# M/S Kishore Auto Sales and others v. Bharat Petroleum Corporation Ltd and another

- **Citation:** (2010) 2 ILRA 587
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2010-05-14
- **Case number:** Civil Misc. Writ Petition No.16930 of 2009
- **Bench:** Ashok Bhushan, Virendra Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-kishore-auto-sales-and-others-v-bharat-petroleum-corporation-ltd-and-another-41638
- **Pages:** 14

## Text

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2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 587
that the applicant was selling liquor at that
time and they arrested her committing the
present crime red handed. The recovery of
urea and chemical along with spurious
liquor, which were kept with the purported
objective of intensifying the effect of
liquor compounded the case against the
applicant because adding such adulterant
could result in loss of life. In the
applicant's village itself some persons
appeared to have died as a result of
drinking of spurious liquor for which the
earlier FIR under sections 272/273/304
IPC at crime No. 24 of 2010 was lodged.

6. As the independent witnesses are
usually unwilling to join in dispute to be
witnesses of crime as they think the issue
does
not
concern
them,
the
nonexamination of independent witnesses is
not very material.

7. It is further submitted that as the
applicant was arrested on the spot together
with the liquor, urea, chemical and powder
of diazapam etc. the plea that she was in
her Maika at the time of incident, has no
leg to stand.

8. The crime of dealing in spurious
liquor has assumed grave proportions and
many cases have been reported where the
consumers have lost their lives because of
the poor or spurious quality of the liquor,
which is given to them. The offences under
sections 272/273 IPC have been made
punishable with imprisonment for life in
the state of UP. Simply because no public
analyst report was available at that stage, it
could provide no ground for releasing the
applicant on bail. The applicant also has a
criminal history and was involved in other
offences.

9. It is observed in the order of the
learned Sessions judge that if ureas is
added in normal alcohol, it gets converted
into Methyl alcohol, which is a poisonous
substance and can prove fatal for human
life.

10. Having given my thoughful
consideration to the totality of the
circumstances, I am not inclined to grant
bail to the applicant.

11. Accordingly, the bail application
is rejected.

12. However, the trial is expedited.
The trial court is directed to make an
endeavour to decide the trial, if possible,
within six months from the date of
production of a certified copy of this order.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 14.05.2010

BEFORE
THE HON'BLE ASHOK BHUSHAN, J.
THE HON'BLE VIRENDRA SINGH, J.

Civil Misc. Writ Petition No.16930 of 2009

M/S Kishore Auto Sales & Others .

 ...Petitioners
Versus
Bharat Petroleum Corporation Ltd. and
another.

 ...Respondents

Councel for the Petitioner
Sri Ravi Kant
Sri Imran Syed

Councel for the Respondent
Sri V.B. Upadhyay
Sri R.G. Padia
Sri Prakash Padia
S.C.
588 INDIAN LAW REPORTS ALLAHABAD SERIES [2010
Constitution
of
India
Art.226Cancellation of dealership of B.P.C.-on
basis of inspection of Petrol and Diesel
Pumps strict.in accordance with G.O.
Date 05.08.2008 under Para 12 of motor
spirit and high speed Diesel (Regulation
of Supply Distribution of Prevention of
malpractices)
order
2007-marker.test
done in presence of petitioners-sufficient
proof of alteration found-failing marker
test
no
further
chemical
analyst
required-objection
regarding
non
compliance of prevention of clause 7 of
G.O.
2005-held
misconceived-petition
dismissed.

Held: Para 11, 17 & 22

The Oil Company has framed Marketing
Discipline Guidelines 2005. The State of
U.P. has also issued a Government order
dated 5.8.2008, providing for details
with regard to inspection of the petrol
and diesel pumps. Paragraph 12 of the
Government order which is relevant
provides that the Central Government by
the Motor Spirit and High Speed Diesel
(Regulation of Supply, Distribution and
Prevention of Malpractices) Order, 2007
has mixed marker in the motor spirit and
high speed diesel for the purpose of
checking
the
adulteration
in
the
aforesaid petroleum products. Clause 12
further provides that if in the marker test
pink result is received, it is sufficient
proof of adulteration and in the event of
failing
of
marker
test,
no
further
chemical analysis is required.

Thus, the submission of the petitioners
that inspection dated 3.12.2008 being in
breach of clause 7 deserves to be set
aside on the ground of violation of
Control Order, 2005 cannot be accepted.

