Delhi Petrol Dealers Association ... vs Govt. Of N.C.T. Of Delhi And Ors.
2007 Latest Caselaw 1834 Del

JUDGMENT

S. Ravindra Bhat, J.

1. The petitioners claimed various reliefs in the course of hearing. Learned Counsel submitted that the main grievance pertains to the practice adopted of the respondent i.e. the Office of the Controller Legal Metrology Weights and Measures, Government of NCT in regard to the steps taken for prosecution of petroleum dealers.

2. The petitioner claims to be an association of dealers of petroleum products. Its members are dealers; they manage various outlets of the respondents No.3 to 5. Without going into details the arrangement between the said members and the petroleum companies; i.e. respondents No.3 to 5, it would be sufficient for purposes of this case to say that the land and the machinery/equipment belongs to the petrol companies. They allow dealers to operate the outlets subject to express conditions.

3. Learned Counsel for the petitioner relied upon the stipulations in the Dealership agreements which are in standard format, particularly Clauses 13 to 19 and submitted that as far as the equipment are concerned; they belong to the petroleum companies. Counsel relied upon Clause 14, to submit that the petroleum company is under obligation to maintain such equipments in proper working condition at its own expense. Learned Counsel contended that members of the petitioner routinely face harassment at the hands of the second respondent who through its inspectors in routine checks determine that quantities inspected do not measure up to the standards. Learned Counsel submitted that when the materials as well as equipment are maintained wholly by petroleum companies, the question of attributing any liability to the dealer cannot arise.

4. It was contended that routinely, respondent No.2 carves inspections where the alleged infraction is only marginal. According to counsel the permissible range of variation between the standard and the quantity collected is to the tune of 15 ML per 5 litres + 4 ML. In most of the cases even though the variation is marginal and the shortage is only 1 or 2 ML and in some cases 5 ML; yet respondent No.2 initiates action and compels dealers to compound the so-called contravention by compounding under Section 39(3) of the Standards of Weights and Measures (Enforcement) Act, 1985 (hereafter referred to as "the Act").

5. Learned Counsel relied upon Section 27(2) which enacts that to ascertain the correctness of any weight or measure used in any transaction, an Inspector may test the weight or measure of the article sold or delivered to any person in the course of such transaction. Particular reliance was placed upon proviso to Section 28(3). The said proviso prescribes that where the Inspector is of opinion that the defect or error in the weight or measure is not such as to require immediate obliteration of the stamp, he should serve notice on the user of such weight or measure informing him of the defect or error found (in the weight or measure) and calling upon him to remove such defect or error within the time specified not exceeding eight days. In the event of failure to comply with the notice the Inspector can take action as provided for. In these circumstances it was contended that the authorities are under the compulsion to issue a show cause notice if they wish to proceed after determining that there is contravention of the standards/weight in question.

6. Learned Counsel relied upon the inspection report/memo issued as well as the challan which were admittedly complied with by the petitioners. Although the controversy raised now is that it was under compulsion of circumstances because failure to do so would have entailed shutting down the dealership. Learned Counsel also relied upon a report disclosing the periodicity of inspection and submitted that every once in a while the equipment is inspected by the authorities and in these circumstances in the absence of any finding or even breakage of seal etc., the authorities could not take arbitrary action.

7. Learned Counsel for the respondent, appearing on advance notice, opposed the claim in these proceedings. He submitted that what is contended and claimed in this case is a direction that a party likely to be prosecuted is entitled a show cause notice. Counsel contended that there is no such provision under Article 39(3) and that in the event the authorities conclude (on the basis of materials on record) that there is contravention of any substantive provision or standard which entails penalty and which does not fall within compounding parameters, it is entitled to proceed and file a complaint before the competent court after following the procedure under Section 39.

8. The above narrative would show that the petitioner association claims to represent dealers of the petrol companies. The terms and conditions of such dealership have been strictly relied upon to contend that the dealers have no manner of control of the equipment at site; and that the equipment is maintained exclusively by the petroleum companies; that the respondents periodically examine/inspect them. In these circumstances the so-called practice adopted by the inspectors of the Office of the Controller Legal Metrology Weights and Measures in allegedly booking the petitioners and compelling them by force of circumstance to compound for small infractions, is challenged.

9. Section 27-28 which have been relied upon in these proceedings read as follows:

27. Power to inspect

(1) An Inspector may, within the local limits of his jurisdiction, inspect and test, at all reasonable times, any weight or measure which:

(i) is in the possession, custody or control of any person, or

(ii) is in or on any premises,

in such circumstances as to indicate that such weight or measure is being or is intended or likely to be, used in any transaction or for industrial production or for protection, and may also verify whether such weight or measure is in conformity with the standards established by or under the Standards Act.

(2) For the purpose of ascertaining the correctness of any weight or measure used in any transaction, an Inspector may also test the weight or measure of the article sold or delivered to any person in the course of such transaction.

28. Power of Inspector to require production of weight or measure or records for inspection

(1) An Inspector may, if he has any reasonable cause to believe that an offence punishable under this Act has been, or is likely to be, committed in respect of any weight or measure or that any weight or measure does not conform to the standards established by or under the Standards Act, require, at all reasonable times, the person having the custody or control of such weight or measure to produce before him for inspection every such weight or measure which

(i) is used by such person or is caused by such person to be used by any other person, or

(ii) is in the possession, custody or control of such person for use, or

(iii) is kept in or on any premises for use, in any transaction or for industrial production or for protection.

