# R.S. Filling Station Indian Oil Corp. Ltd v. Dispute Resolution Panel C/O I.O.C. & Ors

- **Citation:** (2022) 5 ILRA 353
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-05-31
- **Case number:** Writ C No. 1262 of 2020
- **Bench:** Pankaj Bhatia
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/r-s-filling-station-indian-oil-corp-ltd-v-dispute-resolution-panel-c-o-i-o-c-ors-48531
- **Pages:** 12

## Headnote

Law
-
in
the
administrative
and
the
quasi-judicial
decision making process - any decision
taken upon misreading of a document - in
ignorance of a document and without
recording reasons - would clearly qualified
as
arbitrary,
perverse
and
hit
by
wednesbury
arbitrariness
-
denial
of
opportunity of hearing also makes the
order as violative of principles of natural
justice. (Para - 37,38)

(B)
Administrative
Law
-
alternative
remedy
is
not
an
absolute
bar
-
administrative/quasi-judicial
authorities
are obliged to record reasons - show -
cause notice issued with a premeditation
would entitle the petitioner to approach
this Court in exercise of power under
Article 226 of the Constitution of India.
(Para - 26)

Contract as well as dealership of petitioner
(retail out dealer ) cancelled - basis of
termination - report- suspicion expressed with
regard to two pulsar cards - report of OEM
MIDCO - allegation with regard to loss of
reputation of corporation in view of wide
reporting in print and electronic media -
impugned order passed on a clear misreading of
inspection report - clear misreading of report of
MIDCO - non-consideration of vital piece of
evidence - improper invocation of deeming
provision under clause 5.1.4 of MDG .(Para -
1,29,38)

HELD:- Writ petition would lie against an order,
which is perverse and which cannot satisfy the
test of Article 14 of the Constitution of India.
Impugned order cannot be sustained and is set
aside with directions to the respondent -
corporation to permit the petitioner to run the
retail outlet forthwith subject to the petitioner
complying with the other requirements for
dispensing the petroleum products as are
required under the Act and the Rules. (Para -
30,38 )

Writ Petition allowed. (E-7)

List of Cases cited:-

## Text

_Characters 0–39,945 of 40,193. This is a partial read: ask again with offset=39945 for what follows._

5 All. R.S. Filling Station Indian Oil Corp. Ltd. Vs. Dispute Resolution Panel C/O I.O.C. & Ors. 353
----------
(2022)05ILR A353
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 31.05.2022

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Writ C No. 1262 of 2020

R.S. Filling Station Indian Oil Corp. Ltd.
 ...Petitioner
Versus
Dispute Resolution Panel C/O I.O.C. & Ors.
 ...Respondents

Counsel for the Petitioner:
Tushar Hirwani, Amrendra Singh, Ashok
Kumar Singh

Counsel for the Respondents:
Manish Jauhari

(A)
Administrative
Law
-
in
the
administrative
and
the
quasi-judicial
decision making process - any decision
taken upon misreading of a document - in
ignorance of a document and without
recording reasons - would clearly qualified
as
arbitrary,
perverse
and
hit
by
wednesbury
arbitrariness
-
denial
of
opportunity of hearing also makes the
order as violative of principles of natural
justice. (Para - 37,38)

(B)
Administrative
Law
-
alternative
remedy
is
not
an
absolute
bar
-
administrative/quasi-judicial
authorities
are obliged to record reasons - show -
cause notice issued with a premeditation
would entitle the petitioner to approach
this Court in exercise of power under
Article 226 of the Constitution of India.
(Para - 26)

Contract as well as dealership of petitioner
(retail out dealer ) cancelled - basis of
termination - report- suspicion expressed with
regard to two pulsar cards - report of OEM
MIDCO - allegation with regard to loss of
reputation of corporation in view of wide
reporting in print and electronic media -
impugned order passed on a clear misreading of
inspection report - clear misreading of report of
MIDCO - non-consideration of vital piece of
evidence - improper invocation of deeming
provision under clause 5.1.4 of MDG .(Para -
1,29,38)

HELD:- Writ petition would lie against an order,
which is perverse and which cannot satisfy the
test of Article 14 of the Constitution of India.
Impugned order cannot be sustained and is set
aside with directions to the respondent -
corporation to permit the petitioner to run the
retail outlet forthwith subject to the petitioner
complying with the other requirements for
dispensing the petroleum products as are
required under the Act and the Rules. (Para -
30,38 )

Writ Petition allowed. (E-7)

