Keerthika Filing Station, vs Bharat Petroleum Corporation ...
2021 Latest Caselaw 2275 AP

                HON'BLE SRI JUSTICE U.DURGA PRASAD RAO

                          Writ Petition No.2776 of 2021
ORDER:

This writ petition is a sequel to the earlier W.P.No.20299/2019.

Therefore, shorn of unnecessary pleadings, the petitioner's case is stated

briefly thus:

2. Earlier the writ petitioner filed W.P.No.20299/2019 challenging the

action of the respondents in not supplying the MS and HSD products to the

petitioner's retail outlet, in spite of payment of advance amount towards

supply of products as arbitrary and illegal. The petitioner's case in the said

writ petition was that originally the retail outlet dealership of the respondent

Corporation was allotted to M/s. Keerthika Filling Station, a partnership firm

and subsequently the same was converted into a proprietorship on the very

same name vide proceedings of 2nd respondent dated 01.02.2019; the outlet

was handed over to the petitioner in June 2019; the petitioner received letter

dated 08.11.2019 from 2nd respondent stating that there was a mismatch in

digital transaction data for the financial year 2018-19 and that there was

variation in the total value of the sales and the petitioner was asked to

explain the said difference and pending explanation the supplies were

stopped from 08.11.2019; one official from the respondent Corporation by

name Murali Krishna visited the outlet on 11.11.2019 and informed the

petitioner that there was a big scam involving the bank officials, BPCL

officials and the previous dealer and so saying the said officer coerced the

petitioner to write a letter as per his dictates and the petitioner naively

addressed a letter dated 11.11.2019; the officials of the respondents have

inspected the outlet on 17.11.2019; since the supply of oil to the retail outlet

were stopped, the petitioner sent an email on 19.11.2019 requesting to send

the stock; as the supplies were not made, the petitioner filed

W.P.No.18938/2019; when the said writ petition came up for admission, a

copy of letter dated 23.11.2019 was furnished; when the petitioner was

contemplating to challenge the same, another letter dated 02.12.2019 was

received from 3rd respondent claiming an amount of Rs.22,33,471/-; the

petitioner submitted a reply to the said two letters on 05.12.2019 stating that

the letter dated 11.11.2019 was obtained from him under threat and

coercion, and failure to supply the oil was arbitrary and illegal. With the

aforesaid allegations, the petitioner filed earlier WP.No.20299/2019.

3. The respondent-BPCL filed counter and opposed the writ petition

inter alia contending that the petitioner addressed the letter dated 11.11.2019

admitting his mistakes and further agreeing to pay the amounts for the

damage incurred by the Corporation and he now contends falsely as if the

Officer Murali Krishna, who visited the petitioner's retail outlet on

11.11.2019, obtained a letter from the petitioner by coercion. The said

allegation is false to the core.

4. This Court observing that in the earlier emails dated 16.11.2019 and

19.11.2019 sent by the petitioner, he did not make any averment as if the

letter dated 11.11.2019 was obtained by Murali Krishna from the petitioner

by applying threat and coercion and that in the earlier W.P.No.18938/2019

also there was no averment regarding the alleged threat or coercion and it is

only in W.P.No.20299/2019, such plea was taken and ultimately held that

since a show cause notice was already issued by the respondent Corporation

to the petitioner and as the explanation was also submitted by the petitioner,

the respondent Corporation shall conduct enquiry by affording reasonable

opportunity to the petitioner and take suitable action in accordance with law,

expeditiously, preferably within four weeks from the date of receipt of the

copy of the order. Thus, the earlier WP.No.20299/2019 was disposed of

with the above direction.

5. While so, the present writ petition is filed by the petitioner

challenging the letter dated 25.11.2020 of 2nd respondent demanding the

petitioner to pay Rs.68,92,219.74 ps towards digital incentive for the period

from December 2017 to November 2019 which is anterior to the agreement

entered into by the petitioner with the respondent Corporation, as illegal, for,

the petitioner's lease was commenced subsequently.

In this writ petition, the petitioner inter alia, challenged the demand

notice for Rs.68,92,219.74 ps on the main allegation that the respondent

authorities issued the aforesaid demand notice without passing any order as

per the direction contained in the order dated 07.02.2020 in

W.P.No.20299/2019.

6. The respondents filed counter inter alia contending thus:

It is contended that after passing of the judgment in

W.P.No.20299/2019, necessary approvals were taken for conducting a

personal hearing with the petitioner and the dealer was advised vide letter

Ref. NRT/KFS/Personal Hearing dated 02.03.2020 to attend for personal

hearing on 12.03.2020 at the BPCL State Office at Hyderabad. However,

the dealer did not appear for personal hearing on the said date and had sent a

letter through his counsel seeking 10 days time to give written explanation.

However, no written explanation was received from the dealer thereafter.

Again vide letter dated 12.03.2020 the petitioner was provided another

opportunity to appear for personal hearing on 20.03.2020 at the BPCL Retail

State Office in Hyderabad. The dealer however has again sent a letter dated

19.03.2020 stating that due to severe travel restrictions imposed in view of

COVID-19 pandemic situation, he was not able to move and thus requested

the respondent Corporation to adjourn the personal hearing to a later date.

