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2016 Supreme(MP) 848
IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR BENCH
Sujoy Paul, J.
Smt. Shobha Y. Ingole – Petitioner
Versus
Hindustan Petroleum Corporation Limited and Another – Respondents
WP No. 20289 of 2013
Decided On : 05-12-2016
For the Petitioner: Shri D.K. Dixit.
For the Respondent: Shri Anoop Nair.
The test for declaring a product as failed should be restricted to the provisions of the Control Order, and the termination of dealership must be based on valid grounds as per the specified standards.
Headnote:
termination - dealership - Essential Commodities Act, 1955 - IS-1460:2005 - Control Order of 2005
Fact of the Case:
The petitioner challenged the termination of dealership agreement by the respondents based on the test report of High Speed Diesel (HSD) sample. The petitioner had previously filed a writ petition for re-testing the sample, which was granted by the court.
Finding of the Court:
The court found that the test report did not provide sufficient grounds for termination as the sample met the specifications as per IS-1460:2005. The court also interpreted the Control Order of 2005 to determine the definition of 'contamination' and 'adulteration', and concluded that the sample could only be declared as failed if it violated specific clauses of the Control Order.
Issues: The issues revolved around the validity of the termination based on the test report, the interpretation of the Control Order of 2005, and the compliance of the sample with the specified standards.
Ratio Decidendi: The court held that the test report did not provide sufficient grounds for termination as the sample met the specifications as per IS-1460:2005. The court also interpreted the Control Order of 2005 to restrict the test for declaring a product as failed to the provisions of the Control Order.
Final Decision: The court set aside the termination order and allowed the petition.
Sujoy Paul, J.
1. This petition, filed under Article 226 of the Constitution, takes exception to the order of termination of dealership Annexure-P/12 dated 11.10.2013.
2. This is second visit of the petitioner to this Court. The petitioner earlier filed W.P. No. 7601/2011 against the action of the respondents rejecting her claim for sending the sample in question for re-testing. The said writ petition was decided on 01.12.2012 and the writ Court directed the respondents to send the sample of High Speed Diesel (HSD) kept in the custody of the petitioner for re-testing before an appropriate Laboratory and to obtain a report of the same within the stipulated time. The said order of writ Court was unsuccessfully challenged by the Corporation in W.A. No. 314/2012 decided on 29.01.2013. SLP (Civil) No. 13493/ 2013 was also dismissed by Supreme Court with certain observations on 05.08.2013. In turn, the sample of HSD was subjected to a re-test and test report is placed on record as Annexure-P/9 dated 11.03.2013. On the strength of the test report dated 11.03.2013, the respondents issued a show-cause notice dated 23.08.2013 (Annexure- P/10) to the petition. In turn, the petitioner submitted her reply on 05.09.2013 (Annexure-P/11). Thereafter the respondents passed the impugned order dated 11.10.2013 (Annexure-P/12) and terminated the retail outlet dealership agreement dated 03.03.2000 entered into between the petitioner and the Corporation.
3. Shri Dixit, learned counsel for the petitioner criticised the termination order (Annexure-P/12) by contending that:
(a) The sample was subjected to re-test after more than ten days from the date it was procured. Thus, in view of AIR 2003 SC 2120 (Harbanslal Sahnia and Another vs. Indian Oil Corporation Ltd. and Others) such sample cannot be a reason for terminating the outlet of the petitioner.
(b) As per the report (Annexure-P/9), it is clear that sample of HSD meets the specification as per IS-1460:2005. The question of any adulteration or malpractices on the part of the petitioner is to be tested as per the Motor Spirit and High Speed Diesel (Regulations of Supply, Distribution and Prevention of Malpractices) Order, 2005 (hereinafter referred to as the Order of 2005). To elaborate this, Shri Dixit submits that Clause 2(a) defines adulteration whereas 2(c) defines malpractices. As per the report, Shri Dixit contends that petitioner's case/sample does not fall within the ambit of adulteration or malpractices.
(c) Shri Dixit submits that there is no provision which enables the Corporation to compare the sample in question with a reference sample. In detail, it is urged that the respondents have compared the sample prepared by them in the depot with the sample obtained from petitioner's outlet. In absence of any enabling provision, it is totally impermissible.
(d) Lastly, reliance is placed on Clause 2(t) which defines "sale of off specification product." It is urged that the sample is to be tested on the anvil of IS-2796-IS-1460. As per admitted position, the sample was cleared as per IS-1460. Thus, there is no justification in terminating the outlet of the petitioner.
4. Shri Anoop Nair, learned counsel for the Corporation submits that the petitioner himself approached this Court in the earlier round of litigation with the prayer of re-testing of the sample. He succeeded in the said round and in obedience of Court's order, retesting was done. In this backdrop, the judgment of Supreme Court in the case of Harbanslal Sahnia (supra) cannot be pressed into service. Reliance is place on 2015 (2) MPLJ 374 (Hindustan Petroleum Corporation Ltd. and Others vs. Royal Highway Services). Shri Nair submits that, admittedly, the petitioner and respondents entered into a memorandum of agreement (Page 15). The parties are bound by this agreement. By taking this Court to the show-cause notice, it is submitted that it was made clear that sample has actually failed. The respondents were at liberty to take action i