List of Cases cited:-

1. Whirlpool Corporation Vs Registrar of
Trademarks, Mumbai & ors. , (1998) 8 SCC 1

2.
Maharashtra
Chess
Association
Vs
U.O.I.,2019 SCC OnLine SC 932

3. J. Ashoka Vs University of Agricultural
Sciences , (2017) 2 SCC 609

4. Ahmad Ullah Vs U.O.I. & ors. , Writ C
No.25502 of 2019

5. Allahabad Bank & ors. Vs Krishna Narayan
Tewari , (2017) 2 SCC 308

6. Rakesh Kumar Pandey Vs St. of U.P. & ors.
,2019 SCC Online All 4004

7. Gour Chandra Dutta Vs U.O.I. & ors. , 2015
SCC OnLine Bom 4883

8. Siemens Ltd. Vs St. of Mah. & ors. , (2006)
12 SCC 33

9. M/s. Laltu Fillings Station Vs U.O.I. & ors. ,
2016 SCC OnLine Cal 626
354 INDIAN LAW REPORTS ALLAHABAD SERIES
10. Oryx Fisheries Pvt. Ltd. Vs U.O.I. & ors. ,
(2010) 13 SCC 427

11. Savitri Devi & ors. Vs U.O.I.& ors. , Writ C
No.29859 of 2017

(Delivered by Hon'ble Pankaj Bhatia, J.)

1. The present petition has been filed
challenging the order dated 15.10.2019
passed by Dispute Resolution Panel (in
short "DRP") whereby the appellate forum
had remanded the matter for adjudication
before respondent no.4 as well as the order
dated 19.10.2020 passed by respondent
no.3 whereby the contract of the petitioner
has been cancelled and his dealership also
stands cancelled consequently.

2. This Court during the course of
hearing had summoned the records of Writ
- C No.21992 of 2020 for the purpose of
perusal.

3. Heard Shri Prashant Chandra,
learned Senior Advocate assisted by Ms.
Radhika Singh, learned counsel appearing
for the petitioner and Shri Dipak Seth, Shri
Manish Jauhari and Ms. Shruti Sahu,
learned counsel(s) appearing on behalf of
respondent nos.1 to 4.

4. The facts, in brief, are that the
petitioner was appointed as a retail outlet
dealer by Indian Oil Corporation (for short
''corporation') by means of an appointment
letter dated 02.12.2015 for running a retail
outlet
at
Bariha
Taranpur,
District
Lakhimpur Kheri, which was being run by
the petitioner in the name and style of M/S
R.S. Filling Station. An agreement was
executed in between the parties on
01.04.2006. It is also common ground that
the dealership granted to the petitioner is
governed by the agreement executed in
between the parties and the Marketing
Discipline Guidelines (hereinafter referred
as "MDG") issued from time to time. In the
month of April, 2017 in pursuance to the
directions given by the State Government,
inspections were carried out by the
authorities as specified in the Government
Order across various petrol and diesel
outlets and an inspection was also carried
out on the petitioner's outlet on 31.05.2017
by a team of three persons. An inspection
report was prepared, which is annexed as
Annexure - 4 to the writ petition. It is also
relevant to note that detailed instructions
were issued by the Chief Secretary, State of
U.P. vide communication dated 15.06.2017
constituting a team of 5 persons for
carrying out the inspections. In the
inspection report as prepared and contained
in Annexure - 4, it was recorded that an
inspection
was
carried
out
and
the
machines were checked. At the time of
inspection,
four
dispensing
units
(8
nozzles) were found, out of which 6
nozzles were found in working conditions.
From each nozzle, 15 ltrs. each of petrol
and diesel were taken out and after
inspection, the same were found to be
giving proper delivery. 2 nozzles were
found to be not in the working conditions.
On inspection of pulsar cards of the
nozzles, 2 pulsar cards appeared to be
suspicious, which were seized and taken
into custody and a plastic seal was fixed
thereupon.

5. Based upon the inspection report
dated
31.05.2017,
the
respondent
-
corporation issued a letter dated 31.05.2017
calling for the response from the petitioner.
The said letter, which is contained in
Annexure - 8, was termed as "fact finding
letter". It was mentioned that during the
inspection following observations were
made and the petitioner was called upon to
5 All. R.S. Filling Station Indian Oil Corp. Ltd. Vs. Dispute Resolution Panel C/O I.O.C. & Ors. 355
submit his explanation within a period of
15 days as to why action should not be
taken
as
per
the
MDG/dealership
agreement to protect the marketing interest
of the corporation:

"2 Pulsar card were found with
impression of tempering, due to which 3
Nozzles (2 MS AND 1 HSD) were affected
by these 2 Pulsar card."

6. The petitioner submitted a reply on
15.06.2017 denying the allegations and
submitted that no extra chips were found in
the machines, the seals of machines were
found intact, measurements checked were
found in order and the calibration of the
machines was done by the Weights and
Measurement Officer and a certificate was
issued by them, thus, no fault could be
attributed to the petitioner. Subsequently, a
show - cause notice was issued to the
petitioner on 30.08.2018 (Annexure - 10).
In the said show - cause notice, first charge
alleged was that during the inspection
following irregularities were found at the
retail outlet:

"2 Pulsar card were found with
impression of tempering, due to which 3
Nozzles (2 MS AND 1 HSD) were affected
by these 2 Pulsar card."