(2) The Inspector may also require the production of every document or other record relating to the weight or measure referred to in Sub-section (1) and the person having the custody of such weight or measure shall comply with such requisition.

(3) On inspection, whether under Section 27 or under this section, the Inspector shall obliterate the stamp on -

(a) any weight or measure which, being due for verification, has not been submitted for such verification;

(b) any weight or measure which, since the last verification and stamping, has been repaired or re-adjusted, and does not after such repair or re-adjustment, conform to the standards established by or under the Standards Act;

(c) any weight or measure which does not admit or proper adjustment by reasons of its being broken, dented or otherwise defective;

(d) any weight or measure other than those specified in Clause (b) or Clause (c) which does not, or cannot be made to, conform to the standards established by or under the Standards Act:

PROVIDED that where the Inspector is of opinion that the defect or error in such weight or measure is not such as to require immediate obliteration of the stamp, he shall serve a notice on the user of such weight or measure informing him of the defect or error found in the weight or measure and calling upon him to remove the defect or error within such time, not exceeding eight days, as he may specify, and shall -

(i) if the user fails to remove the defect or error within that period, obliterate the stamp, or

(ii) if the defect or error is so removed as to make the weight or measure conform to the standards established by or under the Standards Act, verify such weight or measure and put his stamp thereon.

Explanation: The obliteration of the stamp on any weight or stamp shall not take away or abridge the power of the Inspector to seize or measure in accordance with the provisions of this Act.

10. Section 39 which is the relevant provision in this case reads as follows:

39. Penalty for keeping non-standard weights or measures for use and for other contraventions

(1) Whoever keeps any weight or measure other than the standard weight or measure in any premises in such circumstances as to indicate that weight or measure is being or is likely to be, used for any-

(a) weightment or measurement, or

(b) transaction or for industrial production or for protection, shall be punished with fine which may extend to two thousand rupees, and, for the second or subsequent offence, with imprisonment for a term which may extent to one year and also with fine.

(2) Whoever-

(i) in selling any article or thing by weight, measure or number, delivers or causes to be delivered to the purchaser any quantity or number of that article or thing less than the quantity or number contracted for and paid for, or

(ii) in rendering any service by weight, measure or number, renders that service less than the service contracted for and paid for, or

(iii) in buying any article or thing by weight, measure or number fraudulently receives, or causes to be received any quantity or number of that article or thing in excess of the quantity or number contracted for and paid for, or

(iv) in obtaining any service by weight, measure or number, obtains that service in excess of the service contracted for and paid for,

shall be punished with fine which may extend to five thousand rupees, and for the second or subsequent offence, with imprisonment for a term which may extend to one year and also with fine.

(3) Whoever enters, after the commencement of this Act, into any contract or other agreement, (not being a contract or other agreement for export) in which any weight, measure or number is expressed in terms of any standard other than the standard weight or measure, shall be punished with fine which may extend to two thousand rupees, and, for the second or subsequent offence, with imprisonment for a term which may extend to one year and also with fine.

11. On a careful examination of facts I am of the opinion that these proceedings cannot be entertained. What the petitioner is seeking essentially is a declaration that the practice adopted by the respondents is illegal. Quite apart from the maintainability of the action, the structure of the Act, particularly Section 27-28 is such that the Inspector has under Section 27(2) the authority to test the weight or measure of the article sold or delivered to any person in the course of a transaction. Section 28(3) deals with a specific situation; if a defect, in the course of inspection is found, in the stamp in the weight or measure for any of the four reasons enumerated and the Inspector is of the opinion that the defect or error is not such as to require erasure of the stamp he should serve a notice on the user of such weight or measure about the proposed action. The existence of this power in my opinion does not adapt to Section 39 which prescribes for a penalty for contravention of the other substantive provisions. Section 39(3) gives only two options i.e. in the event of first contravention the offender is granted the option to compound and in the subsequent, action or contravention he has to be prosecuted. Now it is well-settled that where the Legislature the Parliament intends to provide for a contingency and it does so with regard to a specific situation, the omission to do so in regard to other situations is deliberate and conscious. The existence of Section 28(3) proviso, i.e. compelling the Inspector, in the event of a finding that there is a defect or error in the stamp, in my opinion rules out the obligation or compulsion to issue a notice under Section 39. Besides Section 39 merely indicates the consequence of contravention that it is a penalty. In the event of an inspection, it is still open to the respondents on a prima facie consideration of the overall materials that the evidence is insufficient or would not stand scrutiny in the court and therefore it ought not to prosecute the offender under Section 63. However, this itself does not mean that members of the first petitioner are entitled to show cause notice in that regard. The requirement of a show cause notice, hearing and decision before the statutory authority considers whether or not to prosecute an alleged offender cannot be read into in the Statute, as is sought to be contended in this case.

12. Having regard to the above this petition has no merit. In the circumstances of this case the petitioners are directed to pay costs of the proceedings quantified at Rs. 30,000/- to the Delhi High Court Legal Services Committee within four weeks from today.