Ramniklal Keshavlal Lathiwala, ... vs The General Manager, Bharat ...
2019 Latest Caselaw 60 Bom

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    IN THE HIGH COURT OF JUDICATURE AT BOMBAY
              NAGPUR BENCH, NAGPUR

                        WRIT PETITION NO.6094 OF 2014

Petitioner               :         Ramniklal Keshavlal Lathiwala,
                                   Proprietor of M/s. K.T. Lathiwala,
                                   BPCL Dealer (A Proprietorship Concern),
                                   having its Pump near Post office,
                                   Darwah-Karanja Road, Darwah,
                                   District Yavatmal.

                                   -- Versus -

Respondents              :      1] The General Manager,
                                   Bharat Petroleum Corporation Ltd.,
                                   A Government Company and
                                   Public Sector Undertaking,
                                   having registered Office at Bharat Bhavan,
                                   4 & 6, Currimbhoy Road, Ballard Estate,
                                   Mumbai - 400 001.

                                2] Mr. S. Ramesh (Deleted),
                                   Executive Director (Retail),
                                   In-Charge, Bharat Petroleum Corporation Ltd.
                                   12/E & F, 12th Floor, Maker Towers,
                                   Cuffe Parade, Mumbai - 400 005.

      Deleted as                3] Mr. Dinakara L. Tonse (Deleted)
     per Court's                   Territory Manager (Retail), Nagpur,
     Order dated                   Bharat Petroleum Corporation Ltd.,
     30/08/2016.
                                   "Sunny Side", 7, Chitnis Marg,
                                   Civil Lines, Nagpur - 440 001.

                                4] Mr. Pravin Singh (Deleted)
                                   Dy Manager (Sales),
                                   (Previously Asst. Manager (Sales),
                                   Bharat Petroleum Corporation Ltd.,
                                   Akola Giagaon Depot, District Akola.

                                5] Shri Rajiv A. Moghe,
   Amended as per
                                   At Post : Vasantpur Kharda,
  Court's Order dated
     30/06/2016.                   Taluka : Digras, District Yavatmal : 445 203.




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                  Shri S.M. Puranik, Advocate for the Petitioner.
            Shri Abhay Sambre, Advocate for Respondent Nos.1 & 3.
            Shri A.M. Gordey, Senior Advocate with Smt. R.D. Raskar,
                          Advocate for Respondent No.5
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                 CORAM           : SUNIL B. SHUKRE & S.M. MODAK, JJ.

DATE : 4th JULY, 2019.

ORAL JUDGMENT :- (Per Sunil B. Shukre, J.)

Heard Shri Puranik, learned Counsel for the petitioner,

Shri Sambre, learned Counsel for respondent Nos.1 & 3 and Shri

Gordey, learned Senior Counsel for respondent No.5, who is

presently running the outlet or the petrol pump on behalf of

respondent No.1 - Company. Remaining respondents have been

deleted as per the order passed by this Court.

02] The petitioner is a proprietor of M/s. K.T. Lathiwala, who

has been running the petrol or motor spirit outlet of respondent

No.1 - Company since the year 1955 on the address given in the

petition. In the year 2010, the Assistant Sales Manager of

respondent No.1 - Company paid a visit to the petrol outlet and

made inspection. It was a surprise check and was done on

19/03/2010. The motor spirit dispensing unit was installed by

respondent No.1 - Company and it is an admitted position that it is

maintained by and is kept in custody by respondent No.1 -

Company and the dealer like the petitioner is only given a charge

of the same as a trustee for respondent No.1 - Company. During

the surprise check, samples of the motor spirit dispensed by the

unit were taken. They were taken eight times consecutively and on

all the occasions, it was found that the delivery of the motor spirit

was short by 220 ml per five litres of the measure. At that time,

the dispensing unit was running on the power supply through a

generator set, as the regular power supply was disrupted. When

the samples were taken, the underground tank was also not

completely full and that one tanker full of motor spirit had already

arrived there and it was waiting to decant it's contents into the

underground tank.