A copy of the said inspection
report was attached with the show - cause
notice. It was also mentioned that the fact
finding letter was issued to which the
petitioner had replied. It was also noticed
that in the reply of the petitioner he had
requested not to take any action till the time
test report of the pulsar card is received. It
was also noticed that the District Supply
Officer had suspended the diesel selling
license of the petitioner. It was indicated in
the said show - cause notice that MIDCO
Company had released/sent a test report
vide its letter dated 15.06.2018 with the
following remarks:

"(I) R1 resistor is found missing
on pulsar PCB.

(II) Additional Solder marks are
observed on C8 capacitorlead.

(III) Additional solder marks are
observed on L4 location of pulsar PCB."

A copy of the report was attached
alongwith the show - cause notice. It was
further recorded that after going through
the reply dated 15.06.2017, the same
appeared to the respondent to be not
satisfactory/convincing and the attention of
the petitioner was drawn to the Clause Nos.
16, 44, 58(m) and Clause No.5.1.4 of
MDG2012 as amended, which attracts
penal action under Clause 8.2 IV - Critical
Irregularities: Termination of the first
instance. Extract of the report submitted by
the MIDCO is as under:

TEST REPORT

Received
Item No.1 - Midco SureFill Pulsar card for
nozzle No.1

PCB
Design
Reference
Number
Item
No.1
-
MID03323B201003

Tests/Parameter
Result
Remarks
Visual Inspection
Note:
Visual inspection has
been
done
without
providing Power to the
received materials under
test.

NOT OK
(Refer
Remarks)
Item No.1
(I) R1 resistor
is
found
missing
on
pulsar PCB.
(II) Additional
Solder
marks
are observed on
C8
capacitor
lead.
(III) Additional
Solder
marks
are observed on
L4 location of
pulsar PCB.
Delivery Test:

NOT TESTED
(Refer Remark)
Not tested due
to
non
conformance to
356 INDIAN LAW REPORTS ALLAHABAD SERIES
Midco design.

Result:
Pulsar card is not found in conformance
with Midco standard design as per visual
inspection test.

Note:
Tests have been carried out as per Midco
norms only.

7. The second charge was that the
irregularity has also been widely reported
in the print and electronic media, which has
caused prejudiced in the mind of the
general public and the customers and as
such has tarnished the good image and
reputation of the corporation and the same
was against the marketing interest of the
corporation.

8. The petitioner was called upon to
file his reply within a period of 15 days. It
is stated that the petitioner submitted a
detailed reply to the said show - cause
notice on 05.10.2018, which is contained in
Annexure - 13. It is also on record that in
the intervening period, the license of the
petitioner, which was cancelled by the
State, was restored on 31.09.2017. It is on
record that the 2 pulsar cards, which were
taken into custody by the inspecting team
on 31.05.2017 were handed over to the
District
Supply
Officer,
however,
subsequently, the same were taken by the
corporation from the District Supply
Officer and one of the pulsar cards was
handed over to the Original Equipment
Manufacturer (OEM) MIDCO for testing
on 15.12.2017 and the other card was
handed over to the other OEM Dreser
Wayne on 08.12.2017 for testing at
NOIDA. The said two reports given by the
two OEMs are on record as Annexures - 11
& 12.

9. The report of MIDCO has already
been reproduced hereinabove. In the report
of the other OEM Dreser Wayne, no signs
of damage were found. The said report also
observed that although soldiering signs
impression have been observed in the
pulsar PCB circuitry, however, during
testing all operations were found normal.
The petitioner in his defense relied upon
the report of the Dreser Wayne also to
impress that merely by eye estimation, it
cannot be presumed that anything wrong
was done, which stood confirmed by the
OEM
while
recording
that
although
impressions of soldiering were found on
the pulsar PCB, however, during testing all
operations were found normal. The report
of the other OEM Dreser Wayne was
submitted by the petitioner alongwith
supplementary reply dated 27.11.2018.

10. It is on record that after the
inspection, an FIR was also lodged against
the petitioner under Section 3/7 of Essential
Commodities Act, however, subsequently, a
final
report
was
submitted
by
the
Investigating Officer on 26.12.2018, which
was also accepted by the trial Court. It is on
record that subsequent to the FIR coming to
an end and the supply license being
restored by the District Supply Officer on
13.09.2017, the sale of petrol etc., was
supplied by the respondents and the
operation
continued
from
01.07.2017
uninterrupted and the supply of HSD was
resumed w.e.f 13.09.2017.

11. On 14.03.2019 the respondent -
corporation passed an order terminating the
retail outlet dealership of the petitioner. A
copy of the said termination order is
contained in Annexure - 19.