In those circumstances, the personal hearing could not be scheduled between

April and June 2020. Ultimately the personal hearing with the dealer was

held on 03.08.2020. At that occasion, the petitioner submitted that retail

outlet may be opened, as he was selling 200 KL per month and now he is

losing lot of money and if the retail outlet is opened, he will obey whatever

is to be done or payable as per the notice from the company. The petitioner

stated that he was willing to pay any amount due to the company from June

2019 onwards after reopening of the retail outlet. After personal hearing

also, the dealer was repeating the same request that the retail outlet may be

permitted to function, but without making payment due from his side.

Hence, his request was not acceptable to the company and the company was

pursuing with the dealer to make the payment, which he partly obliged by

making payment of Rs.20.00 lakhs in September 2020. The BPCL has

already got registered a police case vide FIR No.14/2020 dated 17.01.2020

to ascertain the malpractice committed by the dealer and the investigation is

still in progress. Since the petitioner has not made the full payment due

from him, stock was not released to him. While so, the petitioner vide letter

dated 16.11.2020 submitted a Xerox copy of the Demand Draft for Rs.10.05

lakhs and submitted a schedule of payment for the remaining amount stating

that total payment will be made by him in 22 quarterly instalments, the last

one of which will be in the month of April 2028. As the proposed

repayment schedule was not acceptable to the company, a letter dated

24.11.2020 was sent to the petitioner demanding him to pay the entire

balance money which was lost by the company due to non-fuelling

transactions done by the dealer worth Rs.68,92,219.74 ps. The petitioner

falsely claims that he started the business only in June 2019, whereas the

agreement was commenced from February 2019 and the dealer was aware of

the said fact. After conducting personal hearing, an opportunity was

provided to the petitioner to make the payment as requested and clear the

dues. However, the petitioner has not made any payment. The respondents

thus prayed to dismiss the writ petition.

7. Heard Sri S.Subba Reddy, learned counsel for petitioner, and Sri

O.Manohar Reddy, Standing Counsel for the respondents.

8. It is the contention of the learned counsel for petitioner Sri S.Subba

Reddy that the subject retail outlet was allotted to M/s. Keerthika Filling

Station, a proprietary firm situated in Naidupet town which was run by

Tummala Kiran Babu and later by following the reconstitution procedure,

the proprietary firm was given in favour of the petitioner and the respondent

Corporation entered into agreement dated 14.06.2019 which will be valid for

five years. As such, he argued, the petitioner will be liable for any dues only

from 14.06.2019 i.e., date of Memorandum of Agreement but not earlier.

He contended that the notice was issued demanding amounts concerning to

the period prior to 14.06.2019. Learned counsel argued that the petitioner is

ready to pay any dues from the date of his agreement only and not prior to

the said date.

9. Per contra, learned Senior Counsel Sri O.Manoher Reddy vehemently

argued on behalf of the respondent Corporation that in the letter dated

04.12.2018 both the outgoing/Retiring Partner Tummala Kiran Babu and the

incoming partner i.e., present writ petitioner, have clearly submitted that

Tummala Kiran Babu may be permitted to retire and in his place the present

writ petitioner may be permitted to run the retail outlet on the same name

i.e., M/s. Keerthika Filling Station as sole proprietor. Learned counsel

further argued that both of them unequivocally mentioned that they

confirmed the security deposit of Rs.3.00 lakhs and debit/credit standing to

the account of the firm before the constitution would be taken over by the

new proprietary firm. In view of the said undertaking letter submitted by

both of them, it does not lie in the mouth of the petitioner to contend that his

liability should be worked out only after he entered into an agreement with

the respondent Corporation. Learned counsel further argued that in

consonance with the said undertaking, the petitioner executed a letter dated

11.11.2019 in favour of Senior Officer of the Corporation namely Murali

Krishna, who visited the retail outlet, and in the said letter also he admitted

his liability to pay the due amount. Considering all these aspects only, the

respondent authorities issued the demand notice and the petitioner is liable to

pay the same. Learned counsel fairly submitted that in case the petitioner

comes up with a reasonable proposal regarding the payment, the Corporation

will consider the same. He thus prayed to dismiss the writ petition.

10. The point for consideration is whether there are merits in the writ

petition to allow?