The above report clearly supports the
submission of the learned Counsel for
the respondents that nothing wrong was
found in the marker test which was
effective till 31.12.2008. Marker test was
statutorily introduced and was available
on the date when the inspection was
made. The submission of learned counsel
for the petitioner that marker test is not
foolproof test and cannot be relied,
cannot be accepted.
Case law discussed:
W.P. No. 37175 of 1999, 2009 (1) EFR 87,
W.P. no. 22959 of 2009, 1998 CriLJ3806

(Delivered by Hon'ble Ashok Bhushan, J.)

1. Heard Sri Ravi Kant, learned
Senior Advocate, assisted by Sri Imran
Sayeed for the petitioners and Sri V.B.
Upadhyay, learned Senior Advocate,
assisted by Sri Prakash Padia for the
respondents.

2. This writ petition has been filed
by the petitioner, a retail outlet dealer of
Bharat
Petroleum
Corporation
Ltd.
challenging the order dated 14.3.2009 by
which dealership of retail outlet has been
terminated by the Bharat Petroleum
Corporation.

3. Brief facts necessary for deciding
the writ petition are; the petitioner was
appointed as retail outlet dealer on
2.5.1977. The dealership between the
petitioner and the respondent Corporation
is being governed by the contract in
writing. Last such a contract was entered
into between the petitioner and the
respondent Corporation on 4.4.2003. An
inspection of the petitioner's retail outlet
which is situated at Hanumanganj, district
Allahabad was conducted by M/s SGS
India Private Ltd. authorised by the
Bharat Petroleum Corporation for such
purpose on 3.12.2008. During inspection
sample of motor spirit and high speed
diesel oil was taken by the inspection
team. A test known as marker test was
conducted at the outlet of the petitioner in
which sample of motor spirit failed, the
traces of marker were found in the petrol
2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 589
confirming adulteration. sample from the
nozzle of dispensing pump including T.T.
sample were taken. The samples collected
were tested in the laboratory of the
corporation
at
Mughalsarai
in
the
presence of the petitioner and the
transporter. Sample of motor spirit was
found
adulterated.
The
supply
of
petroleum products was suspended on
3.12.2008 itself. A show cause notice
dated
9.1.2009
was
issued
to
the
petitioner to show cause as to why the
dealership
be
not
terminated.
The
petitioner submitted a reply to the show
cause notice vide his letter dated
19.1.2009. The petitioner filed a writ
petition in this Court being writ petition
No. 3568 of 2009. A Division Bench of
this Court vide order dated 28.1.2009
stayed the effect and operation of the
order dated 3.12.2008, passed by the
Bharat
Petroleum
Corporation
and
respondents were directed to resume
supply of the petitioner forthwith. Against
the order dated 28.1.2009, passed by the
Division Bench S.L.P.(C) No. 4543 of
2009 was filed in which S.L.P. leave was
granted and the order of the High Court
dated 28.1.2009 was set aside and High
Court was directed to reconsider the
matter afresh after hearing the parties. On
14.3.2009, the Corporation terminated the
petitioner's dealership hence, writ petition
No. 3568 of 2009 was withdrawn with
liberty to challenge the order terminating
the dealership.

4. The present writ petition has been
filed by the petitioner challenging the
order dated 14.3.2009, terminating the
petitioner's dealership. A counter affidavit
has been filed by the Corporation to
which rejoinder affidavit has also been
filed.

5. Sri Ravikant, learned Senior
Advocate, appearing for the petitioner
challenging the impugned order submitted
that the entire exercise of inspection,
taking of sample and the report of
laboratory have been done in flagrant
breach of the Government orders and the
Marketing Discipline Guidelines, 2005. It
is contended that inspection, seizure and
sampling of the petrol and diesel have to
be carried out in accordance with the
procedure prescribed in the Marketing
Discipline
Guidelines,
2005.
It
is
submitted
that
under
the
Essential
Commodities Act, 1955, the Central
Government has issued a Control Order
namely; Motor Spirit and High Speed
Diesel
(Regulation
of
Supply,
Distribution,
and
Prevention
of
Malpractices) Order, 2005. Clause 7 of
which order provides that power of search
and seizure can be exercised only by
Gazetted
Officers
of
the
Central
Government or State Government or any
police officer not below the rank of
Deputy Superintendent of Police or any
officer of the oil company not below the
rank of Sales Officer. It is submitted that
inspection having not been conducted in
accordance with clause 7 of the Control
Order,2005, the entire exercise is vitiated
and deserves to be set aside. It is further
submitted that method of test and sample
of motor spirit and high speed diesel are
to be adopted as contemplated in
Marketing
Discipline
Guidelines,2005
copy of which has been filed as
Annexure- 4 to the writ petition, which
provide that test has to be conducted
according to BIS specification i.e. I.S.
1448. The inspection in question having
not been conducted in accordance with
the above Control Order, 2005 the
termination of dealership is invalid. It has
been further submitted that the marker test
590 INDIAN LAW REPORTS ALLAHABAD SERIES [2010
which was conducted on 3.12.2008 and
has been relied for termination of
dealership has not been found to be
foolproof test and Committee of Directors
appointed by Government of India in
December, 2008 itself found inefficiency
of marker test system. Learned counsel
for the petitioner has placed reliance on
the judgement of Karnataka High Court
dated 13.1.2010 in writ petition No.
37175 of 1999 Sri G.V. Bhushan and
others Vs. Union of India and others, in
which
judgement
the
Marketing
Guidelines of 2005 has been set aside
including
the
consequent
actions
thereunder.