12. Aggrieved against the termination
order dated 14.03.2019, the petitioner
preferred a writ petition being Writ Petition
No.9062 (MB) of 2019 (R.S. Filling Station
5 All. R.S. Filling Station Indian Oil Corp. Ltd. Vs. Dispute Resolution Panel C/O I.O.C. & Ors. 357
v. Indian Oil Corporation & Ors.) before
this Court wherein this Court granted an
interim
indulgence
by
staying
the
implementation of the termination order till
the disposal of the application for interim
relief by the appellate forum and the
petitioner was relegated for filing an appeal
before the Disputes Resolution Panel. The
petitioner preferred an appeal challenging
the termination order dated 14.03.2019.
The said appeal was disposed off vide order
dated 15.10.2019 whereby the appellate
authority noticing the contention of the
petitioner remanded the matter solely on
the ground that the petitioner was denied an
opportunity of hearing before passing of
the order dated 14.03.2019 with a direction
to proceed with the matter from the stage of
granting of personal hearing as provided
under Clause 8.6 of MDG. The order dated
14.03.2019 was set aside.

13. The said order of the appellate
Court was challenged by the petitioner by
filing a writ petition being Writ - C
No.21992 of 2020, however, during the
course of pendency of the said writ
petition, a personal hearing letter was
issued to the petitioner by respondent no.4
fixing 02.01.2020 for grant of personal
hearing in terms of the remand order dated
15.10.2019. The petitioner vide his letter
dated
27.12.2019
requested
for
an
adjournment in view of the fact that
petitioner could not contact his legal
adviser on account of winter vacations,
however, an order came to be passed on
19.10.2020 once again cancelling the
dealership agreement of the petitioner. The
said termination order was made subject to
the final outcome of Writ Petition No.1262
(MS) of 2020, which was pending.

14. As the order was passed during
the pendency of the writ petition, an
amendment application was filed which
was allowed permitting the petitioner to
amend the writ petition and it is also
noticeable that earlier Writ - C No.21992 of
2020 was withdrawn by the petitioner in
view of the subsequent developments.

15. Learned counsel for the petitioner
has placed heavy reliance on the judgment
of this Court passed in Writ Petition
No.27043 (MB) of 2018 (M/s Chaudhary
Filling Point, Kazipur & Anr. v. State of
U.P. & Ors.) to argue that in similar
circumstances this Court had allowed the
writ petition filed by a similarly placed
dealer and the said order has attained
finality. I shall revert to the same in the
latter part of the judgment.

16. Learned counsel for the petitioner
also places reliance on a certificate issued
by Professor and Head of Electronics
Department,
National
Institute
of
Technology, Karnataka, who has expressed
his opinion that an ordinary laboratory will
find it difficult to detect and prove the
tampering,
which
requires
specialized
instruments and cannot be detected by a
visual inspection alone.

17. In the backdrop of the facts as
narrated
hereinabove,
Shri
Prashant
Chandra, learned Senior Advocate argues
that the entire exercise initiated and which
has
resulted
in
cancellation
of
the
dealership, was premeditated which is
reflected from the show - cause notice and
the fact finding letter issued, which clearly
is a case of misreading of the report of the
inspection team dated 31.05.2017. He
further argues that any proceedings which
are an outcome of a premeditated mind are
clearly arbitrary and are liable to be
quashed.
He
further
argues
that
in
inspection report dated 31.05.2017, it was
358 INDIAN LAW REPORTS ALLAHABAD SERIES
observed that the seals in the dispensing
unit were intact, delivery was correct and
mere
suspicion
was
noticed
in
the
inspection report, which was clearly
misinterpreted while issuing the fact
finding letter as well as the show - cause
notice wherein it was recorded that
inspection team in respect of pulsar cards
found an impression of tampering.

18. Learned Senior Advocate further
argues that the report of MIDCO which
was the basis for issuance of a show - cause
notice is based upon visual inspection alone
and does not record any conclusion with
regard to any material, which can lead to a
conclusion that there was any tampering
done. He argues that the report of the
MIDCO only recorded that "pulsar card is
not found in conformance with Midco
standard design as per visual inspection
test.", which according to the petitioner is
not enough to form an opinion that there
was any tampering and as also opined by
the Professor of NIT, Karnataka. He further
argues that in the show - cause notice while
levelling second charge it was mentioned
that in view of matter being reported
widely in the print and medical electronic
image, a prejudice has been caused and the
good reputation of the corporation is
tarnished whereas no material in support of
the said allegation contained in the show -
cause notice either exists or was ever given
to the petitioner. He further argues that the
entire exercise was an arbitrary exercise of
administrative powers conferred upon the
respondent authority, which is subject to
judicial review and cannot stand the test of
Article 14 of the Constitution of India.

