8.2.2, there was sufficient compliance of
the principles of natural justice. More so,
when penalty for having a duplicate key is
blacklisting of TTs on industry basis. It was
therefore prayed that the petition be
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
397
dismissed with liberty to the petitioner to
avail the alternative remedy available under
the contract.

12.

Having
noticed
the
rival
submissions, the contents of the notices and
the relevant clauses of OITDG, before we
proceed to examine the weight of the
respective submissions, it would be pertinent
to observe that it is trite law that where an
order having penal consequences is passed in
violation of the principles of natural justice
then existence of an alternative remedy is not
an impediment in exercise of the writ
jurisdiction. Therefore, what we have to
examine is whether the order blacklisting the
entire fleet of the petitioner is in violation of
the principles of natural justice. To test
whether the order complies with the
principles of natural justice we would have to
ascertain whether the notices issued to the
petitioner
unequivocally
informs
the
petitioner that an order blacklisting his entire
fleet of TTs is contemplated and might be
passed if petitioner's reply is found not
satisfactory. In Gorkha Security Services v.
Government (NCT of Delhi) (supra), the
Supreme Court while expounding the law as
to what are the requirements of a valid show
cause
notice
preceding
an
order
of
blacklisting, in paragraphs 21 and 22,
observed as follows:-

"21) The Central issue, however,
pertains to the requirement of stating the
action which is proposed to be taken. The
fundamental purpose behind the serving of
Show Cause Notice is to make the noticee
understand the precise case set up against
him which he has to meet. This would
require the statement of imputations
detailing out the alleged breaches and
defaults he has committed, so that he gets
an opportunity to rebut the same. Another
requirement, according to us, is the nature
of action which is proposed to be taken for
such a breach. That should also be stated
so that the noticee is able to point out that
proposed action is not warranted in the
given case, even if the defaults/ breaches
complained
of
are
not
satisfactorily
explained. When it comes to black listing,
this requirement becomes all the more
imperative, having regard to the fact that it
is harshest possible action.

22) The High Court has simply
stated that the purpose of show cause
notice is primarily to enable the noticee to
meet the grounds on which the action is
proposed against him. No doubt, the High
Court is justified to this extent. However, it
is equally important to mention as to what
would be the consequence if the noticee
does not satisfactorily meet the grounds on
which an action is proposed. To put it
otherwise, we are of the opinion that in
order
to
fulfil
the
requirements
of
principles of natural justice, a show cause
notice should meet the following two
requirements viz:

i) The material/ grounds to be
stated
on
which
according
to
the
Department necessitates an action;

ii)
Particular
penalty/action
which is proposed to be taken. It is this
second requirement which the High Court
has failed to omit.

We may hasten to add that even if
it is not specifically mentioned in the show
cause notice but it can be clearly and safely
be discerned from the reading thereof, that
would
be
sufficient
to
meet
this
requirement."

13. From the observations of the
Apex Court what is clear is that in the
context of blacklisting to fulfil the
requirements of principles of natural
justice, the show cause notice should meet
the following two requirements:-
398 INDIAN LAW REPORTS ALLAHABAD SERIES

(i)
It
must
state
the
material/grounds
on
which
action
is
necessitated; and

(ii) It must state the particular
penalty/action which is proposed to be
taken.

The purpose of fulfilling the first
requirement is to enable the noticee to meet
the grounds on which the action is
proposed against him; whereas, the second
part enables the noticee to point out that the
proposed action is not warranted in the
given case, even if the defaults/breaches
complained
of
are
not
satisfactorily
explained.

14. On a careful reading of the notices
dated 03.10.2021 and 06.10.2021, what we
observe is that there is no clear disclosure
that if the reply of the petitioner's firm is
found unsatisfactory, the order blacklisting
its entire fleet may be passed. In the first
notice dated 03.10.2021 what is mentioned
is that if the information with regard to
pilferage from the Tank Lorry is found
correct then it is a violation of transport
agreement and OITDG which has been
signed
by
the
petitioner
with
the
Corporation and therefore, the Company
may take action against the Tank Lorry as
well as transporter as per clause mentioned
therein which we have already extracted
above. There is no clear indication in the
notice that if the allegations against the
petitioner were found substantiated then an
action to blacklist the entire fleet of
petitioner's firm might be taken. In view
whereof, we are of the considered opinion
that the notice dated 03.10.2021 cannot
form the basis of the order of blacklisting
the entire fleet of the petitioner.

