1988 Supreme(Guj) 193
Gujarat High Court
Judgename :R.A.MEHTA
M.S.DESAI and COMPANY - Appellant
Versus
HINDUSTAN PETROLEUM CORPORATION LIMITED - Respondent
S.C.A. 3943 of 1982
Decided On : 11/24/1988
Headnote:
Constitution of India –Art. 12, 14, 226, 236 –Dealership agreement –Petition filed the present petition praying that the respondent Corporation be directed to resume the supplies of the petroleum products and restrain the Corporation from terminating the arrangement with the petitioner-Firm – The order of termination of dealership is mainly challenged on the ground that it is in breach of binding executive directions regarding the penalty in the case of first lapse – Held, The Court had not directed that if it was a case of first lapse the Corporation will not terminate the supplies and dealership –In fact the interim direction also took into consideration that an order of termination of dealership may also be passed and therefore there was a further direction that if the respondent takes a decision to terminate the dealership the implementation of that decision will be made effective 15 days after the decision is communicated –In Court view none of these questions are required to be considered in view of the fact that even if it is a first misconduct it attracts termination of dealership agreement –In the result the petition fails and is dismissed – Petition dismissed
( 1 ) THE petitioner-Firm was an authorised dealer of petroleum products of respondent-Corporation since 1964. The last of such dealership agreement is of 2-8-1976. During the working of the dealership a sample of petrol sold at the petitioners petrol pump was taken on 22 and was subjected to the laboratory test. The test report received on 30-10-1981 showed that the petrol sold at the petitioners petrol pump was adulterated. By the letter dated 10-11-1981 an explanation was called for and the supplies of the petroleum products were suspended. On 1-7-1982 a notice was issued to the petitioner to show cause as to why the dealership of the petitioner should not be terminated. The petitioner filed his reply on 7-7-1982 He also filed the present petition on 28-9-1980 praying that the respondent Corporation be directed to resume the supplies of the petroleum products and restrain the Corporation from terminating the arrangement with the petitioner-Firm. The respondent had filed an affidavit-in-reply dated 8-10-1982. Thereafter by an interim order dated 2-11-1982 this Court (Coram: A. M. Ahmadi J.) issued an interim direction. That order in its entirity is as follows:" It appears that certain guidelines have been issued by the Ministry of Petroleum vide Annexure A to the petition Similar guidelines also appear to have been issued by the respondent vide Annexure F to the affidavit-in-rejoinder. of course. the case of the respondent is that no such directive is issued by the Ministry and that the said directives have come into operation at a subsequent date. The sample was collected on 22nd July 2981 and the test report dated 30/10/1981 indicated adulteration. As such the suspension order was issued on 10 November 1981 Since th then the sale has been suspended. Show cause notice was served on the petitioner on 1/07/1982 and the reply thereto was filed on 7/07/1982 Even though the suspension order is of 10/11/1981 the petition was filed on 21st Sept 1982 in view of the guidelines directives issued by the Ministry of Petroleum Annexure A adopted by the respondent by Annexure T for the first lapse the retail outlet is required to be suspended for is days and if there is a second lapse the dealership agreement may even be terminated. After the show cause notice end the reply thereto it appears that the respondent has not taken any decision presumably because of the institution of the present petition. Be that as it may the respondent is by this interim order directed to take a decision within four weeks from today and in doing so the respondent may treat the present petition as the petitioners representation to the respondent. The respondent will make a speaking order specifically stating whether this Is a case of first lapse or a second lapse. If the respondent takes a decision to terminate the dealership agreement the implementation of that decision will be made effective fifteen days after the decision is communicated and placed on the record of the petition. Further orders will be passed after expiry of the period allowed to the respondent to take a decision on merits S. O. to 30/11/1982.
( 2 ) THEREAFTER the respondent-Corporation passed an order terminating the petitioner s dealership on 24-11-1982. The petition was amended on 13-12-1982.
( 3 ) IT may also be mentioned that after the order of termination of dealership and the amendment of the petition several preliminary contentions were raised at the time of admission of the petition before the learned single Judge. One preliminary contention upheld by the learned single Judge was that the relationship between the parties was governed by the contract and that excluded the writ petition and consequently the writ petition was dismissed on the ground of no jurisdiction. The petitioner had preferred Letters Patent Appeal No. 98 of 1984 which came to be allowed by the judgment reported in [1987 (1)1] 28 (1) GLR 375. The Division Bench considered that apart from the contra