Diesel Engineering Co. Pvt. Ltd. & ... vs Union Of India & Ors.
2010 Latest Caselaw 5252 Del

                IN THE HIGH COURT OF DELHI AT NEW DELHI

                          CIVIL APPELLATE JURISDICTION

               LETTER PATENT APPEAL NOS. 1121-22 OF 2006

                                           Reserved On : October 08, 2010
                                    Date of Judgment : November 19, 2010


Diesel Engineering Co. Pvt. Ltd. & Anr.           ................Appellant
                       Through Ms. Radhika Chadrashekhar, Advocate

                                     Versus

Union of India & Ors.                                   .......Respondents
                             Through Mr. A.D.N.Rao, Advocate for R2.
                             Mr. Ramesh Kumar, Advocate for R4.


CORAM :

        HON'BLE MR. JUSTICE SANJAY KISHAN KAUL
        HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA

1.      Whether Reporters of local papers may be allowed to see the
        judgment? Yes

2.      To be referred to the Reporter or not? Yes

3.      Whether the judgment should be reported in the Digest?         Yes

SUDERSHAN KUMAR MISRA, J.

1. This appeal under the Letters Patent has been filed by

Diesel Engineering Company Pvt. Ltd., impugning the order of a Single

Judge, dated 8th May, 2006, whereby the writ petition filed by the

appellant came to be dismissed at the preliminary stage primarily on

the ground that the petitioner has failed to show any violation of the

guidelines which require the sample lifted from the petrol pump of the

appellants to be tested within ten days. It was noted that counsel for

the petitioner has not been able to show anything that would enable

the Court to conclude that the sample which was lifted on 28 th

September, 2004 was tested after 37 days. We might also notice that

after the writ petition came to be dismissed, the petitioner moved

another application before the writ court praying that the court take on

record the fact that before the writ petition came to be filed in this

Court, the appellant had in fact instituted a Suit against the

respondents claiming the same relief. That application was dismissed

as frivolous. While dismissing that application, the Court also noted

that the pendency of the suit seeking the same or similar relief at the

time when the writ petition came to be filed would in fact have been

another ground for dismissing the petition.

2. Notice in this matter was issued after the counsel for the

appellant demonstrated that in fact the relevant test report of the

sample in question, which had also been annexed to the writ petition,

showed that the sample was lifted on 28 th September, 2004 and was

received in the lab on 1st November, 2004 i.e. after 33 days, whereas

the sample is required to be sent within 10 days in the ordinary

course.

3. The central pillar of the appellant‟s case is a circular of the

respondents titled, "Marketing Discipline Guidelines - 2001." The

relevant portion on which reliance is placed is as follows:-

"SAMPLE TESTING AND RESULTS:

.........................................................................................

All samples should reach the labs within 10 days from the date of drawal and they should test the samples within the next 10 days. Results are to be communicated to the dealer by the concerned Oil

company within the next 10 days (of the testing of the sample).

While in general above procedure should be strictly followed and the time frame as stipulated above to be adhered to, however, during special drives, in view of the large number of samples, the labs may accept the samples upto 15 days after drawal and the testing should be completed within 30 days of the receipt of the sample.

........................................................................................."

It is contended by counsel for the appellant that the aforesaid

guidelines govern all sample testing and results, and, according to

this, all samples taken "should reach the laboratory within 10 days."

from the date they are drawn and that the lab should test the sample

within the next 10 days. In the case of special drives, since a large

number of samples are likely to be drawn, the laboratory may accept

the sample up to 15 days after the date on which it was drawn, but

the testing must be completed within 30 days of drawing the sample.

Counsel further contends that in the instant case, the sample was

received by the laboratory after 33 days as a result the sample could

only be analyzed after about 36 days. This, according to the counsel

for the appellant, was a clear violation of the guidelines. Not only that,

keeping in mind the fact that petrol is a volatile substance, its quality

could well have changed over this period of time and, therefore, the

test results could not be relied upon. Counsel has also referred to a

decision of the Supreme Court in the case of Harbans Lal Sahnia Vs.