15. In respect of the second notice
dated 06.10.2021, it is mentioned in the
notice that certain clauses of Oil Industry
Transport Discipline Guidelines recited
therein
have
been
violated.
Learned
counsel for the petitioner has challenged
the notice dated 06.10.2021 on the ground
that it fails to meet the second requirement,
which is, that it fails to state the particular
penalty/action contemplated against the
noticee. On the other hand, the learned
counsel for the corporation contended that
the notice recites those clauses under which
the order of blacklisting the entire fleet of
TTs on industry basis could be passed
therefore, there is substantial compliance of
the principles of natural justice and no
prejudice has thus been caused to the
petitioner.

16. At this stage, it would be useful to
extract the relevant part of the notice dated
06.10.2021 by which, according to the
corporation's
counsel,
the
second
requirement of a proper show cause notice
has been met. The same is extracted
below:-

"Viewing above, it is clear that
you have failed to keep your obligations
under
the
aforesaid
OITD
Guidelines/Agreement
entered
by
in
between us inter alia causing breach of the
same. You are required to submit your
reply in writing within 7 days as to why
action against you should not be taken for
the violations as per Oil Industry Transport
Discipline Guidelines under Clause 8.2.2.2
(a), 8.2.2.8, 8.2.2.11 and 8.2.2.16 and 8.2
(Point No. 2)."

17. The issue that falls for our
consideration is whether the disclosure in
the notice extracted above could be treated
as sufficient compliance of the second
requirement of a valid show cause notice
for imposing the penalty of blacklisting the
entire fleet of TTs. Notably, the notice
12 All. M/s ATTS Associates Vs. B.P.C.L. & Ors.
399
speaks of action that might be taken under
five specified clauses of OITDG. As to
what penalty each clause provides for is
thus relevant. We shall address it clausewise. In so far as clause 8.2.2.2 (a) is
concerned it relates to suspension of TT for
three months on first violation. In the
instant case, it is not the suspension of
Tank Lorry for three months but it is a case
where the entire fleet of TTs have been
blacklisted for five years. Thus, the penalty
awarded is not relatable to clause 8.2.2.2
(a). In so far as clause 8.2.2.8 is concerned
it relates to blacklisting of TT. It also does
not relate to blacklisting the entire fleet.
Accordingly, clause 8.2.2.8 is also not
relatable to the penalty awarded. Similarly,
Clause 8.2.2.11 is not relatable to the
penalty awarded as it relates to blacklisting
of TT and not the entire fleet. In so far as
clause
8.2.2.16
is
concerned
it
is
ambiguous as it does not specify any
penalty. It only leaves it to the discretion of
the corporation. Hence, mere mention of
clause 8.2.16 would not satisfy the second
requirement of a valid show cause notice.
In so far as Clause 8.2 (Point No.2) is
concerned, the same is an omnibus clause
which enumerates multiple penalties upon
detection of malpractices/ irregularities and
not just the penalty of blacklisting the
entire fleet of TTs. No doubt, under clause
8.2.2 there can be blacklisting of TTs on
industries basis but since there are several
other penalties specified therein mere
mention of clause 8.2.2 in the notice would
not satisfy the second requirement of a
valid show cause notice as noticed above
because, from it, it cannot be clearly and
safely inferred that the action proposed is
of blacklisting the entire fleet of TTs on
industries basis. We are therefore of the
considered view that the notice fails to
fulfil the second requirement of a valid
show cause notice as held by the Apex
Court in Gorkha Security Services v.
Government (NCT of Delhi) (supra).

