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2010 Supreme(Mad) 985

High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE ELIPE DHARMA RAO & THE HONOURABLE MR. JUSTICE N. PAUL VASANTHAKUMAR
M/s. Hindustan Petroleum Corporation Limited, rep. by its Managing Director, Mumbai & Another
Versus
Geetha Kasturirangan & Others
W.A.No.1250 of 2008 & M.P.No.1 of 2008, W.A.No.1251 of 2008 & M.P.No.1 of 2008
Decided On : 11-03-2010

Advocates Appeared:
For the Appellants :O.R. Santhanakrishnan, Advocate.
For the Respondents:R1 - N.L. Raja, R2 -M. Ramya, V. Raghavachari, Advocates.

The court can intervene in a writ petition, despite the availability of an alternate remedy, when there is a violation of natural justice or mandatory statutory procedures.

Headnote:

Natural Justice - Termination of Dealership Agreement - Central Order, 2005 - Essential Commodities Act, 1955 - [Natural Justice] - [Termination of Dealership Agreement] - [Central Order, 2005]

Fact of the Case:

The Retail Dealer challenged the termination of the dealership agreement by HPCL, citing violations of natural justice and procedural irregularities in the testing process of petroleum products. The single Judge found in favor of the Retail Dealer, setting aside the termination order.

Finding of the Court:

The court held that the violation of mandatory procedures in the testing process, as prescribed in the Central Order, 2005, constituted a breach of natural justice and justified the court's intervention, despite the availability of an alternate remedy through arbitration.

Issues: 1. Whether the court was justified in entertaining the writ petition despite the availability of an alternate remedy. 2. Whether the principles of natural justice were violated by HPCL in terminating the dealership agreement. 3. Whether the procedure for testing petroleum products, as per the Central Order, 2005, was mandatory or directory.

Ratio Decidendi: The court can entertain a writ petition, even if an alternative remedy is available, particularly when there is a violation of natural justice or mandatory procedures. The mandatory procedures prescribed in the Central Order, 2005, for testing petroleum products must be strictly adhered to, and failure to do so justifies intervention by the court.

Final Decision: The court upheld the single Judge's decision, setting aside the termination of the dealership agreement and confirming the writ petition filed by the wife of the Retail Dealer. Both writ appeals were dismissed.

Judgment :-

N. PAUL VASANTHAKUMAR, J.

1. Both these writ appeals are preferred by the Hindustan Petroleum Corporation Limited (hereinafter called HPCL) challenging the common order of the learned single Judge made in W.P.Nos.3914 and 28696 of 2007 dated 19. 2008 respectively, wherein the learned single Judge allowed the writ petition filed by the Retail Dealer in Petroleum products, who is the writ petitioner in W.P.No.28696 of 2007; and forbearing the Corporation from carrying on retail trade in petroleum products from the premises comprised in D.No.90B, Bhavani Main Road, Bhavani, or in any manner entering upon the said land in the writ petition filed by the wife of the Retail Dealer, who is the petitioner in W.P.No.3914 of 2007.

2. Both the writ petitioners are husband and wife. The land belongs to the wife and the husband is the Retail Dealer in petroleum products.

3. The Retail Dealer was granted dealership in petroleum products in the above said premises for the past five decades. Originally the Dealership Agreement was with ESSO and after merger of ESSO with HPCL, the dealership continued with HPCL.

4. On 111. 2006, the Regional Manager, HPCL, Coimbatore issued a show cause notice based on an inspection made by the Mobile Lab Officer on 28. 2006, in which sample was taken and sent to the laboratory of the HPCL alleging that it was found that the Retail Dealer failed positively in Octane Number Test. On 28. 2006 it was the same officer, who had taken the test sample, after conducting the test of the same sample, certified that the sample met the specification. Based on the said test report, the Retail Dealer replied to the show cause notice on 20.11.2006 stating that the whole stock was received on 8. 2006 and therefore the alleged variation found in the inspection report was incorrect as there cannot be two different results in respect of the same sample. It is also stated by the Retail Dealer that at the time of inspection, he was not present and no sample was given to the Retail Dealer and on many occasions when tests were conducted, it was found that there was no adulteration.

5. Even as per the show cause notice, the inspection was carried out on 26. 2006, however, the notice was issued on 111. 2006 and the order terminating the dealership was passed without considering, either the reply of the Retailer or the fact that the premises where the petroleum retail outlet is located belongs to the Retailers wife, and therefore the Corporation has no right to trespass into the said land. Pointing out all the above pleadings, the above writ petitions were filed.

6. It was urged in the writ petition that as the order terminating the dealership is in violation of the principles of the natural justice, the respondents are under legal obligation to conduct enquiry before passing such order of termination, and failure of the same amounts to interfering with his right to carry on business, which is against Rule 4. 4 of the Marketing Discipline Guidelines.

7. The said writ petitions were opposed by the HPCL mainly on the ground that even if the termination is bad on any reason, the Dealer has got a remedy for arbitration and without resorting to the said remedy, the writ petition filed under Article 226 of the Constitution of India is not maintainable. It is also contended that the husband, having been given dealership of retail outlet, the materials of the Corporation are available in the outlet and even though the said land belongs to the wife of the Retail Dealer, the dealership agreement granted in favour of the husband having been terminated, the Corporation is entitled to get back the materials, which are available in the land of the wife and therefore the writ petition filed by the husband challenging the order terminating the retail dealership and the writ petition filed by the wife of the Retail Dealer are liable to be dismissed.

8. The learned single Judge taking note of the submissions made by the learned counsel
























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