19. Learned Senior Advocate argues
that the specific defense of the petitioner as
taken in the two replies filed in response of
the show - cause notice reliance was placed
upon the other report sent by other OEM
Dreser Wayne, which clearly demonstrated
that there was nothing wrong with the
pulsar card and that report ought to have
been considered while passing the order
only to ascertain that the petitioner was
guilty of any malpractices or not. He
further argues that the order impugned
clearly reveals that no opportunity of
hearing has been granted. He argues that
the order calling upon the petitioner for
personal hearing could not be adhered to in
view of the prevalent Covid - 19 Pandemic
situation and as such, the directions given
by DRP for grant of personal hearing have
not been complied with. He further argues
that even if the personal hearing was not
granted, it was incumbent upon the
authority to have considered the replies
submitted by the petitioner before forming
an opinion leading to termination of the
dealership. He again draws my attention to
the impugned termination order wherein
the authority concerned recorded the
findings as were passed in the earlier order
dated 08.10.2018, thereafter it records the
directions given by the DRP and thereafter
it records that despite various opportunities,
the opportunity of personal hearing has not
been availed by the petitioner, as such, the
same was closed. While taking a decision it
merely mentions that "in the absence of any
new fact, it is concluded that "you have
failed to discharge your responsibility as
custodian of the outfits and to ensure that
no acts are committed by you or your
servants or agents, which is prejudicial to
the interests or good name of the
corporation or its product and in view of
large scale reporting in media, the image of
the corporation is tarnished", and thus,
proceeded to terminate the retail outlet
dealership in consonance with Clause 16,
44, 58(m) of the dealership agreement
dated 01.04.2006 and clause no.5.1.4 of
5 All. R.S. Filling Station Indian Oil Corp. Ltd. Vs. Dispute Resolution Panel C/O I.O.C. & Ors. 359
MDG-2012 as amended and Clause 8.2 IV
of the said MDG. This manner of decision
making, according to the counsel for the
petitioner, is an arbitrary exercise of powers
as the appellate order had clearly quashed
the
earlier
termination
order
dated
14.03.2019 and thus, it is incumbent to
have recorded fresh findings taking into
consideration the written submissions made
by the petitioner.

20. Learned Senior Advocate argues
that if the petitioner was granted an
effective personal hearing, the petitioner
could have demonstrated that in view of the
report of the other OEM Dreser Wayne and
the opinion of the Professor of NIT,
Karnataka, the report of MIDCO could be
shown to be no report at all warranting
such a severe action. In the light of the said,
he argues that the writ petition be allowed.

21. Shri Dipak Seth, learned counsel
for the respondent argues that the petition is
not maintainable in view of the alternative
remedy of appeal, which is provided for in
the MDG guideline. He further argues that
despite granting ample opportunities, the
petitioner failed to avail an opportunity of
personal hearing and thus, cannot find fault
with the process of decision. He argues that
the show - cause notice as issued to the
petitioner was not premeditated as the
corporation has no bias against the
petitioner. In any case, there is no material
to argue that there was any personal or
institutional bias. He further justifies the
order in terms of the MDG, especially
Clause 5.1.4, the following is provided:

"5.1.4
ADDITIONAL
/
UNAUTHORISED FITTINGS / GEARS
FOUND
IN
DISPENSING
UNITS
/TAMPERING
WITH
DISPENSING
UNIT

Any mechanism / fittings / gear
found fitted in the dispensing unit which is
likely to manipulate the delivery.

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

In
such
cases,
views
and
independent
opinion
of
the
original
equipment manufacturer would be obtained
and suitable decision taken.

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 sent to lab
for testing."

22.

Learned
counsel
for
the
respondent
further
argues
that
the
irregularities as classified under MDG are
classified as ''critical irregularities' and in
terms of Clause - 8.2 (iv), the allegation
against the petitioner would fall as ''critical
irregularity',
consequence
whereof
is
provided under MDG itself. He further
argues from the report of MIDCO, that
perusal of the report itself clearly reveals
that the same would fall within mischief of
Clause 5.1.4 and thus, no wrong has been
committed by the corporation. In the light
of the said, he argues that the writ petition
is liable to be dismissed.

