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2008 Supreme(UK) 475
2009 (1) UAD 828
UTTARAKHAND HIGH COURT
Hon’ble Mr. Justice Prafulla C. Pant
Writ Petition No. 1881 of 2007 (M/S)
M/S DURGA FILLING STATION, RAINTA – Petitioner
Versus
INDIAN OIL CORPORATION & ANR. – Respondents
Decided on : 05.11.2008
Forthe Respondents:Mr. Rahul Consul and Ms. Puja Banga, Advocates
Headnote:Constitution of India, Art. 226 — Show-cause notice — Petitioner, licenced to run Petrol Pump by Indian Oil Corporation under an agreement — Inspection team of Indian Oil Corporation took sample of the Petrol, sold at petitioner's petrol pump, sample collected failed to meet the specification in respect of boiling point in distillation test — Indian Oil Corporation directed the petitioner to stop sale from his out let — Petitioner challenged the said order in writ petition — It was held that the respondents were well within their rights to advice the petitioner to stop sale, as the petitioner was an agent of the respondents and if he would be permitted to sell adulterated commodity, it would have affected the good-will of the respondents — No illegality in the impugned order asking the petitioner to stop sale. (Paras 3, 4, 7, 8)
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By means of this writ petition, the petitioner has sought writ in the nature of certiorari quashing the order dated 04.10.2006 (copy annexure-1 to the writ petition), passed by respondent No. 2, whereby sale through the petrol pump run by the petitioner is advised to be stopped. A further mandamus has been sought directing the respondents to permit the petitioner to sell the commodities supplied by the respondents through his retail outlet.
2. Heard learned counsel for the parties and perused the affidavit, counter affidavit and rejoinder affidavit filed on their behalf.
3. Brief facts, as narrated in the writ petition, are that petitioner was granted dealership by the Indian Oil Corporation to run its retail outlet in Rainta, in the year 2001. Since then the petitioner was running the petrol pump in terms of the agreement between the parties. However, on 04.10.2006, the respondent passed the impugned order without giving any opportunity of being heard, and directed the petitioner to stop the sale through the outlet M/s Durga Filling Station (run by the petitioner). It is pleaded by the petitioner that the functioning of the outlet run by the petitioner was clean and unblemished. It is stated that the petitioner maintained all the necessary record. The density of the petrol and diesel sold by the petitioner was well within the permissible limit. It is stated that on 20.09.2006, respondent no. 2 with ulterior motive got inspected the petitioner’s outlet and tested the density of the petrol (Motor Sprit) and diesel (HSD) but nothing adverse was found by the inspection team. It is alleged that no part of the samples collected by the Inspecting team was given to the petitioner and the procedure provided in Rule 7 and 8 relating to taking samples was violated. Merely for the reason that only one attendant was present at the time of inspection and that the sale at the outlet was poor, cannot be a ground to suspend the same. According to the petitioner the reason for poor sale was due to the opening of the new outlet by Cooperative Society with the name Kisan Sewa Kendra.
4. In the counter affidavit filed on behalf of the respondents, a preliminary objection is raised that in the terms of agreement, a dispute between the parties can be referred to arbitration. In parawise reply, it is stated that under Special Anti Adulteration Drive, inspections were made through out India under the directions of Ministry of Petroleum and Natural Gas (Government of India). Samples were drawn from the tank at M/s Durga Filling Station (petitioner) and sent for testing. On testing it was found that the sample did not meet IS specifications on the final boiling point parameter and as such, dealer was issued impugned order dated 04.10.2006, directing him to stop the sale of the commodities supplied by the respondents, through his outlet. It is stated in the counter affidavit that petitioner was present at the time when the samples were taken. It is further pleaded that the allegations against the respondent No. 2 and the team of inspectors are false. The density which was found within parameter, as mentioned in inspection report is done with the help of thermometer and Hydrometer only, while in the lab, the testing is done as per the provisions under MDG 2005. It is further stated that a show cause notice was issued to the petitioner on 03.10.2006, but he did not reply the same.
5. In the rejoinder affidavit filed on behalf of the petitioner, it is stated that clause relating to arbitration has no application to the proceedings under Article 226 of Constitution of India. As to the inspection made on 20.09.2006, the averments made in the writ petition are reiterated.
6. Admittedly, the petitioner has been given license to run the petrol pump by the Indian Oil Corporation in terms of the agreement between the parties. A copy of agreement filed with the counter affidavit shows following arbitration clause in the agreement.
“Any dispute of differen