11. Point: The admitted facts are that by agreement dated 29.09.2012,

one Sri Thummala Kiran Babu was originally carrying on the Proprietary

firm in the name and style of M/s. Keerthika Filling Station as a BPCL

dealer at Kalahasthi Road, Naidupet, SPSR Nellore District. Later, on

04.12.2018, the said Thummala Kiran Babu and the petitioner have

submitted a letter to 3rd respondent stating that Kiran Babu was intending to

retire from the dealership and in his place the writ petitioner was proposed to

be inducted with the permission of the respondent Corporation. Both of

them submitted a reconstitution application dated 04.12.2018. Thereafter, as

per the guidelines of the respondent Corporation, 3rd respondent addressed a

letter dated 01.02.2019 to the writ petitioner stating that the reconstitution

proposal was approved by the respondent Corporation, subject to fulfillment

of the conditions mentioned in the said letter. Thereafter, the petitioner and

respondent Corporation entered into Memorandum of Agreement dated

14.06.2019. While so, the respondents addressed a letter dated 08.11.2019

to the petitioner stating that there was a mismatch between actual sales and

sales from Loyalty/Bank POS/Wallet sales at the retail outlet of the

petitioner and the petitioner was required to explain the reasons. Pending

explanation, the supplies were stopped from 08.11.2019. Then a crucial turn

of events had taken place. On 11.11.2019, the official of the respondent

Corporation by name Murali Krishna visited the RO of the petitioner and at

that time the petitioner allegedly issued an even dated letter admitting that he

committed mistakes, due to which the difference occurred between the

actual sales and sales from Loyalty/Bank POS/Wallet sales and that he

would take upon the responsibility of those transactions and will be liable to

pay back the amounts. Subsequently the respondent Corporation raised the

impugned demand notice for payment of the said amount.

While so, the contention of the petitioner is that the letter dated

11.11.2019 was obtained by coercion and he did not issue the said letter out

of his free will. So, one of the crucial aspects is whether the petitioner

voluntarily addressed the letter dated 11.11.2019 admitting his mistakes or

whether it was obtained by the official of the respondent Corporation by

threat and coercion. Be that it may, as already noted supra, earlier the writ

petitioner filed W.P.No.20299/2019 challenging the action of the

respondents in stopping the supply of MS and HSD products to his RO. In

the said writ petition also, one of the issues was whether the petitioner

executed the letter dated 11.11.2019 voluntarily or was it a product of

coercion. Ultimately this Court on 07.02.2020 passed the following order:

"The petitioner addressed a letter on 11.11.2019 admitting the mistake, according to the Corporation, but according to the petitioner the said letter was obtained by coercion. Thereafter, a show cause notice has been issued to the petitioner on 23.11.2019 and for the first time the petitioner has addressed a letter on 05.12.2019 stating that the letter dated 11.11.2019 was obtained by coercion and even in the previous e-mails which are addressed to the various authorities on 16.11.2019 and 19.11.2019, there is no mention with regard to coercion exercised by the Corporation in obtaining the letter dated 11.11.2019. In the previous Writ Petition filed by the very same petitioner, there is no reference to the letter dated 11.11.2019 at all and the said Writ Petition was withdrawn.

In view of the facts and circumstances of the case, as already a show cause notice was issued to the petitioner and as explanation

was already submitted by the petitioner, I deem it appropriate to direct the appropriate authority of the respondent - Corporation to conduct enquiry after affording reasonable opportunity to the petitioner herein and take suitable action in accordance with law, as expeditiously as possible, preferably within a period of four (4) weeks from the date of receipt of a copy of this order."

12. In the above order, this Court specifically directed the respondent

Corporation to conduct enquiry by affording reasonable opportunity to the

petitioner and take suitable action in accordance with law preferably within

four weeks from the date of receipt of the copy of the order. A perusal of

the Para Nos.11 & 12 of the counter filed by the respondents in the instant

writ petition, would show that pursuant to the order in W.P.No.20299/2019,

the Corporation issued notices to the petitioner to attend for personal hearing

and ultimately personal hearing was held on 03.08.2020, wherein the

petitioner requested to reopen the retail outlet and supply the stock to him so

that he will pay the amounts due to the company; since the petitioner has not

paid any amount, his request was not acceptable to the company; the

petitioner voluntarily made a payment of Rs.20.00 lakhs in September 2020

and later he did not pay further amount. In the above counter, we do not

find any information as to whether the respondent Corporation completed

the enquiry and passed a detailed and reasoned order fixing the liability on

the petitioner or exonerating him of the charge. On the other hand, the

respondent Corporation mainly relies upon the letters dated 11.11.2019 and

16.11.2020 of the petitioner, wherein he allegedly admitted his mistakes and

requested to permit him to reopen the RO so that he would pay the

outstanding dues. The respondent has denied the execution of those letters

voluntarily. In these circumstances, the respondent Corporation is obligated

to pass a detailed and reasoned order so as to enable the petitioner to take the

further course of action.

13. In the considered view of this Court, without passing the order as

directed by this Court in W.P.No.20299/2019, the respondent Corporation is

not justified in sending the impugned demand letter dated 25.11.2020.

14. In the result, this Writ Petition is partly allowed by setting aside the

demand notice dated 25.11.2020 issued by 2nd respondent with a direction

that the respondent Corporation shall comply with the direction in the order

dated 07.02.2020 in W.P.No.20299/2019 and pass an appropriate order in

accordance with the governing rules of the Corporation within four (4)

weeks from the date of receipt of a copy of this order and communicate the

same to the petitioner. No costs.

As a sequel, interlocutory applications pending, if any, shall stand closed.

_________________________ U.DURGA PRASAD RAO, J 06.07.2021 MVA