IOCL, AIR 2003 SC 2120, in which a portion of another circular

issued by the Government of Uttar Pradesh on 25th April, 1997, which,

inter alia, states that the strength/friction of petrol and diesel change

after 10 days and it is for that reason that the time limit of 10 days is

fixed for testing all such products.

4. Counsel for the respondent No. 2 sought to urge that the

limit of 10 days for the sample to reach the laboratory after it is

drawn, has been fixed only for administrative reasons, with a view to

ensuring efficiency, and not because the sample would become useless

thereafter. In support, he also relies on the next paragraph in the

guidelines which states, "while in general, the above procedure should

be strictly followed ........., however, during special drives in view of

large number of samples, the labs may accept the sample up to 15

days after drawal and the testing should be completed within 30 days

of receipt of the sample." He submits that it is thus clear that the

guidelines contemplate testing of samples upto 45 days after they are

drawn.

5. On analyzing the aforesaid extract of MDG - 2001, which

is relied upon by counsel for the appellant, one thing is clear that

although there is a direction to respondent No. 2 to ensure that the

samples must reach the lab within 10 days from the date they have

been drawn in normal circumstances and within 15 days in case of a

special drive resulting; the further and relevant direction is that the

testing of the samples, which have been lifted within 15 days, "should

be completed within 30 days of the receipt of the samples."

Therefore, even according to the aforesaid circular, relied upon by the

appellant, the outer limit for testing a sample is 45 days and not 30

days as contended. Furthermore, an overall reading of this provision

can only mean that the respondent company is confident that at least

up to 45 days, there would not be any variation in the quality and

composition of the sample which might render it useless for

ascertaining the purity of the goods being sold by the appellant.

Another factor is that the full name of the guidelines relied upon by the

petitioner, is „Marketing Discipline Guidelines - 2001‟. This also leads

us to infer that the above time limits have been prescribed in these

guidelines for ensuring, "Marketing Discipline", and fortifies our

conclusion that there is nothing in these guidelines that would

persuade us to conclude that if a sample is either forwarded or tested

after the time limit of either 20 or 45 days prescribed here, it would

have lost certain vital characteristics and could no longer be

considered representative of the quality of the product from which it

was drawn. We are inclined to agree with the submission of counsel

for the respondent that, therefore, the time limit for the samples to

reach the laboratory, and be tested thereafter, mentioned in these

guidelines is largely for administrative reasons.

6. What we are concerned with here is whether the sample in

question would have retained the essential characteristics for which it

is required to be tested on the date when it was actually tested. In

this context, although we have no doubt that the aforesaid guidelines

relied upon by the appellant are aimed at administrative efficiency,

they can nevertheless be a useful guide on this case. This is because

the respondent, which is a Public Sector Company, controlled by the

Government is unlikely to prescribe a time limit for testing samples,

albeit for administrative efficiency, which exceeds the life of the

product sampled. Here, in fact the sample was lifted on 28 th

September, 2004 and it was analyzed on 4 th November, 2004. It was

therefore analyzed after 36 days i.e. on the 37th day. In other words,

the time taken to analyze the sample was sixteen days more than the

first period prescribed by the aforesaid guidelines. It was, however,

well within the overall period of 45 days contemplated in the second

paragraph of the same guidelines.

7. In support of its contentions, the second respondent has

also filed an additional affidavit contending that there can be no

question of any change of strength/friction of gasoline within 40 to 60

days. In support of this contention, it has quoted, reports of three

different institutes. The first is from the South West Research

Institute, Texas, USA, which has stated in its report on, "Evaluation of

Motor Gasoline Stability", as follows:-

"The fuel will be stable for one year at ambient

temperatures. 1 year at ambient temperature of 23ºC

would be equivalent to 2 years at 13ºC."

