AR. LAKSHMANAN, C. J.

( 1 ) WITH the consent of the learned Counsel appearing for the parties both the Writ petition and the Writ Appeal were heard together and are being disposed of by this common judgment.

( 2 ) THE writ petition was filed by the petitioner originally to declare the letter bearing No. VRO/bak/ret dated 16. 9. 2002 issued by the respondent-Corporation as illegal, arbitrary and inoperative. Later, the petitioner challenged the order passed by the respondent-Corporation in Ref. VRO/ bak//ret dated 5. 10. 2002 by way of amendment. The prayer was granted as per court order dated 11. 10. 2002 in W. P. M. P. No. 25154 of 2002.

( 3 ) THE parties will be referred to by their status in the Writ Petition.

( 4 ) THE petitioner herein is a partnership firm registered under the provisions of the indian Partnership Act, 1932 on 3. 4. 2002 and entered into an agreement with the respondent-Corporation on 10. 4. 2002 to sell all its petroleum products in retail at Samalkot in East Godavari District. The petitioner s business premises were inspected by the officers of the respondent-Corporation on 28. 8. 2002. The inspecting officer conducted density test to the products of M. S. and h. S. D. available in the underground tanks of the outlet of the petitioner and found that the samples are not in conformity with the specifications. The respondent issued a letter on 4. 9. 2002 informing the petitioner that one of the M. S. samples drawn from its outlet on 28. 8. 2002 was failed in respect of clinical tests i. e. , distillation and gum tests though it passed the density test and directed the petitioner to stop sales and supplies. The petitioner thereafter received the impugned notice dated 16. 9. 2002 from the respondent on 19. 9. 2002. In the said notice it is stated that the earlier firm of the petitioner was awarded a punishment and this mistake is a second one and as such the petitioner was asked to show-cause why action should not be taken for termination of dealership. Against the said show-cause, the present writ petition was filed.

( 5 ) THIS Court by order dated 26. 9. 2002 directed the petitioner to submit its explanation within three days and the respondent was permitted to pass appropriate orders within ten days thereafter. Pursuant to the said direction, the petitioner submitted its explanation on 27. 9. 2002. The respondent thereafter passed final orders in the notice vide his letter dated 5. 10. 2002 wherein the dealership agreement dated 10. 4. 2002 of the petitioner was terminated. Therefore, the petitioner filed a petition for amendment of the prayer in the writ petition. As stated earlier, the prayer was allowed as per the orders of this Court dated 11. 10. 2002. Thus the show cause notice dated 16. 9. 2002 and the order dated 5. 10. 2002 are challenged as illegal, arbitrary and inoperative and for a consequential direction directing the respondent to drop all further proceedings against the petitioner and restore the sale and supplies of all petroleum products to the petitioner s outlet.

( 6 ) DURING the pendency of the writ petition, the petitioner filed WPMP No. 25155 of 2002 to suspend the operation of the letter dated 5. 10. 2002 of the respondent addressed to the petitioner pending disposal of the writ petition. The learned Single Judge by the order dated 11. 10. 2002 suspended the impugned order pending further orders and directed the respondent-Corporation to continue supply of commodity to the petitioner on its depositing an amount of Rs. 50,000/- as a measure of tentative penalty. It was made clear that if any violation on the part of the petitioner is detected, it would be open to the respondent to terminate the dealership inasmuch as the same constitutes the second violation. Aggrieved by the said order, the respondent-Corporation filed the writ Appeal contending that the order of the learned Single Judge is contrary to law and also contending that the writ petition is not maintainable as the disput

Click Here to Read the rest of this document