6. Sri V.B. Upadhyay, learned
Senior Advocate, refuting the submissions
of learned counsel for the petitioners
contended that the petitioner's outlet was
inspected in the presence of petitioner's
representative, who has also signed the
inspection report in which report, the
petitioner's sample of motor spirit failed
in the marker test. It is submitted that the
sample collected from retail outlet was
also tested at Mughalsarai Laboratory of
the Corporation in the presence of the
petitioner on 5.12.2008 which test also
confirmed that motor spirit (petrol) was
adulterated.
It
is
submitted
that
adulteration having been proved in the
petrol, the Corporation was within its
right to cancel the dealership of the
petitioners and the order impugned was
passed
after
giving
notice
to
the
petitioners, which does not suffer from
any infirmity. It is submitted that M/s
SGS India Private Ltd. was authorised to
inspect the retail outlet on behalf of the
company and the said system continued
till 31.12.2008. Hence, there is no error in
the test conducted by the inspection team.
It is submitted that marker test is a valid
test which was relied by the Corporation
at the relevant time and mere fact that
subsequently, the matter was being
reviewed
for
finding
out
another
methodology of conducting inspection has
no bearing in the present case. It is
submitted that against the judgement of
the Karnataka High relied by the
petitioner in Sri Sri G.V. Bhushan and
others Vs. Union of India and others
(supra), a special appeal has been filed in
which special appeal, the judgment of the
Karnataka High Court has been stayed.
Reliance has been placed on the Division
Bench judgment of this Court in Vindhya
Services Station, Mirzapur and another
Vs. Union of India and others reported
in 2009 (1) EFR 87 and judgment learned
Single Judge in writ petition No. 22959 of
2009 M/s Satyam Filling Station Vs.
Appellate Authority& Anr. decided on
1.2.2010.

7.

We
have
considered
the
submissions of learned counsel for the
parties and have perused the record.

8. The submissions raised by the
learned counsel for the petitioners can be
summarised as follows:

(i) The search and seizure of the
retail outlet has to be made in accordance
with Clause 7 of the Motor Spirit and
High Speed Diesel (Regulation of Supply,
distribution,
and
Prevention
of
Malpractices) Order, 2005. According to
clause 7 of the aforesaid order only a
Sales Officer of a company is authorised
to conduct the search and inspection.
Search and inspection having not been
made in accordance with Clause 7 of the
2005 Order, the consequential action falls
on the ground.
2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 591

(ii) The
Marketing
Discipline
Guidelines, 2005 provides for method and
manner of testing the sample. The test has
to conform to the specification No. 2796
and IS 1448 and no such test having been
conducted,
the
impugned
order
terminating the agency is violative of
Marketing and Discipline Guidelines,
2005. The samples having been taken by
an agent appointed by the Oil Company
and not by officers of the Corporation, the
whole process is vitiated.

(iii) The marker test which was
applied for inspection on 3.12.2008 lacks
credence and is not foolproof test.