03] After the eight samples were taken consecutively, the

contents of the tanker were emptied in the underground tank and

by that time, the regular electricity supply had also been restored.

On the insistence of the petitioner, one more sample from the

dispensing unit was taken and this time, the reading of the sample

showed that delivery of the motor spirit was short by only 20 ml

per five litres of the measure.

04] All these facts were recorded by the Assistant Sales

Manager and he sent his report to respondent No.1 - Company.

After considering the report, respondent No.1 - Company felt that

action for termination of the petrol pump licence given to the

petitioner be taken and, therefore, a 'show cause notice' was

issued by it to the petitioner on 04/05/2010. A detailed reply was

given by the petitioner. But, the explanation was not accepted and

by the order issued on 23/03/2013, the licence of the petitioner

was cancelled. Thereafter, the petitioner had approached this

Court by filing Writ Petition No.3239/2013, but it was allowed to be

withdrawn by the petitioner, as a remedy of appeal was available

to the petitioner and he was relegated to that remedy. The appeal

filed by the petitioner before the higher authority of the Company

came to be rejected and this is how the petitioner is now before

this Court.

05] The basic issue which lies at the centre of the

controversy, which could be culled out from the arguments

canvassed before us on behalf of both sides, is about the need for

involving the manufacturer of the dispensing unit for determining

as to whether or not the dispensing unit or the microchip contained

in the dispensing unit had been tampered with by the petitioner so

as to derive undue gains in the matter.

06] It is submitted by Shri Puranik, learned Counsel for the

petitioner that sending of the microchip to the manufacturer, a

Company known as "MIDCO", was necessary, as there was a vast

difference between reading of the samples taken on the same day,

at two different times, with some relevant factors intervening in

between. Shri Sambre, learned Counsel for respondent No.1 -

Company submits that this was not necessary as the seal pasted

on the chip of dispensing unit was found to be tampered with and it

gave a clear indication of tampering with the chip which was

further confirmed by the short delivery of 220 ml per 5 litres of

measure discovered from the samples taken eight times

consecutively. Shri Gordey, learned Senior Counsel submits that

although there were intervening factors, the tampering with the

seal pasted on the microchip was sufficient for the Company to

reach the conclusion about tampering with the insides of the chip

and it was also demonstrated by short delivery of motor spirit per 5

litres measure.

07] Upon consideration of the admitted facts, we find that

there is great substance in the argument of the learned Counsel for

the petitioner and no merit in the arguments canvassed on behalf

of respondent No.1 and respondent No.5 by their respective

learned Counsel and learned Senior Counsel.

08] The admitted facts show that there were two sets of

samples taken in the present case and they were taken on one and

the same day with a gap of some time in between them. The first

set of samples consisted of eight samples taken consecutively or

one after another and the second set of samples comprised only

one sample taken some time after the first set of sample. There

was a huge difference in reading recorded by the first set of

samples and the reading noted by second set of samples. The first

set of samples indicted that delivery was short by 220 ml and

whereas the second set of samples showed that the delivery was

short by 20 ml per five litres. It is also an admitted fact that the

first set of samples was drawn when the power was being supplied

through the diesel generation set, whereas the second set of

sample was taken when the power was being supplied by the

M.S.E.B., which was a normal power supply. It is also an admitted

fact that the reading of 20 ml short shown by second sample was

within the permissible limit. These admitted facts could be seen

from the order of the appellate authority dated 30 th April, 2014

(Para 4).

