# M/S Mishra Automobiles v. U.O.I. & Ors

- **Citation:** (2024) 8 ILRA 1069
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-08-05
- **Case number:** Writ - C No. 24199 of 2020
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-mishra-automobiles-v-u-o-i-ors-52387
- **Pages:** 6

## Headnote

A. Marketing and Dealership Law
-
Weights and Measures - Cancellation of
license - Marketing Dealership Guideline,
2012: Clause 5.1.4 - Mere presence of
foreign elements does not ipso facto show
intention unless there is evidence to show
that the foreign components are capable
of or in fact affecting the fair dispensation
of fuel.

Provision
5.1.4
of
MDG
Guidelines
is
substantially penal in nature and its essential
ingredients, prima facie, consist of:

## Text

8 All. M/S Mishra Automobiles Vs. U.O.I. & Ors.
1069
dismissed. No interference is warranted in
the order dated 19.11.2012 passed by the
respondent no. 2, the Presiding Officer,
Industrial Tribunal - IV, Agra.

17. The writ petition is, accordingly,
dismissed.
----------
(2024) 8 ILRA 1069
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 05.08.2024

BEFORE

THE HON'BLE ALOK MATHUR, J.

Writ - C No. 24199 of 2020

M/S Mishra Automobiles ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
Akhilesh Kumar Kalra, Shreya Chaudhary

Counsel for the Respondent:
A.S.G., Manish Jauhari

A. Marketing and Dealership Law
-
Weights and Measures - Cancellation of
license - Marketing Dealership Guideline,
2012: Clause 5.1.4 - Mere presence of
foreign elements does not ipso facto show
intention unless there is evidence to show
that the foreign components are capable
of or in fact affecting the fair dispensation
of fuel.

Provision
5.1.4
of
MDG
Guidelines
is
substantially penal in nature and its essential
ingredients, prima facie, consist of:

1. The finding of the foreign objects in the
dispensing unit, which is only a ground for
inquiry and inspection.
2. Intention of manipulating the delivery.

In the present case, there is no evidence
w.r.t. the second necessary ingredient,
which is 'intention of manipulating the
delivery' and also the inquiry fell short of
returning any finding as to show any such
manipulation. Therefore, the petitioner
cannot be said to have violated 5.1.4. of
the MDG Guidelines. (Para 17)

Firstly, it is not the case of the respondent Oil
Company that there was any shortfall of the
delivery, coupled with the fact that even the
OEM has never reported, the result of the
foreign body attached to the pulsar card and
secondly, the benefit of doubt of the seal being
intact during the time of inspection has to be
given to the petitioner as the foreign component
cannot be inserted without breaking the seal of
the dispensing unit. Therefore, reading the
inspection report dated 05.05.2017 wherein, it
has clearly been found that the delivery was
found to be correct, coupled with the fact that
the seals were broken in the presence of the
inspecting team leads to have irrebuttable
conclusion that the seals were intact and there
was
no
short
supply
of
the
fuel
and
consequently, in the aforesaid circumstances, it
cannot be concluded that there was intention to
manipulate the delivery, and hence any violation
of Clause 5.4.1. of the MDG Guidelines. (Para
18)

Writ petition allowed. (E-4)

Present petition assails the order of the
Dispute
Resolution
Panel
dated
10.02.2020
as
well
as
order
of
cancellation dated 21.06.2017.

(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Ms. Aadya Antya, learned
counsel for the petitioner and Shri Manish
Jauhari, learned counsel on behalf of
respondents no.3 to 5.

2. The petitioner is an authorized
dealer of the Indian Oil Corporation Ltd.
since 1990 and has been operating a retail
outlet. He is licensed dealer of Indian Oil
Corporation Ltd. and selling Petroleum
products from the retail outlet at Sector - G,
1070 INDIAN LAW REPORTS ALLAHABAD SERIES
Aliganj, Lucknow. It has further been
stated that the retail outlet has four
dispensing units, two of which have been
installed by Gilbarco and Tatsno and the
third Dispensing Unit has been installed by
M/s Midco and fourth unit has been
installed by L&T Company. It has been
submitted by counsel for the petitioner that
on 29.04.2017 around 7:00 PM, an
inspection
team
had
inspected
the
applicant's
retail
outlet
after
taking
permission from Weights & Measures
Department and the delivery of petrol was
found to be proper and further inspection
was carried out after breaking the seal
installed by the Weights & Measures
Department and two pulsar cards were
removed from the dispensing units and
were taken by the inspecting team and sent
to the Original Equipment Manufacturer
(hereinafter referred to as "OEM") for
seeking the report. It is stated that the
OEM, namely, M/s Midco submitted the
report on 11.05.2017, which is as under: :-

(1) Foreign components were
found on the pulsar cards. These foreign
components do not belong to Midco
standard components.

