Village Bhikewala vs International Commission On ...
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         IN THE HIGH COURT OF HIMACHAL PRADESH
                        AT SHIMLA
                 ON THE 7th DAY OF JANUARY, 2022
                             BEFORE




                                                       .

            HON'BLE MR. JUSTICE VIVEK SINGH THAKUR
                 CIVIL WRIT PETITION No. 1080 OF 2020
    Between:-





          M/S   VIKRANT     OIL   CARRIER,
          THROUGH ITS          PROPRIETOR
          CHANDERPHOOL, SON OF SH.
          BAJE    SINGH,    RESIDENT    OF





          VILLAGE    BHIKEWALA,     TEHSIL
          NARWANA,       DISTRICT     JIND,
          HARYANA.                                   ....PETITIONER

          (BY SH. KSHITIJ SHARMA AND

          SH. PRASHANT SHARMA, ADVOCATES.)

          AND
    1.    HINDUSTAN PETROLEUM
          CORPORATION LTD. THROUGH ITS


          CHAIRMAN, 17 JAMSHEDJI TATA
          ROAD, MUMBAI, MAHARASHTRA.

    2.    THE DEPUTY GENERAL MANAGER,




          SHIMLA RETAIL REGION,
          HINDUSTAN PETROLEUM
          CORPORATION LTD. 3RD FLOOR,





          HAMEER HOUSE, LOWER
          CHAKKER, SHIMLA, HIMACHAL
          PRADESH.





    3.    THE CHIEF DEPOT MANAGER,
          NALAGARH DEPOT, P.O.L. DEPOT,
          NALAGARH, BADDI-NALAGARH
          ROAD, VILLAGE DHADI KANIA, P.O.
          NALAGARH, DISTRICT SOLAN
          174101.
    4.    THE SENIOR MANAGER,
          VIGILANCE, CHANDIGARH
          REGIONAL OFFICE, PLOT NO. 6-A,




                                      ::: Downloaded on - 31/01/2022 23:35:16 :::CIS
                                              2              CWP No. 1080 of 2020


           SECTOR 19-B, MADHYA MARG,
           CHANDIGARH.                                       ....RESPONDENTS

           (BY SH. BIPIN CHANDER NEGI, SENIOR ADVOCATE
           WITH MR. NITIN THAKUR AND MR. UDIT SHOURYA
           KAUSHIK, ADVOCATES.)




                                                                    .

    Whether approved for Reporting? Yes.

         This petition coming on for orders this day, the Court





    delivered the following:

                               JUDGMENT

                  Petitioner,          a     transporter    in     business        of





    transportation     of     fuels,        has   approached         this     Court

challenging impugned show cause notice dated 17.1.2020

(Annexure P-12) as well as decision of termination of

Transport Agreement dated 1.1.2019 and forfeiture of

security deposit communicated vide letter dated 14.2.2020

(Annexure P-14) issued by respondent No. 2, on the ground

that impugned action of respondents taken through

respondent No. 2 is illegal, arbitrary, unjust and outcome of

vendetta against the petitioner for blowing whistle, against

illegalities, irregularities being committed by local officials of

respondent-Corporation in P.O.L. Depot Nalagarh, by

submitting various applications/complaints, including

complaints dated 4.10.2019 and 4.12.2019 (Annexure P-15)

to the higher authorities and filing CWP No. 628 of 2019 in

this High Court against respondent-Corporation and private

persons.

2. Undisputed facts of present case are that Bulk

.

Petroleum Road Transport Agreement (herein after referred

to as the 'Transport Agreement') dated 1.1.2019 was entered

between petitioner Vikrant Oil Carrier and Hindustan

Petroleum Corporation Limited (herein after referred as

'HPCL') for road transport of bulk petroleum products from

various storage points of HPCL to its consumers/other

storage points. Under aforesaid Transport Agreement,

petitioner has offered four tank trucks (TTs) bearing

registration No. HR-39D-9470, HR-39D-1004, HR-56B-5852

and HR-56B-8795. These TTs were inducted and started

plying w.e.f. 2.1.2019. On 7.2.2019, petitioner had made a

written request to replace two TTs bearing No. HR-39D-9470

and HR-39D-1004 with two other TTs bearing registration

No. HR-56B-8491 and HR-56B-4366. Despite the request,

these trucks were not replaced, leading to issuance of notice

by petitioner through counsel to respondent No. 2, wherein

along with issue of replacement, various other illegalities and

irregularities being committed at Nalagarh Depot of

respondent-Corporation were brought in the notice of

respondent-Corporation with request to take appropriate

action and to allow the petitioner to replace the TTs. Instead

.

of taking any action, as requested in the legal notice,

successive letters were issued to the petitioner to continue

the Trucks already inducted, which were sought to be

replaced by the petitioner. In response to such letters,

petitioner had informed that he had stopped the above

referred two Trucks as they had been indulged in illegal

activities with further submission that in replacement

petitioner has already given documents of two vehicles,

sought to be replaced. Correspondences in this regard

continued from both sides.

