The court established the validity of the re-testing procedure under the Marketing Discipline Guidelines, 2005, and upheld the penalty of termination of dealership for adulterated products.

Alok Aradhe, J.

1. In this intra-court appeal the appellants have assailed the validity of the order dated 7-2-2012 passed by learned Single Judge in Writ Petition No. 10226/2008. In order to appreciate the appellants' challenge to the impugned order, few relevant facts need mention, which are stated infra. On 6-2-2007, the retail outlet operated by the respondent was inspected by the Sales Officer. During inspection, the sample was taken from the outlet of the respondent and the same was sent to the testing laboratory at Pune which was received by the said laboratory on 2-3-2007. The sample was tested on 14-3-2007 by the approved laboratory and as per the Laboratory Report the sample of motor spirit was found being OFF-SPEC as per IS 2796:2000. Accordingly, vide notice dated 27-3-2007, an explanation was sought from the respondent. The respondent vide communication dated 4-4-2007 requested the appellants to take a considerate view and also requested for retesting of sample. The request made by the respondent was considered sympathetically and under clause 2.5(D) of the Marketing Discipline Guidelines, 2005 (hereinafter referred to as the "Guidelines") an approval was granted by the General Manager, West Zone for retesting of the sample. In view of request made by the respondent, the sample was sent for re-testing on 4-4-2007 and was re-tested on 6-6-2007 in presence of the respondent and it was found that sample did not meet the specification as per IS-2796:2000, as it failed RON test. Thereafter a show-cause notice dated 5-11-2007 was issued to the respondent by which an explanation was sought from the respondent. The respondent submitted his explanation on 20-11-2007. The appellants after consideration of the explanation offered by respondent decided to terminate the dealership agreement of respondent dated 29-2-2000 and by an order dated 1-8-2008, the same was terminated.

2. Being aggrieved, the respondent filed the writ petition, namely, Writ Petition No. 10226/2008 which was decided vide order dated 7-2-2012. Learned single Judge inter alia held that once the Marker test was conducted, there was no need to hold any further tests. It was further held that in case any laboratory test was required to be conducted, then the notice ought to have been given to the respondent. It was also held that there was an inordinate delay in conducting the second test and in any case even if the sample had failed the test, penalty of termination of dealership as per guidelines is harsh and excessive. Accordingly, the order dated 1-8-2008 terminating the dealership of the respondent was quashed and the appellants were directed to issue show-cause notice to the respondent and pass a fresh order after affording an opportunity of hearing to the respondent.

3. Learned counsel for the appellants submitted that the Marker test is conducted only to detect kerosene in the petroleum products. It is further submitted that in the absence of any express prohibition, there is no basis for recording the finding by the learned Single Judge that once Marker test fails, any other test cannot be held. It was further pointed out that respondent was present at the time when the sample was drawn and there is neither any averment made in the writ petition nor any argument was raised before the learned Single Judge that notice was required to be given for remaining present at the time of testing of the sample. While inviting the attention to Clause 2.5(L) of the Guidelines, it was urged that purpose of mentioning the timeframe prescribed for various activities i.e. sending sample to Laboratory, preferably within ten days etc., is to streamline the system and is no way related to quality/result of the product. It was also pointed out that the test has been conducted under the Marketing Discipline Guidelines. It was further submitted that under the revised Marketing Discipline Guidelines, in case of an adulteration of the petroleum product, the penalty of ter