23. Shri Dipak Seth, counsel for the
respondent, was confronted with the
specific query of this Court as to whether
any material was given to the petitioner in
support of the second allegation that in
view of large scale media reporting, the
image of the company tarnished to which
he fairly submits that no such material was
given to the petitioner nor is it contained in
the show cause notice.
360 INDIAN LAW REPORTS ALLAHABAD SERIES

24. Shri Prashant Chandra, learned
Senior Advocate in rejoinder argues that the
alternative remedy would not be an
efficacious one in view of the fact that the
writ petition is already pending and the
termination order has been made subject to
the
outcome
of
the
writ
petition.
Furthermore, relegating the petitioner to the
alternative remedy would violate the rights
of the petitioner under Article 21 of the
Constitution of India and further as the
retail outlet was admittedly running from
2017, relegating the petitioner to the
alternative remedy would cause undue
hardship to the petitioner as the retail outlet
of the petitioner would not start during the
pendency of the appellate proceedings and
lastly he argues that any order, which is
passed contrary to the principles of natural
justice, ex-facie, perverse and based upon
no material should not be relegated to the
alternative remedy and the writ petition
would lie in terms of the judgment of the
Hon'ble Supreme Court in the case of
Whirlpool Corporation v. Registrar of
Trademarks, Mumbai & Ors. - (1998) 8
SCC 1.

25. Learned counsel for the petitioner
has relied upon the following judgments:

"1.
Maharashtra
Chess
Association v. Union of India - 2019 SCC
OnLine SC 932

2. J. Ashoka v. University of
Agricultural Sciences - (2017) 2 SCC
609

3. Ahmad Ullah v. Union of India
& Ors. - Writ C No.25502 of 2019 decided
on 13.09.2019

4. Allahabad Bank and Ors. v.
Krishna Narayan Tewari - (2017) 2 SCC
308

5. Rakesh Kumar Pandey v. State
of U.P. & Ors. - 2019 SCC Online All 4004

6. Gour Chandra Dutta v. Union
of India and Ors. - 2015 SCC OnLine Bom
4883

7. Siemens Ltd. v. State of
Maharshtra & Ors. - (2006) 12 SCC 33

8. M/s. Laltu Fillings Station v.
Union of India & Ors. - 2016 SCC OnLine
Cal 626

9. Oryx Fisheries Private Limited
v. Union of India and Ors. - (2010) 13 SCC
427"

26. The said judgments referred to
above were to canvass the point that
alternative remedy is not an absolute bar,
the administrative/quasi-judicial authorities
are obliged to record reasons and that show
- cause notice issued with a premeditation
would entitle the petitioner to approach this
Court in exercise of power under Article
226 of the Constitution of India.

27.

Learned
counsel
for
the
respondent on the other hand relies upon a
judgment of this Court in the case of
Savitri Devi and Ors. v. Union of India
and Ors. - Writ C No.29859 of 2017
decided on 13.07.2017.

28. In the light of the argument raised
at the bar and the pleadings exchanged, this
Court is to decide: (i) whether the writ
petition would lie before this Court
bypassing an appellate remedy provided
under the MDG? and;

(ii) whether the action of the
respondent in terminating the retail outlet
by the petitioner was justified or not?

29. It is undisputed and on record that
the basis for passing of the order
terminating the dealership was the report
dated 31.05.2017 wherein a suspicion was
expressed with regard to two pulsar cards,
5 All. R.S. Filling Station Indian Oil Corp. Ltd. Vs. Dispute Resolution Panel C/O I.O.C. & Ors. 361
the report of OEM MIDCO and the third
allegation with regard to loss of reputation
of the corporation in view of wide reporting
in print and electronic media.

30. Although a remedy of appeal lies,
however, the fact remains that during the
period 13.09.2017 till the passing of the
termination order dated 19.10.2020, the
petitioner was continuing to operate the
retail outlet and no fault was found during
the said period and the manner of passing
the order, which shall be dealt with while
deciding the second issue, I have no
hesitation in holding that the writ petition
would lie against an order, which is
perverse and which cannot satisfy the test
of Article 14 of the Constitution of India.

31. Referring to the second question,
what emanates from the facts is that an
inspection was carried out on 31.05.2017
wherein it was expressed that two pulsar
cards appeared to be suspicious, the
corporation clearly misreading the said
inspection report prima - facie formed an
opinion that the two pulsar cards were
found with impression of tampering. In
terms of the inspection report dated
31.05.2017, clearly the said impression
formed by the corporation on the reading of
the report of the inspection team was a
clear misreading and misunderstanding of
what was expressed by the inspection team.
In the fact finding letter and the subsequent
show - cause notice after receiving of the
report of MIDCO was the only material
available
for
passing
of
the
order
terminating the dealership. The report of
the MIDCO on its plain reading did not
specifically conclude that there was any
tampering or had contained anything to
demonstrate that the discrepancies as
observed by MIDCO from their ocular
inspection could be attributed to the
petitioner.

32. It is common ground and not
disputed that all the seals were found intact,
the quantity of the product dispensed by the
dispensing unit were found to be alright.
Mere presence of soldiering marks over the
pulsar cards, which was the basis of the
passing of the order does not make it clear
as to how the said discrepancy observed
could be attributed to the petitioner, more
so, in the light of the report of the OEM
Dreser Wayne, which was also given the
similar
pulsar
cards
with
similar
discrepancies, however, after testing, they
found that there was nothing wrong with
the operations which were effected through
the pulsar cards despite their being
soldiering marks on them.