Similarly, Chevron, which is another energy company, is stated to

have concluded that, "gasoline stored in a tightly closed container in a

cool place will stay good for at least a year." Finally, it has also relied

upon Indian Standard IS 2796:2008, which states as follows:

"Investigations had established that the potential gum

corresponding to 4 h of ageing at 100ºC and under

oxygen pressure of 690 kPa (ASTM D 873) represents gum

content after storage for three months at 43ºC."

A perusal of these extracts relied upon by the respondents shows that

the stability of motor spirit deteriorates overtime and with increasing

temperature.

8. Therefore, what is important is the conditions under which

the sample was lifted from the pump and was kept before it was tested

and to see whether the quality of the sample lifted from that could

have deteriorated substantially before being tested on the 37th day.

All this is dependent upon the manner in which the sample was taken

and preserved and other relevant factors. There is nothing to show

these facts. However, these writ proceedings are hardly the place to

determine the relevant facts with regard to the average ambient

temperature at which the sample was stored and what would be the

rate of deterioration of the gasoline and over what period of time.

These are facts that could best be established only by a trial. Looking

to the aforesaid reports including that of the Indian Standard IS

2796:2008 cited by the respondents, it is very likely that the petrol

would have remained stable for some time, including the 36 days

before the sample was tested on the 37 th day. As regards the

circular, which has been reproduced in Harbans Lal Sahnia (supra),

is concerned, we are not inclined to give any weightage to the same

since it appears to be an administrative circular drawing conclusions

about the volatility and stability of petrol and diesel after 10 days,

without any scientific basis or reasoning. If we were to accept this as

correct, then even the aforesaid, "Marketing Discipline Guidelines -

2001", which have been relied on by the petitioner itself, would also

have to be set aside since they have prescribed a maximum period of

45 days for testing the sample after the same has been drawn.

Furthermore, the conclusion in the aforesaid circular appears to be

quite contrary to the additional affidavit filed by senior officer of the

respondent No. 2, which is a public sector corporation dealing

exclusively in petroleum products, and which has relied on reports of

the experts in field, as well as on Indian Standards 2796:2008. Under

the circumstances, we are inclined to rely on the latter in preference to

the aforesaid circular.

9. In reaching our decision we have also kept in mind the

demonstrated conduct of the appellant in admittedly having filed the

instant writ petition in this Court whilst its own civil suit filed seeking

similar reliefs, was pending in the Court at Rampur, without disclosing

the fact that the said suit was pending at Rampur. The fact that the

suit came to be dismissed by the Rampur Court for want of jurisdiction

thereafter is, to our mind, wholly irrelevant. This is because it cannot

be said that on the date the writ petition was moved in this Court, the

appellant had any inkling that his suit would be dismissed for want of

jurisdiction. Admittedly, at the time when it filed the writ petition

before this Court on 4th April, 2006; the appellant was also

maintaining its suit before the Rampur Court with full force. Not only

that, it was only on an application moved by the defendant that the

suit was dismissed for want of jurisdiction by the Civil Judge Ist Class,

Rampur, later on 6th May, 2006, by a detailed order and that too after

hearing arguments of both parties on that aspect. It was always

open to appellant to file a suit in Delhi after its plaint was returned by

the Rampur Court. Had it done so, all relevant facts may have been

properly established after trial. We are, therefore, satisfied that the

appellant did not approach this Court with clean hands.

10. Consequently, looking at the overall picture and in view of

the peculiar facts of this case, which, to our mind, in any case could

best be established by trial, which option the appellant failed to

exercise after the return of its plaint by the Rampur Court; and also

because even the guidelines permit testing upto 45 days, we are not

inclined to reverse the decision of the learned Single Judge merely

because the sample in question came to be tested after 36 days, on

the 37th day.

11. The appeal is dismissed with costs of ` 25,000.

SUDERSHAN KUMAR MISRA, J.

SANJAY KISHAN KAUL, J.

November 19, 2010.

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