9. Before we proceed to examine the
respective submissions of learned counsel
for the parties, it is relevant to note certain
important terms and conditions of the
agreement entered into between the
petitioner and the Oil Company on
4.4.1993, copy of which agreement has
been filed as Annexure-1 to the writ
petition. By the aforesaid agreement
licence was granted to the petitioner for
carrying on business at Hanumanganj,
Allahabad in accordance with the terms
and
conditions
of
the
agreement.
Paragraph 10 of the agreement provides
that the licensees hereby covenant and
agree with the Company as follows:-

a)................
(b)........
(c).......
(d)..........
(e)..........
(f)............
(g)...............
(h)...............
(i)................
(j)...............
(k)...............
(l)................
(m).................
(n)...................
(o) At all times and from time to time
during the currency of this licence to give
adequate facilities to the Company, its
officers, agents and servants to inspect
and test the accuracy and general
working
of
the
pumps
and
other
equipment upon the said premises and to
investigate the conduct and management
by the Licensees of the said facilities, and
afford to the Company its officers, agents
and servants all proper and necessary
assistance and facilities for conducting
such inspection and investigating and for
maintenance of the outfit.'

10. Clause 13(a) provides that
notwithstanding anything to the contrary
herein contained the Company shall be at
liberty to terminate the agreement upon or
at any time on the happening of any of the
events as enumerated in the said clause.
Clause 13(a) (vii) and (viii). It is relevant
for the present case are quoted herein
below:

13(a) (vii) If the Licensees shall be
guilty of a breach of any of the covenants
and stipulations on their part contained in
this agreement;

(viii) If the Licensees shall commit or
suffer to be committed any act which in
the opinion of the Marketing Manager of
the Company for the time being in
Bombay or any other person nominated
for this purpose by the Company is
prejudicial to the interest or good name of
the Company or its products. The decision
of such officer or person shall be final
and binding on the Licensees."
592 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

11. The Oil Company has framed
Marketing Discipline Guidelines 2005.
The State of U.P. has also issued a
Government
order
dated
5.8.2008,
providing for details with regard to
inspection of the petrol and diesel pumps.
Paragraph 12 of the Government order
which is relevant provides that the Central
Government by the Motor Spirit and High
Speed Diesel (Regulation of Supply,
Distribution
and
Prevention
of
Malpractices) Order, 2007 has mixed
marker in the motor spirit and high speed
diesel for the purpose of checking the
adulteration in the aforesaid petroleum
products. Clause 12 further provides that
if in the marker test pink result is
received,
it
is
sufficient
proof
of
adulteration and in the event of failing of
marker test, no further chemical analysis
is required.

12. In exercise of power under
Essential Commodities Act, 1955 Central
Government has made Order 2005 clause
7 of the order on which much reliance
have been placed by the learned counsel
for the petitioner is quoted as below:

"7. Power of search and seizure.-
(1) Any Gazetted Officer of the Central
Government or a State Government or
any police officer not below the rank of
Deputy Superintendent of Police duly
authorised by general or special order of
the Central Government or a State
Government, as the case may be, or any
officer of the oil company, not below the
rank of sales officer, may, with a view to
securing compliance with the provisions
of this order, or for the purpose of
satisfying himself that this order of any
order made thereunder has been complied
with or there is reason to believe that all
or any of the provisions of this order have
been and are being or are about to be
contravened."

13. The principal submission of
learned counsel for the petitioners is that
under clause 7 only an officer of the Oil
Company not below the rank of Sales
officer is authorised to conduct search and
the search which was conducted on
3.12.2008, no officer of the company was
present hence, the search is in violation of
clause 7 of the 2005 Order and the
consequential action deserves to be set
aside on this ground alone.

14. As noticed above, clause 10 (o)
of the agreement between the petitioner
and the Corporation obliges an outlet
dealer to give adequate facilities to the
Company, its officers, agents and servants
to inspect and test the accuracy and
general working of the pumps. Under
clause 10 (o) the Company its officers,
agents and servants are authorised to
investigate and conduct inspection and
investigation. It is thus, clear that under
the agreement between the parties, agents
of the company are also authorised to
inspect to find out as to whether the terms
and conditions of the agreement is being
followed by the outlet dealer or not.
Whereas under clause 7 of the 2005
Order, search can be conducted only by
an officer not below the rank of the Sales
Officer in the oil company apart from the
gazetted
officer
of
the
Central
Government and at least officer not below
the rank of Deputy Superintendent of
Police. The search which was conducted
on 3.12.2008 was not an inspection of the
officers of the Central Government and
State Government rather it was inspection
on behalf of the Company.
2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 593