33. A very vital piece of evidence
given by the petitioner being the report of
the Professor of NIT was not even
considered. There is further nothing on
record to demonstrate as to whether
MIDCO had any facility for testing or they
were qualified to carry out the testing. That
being the case, the entire order is based
upon misreading of the inspection report
and the report of the MIDCO, which cannot
be termed as conclusive so as to establish
anything which can be attributed to the
petitioner. This aspect was elaborately
considered by this Court while delivering
the judgment in the case of M/s Chaudhary
Filling Point (supra) while dealing with the
contentions pertaining to irregularities in
the pulsar card, which was almost similar
to the allegations contained against the
petitioner. It is relevant to quote the
relevant extracts from the case of M/s
Chaudhary Filling Point (supra), which are
as under:
362 INDIAN LAW REPORTS ALLAHABAD SERIES

"............

As seen from the reading of the
impugned order, the only reason assigned
for being not satisfied with the explanation
offered by the petitioner was that there was
tampering in the DU and pulsar card
contains certain soldering marks. However,
what was not considered by the competent
authority was that at what point of time this
unauthorized
tampering/soldering
was
done in the dispensing unit and how the
dealer is manipulating the distribution of
fuel. No material, much less credible one
has been brought on record by the
respondents to disclose the unauthorized
access to the equipment by the petitioner. It
was specific stand of the petitioner that
periodically the Weights and Measurements
Department officials inspected the seals
and they were found to be intact. Further
more,
what
is
the
impact
on
tampering/soldering in delivery unit is not
disclosed. How the dealer can manipulate
delivery of fuel by inserting such unit is not
explained. The only objective of a dealer to
tamper
with
dispensing
unit
is
to
manipulate delivery of fuel. In this case, the
delivery of fuel was found to be accurate
prior to checking of unit and after the
checking. Furthermore, the defence of the
petitioner that it is possible that the
supplier himself might have done soldering
while repairing for proper functioning of
the unit by supplier himself cannot be
brushed aside.

In view of the above, merely on
assumptions that the tampering/soldering
was found in the delivery unit of the dealer
premises, the petitioner dealer cannot be
visited
with
severe
consequence
of
termination of dealership and that too
when the OEM report does not support or
corroborate the version of the respondents.
Thus, the action of the respondentCorporation, in the facts of this case, in
terminating the dealership of the petitioner
no.1
on
the
sole
ground
that
soldering/tampering was found in the
Dispensing Units is illegal, unreasonable,
excessive and made in arbitrary exercise of
power and hence unsustainable, more
particularly when performance of the
petitioner-dealer
all
along
has
been
appreciated."

34. The submission of Shri Dipak
Seth that soldering marks over the pulsar
card would be deemed to be tampering in
view of Part II of Clause 5.1.4. of the MDG
does not merit acceptance for the following
reasons:

"5.1.4
ADDITIONAL
/
UNAUTHORISED FITTINGS / GEARS
FOUND
IN
DISPENSING
UNITS
/TAMPERING
WITH
DISPENSING
UNIT

Any mechanism / fittings / gear
found fitted in the dispensing unit which is
likely to manipulate the delivery.

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

In
such
cases,
views
and
independent
opinion
of
the
original
equipment manufacturer would be obtained
and suitable decision taken.

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 sent to lab
for testing."

On a plain reading, Clause 5.1.4
as quoted above deals with the effect of
manipulation/modification
of
the
machinery, the said clause has to be read as
a whole and cannot be read in parts as
5 All. R.S. Filling Station Indian Oil Corp. Ltd. Vs. Dispute Resolution Panel C/O I.O.C. & Ors. 363
argued by Shri Dipak Seth. On its
composite reading, it is clear that any
addition, removal, replacement or any
manipulation of any part of the dispensing
unit should be read with Part 1 and
necessarily has to correlate with the
manipulation of delivery.

To further clarify, the words
''addition',
''removal',
''replacement'
or
''manipulation' have to be interpreted to be
the acts which are done by any person by a
conscious act with an intent to manipulate
delivery to gain unfair advantage. The
deeming fiction can be applied only when it
can be concluded that the addition or
manipulation has been done with a view to
gain any unfair advantage. It is also
inconceivable that any dealer would do any
manipulation with no consequential gains
or benefits. The report of ''MIDCO' is silent
on this aspect as also the inspection report
dated 31.05.2017 and that of OEM Dreser
Wayne suggests otherwise. Thus, no
material on record exists so as to attract the
deeming fiction of clause 5.1.4. of MDG.

