The Bharath Petroleum ... vs Sree Brundavan Bharat Gas ...
2023 Latest Caselaw 4275 AP

    IN THE HIGH COURT OF ANDHRA PRADESH: AMARAVATI

HON'BLE MR. JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE
                          &
       HON'BLE MR. JUSTICE R. RAGHUNANDAN RAO

                    WRIT APPEAL No.900 of 2023
Between:
  1. The Bharath Petroleum Corporation Limited, rep. by its
     Chairman and Managing Director, Bharat Bhavan 4 and 6
     Currimbhoy Road, Ballard Estate, Mumbai-400 001.
  2. The Regional LPG Manager, South BPCL, Southern Regional
     Office, Ranganathan Gardens, Anna Nagar, Chennai-600 040.
  3. The State Head Andhra Pradesh and Telangana State, BPCL
     Reliance, Humsafar Building, Banjara Hills, Road No.11,
     Hyderabad.
  4. The Territory Manager LPG, Kurnool LPG, Territory Office,
     NH-7 217/6, K M tone NP No.10B Camp PO, Kurnool-5180.
  5. The Manager Sales LPG, Kurnool LPG, Territory Office, NH-7
     217/6, K M tone NP No.10B Camp PO, Kurnool-5180.
  6. The Director (Marketing), Bharath Petroleum Corporation
     Limited, Bharat Bhavan, 4 and 6, Currimbhoy Road, Ballard
     Estate, P.B.No.688, Mumbai - 400 001.
  7. The Executive Director (LPG), Bharath Petroleum
     Corporation Limited, Bharat Bhavan, 4 and 6 Currimbhoy
     Road, Ballard Estate, P.B.No.688, Mumbai - 400 001.
                                   ...Appellants/Respondents 2 to 8

Versus

1. Sree Brundavan Bharat Gas Services, rep. by its Managing Partner, Putakala Shankar Mahadev, S/o. Shankar Mahadev, R/o. D.No.7/1230, Tadipatri Road, Gooty.

2. Putakala Shankar Mahadev, S/o. Shankar Mahadev, R/o. 4/43 AI, BC Colony, Engilibanda, Anantapur..

....Respondents/writ petitioners

3. The Union of India, rep. by its Secretary Ministry of Petroleum and Natural Gases, New Delhi.

...Respondents/Respondents 1 Counsel for the Appellants : Sri O. Manohar Reddy Sr. Counsel For Sri V.V. Satish Counsel for respondents 1 & 2: Sri T. Anup Kumar Counsel for respondent No.3 : Sri N. Harinath (DSG)

HCJ & RRR,J W.A.No.900 of 2023

ORAL JUDGMENT Dt: 15.09.2023

(per Hon'ble Sri Justice R.Raghunandan Rao)

Heard Sri O. Manohar Reddy, learned Senior Counsel

appearing for Sri V.V. Satish, learned counsel for the appellants and

Sri T. Anup Kumar, learned counsel for respondents 1 and 2.

2. The 1st respondent is a firm and the 2nd respondent is

the Managing Partner of the said firm. The 1st appellant-Corporation

had, by way of an agreement, dated 14.03.2015, granted to the 1st

respondent distributorship of LPG cylinders for distribution in the

area of Gooty rural and surrounding 15 Kms., for a period of 5

years. Upon expiry of this period, the agreement was renewed for a

further period of 5 years ending on 09.03.2023.

3. On account of complaints received against the 1st

respondent, inspections were carried out by the officials of the 1st

appellant-corporation, from time to time, and proceedings were

initiated under the Marketing Disciplinary Guidelines of the

Corporation on 18.20.2017 resulting in levy of penalty of

Rs.1,27,821.35/-, which was reduced to Rs.55,769/-; proceedings

dated 01.08.2018 imposing a penalty of Rs.77,096/-, which was

challenged before the High Court, by way of W.P.No.39747 of 2018,

which came to be disposed of on 05.11.2018 permitting the 1st

HCJ & RRR,J W.A.No.900 of 2023

respondent to avail of the alternative remedy of appeal, which was

dismissed; proceedings dated 20.02.2019 levying penalty of

Rs.1,10,624/-. Apart from this, a letter dated 12.07.2019 was also

issued to the 1st respondent, containing the minutes of the meeting

in which the 1st respondent was warned that the agency of the 1st

respondent would be terminated if proper home deliveries are not

provided regularly.

4. An inspection was again conducted on 21.05.2020. A

report was prepared on the basis of the said inspection. This report

stated that the 1st respondent was overcharging for home deliveries

and cash memos were not being issued. On the basis of this report, a

show cause notice was issued on 21.05.2020 to the 1st respondent

and explanation was given on 17.07.2020. However, the authorities

of the 1st appellant-corporation had transferred 3148 customers

from the 1st respondent without any notice and without giving any

inspection report. Subsequently, a further notice dated 03.06.2020

was issued to the 1st respondent on the ground that the 2nd

respondent had conducted a press meeting on 29.05.2020

complaining against the vindictive attitude of the affairs of the 1st

appellant-corporation. Thereafter, the distributorship of

respondents 1 and 2 was terminated on 01.08.2020.

HCJ & RRR,J W.A.No.900 of 2023

5. Aggrieved by the said termination, respondents 1 and 2

moved this Court by way of W.P.No.14893 of 2020 which was

disposed of by this Court on 08.03.2021 leaving it open to

respondents 1 and 2 to pursue the remedy of appeal under revised

Marketing Disciplinary Guidelines, 2017.