15. The power under clause 7 of the
Control Order, 2005 has been given to the
authorised officer for the purpose of
satisfying himself that the order 2005 or
any order made thereunder has been
complied with or any of the provisions of
the Order 2005 are being contravened.
The contravention of orders issued under
section 3 of the Essential Commodities
Act are punishable under section 7 and
other consequences have been laid down
in the Essential Commodities Act, 1955
including the confiscation etc. The search
and seizure thus under clause 7 of the
Control Order 2005 relates to finding out
as to whether any provision of the Control
Order, 2005 has been contravened and
any of the actions contemplated under
Control Order, 2005 as well as Essential
Commodities Act may result from such
contravention. However, the inspection by
the officers of the Company, its servants
or agents may be for the purpose as
provided for in the agreement between the
parties dated 4.4.1993. Inspection by the
agents of the company can thus, be for the
purpose other than the search and seizure
as provided in paragraph 7 of the Control
Order 2005. The company which has
given the dealership by contract entered
between the parties has also right to
determine as to whether the terms and
conditions of the contract are being fully
followed by the petitioners or not. Thus
for inspection by the company for the
purpose of finding out whether the
covenants of the contract are being
followed or not paragraph 7 of the
Control Order may not be applicable.
There is no conflict between the right of
the Company to carry on inspection for
the purpose of contract and the right to
search and seizure given in paragraph 7 of
the Control Order, 2005 both being not
contrary to each other can survive
together.

16. The Division Bench of this
Court in Vindhya Services Station
Mirzapur Vs. Union of India (supra)
had occasion to consider the similar issues
in the said case. The petrol pump agency
was given to the petitioner under a written
agreement. The officers of M/s SGS India
Pvt. Ltd. inspected the outlet and
conducted the marker test. The arguments
was raised in the said case that under the
Control Order, the inspection can be made
only by an authorised officer and M/S
S.G.S. India Pvt. Ltd. has no jurisdiction
to take the sample. Repelling the said
arguments following was laid down in
paragraph 11:

"The
second
argument
of
the
petitioners is that under the Control
Order, which is issued under the Essential
Commodities Act, it is only the authorised
officer who can carry out the taking of
samples. The argument is misconceived.
There is a two fold check upon
adulteration: one at the level of Oil
Marketing Companies and the other by
the State authorities under the Essential
Commodities Control Orders. In respect
of the agreement between the Oil
Marketing Company and their dealers the
terms are governed not by the Control
Order but by the agreement and the
Marketing Discipline Guidelines."

17. Thus, the submission of the
petitioners that inspection dated 3.12.2008
being in breach of clause 7 deserves to be
set aside on the ground of violation of
Control Order, 2005 cannot be accepted.

18. The submission next pressed by
learned counsel for the petitioner is that
594 INDIAN LAW REPORTS ALLAHABAD SERIES [2010
test has to be conducted according to the
specification as provided in the Marketing
Discipline Guidelines 2005 and the test
should conform to requirement of Bureau
of Indian Standard Specification Nos. IS
2796 and IS 1460 for motor spirit and
High speed diesel respectively. In the
present case as noticed above, the marker
test was conducted by inspecting team on
3.12.2008 at the outlet of the petitioners
in which the sample collected from nozzle
of the dispensing unit failed in so far as
the petrol is concerned. Sample was
collected on 3.12.2008 and was sent for
laboratory test at Mughal Sarai laboratory
of the Corporation. The petitioners were
also called to appear in the laboratory test
which was conducted on 5.12.2008. The
sample collected on 3.12.2008 was also
found adulterated in the laboratory test on
5.12.2008. The report of the test held on
5.12.2008 i.e. joint marker inspection has
been given to the petitioner along with
show cause notice dated 9.1.2009. The
submission that marker test was not
sufficient as per Marketing Discipline
Guidelines and the Control Order has to
be considered. It is to be noted that in the
Control Order, 2005, amendments were
made w.e.f. 12.1.2007 by which the
definition of marker was added and the
definition of adulteration was amended.
Amendments were also made in clause 8
of the Control Order. Paragraphs 2 (a),
(fi), (t) are quoted as below:

2(a) "adulteration" means presence
of marker in motor spirit and high speed
diesel and/or the introduction of any
foreign substance into motor spirit or
high
speed
diesel
illegally
or
unauthorisedly with the result that the
product
does
not
conform
to
the
requirements of the Bureau of Indian
standards Specification Numbers IS 2796
and IS 1460 for motor spirit and high
speed diesel respectively or any other
requirement notified by the Central
Government from time to time;"

