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2015 Supreme(Jhk) 1232

IN THE HIGH COURT OF JHARKHAND AT RANCHI
SHREE CHANDRASHEKHAR, J.
M/s Suresh Kumar Patwari - Petitioner
Versus
Bharat Petroleum Corporation Limited & Ors. - Respondents
W.P.(C) No. 1400 of 2015
Decided On : 11-08-2015

Advocates:
Advocate Appeared:
For the Petitioner: Mr. Ajit Kumar, Mr. Saket Upadhyay, Mr. Syed Ramiz Zafar
For the Respondents: Mr. Mrinal Kanti Roy

The main legal point established in the judgment is that the termination of a dealership agreement based on allegations of adulteration must be supported by evidence of actual adulteration as per the legal provisions, and the court's decision was influenced by the interpretation of the relevant provisions of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005.

Headnote:

Petroleum Outlet - Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 - Section 2(a), Clause 1.2(iv), Clause 5.1.1, Clause 8.2 - The court discussed the provisions of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, including the definition of 'adulteration' and the permissible limits for density variation. The interpretation of these provisions influenced the court's decision to quash the termination of the dealership agreement.

Fact of the Case:

The petitioner, a proprietorship firm, was aggrieved by the termination of the dealership agreement for a retail petroleum outlet due to alleged adulteration of petroleum products. The court analyzed the test reports and submissions of the parties to determine whether the samples collected at the outlet were adulterated.

Finding of the Court:

The court found that the termination of the dealership agreement was illegal as the test reports indicated that the petroleum products at the outlet were not adulterated, and the variation in density was within permissible limits.

Issues: The main issue was whether the samples collected at the retail outlet could be deemed adulterated under the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005.

Ratio Decidendi: The court's decision was based on the interpretation of the provisions of the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005, and the finding that the petroleum products at the outlet were not adulterated as per the test reports.

Final Decision: The court quashed the impugned order dated 23.02.2015 and allowed the writ petition, holding that the termination of the dealership agreement was illegal.

ORDER :

The petitioner, a proprietorship firm was allotted dealership for a retail petroleum outlet at Dumka. A Dispensing Pump and Selling Licence Agreement was executed on 10.10.2013 for sale and supply of petroleum products for 15 years. The petitioner is aggrieved by order dated 23.02.2015 whereby, the agreement dated 10.10.2013 has been terminated with immediate effect.

2. The brief facts of the case are summarized thus,

An inspection was carried on 09.07.2014 at petitioner’s outlet by Quality Control Cell Team when it was found that density register was not updated for MS and HSD since 25.06.2014 and the stock register/DSR was not updated since 20.06.2014. Accordingly, the QCC Team tested the density of petroleum product with reference to last invoice of the product. The QCC Team found variation in density in MS sample much beyond permissible limits. In MS stock and HSD stock, abnormal stock variation was detected and accordingly, samples were drawn for clinical tests. When the QCC Inspection Team asked to handover Tank Lorry (TL) samples of the last and second last load of MS and HSD, it was informed that TL samples for MS are not available and TL sample of HSD was available only for the last load. The outlet's representative was instructed to suspend sales of all petroleum products till, further instruction from the Team Manager (Retail), Ranchi. A show-cause notice was issued to the petitioner on 02.08.2014 and a direction for further suspension of sales and supplies of petroleum products was issued. The petitioner submitted detailed reply on 13.08.2014. A notice for personal hearing on 17.09.2014 was given and the petitioner's representative appeared and filed further reply. The petitioner approached this Court in W.P.(C) No. 5788 of 2014 which was disposed of vide order dated 30.01.2015 directing the respondent-BPCL to pass final order keeping in view Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 and the findings recorded in order dated 30.01.2015. Aggrieved by the direction of the Writ Court, L.P.A. No. 105 of 2015 was preferred by M/s Bharat Petroleum Corporation Limited against the said order and the Letters Patent Court vide order dated 12.02.2015 interfered with the findings of the Writ Court vis-a-vis adulteration of MS samples drawn from the retail outlet and directed the appellant-BPCL to pass a speaking order within three weeks.

3. Heard the learned counsel for the parties.

4. Mr. Mrinal Kanti Roy, the learned counsel for the respondent-BPCL raises a preliminary objection to maintainability of the writ petition and submits that Clause 8.9 of Marketing Discipline Guidelines (MDG) provides a right of appeal to the dealer against order passed in cases of critical irregularity and therefore, the petitioner must, first avail the remedy of appeal under Clause 8.9. Resisting the preliminary objection, Mr. Ajit Kumar, the learned Senior Counsel for the petitioner submits that the provision for appeal under MDG-2012 is not a statutory appeal. It is only a guideline to the marketing company and the retailer for conduct of business and thus, it is not mandatory. It is further submitted that Clause 8.9 of MDG-2012 does not lay down precondition for preferring appeal and therefore, it cannot be contended that, to avoid the conditions for filing appeal, the petitioner has short-circuited the said provision by filing the writ petition.

5. I find that when the petitioner approached this Court in W.P.(C) No. 5788 of 2014, the respondent-BPCL had raised similar objection which was rejected by this Court. In the present proceeding, the petitioner has challenged order dated 23.02.2015 which has been passed pursuant to order passed by the Hon'ble Division Bench. The respondent-BPCL has filed detailed counter-affidavit and supplementary counter-affidavit and the petitioner has filed rejoinder affidavit. The matter has been listed on as many as 9 occasions and the cou















































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