18. The question that now arises for
our consideration is whether omission to
fulfil the second requirement of the notice
has caused prejudice to the petitioner. In
this context it would be apposite for us to
notice certain observations of the Apex
Court in Gorkha Security Services case
(supra) in the context of the submission that
the noticee suffered no prejudice even if the
proposed penalty of blacklisting had not
been specifically proposed in the show
cause notice. The Supreme Court in
paragraph 33 of its judgment, as reported,
negativing
the
submission
so
made,
observed :-

"Had the action of blacklisting
being specifically proposed in the showcause notice, the appellant could have
mentioned as to why such extreme penalty
is not justified. It could have come out with
extenuating circumstances defending such
an action even if the defaults were there
and the Department was not satisfied with
the explanation qua the defaults. It could
have even pleaded with the Department not
to blacklist the appellant or do it for a
lesser period in case the Department still
wanted
to
black
list
the
appellant.
Therefore, it is not at all acceptable that
non mentioning of proposed blacklisting in
the show cause notice has not caused any
prejudice to the appellant. This apart, the
extreme nature of such a harsh penalty like
blacklisting with severe consequences,
would itself amount to causing prejudice to
the appellant."

19. The above quoted observations
squarely apply on the facts of the instant
case. Consequently, the writ petition is
allowed. The order dated 09.12.2021 to the
400 INDIAN LAW REPORTS ALLAHABAD SERIES
extent it seeks to blacklist the entire fleet of
TTs of the petitioner's firm is set aside. In
so far as other penalties imposed by the
order dated 09.12.2021 are concerned, we
leave it open to the petitioner to take
recourse to other alternative remedies
including the alternate dispute resolution
mechanism which exists in the contract.
We, accordingly, do not express any
opinion in respect of those other penalties.
It is also clarified that quashing of the order
dated 09.12.2021 to the extent indicated
above will not come in the way of the
respondent-corporation to issue a fresh
show cause notice and pass a fresh order in
respect thereof, in accordance with law.
----------
(2022) 12 ILRA 400
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 30.11.2022

BEFORE

THE HON'BLE PRAKASH PADIA, J.

Writ-C No. 31056 of 2022

Yogendra Prasad ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Sri Anand Tiwari

Counsel for the Respondents:
C.S.C., Sri Ashutosh Pandey, Sri Ashish
Agrawal

A. Civil Law - UP Essential Commodities
(Regulation at Sale & Distribution) Rules
2013 - R. 13 (1) - Fair price Shop licence
- Subsequently allotted after cancellation
- Subsequent allottee, how far entitled to
be impleaded and hearing - Ram Kumar's
case relied upon - Subsequent allottee
should also be arrayed as a one of the
party before the authorities while hearing
the matter in respect of cancellation of
fair
price
shop
-
Held,
even
if
a
subsequent allottee does not have a
independent rights, he/she still has a right
to be heard and to make submissions
defending the order of cancellation. (Para
13 and 16)
Writ petition allowed. (E-1)
List of Cases cited:
1. Ram kumar Vs St. of U.P. & ors.; 2022 (11)
ADJ 229 (S.C.)
2. Civil Appeal No. 3668 of 2022; Pawan
Choubey Vs St. of U.P. & ors. decided on 6-52022
3. Special leave to Appeal (C) Nos. 37283-37284
of 2012; Sumitra Devi Vs St. of U.P. & ors.
decided on 8-10-2014
4. Poonam Vs St. of U.P. & ors..; (2016) 2 SCC
779
(Delivered by Hon'ble Prakash Padia, J.)

1. Heard, learned counsels for the
parties and perused the material on records.

2. By means of present writ petition,
petitioner is seeking for quashing of the
order dated 26-09-2022 passed by the
respondent No-2, Deputy Commissioner
(Food) Basti Region, Basti in case No. 285
of 2022 under Rule 13 (1) of UP Essential
Commodities (Regulation at Sale and
Distribution) Rules 2013, allowing the
appeal filed by respondent No. 5. Further
prayer has been made by petitioner for
mandamus directing the respondents not to
interefere in peaceful functioning of the
petitioner as Fair Price Shop Dealer in
Gram Panchayat Bhotaha, Block Pauli,
Tehsil Dhankata District Sant Kabir Nagar.

3. Learned counsel for the petitioner
submits that after cancellation of fair price
shop licence of respondent No. 5, by the
respondent
No.3-Sub
Divisional