(f)"malpractices" shall include the
following
acts
of
omission
and
commission in respect of motor spirit and
high speed diesel-
(i) adulteration;
(ii) pilferage;
(iii) stock variation;
(iv) unauthorised exchange;
(v) unauthorised purchase;
(vi) unauthorised sale;
(vii) unauthorised possession;
(viii) overcharging;
(ix) sale of oil-specification product; and
(x) short delivery;

(fi) "marker" means a chemical
substance approved by the Central
Government from time to time for
blending in kerosene and other petroleum
products with the objective of preventing
their diversion or adulteration of motor
spirit or high speed diesel"

(t) "sale of off-specification product"
means sale of motor spirit or high speed
diesel by dealer of "having traces of
marker and/or" quality not conforming to
Bureau of Indian Standards Specification
Numbers IS 2796 and IS 1460 for motor
spirit or high speed diesel respectively"

19. Paragraph 8 of the Order deals
with Sampling of Product and testing. A
reading of paragraph 8 indicates that
where the product does not contain
marker, the sample is to be collected to
check
whether
density
and
other
parameters of the product conform to the
requirement of Bureau of Indian Standard
Specification Numbers IS 2796 and IS
2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 595
1460 for motor spirit and high speed
diesel respectively. Paragraph 8 is quoted
herein below:

"8. Sampling of Product and testing.-
(1-A) The authorized officer under clause
7 shall draw the sample from the tank,
nozzle, vehicle or receptacle, as the case
may be, in the test kit and test the product
with the aid of test kit, to check whether
the product contains any traces of
marker. If such traces are found in the
product, the authorised officer shall
record the same in triplicate which shall
be jointly signed by him and the dealer or
transporter or concerned person or his
representative, as the case may be, and
given one copy of such recording to the
dealer or transporter or concerned
person or his representative and another
copy to the oil company concerned, as the
case may be."

(1) "Where the product does not
contain marker under sub-clause (1-A),
the authorised officer." Under Clause 7
shall draw the sample from the tank,
nozzle, vehicle or receptacle as the case
may be, in clean aluminium containers, to
check
whether
density
and
other
parameters of the product conform to the
requirement of Bureau of India Standard
Specification Numbers IS 2796 and IS
1460 for motor spirit and high speed
diesel respectively. Where samples are
drawn from retail outlet, the relevant
tank-truck sample retained by the dealer
as per Clause 3(b) would also be
collected for laboratory analysis.

(2) The authorized officer shall take
and seal six samples of 1 litre, each of the
motor spirit or three samples of 1 litre
each of the high speed diesel. Two
samples of motor spirit or one of high
speed di4sel would be given to the dealer
or transporter or concerned person under
acknowledgement with instruction to
preserve the sample in his safe custody till
the
testing
or
investigations
are
completed. Two samples of motor spirit or
one of the high speed diesel shall be kept
by the concerned oil company or
department and the remaining two
samples of Motor Spirit or one of High
Speed
Diesel
would
be
used
for
laboratory analysis;

(3) The sample label shall be jointly
signed by the authorised officer who has
drawn the sample, and the dealer or
transporter or concerned person or his
representative and the sample label shall
contain information as regards the
product, name of retail outlet, quantity of
sample, date, name of the authorized
officer, name of the dealer or transporter
or
concerned
person
or
his
representative;

(4) The authorised officer shall
forward the sample of the product taken
within ten days to any of the laboratories
mentioned in Schedule III or to any other
such laboratory when it may be notified
by the Government in the official Gazette
for this purpose, for analysing with a view
to checking whether the density and other
parameters of the product conform to the
requirements
of
Bureau
of
Indian
Standard Specification Numbers IS 2796
and IS 1460 for motor spirit and high
speed diesel respectively.

(5) The laboratories mentioned in
sub-clause (4) shall furnish the test report
to the authorised officer within twenty
days of receipt of sample at the
laboratory.
596 INDIAN LAW REPORTS ALLAHABAD SERIES [2010

(6) The authorised officer shall
communicate the test result to the dealer
or transporter or concerned person and
the oil company, as the case may be,
within five days of receipt of test results
from the laboratory for appropriate
action."

20. As noticed above paragraph 12
of the Government order relied by the
petitioner and filed as Annexure-4 to the
writ petition also indicates that if in the
marker test the product fails there is no
necessity of any further chemical analysis.
In the present case, when the test was held
on 3.12.2008, marker was found present
hence, there was no further requirement
of density analysis or any other analysis.
The
Control
Order
2005
and
the
Government order clearly relies on the
marker test for finding out adulteration,
no error has been committed by the
Corporation in cancelling the agreement
relying on the marker test. Thus the
submission
that
density
and
other
specification was to be checked as per
Indian Standard Specification Numbers is
not applicable in the facts of the present
case.