(2) Three points (JP1, JP2 and
JP3) in the pulsar cards PCBs are
shortened by using additional wire.

3. On receiving the said information
that the pulsar cards had foreign components,
the matter was duly considered by the
respondents Oil Company and the petitioner
was subjected to a show cause notice on
20.05.2017. A copy of the report submitted
by M/s Midco was annexed along with the
show cause notice. Apart from the said
report, the respondent Oil Company had also
sought a clarification from OEM as to
whether mere finding of foreign components
of the pulsar card would tantamount to
manipulation in the delivery. It is only in
response to the query of the respondent Oil
company that on 15.05.2017 the OEM stated
that "any tampering/additional fitting in
pulsar will tantamount to manipulation of
delivery.

4. The petitioner duly replied to the
show cause notice denying the allegations
made against him and stated that the delivery
of petrol dispensed from the retail outlet were
checked during the inspection and was found
to be correct and no irregularities or
tampering were found in the dispensing unit.
It was further stated that the dispensing unit
which was inspected had seal intact and
accordingly submitted that there was no
evidence of tampering of the dispensing unit
by the licensee and also that the quantity of
petrol dispensed from units was also not short
which finding is also mentioned in the
inspection report, accordingly, denied the
said allegations.

5. Considering the response of the
petitioner,
by
means
of
order
dated
21.06.2017, the Chief Divisional Retails
Sales Manager, Lucknow Division Office
rejected the response of the petitioner and
cancelled his retail license.

6. It was stated that as per report of
the OEM, Foreign component was found in
the pulsar cards and the additional fittings
tantamount to manipulation of delivery and
consequently, order for cancellation was
passed. The petitioner being aggrieved by
the order of cancellation dated 21.06.2017,
had preferred an appeal before the Dispute
Resolution Panel which also did not find
favour and dismissed the appeal of the
petitioner.

7. The present writ petition has been
preferred by the petitioner assailing the
8 All. M/S Mishra Automobiles Vs. U.O.I. & Ors.
1071
order of the Dispute Resolution Panel dated
10.02.2020 as well as the order of
cancellation dated 21.06.2017.

8. Counsel for the petitioner has
submitted that the impugned orders passed
by the respondents are illegal and arbitrary
inasmuch as the petrol outlet of the
petitioner is running since 1990 without
any complaint. He has further submitted
that on the date of the inspection, the seals
of the dispensing units were found to be
intact and the dispensing units had been
dispensing the exact quantity of the
petroleum products, but merely because the
pulsar cards which were attached inside the
dispensing unit were reported to have
certain foreign objects attached to it and
consequently, merely on account of the
report of the OEM, it has been held that the
petitioner has violated Clause 5.1.4 of the
Marketing Dealership Guideline, 2012
(hereinafter referred to as "MDG") and
merely on the basis of said assumption the
license of the petitioner has been cancelled.
He had submitted that there was no
material available with the respondents to
have come to a conclusion that there was
firstly tampering with the dispensing unit
by the petitioner nor is there any evidence
of short supply of the diesel or petrol from
the dispensing units and consequently, the
proceedings initiated by the respondents as
well
as
subsequent
cancellation
and
rejection of his appeal are illegal and
arbitrary and without any application of
mind
and
consequently,
deserves
interference by this Court in exercise of
power under Article 226 of the Constitution
of India.

9. Counsel for the respondent, on
the other hand, has vehemently opposed the
writ petition. He has not disputed the facts
of the case but submits that merely because
the report of the OEM indicates that foreign
body was found in the pulsar cards is
sufficient in itself to invite proceedings for
cancellation of the retail license of the
petitioner in exercise of power under
Clause 5.1.4 of the MDG. He further
submits that due opportunity of hearing
was given to the petitioner inasmuch as all
the
offending
materials
as
well
as
opportunity of hearing was given to the
petitioner prior to cancellation and also that
he had exercised his right of filing an
appeal where all the contentions raised by
the petitioner was duly considered and
consequently, submits that there is no
reason for this Court to interfere in the
present case where the licensee has been
found to have manipulated the pulsar cards
which in ordinary course of nature would
tantamount to interfering with the supply of
the dispensing unit.