09] When there is such a huge difference between the

readings of two different sets of samples in respect of the same

dispensing unit, a doubt arises. The doubt is veritable as the

difference is quite large and is between samples taken on the same

day and, therefore, it is necessary for an authority taking a drastic

decision having civil consequences like the decision of terminating

of the old licence of a petrol pump dealer, that the doubt is cleared

by it through proper means. The only proper way available in this

case for removal of the doubt was that of getting the chip

examined by it's manufacturer. In such a case, it is only a

manufacturer, who would be in a position to give an opinion like an

expert, as to whether or not, there is really any tampering with the

microchip which has resulted in showing of a short delivery beyond

permissible limit. This has not been done in the present case.

10] Then, there were also intervening factors when the two

different sets of samples were taken. The first set of samples had

different environment and while the second set of sample had

another. The environment of the first sample consisted in energy

being provided through a diesel generator set, which was, our

common knowledge would indicate, in the form of a direct current

and whereas the energy, which was provided at the time of

drawing of the second sample, was through regular power supply

made by the M.S.E.B., which was based upon, again our common

knowledge would indicate, alternating current system. At the time,

when the first set of samples was taken, the underground tank,

from which the motor spirit was pumped out by the dispensing unit,

admittedly was almost empty with only about 900 litres of the

motor spirit left in it and this tank had a capacity of 12000 litres. At

the time, when the second sample was obtained, the underground

tank was admittedly full to the brink or to the capacity. Such

difference in the environments, it is possible, may have resulted in

giving of two different kind of readings in two different sets of

samples. Then, the question would be - which reading of the two is

correct? This would give rise to a doubt regarding the conclusion to

be made. Such doubt did exist here.

11] The law is that for removal of such doubt, it was essential

on the part of respondent No.1 - Company, once again we would

say, to refer the concerned part to it's manufacturer for it's opinion.

If this had been done by respondent No.1 - Company, definite

conclusion could have been reached in this case and this

conclusion would have been based upon the empirical evidence

collected by the Company. In fact, the Marketing Discipline

Guidelines - 2005 also refer to the same thing. A copy of these

guidelines has been filed on record and our attention has been

invited to note (ii) appearing below the clause 6.3.5 which deals

with situations of stock variation between physical stock and book

stock. This note reads as under - (Page 109).

ii) All cases of irregularities needs to be established before any penal action is taken against a dealer.

12] It is clear that the own guideline of respondent No.1 -

Company cautions it's officials against taking any penal action on

the basis of doubtful data. The guideline says that every case of

irregularity must be established before any penal action is taken

and it would mean that the irregularity must be supported by a

scientific data and not the personal opinion arrived at without

making any effort to remove the doubt or rule out the possibility

which may speak in favour of the concerned dealer.

13] In the circumstances, we find that the termination order

cannot be sustained in the eye of law and it deserves to be

quashed and set aside.

14] Now, it is necessary to know if any equity has been

created in favour of respondent No.5 and if so, the question would

be as to how it be dealt with. An answer is provided by the Pursis

filed on record by respondent No.1. It places on record an

important fact in the nature of respondent No.5 being aware of this

dispute at the time when the dealership was allotted to him. It also

shows that respondent No.5 was made aware of the possible

consequence of cancellation occurring, with 30 days notice given to

him, if any order adverse to the Company would be passed by this

Court. The Pursis is accompanied by an undertaking given on the

same lines by respondent No.5. This would not result in creation of

any equity in favour of respondent No.5. Therefore, we see no

difficulty in allowing this petition by cancelling the termination

order.

15] In the result, the following order is passed :

i. The writ petition is allowed.

ii. The impugned termination order is hereby quashed

and set aside with the consequence of restoration of

the dealership of the petitioner, subject to payment

of necessary charges, fees and observance of all the

conditions of the original licence and other applicable

regulations.

iii. We would also direct respondent No.1 to consider

allotment of alternative outlet to respondent No.5.

iv. The restoration of the original licence in pursuance of

this order would take place after expiry of period of

three months from the date of the order.

v. Rule is made absolute in the above terms with no

order as to costs.

                 (S.M. Modak, J.)                     (Sunil B. Shukre, J.)
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