21. The third submission of the
learned counsel for the petitioners that
marker test is not foolproof test and the
said marker system has been reviewed by
the Government of India. Copy of the
letter dated 22.12.2008 has been brought
on record as Annexure-18 which is a
report
submitted
by
the
Director
Marketing and Oil Companies. It is
relevant to extract some part of the report
which is quoted as below:

"The Marker System was introduced
by the PSU oil companies w.e.f. 1.10.2006
in the country. The Kerosene released
from the supply locations is being doped
with the Authentix Marker system since
the
introduction
of
the
Marker
programme.

The
industry
has
been
closely
monitoring the effectiveness of the Marker
programme
and
it
has
been
our
experience that the Marker system is
found to be more effective than the
traditional methods of inspections, BIS
tests etc. to detect adulteration. The
Marker legislation was enforced from
16.2.07 and during the period from
16.2.07 to 30.11.08 there was 558 cases
of adulteration detected thorugh the
Marker system involving Ros and Tanktrucks.

In order to identify more suppliers
for Marker system, a Global Expression
of Interest (GEOI) was floated by Interim
order already granted shall continue.
R&D on 26th July, 2008 on Industry
basis. The details of the Mandatory
Characteristics/Requirements
of
the
Marker System included in GEOI are
given as under:

•
After inducing into the potential
adulterants, the Marker should not be
removable/tampered with by physical or
chemical means.

•
The marker should be compatible
with potential adulterants.

• The Marker should be stable with
potential adulterants.

• The Marker should be detectable in
Ethanol Gasoline blends.
2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 597
•
The Marker System should provide
simple field level testing to determine
adulteration (i.e. test positive or test
negative).

•
The Marker should be cost effective.

•
The Marker System should enable
exact
quantitative
estimation
of
adulternation.

•
Marker as well as the test reagents
should have adequate shelf life, should be
storable under ambient conditions & be
portable to facilitate the field force in
implementation of the Marker system.

The conclusions drawn by the
technical Committee based on Laboratory
evaluation of the 3 Marker systems is as
under:

1.
1% marked Kerosence can be
detected in MS & HSD except in Interim
order already granted shall continue.
branded HSD and BPC Branded MS.

2.
Testing time required for one
sample will be approximately 75 to 90
minutes as per recommended procedure
i.e. 1&2 as most of the samples will have
to be tested for both procedures. This also
requires substantial number of IAS
columns for procedure 2 which cannot be
reused.

3.
Marked
Kerosene
can
be
laundered by Conc. Nitric acid and
Charcoal.

4.
Marker could not be detected
when marked kerosene was exposed to
sunlight.

5.
Un-dyed Kerosene when marked
does not meet saybolt colour specification
as per IS: 1459.

B) M/s Chematek:

1
1% marked kerosene can be
detected in MS & HSD including Branded
fuels.

2
Testing time required for one
sample will be approximately 20 to 25
Minutes as per recommended procedure
which is simple and requires common
glassware.

3.
Marked Kerosene cannot be
laundered by 1% clay. However, marked
kerosene can be laundered by 5% clay.
Conc. Sulphuric acid, Conc. Nitric acid
and Charcoal.

4
 Marker can be detected when
marked
Kerosene
was
exposed
to
sunlight.

5
 Undyed Kerosene when marked
does not meet saybolt colour specification
as per IS: 1459.

C) M/s GFI, Israel Marker System
offered by M/s Nandan Petrochemicals,
Mumbai

1
 1% marked kerosene can be
detected in MS &HSD including Branded
fuels.

2
 Testing time required for one
sample will be approximately 5 minutes
as per recommended procedure.

3
 This testing involves use of
XRF analyser which has to be mounted on
598 INDIAN LAW REPORTS ALLAHABAD SERIES [2010
a vehicle and will require stabilized
power supply or invertor. This analyser
was brought pre calibrated by the party.
The frequency of calibration and matrix
effect of different fuels may have to be
ascertained.

4.
This Marker System in the Lab
test was not found to be launderable with
clay, acids, alkali. While 1% charcoal
could not remove the Marker however
about 20% lower concentration of Marker
was
observed
with
5%
charcoal
treatment. The machine, however, was
able to detect 1% adulteration of 5%
charcoal treated marked kerosene in fuel.