6. Respondents 1 and 2, thereupon, filed an appeal before

the Executive Director (LPG) and also writ appeal No. 349 of 2021

against the orders of the learned Single Judge. The writ appeal was

withdrawn with a further direction that the 1st appellant-

corporation would dispose of the appeal within a period of one

month from the order of the Division Bench.

7. In pursuance of the directions of this Court, the appeal

was heard by the Director (Marketing), who dismissed the appeal

on 06.09.2021.

8. Aggrieved by the said order of dismissal, respondents 1

and 2 moved this Court again by way of W.P.No.25793 of 2021. The

contention of respondents 1 and 2 was that the Revised Marketing

Disciplinary Guidelines provide for an appeal to the Executive

Director, while the appeal was heard by the Director (Marketing),

who is above the position of Executive Director and the same is not

in accordance with the Revised Marketing Disciplinary Guidelines.

HCJ & RRR,J W.A.No.900 of 2023

Respondents 1 and 2 also took the plea that the documents relied

upon by the authorities, for terminating the distributorship of the

1st respondent had not been served on respondents 1 and 2 and the

same is in violation of the Guideline 3.6 of the Revised Marketing

Disciplinary Guidelines, which are applicable to the present case.

9. The 1st appellant corporation took the ground that no

complaint of any nature was made by respondents 1 and 2 about

non-receipt of the documents or reports relied upon by the

authorities while terminating the distributorship of the 1st

respondent and the said objection has only been raised subsequent

to the order of termination and the same is not permissible. The 1 st

appellant-corporation also contended that the major step of

termination of distributorship was taken only on the 4th instance of

the misbehavior of the 1st respondent and the same is in accordance

with law. On the question of the appeal being disposed of by the

Director (Marketing), it was contended that the Executive Director

was part of the committee that terminated the distributorship and

as such could not have acted as the appellate authority on his own

decision. In such circumstances, it was decided that the it would be

appropriate that the Director (Marketing) who is above the position

of Executive Director would be the appropriate person to hear and

HCJ & RRR,J W.A.No.900 of 2023

dispose of the appeal. The same was informed to respondents 1 and

2 and no objection was expressed by the said respondents.

10. The learned Single Judge, after hearing both sides, was

pleased to allow the writ petition on the ground that non-supply of

the documents and reports relied upon by the authorities while

terminating the distributorship of the 1st respondent is in violation

of Guideline 3.16, which mandates that the inspection report and all

other documents relied upon by the authorities would have to be

supplied along with the show cause notice and non-supply of such

documents would be fatal to the enquiry irrespective of whether

respondents 1 and 2 had sought the said documents or not.

11. We are in agreement with the said proposition of law set

out by the learned Single Judge and do not find any reason to

interfere with the orders of the learned Single Judge.

12. Sri O. Manohar Reddy, learned Senior Counsel

appearing for the appellants would submit that the transfer of LPG

connections to the 1st respondent, from the existing dealers, would

cause dislocation in the supply of LPG cylinders to the customers in

the rural areas and it would be appropriate if the respondent

authorities are given adequate time to supply copies of the

inspection report and other documents to the 1st respondent and to

HCJ & RRR,J W.A.No.900 of 2023

take a fresh decision within a stipulated time without the dealership

being restored to the 1st respondent.

13. Sri T. Anup Kumar, learned counsel appearing for

respondents 1 and 2 would submit that the 1st appellant

Corporation, would take its own time in taking a decision on the

question of termination of the distributorship of the 1st respondent

and the 1st respondent would be denied the benefit of the order of

the learned Single Judge.

14. In order to balance the interests of both sides, it would

be appropriate to modify the orders of the learned Single Judge in

the following manner:

1. The original order of termination dated 01.08.2020 and the

appellate order dated 06.09.2021 are set aside.

2. The appropriate authority, under the Revised Marketing

Disciplinary Guidelines, which are in force, shall furnish

copies of all the documents and reports, which are being relied

upon in the show cause notice as well as such documents and

reports which would form the basis of any order passed by the

authority, to the 1st respondent.

HCJ & RRR,J W.A.No.900 of 2023

3. Respondents 1 and 2 shall be given appropriate time for

responding to the show cause notice issued earlier and to the

material supplied to the 1st respondent.

4. Thereafter, appropriate orders are to be passed after giving an

opportunity of hearing to the 1st respondent.

5. This exercise shall be completed within a period of 8 weeks

from the date of receipt of this order, failing which the

distributorship of the 1st respondent shall stand restored,

subject to the final orders that would be passed in the

disciplinary proceedings.

6. The 1st respondent shall cooperate fully with the authorities

for an early completion of the proceedings and any delay

caused by the 1st respondent shall automatically extend the

period of eight weeks mentioned above.

15. With the above directions this writ appeal is disposed of.

There shall be no order as to costs. As a sequel, pending

miscellaneous petitions, if any, shall stand closed.

DIRAJ SINGH THAKUR, CJ R. RAGHUNANDAN RAO, J

JS.

HCJ & RRR,J W.A.No.900 of 2023

HON'BLE MR. JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON'BLE MR. JUSTICE R. RAGHUNANDAN RAO

WRIT APPEAL No.900 of 2023

(per Hon'ble Sri Justice R.Raghunandan Rao)

15th September, 2003 JS