10. I have heard the counsel for
the parties and perused the record.

11. The facts as narrated above are
not in dispute inasmuch as the dispensing
unit of the petitioner were duly inspected
by the joint team, including officials of the
respondent Oil Company on 29.04.2017. It
is not in dispute that the seals affixed by the
Weights & Measures Department were
found to be intact and also that according to
the
petitioner,
the
supply
from
the
dispensing unit was also found to be
normal.
The
pulsar
cards
were
subsequently sent to the OEM for the report
inasmuch as the pulsar cards are installed
by the OEM and second hand pulsar cards
are installed in the machines, which have
been removed from early dispensing units
installed in other retail outlets. They are
rectified and all the rectifications and
soldering marks on the pulsar cards are
supposed to be duly monitored and profiled
1072 INDIAN LAW REPORTS ALLAHABAD SERIES
by OEM and the photographs are kept by
them. Whenever subsequently, a pulsar
card is sent for inspection, they compare
the last photograph taken from the pulsar
card from which they determine as to
whether any fresh soldering marks or any
foreign component has been attached to the
pulsar cards. The Oil Company on its
behalf relies totally on the report of the
OEM to determine whether there has been
manipulation in the pulsar cards and also
that whether such a manipulation would
result in short supply of the oil.

12. In the present case, the OEM
submitted the report on 11.05.2017 and
only stated that the foreign component was
found in the pulsar cards and these foreign
components do not belong to the OEM.
There was no findings return as to the
nature of the foreign components or as to
whether the foreign components could have
resulted in short supply of the petroleum
products. It is in these circumstances, it
seems that the respondent Oil Company
itself was not satisfied with the OEM report
and sought a clarification especially in this
regard
as
to
whether
the
foreign
components attached to the pulsar cards
would result in short supply of petroleum
products dispensed from the said unit and
whether the said manipulation could result
in short delivery. It is on seeking of the said
clarifications, the OEM had reported that
any tampering / additional fitting in the
pulsar
cards
will
tantamount
to
manipulation of delivery.

13. From the aforesaid, it is clear that
the OEM had merely reported the finding
of a foreign object on the pulsar cards.
Even
in
the
previous
report
dated
11.05.2017 their finding was limited only
to the findings of foreign component in the
pulsar card and even when subsequent
clarification was sought by the respondent
Oil Company, they merely stated that such
an additional component would tantamount
to manipulation of delivery. To consider as
to whether the findings of the OEM, as
stated above, would amount to violation of
Clause 5.1.4 of the MDG Guidelines, it is
necessary to quote the said rule itself which
reads as under:

"5.1.4
ADDITIONAL
/
UNAUTHORIZED FITTINGS / GEARS
FOUND IN DISPENSING UNITS /
TAMPERING
WITH
DISPENSING
UNIT
 Any mechanism / fittings / gear
found fitted in the dispensing unit with the
intention of manipulating the delivery.

Removal,
replacement
/
manipulation of any part of the Dispensing
Unit including microprocessor chip /
electronic parts / OEM software will be
deemed as tampering of the dispensing
unit.

In case of this irregularity sales
from the concerned dispensing unit to be
suspended, DU sealed. Samples to be
drawn of all the products and send to lab
for testing."

14. From the aforesaid provision,
it is clear that when any mechanisms,
fitting, gear found fitted in dispensing unit
with the intention of manipulation of
delivery
would
amount
to
invite
proceedings under the said sections and
lead
to
cancellation
of
the
license.
Therefore, from a bare reading of Clause
5.1.4 of the MDG Guidelines, it is clear
that any mechanism or fitting in the
dispensing
unit
should
result
in
manipulation of delivery or such additional
fitting should at least the capable of
manipulating the delivery. There is no
dispute with regard to the fact that the
8 All. M/S Mishra Automobiles Vs. U.O.I. & Ors.
1073
foreign component was in fact found on the
pulsar cards but the dispute in the present
case is only with regard to the fact that as
to
whether
discovery
of
a
foreign
component on the pulsar card would
automatically lead to the conclusion that
same has been installed with an intention of
manipulation of delivery. In the present
case, the peculiar facts are that seals of the
dispensing units were intact at the time
inspection. The foreign component found
in the pulsar card has been reported by the
OEM. Thee is no clear finding that such
foreign component would led to the short
supply of diesel in its original report dated
11.05.2017 or in subsequent clarification
issued on 17.05.2017.

15. To return a finding with regard to
the intention of manipulating the delivery,
the basic fact which has to be established
that
the
installation
of
the
foreign
component had in fact led to manipulating
the delivery meaning thereby that on
installation of foreign component on the
pulsar cards, the dispensing unit had
dispensed lesser quantity of fuel than it was
supposed to dispense.