5
 The addition of this Marker to
Kerosene does not affect the Physicochemical
properties
of
Kerosene
including saybolt colour.

6
 The Marker can be detected
when marked kerosene was exposed to
sunlight.

a) The basic requirement of the
Marker as stated in the GEOI was that "it
should not be removable/tampered with,
by physical or chemical means" This
condition is not met by M/s Authentix and
M/s Chematek S.P.A. Italy in addition, the
Authentix Marker could not be detected
when exposed to sunlight and also in
branded HSD of Interim order already
granted shall continue. & branded MS of
BPC. The Marker system of GFI offered
by M/s Nandan Petro chemicals is found
to be least launderable.

b)
One
of
the
mandatory
requirements is also that the Marker
System should provide simple field level
testing to determine adulteration (i.e. test
positive of test negative). The equipment
of M/s GFI Marker system for detection of
adulteration is bulky & heavy also
requiring stabilised electrical power. The
equipment is required to be calibrated at
the frequency to be decided by the user
and fitted in mobile vehicle for field
testing of samples.

Review of Marker System by MOP &NG:

Secretary (P&NG) had taken a
review meeting on Marker system on 10th
December, 2008. In this meeting Interim
order already granted shall continue.
(R&D), on behalf of the Technical
Committee had made a presentation on
evaluation of the Global Expression of
Interest (GEO). During the meeting the
Industry advised MOP&NG that all the 3
evaluated Markers are not meeting 100%
mandatory requirements of the GEOI.

In this regard a letter has already
been addressed by the industry to
MOP&NG vide RSHQ: Policy dated 28th
November, 2008 intimating that retendering. In respect of Marker system will
be required. Further, in the intervening
period MOP&NG was requested to make
suitable amendments to the Control Orders
as the contract with the current suppliers
expires on 31.12.2008.

However, Secretary P&NG advised
that
the
Committee
of
Directors
(Marketing) of the oil companies should
examine all the aspects of the issue and
submit their recommendations latest by
20th December, 2008.

The
Committee
of
Directors
(Marketing) after examining all the aspects
of the issue recommends as follows:-
2 All] M/S Kishore Auto Sales and others V Bharat Petroleum Corporation Ltd and another 599

1. To re-tender for procurement of
Marker system as none of the parties have
fulfilled
100%
of
the
mandatory
requirements of the GEOI. A minimum
time period of 6 months will be required to
complete the process.

2. To amend the existing Kerosene
Control Order which makes it mandatory
to dope all Kerosene released from supply
locations with Marker. The existing
contract for procurement of Marker system
expires on 31.12.08 and effective 1.1.2009
Kerosene will have to be sold without
doping of marker.

3. To amend MS-HSD control order
as Marker tests will not be carried out at
retail outlets effective 1.1.2009."

22. The above report clearly supports
the submission of the learned Counsel for
the respondents that nothing wrong was
found in the marker test which was
effective till 31.12.2008. Marker test was
statutorily introduced and was available on
the date when the inspection was made.
The submission of learned counsel for the
petitioner that marker test is not foolproof
test and cannot be relied, cannot be
accepted.

23. Learned counsel for the petitioner
has also placed reliance on the Division
Bench judgment of Krishna Kumar and
Anr. Vs. Sr. Supdt. of Police and Ors.
1998 CriLJ3806 for the submission that the
product quality is to be tested in
accordance with the bureau of Indian
Standard Specification No. IS 1460. In the
case of Krishna Kumar (supra) a first
information report was lodged under
section 3/7 of the Essential Commodities
Act, 1955. The writ petition was filed
challenging the said first information
report. The challenge was made in the writ
petition on the ground that sample taken
from the petrol pump was said to be
adulterated but the extent or exact quantity
of the adulteration was not mentioned. All
the writ petitions were dismissed. The
Court considered and held that sample of
the petrol and diesel was to be taken in
accordance with clauses 7 and 8 . The said
case was not a case of termination of
dealership by oil company exercising its
right under the agreement between the
parties but was a case challenging the first
information report hence, it is clearly
distinguishable. The judgment of learned
Single Judge in M/s Satyam Filling
Station fully supports the submission of
the learned Counsel for the respondents.
On
the
marker
system
following
observation was made by Hon'ble Single
Judge.

"Learned counsel for the petitioner
has also place reliance upon the affidavit
filed on behalf of Bharat Petroleum
Corporation in the Delhi High Court that
marker test was not reliable.