35. The judgment of this Court in the
case of Savitri Devi (supra) as cited by Shri
Dipak Seth did refer to Clause 5.1.4. of the
MDG, however, the Court did not interfere
for the simple reason that in the said case
there was a specific allegation of tampering
and also allegation of compromise with the
quality and quantity of the petroleum
products. The said case also recorded that in
the said case, the petitioners did not deny
tampering of the dispensing unit in their reply
and furthermore on the examination, two
external yellow wires were found. These facts
are clearly absent in the present case, thus,
the
said
judgment
would
have
no
applicability to the facts of the present case.

36. The second allegation levelled
against the petitioner with regard to
tarnishing of the image of the corporation
in view of the large scale reporting, it is an
admitted ground that no material existed
either
before
the
authority
or
was
confronted to the petitioner to enable the
authority to come to a conclusion that the
image of the corporation was tarnished and
the same could be attributed to the
petitioner.

37. It is well settled law that in the
administrative
and
the
quasi-judicial
decision making process, any decision
taken upon misreading of a document, in
ignorance of a document and without
recording reasons would clearly qualified
as
arbitrary,
perverse
and
hit
by
wednesbury
arbitrariness.
The
order
impugned, which has been passed merely
records the earlier order, the directions
given by the appellate forum and the
absence of the petitioner for personal
hearing and abruptly records that "it is
concluded that the petitioner had failed to
discharge its responsibilities as custodian of
the outfits" clearly there is no application of
mind by the authority concerned, the
defense as taken by the petitioner in his
reply and the supplementary reply have not
even been referred to, although the same
were also canvassed when the first order of
termination was passed and as recorded in
the order dated 19.10.2020.

38. The denial of opportunity of hearing
also makes the order as violative of principles
of natural justice. Although the order records
that despite opportunity, the petitioner did not
avail the opportunity of hearing, however, the
fact remains that during the period from
which the dates were fixed for hearing, Covid
- 19 Pandemic was prevalent in the country
and no reason has been shown as to why the
corporation acted in hot haste and closed the
right of hearing of the petitioner. Thus,
364 INDIAN LAW REPORTS ALLAHABAD SERIES
following the judgment of this Court in the
case of M/s Chaudhary Filling Point (supra)
and observing that the impugned order has
been passed on a clear misreading of the
inspection report, a clear misreading of the
report of MIDCO, non-consideration of vital
piece of evidence in the form of report of the
other OEM Dreser Wayne as well as the
report of the Professor of NIT and improper
invocation of deeming provision under clause
5.1.4 of MDG, the impugned order dated
19.10.2020 (Annexure RA - 8) cannot be
sustained and is set aside with directions to
the respondent - corporation to permit the
petitioner to run the retail outlet forthwith
subject to the petitioner complying with the
other
requirements
for
dispensing
the
petroleum products as are required under the
Act and the Rules.

39. The writ petition stands allowed in
terms of the aforesaid directions.
----------
(2022)05ILR A364
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 05.05.2022

BEFORE

THE HON'BLE PANKAJ BHATIA, J.

Writ C No. 2059 of 2022

Santosh Kumar Chaurasia ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioner:
Roopani Mishra, Manoj Kumar Dubey

Counsel for the Respondent:
C.S.C.

(A) Detention of vehicle - The Indian
Forest Act, 1927 - Section 52 - power of
detention
of
vehicle
after
recording
'reasons to believe' - Section 52(3) - after
making a seizure report, the same shall be
sent to the magistrate concerned, Section
52-A - power conferred upon Divisional
Forest
Officer
to
take
action
for
confiscation only on being satisfied that a
'forest offence' is believed to have been
committed
in
respect
of
any
forest
produce, which is the property of the
State Government, Section 52-B - appeal -
an order passed cannot be supplemented
by giving any reasons which are absent in
the orders passed and impugned herein -
'Reasons to believe' as prescribed under
section 52 are necessary to be recorded as
the
order
of
detention/seizure
is
expropriatory in nature and intends to
deprive the owner of his property - prior
to the passing of the confiscating order, it
is essential to come to a conclusion that a
'forest offence' is believed to have been
committed.(Para -7,8,9,11,14)

Petitioner claims to be owner of Truck - hire for
transporting goods - truck of petitioner seized
- transporting 45 logs of Sagwan - forest officer
view - goods were illegally transported - order
of seizure - detention order - does not disclose
any 'reasons to believe' - to implicate the Truck
in question with offence alleged against owner
of goods - proceedings with regard to
allegation of 'forest offence' not adjudicated -
appeal- dismissed - Hence present petition.
(Para -4,9 )

HELD:- Finding is erroneous as the question of
offence committed is yet to be established.
Direction to release forthwith, the truck in
question, which is in custody, on furnishing
proof of ownership and giving an undertaking to
produce the truck as and when required and
with condition that the petitioner shall not sell
the
truck
in
question
without
obtaining
adequate permission from the divisional forest
officer in accordance with law.