16. We do not agree with the
submission
of
the
counsel
for
the
respondent that mere finding of the foreign
component of the pulsar cards is sufficient
in itself to come to a conclusion that the
same has been done with an intention to
manipulate the delivery. In case there is
manipulation in delivery meaning thereby
short supply of the fuel dispensed from the
dispensing unit is a question of fact and can
not be assumed. Only when it is established
that the dispensing unit had in fact
dispensed lesser quantity of fuel, coupled
with the fact that foreign component was
found in the pulsar card, can a person be
held responsible for violating provisions of
5.1.4
of
the
MDG
Guidelines
and
consequential cancellation of his license
can be done. Apart from finding a foreign
component on the Pulsar Cards there
should have been categorical finding with
regard to the intention to manipulate the
delivery.

17. On perusal of the relevant
provision i.e. 5.1.4 of MDG Guidelines, it
is found to be substantially penal in nature
and its essential ingredients, prima facie,
consist of:

(1) The finding of the foreign
objects in the dispensing unit, which is only
a ground for inquiry and inspection.

(2) Intention of manipulating the
delivery.

Mere
presence
of
foreign
elements does not ipso facto show intention
unless there is evidence to show that the
foreign components are capable of or in
fact affecting the fair dispensation of fuel.
 In the present case, there is no
evidence with regard to the second
necessary ingredient, which is 'intention of
manipulating the delivery' and also the
inquiry fell short of returning any finding
as to show any such manipulation.
Therefore, the petitioner cannot be said to
have violated 5.1.4 of the MDG Guidelines.

18. In the aforesaid circumstances,
firstly, it is not the case of the respondent
Oil Company that there was any shortfall of
the delivery, coupled with the fact that even
the OEM has never reported, the result of
the foreign body attached to the pulsar card
and secondly, the benefit of doubt of the
seal being intact during the time of
inspection has to be given to the petitioner
as the foreign component cannot be
inserted without breaking the seal of the
dispensing unit. Counsel for the respondent
1074 INDIAN LAW REPORTS ALLAHABAD SERIES
also could not confirm as to whether the
foreign component can be inserted on
pulsar card without breaking the seals.
Therefore, reading the inspection report
dated 05.05.2017 wherein in paragraph 2, it
has clearly been found that the delivery was
found to be correct, coupled with the fact
that in paragraph-5, it has been stated that
seals were broken in presence of the
inspecting team leads to have irrebuttable
conclusion that the seals were intact and
there was no short supply of the fuel and
consequently,
in
the
aforesaid
circumstances, it cannot be concluded that
there was intention to manipulate the
delivery, and hence any violation of Clause
5.4.1. of the MDG Guidelines.

19. In light of the above, this
Court impugned orders of cancellation as
well as the appeal are arbitrary and
accordingly set aside. The writ petition
stands allowed.

20. Consequences to follow.
----------
(2024) 8 ILRA 1074
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 23.08.2024

BEFORE

THE HON'BLE SALIL KUMAR RAI, J.

Writ - C No. 25324 of 2023

C/M, Shri Shanker Inter College, Mathura
& Anr. ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Rahul Sahai, Sri Saumitra Anand

Counsel for the Respondents:
C.S.C., Sri Namit Srivastava, Ms. Parul
Srivastava, Sri Prabhakar Awasthi

A. Societies Law - Societies Registration
Act, 1860 - Section 4-B, 25(2) - An
Authorized
Controller
not
appointed
u/Clause 7, but otherwise, will not be
empowered to hold the elections and any
elections held by such an Authorized
Controller would be in violation of the
Scheme of Administration.

Clause 7 of the Scheme of Administration
(Scheme) of the Institution provides that
elections for constituting the Committee of
Management (Committee) of the Institution and
to elect its office bearers are to be held one
month before the term of the
existing
Committee expires and in case elections are not
held within the prescribed time the Regional
Joint Director of Education (Regional J.D.), on
the recommendations of the D.I.O.S., may
appoint an Authorized Controller who shall
expeditiously hold the elections to constitute the
Committee and to elect its office bearers. (Para
22)

In the present case, the Authorized Controller
was not appointed u/Clause 7 of the Scheme of
Administration. The appointment was not on the
recommendations of the D.I.O.S. or for the
reason that the elections of the Committee of
Management and its office bearers had not been
held within the time prescribed in the Scheme of
Administration. The appointment of the
Authorized Controller was a consequence
of the interim order dated 07.08.2006
passed by this Court in Writ-C No. 42354
of 2006. The appointment was only an
interim arrangement which came to an
end when Writ-C No. 42354 of 2006 was
dismissed by this Court vide its order
dated 08.05.2012, albeit on the ground
that the petition had become infructuous.
The appointment of an Authorized Controller as
a consequence of an interim order passed by
this Court would not metamorphose into an
appointment u/Clause 7 of the Scheme of
Administration and empower him to hold
elections excluding the elected Committee of
Management merely because the Authorized
Controller continued to function even after Writ-