3. It is also pertinent to mention here that

petitioner had also filed Civil Writ Petition No. 628 of 2019 on

30.3.2019 against respondent-Corporation and some private

respondents, whose trucks were inducted by the officials of

Corporation for transportation of petroleum products but

without genuine Calibration Certificate, on the basis of a fake

Calibration Certificate managed and fabricated in connivance

with the officials of the Corporation.

4. It is case of the petitioner that officials at

Nalagarh Depot started providing lesser work to the TTs of

petitioner to mount pressure upon him to withdraw CWP No.

.

628 of 2019, but instead of succumbing to the pressure,

petitioner had stopped plying its third truck HR-65B-5852 on

30.10.2019 and fourth truck HR-26B-8795 w.e.f. 18.12.2019

with information about reason for doing so.

5. As per respondents, petitioner had stopped

plying its truck without any information, whereas claim of the

petitioner is that he had given written information to the

concerned authority. Further vide communication dated

31.10.2019 sent to respondent No. 3 in response to

communication dated 26.10.2019 and in continuation to

communication of the petitioner dated 14.10.2019, petitioner

had asked reasons for not replacing his two TTs, documents

whereof he had already submitted. Vide communication

dated 3.1.2020, petitioner had communicated that reasons

for stopping TTs Nos. HR-39D-9470 and HR-39D-1004 has

already been given by him in his communication submitted at

the time of stopping these vehicles in February, 2019 and

again informing that owners of these trucks were having

partnership with those persons against whom petitioner had

filed a Writ Petition in H.P. High Court, Shimla and, therefore,

there was reasonable apprehension to the petitioner that for

.

blacklisting the petitioner those persons may do any illegal

activity while plying their trucks under transport Agreement of

the petitioner and, thus, petitioner had expressed his inability

to continue these trucks. It was further informed by the

petitioner that remaining two trucks have been stopped from

plying by him for the reason that officials of the Corporation

at Nalagarh Depot were taking side of the persons involved

in unlawful and illegal activities and were mounting pressure

upon the petitioner to withdraw the case filed by him in the

Court and had also stopped EMD payment to the petitioner

and further that petitioner was being harassed and snubbed

by the officials at Nalagarh Depot. Lastly, it was stated that

despite having address of petitioner available on the letter

head, officials of Nalagarh Depot had been corresponding

with petitioner at address of Hisar. Petitioner has also

communicated to the respondents that he would not be able

to ply the trucks unless and until his grievances are

redressed.

6. Ultimately a show cause notice dated

17.1.2020 was issued to the petitioner. In response thereto,

communication dated 30.1.2020 was submitted by petitioner,

.

re-iterating his request for replacement of two vehicles with

further information that officials at Nalagath Depot, namely,

Gopal Dass and Manasri Dixit used to snub the proprietor of

petitioner firm and they were not taking any action despite

submission of proof of 22 vehicles which were plying

fraudulently for the reasons that either they were conniving

with the transporters of these 22 vehicles or they were

having their business shares in that and, therefore, it was

informed that till matter is listed in the Court, petitioner would

not be able to ply the vehicles.

7. Finally, vide impugned communication dated

14.2.2020 Transport Agreement of the petitioner was

terminated and security deposit in the form of bank

guarantee of `8,00,000/- was forfeited, leading to filing of

present Writ Petition.

8. Learned counsel for the petitioner contended

that petitioner had stopped plying his vehicles for illegalities

and irregularities pointed out by him as a Whistle blower and

under protest to the pressure being mounted upon him to

withdraw the case and in this regard respondent No. 2 in the

impugned communication dated 14.2.2020 has concluded

.

that allegations raised by the petitioner were baseless,

incorrect and was a futile attempt to divert from main issue of

unauthorized stoppage of TTs despite issuance of various

letters by and on behalf of Corporation.

9. Learned counsel for the petitioner has further

submitted that CWP No. 628 of 2019 filed by the petitioner

has been allowed by a Single Bench of this High Court by

holding that private respondents therein were plying their

trucks on the basis of fake Calibration Certificates and LPA

No. 4 of 2021 preferred by private respondents against it has

also been dismissed by the Principal Division Bench of this

High court vide judgment dated 15.6.2021, whereas

Corporation has accepted the verdict of the Single Bench

and has taken action against the guilty transporters and all

this substantiates correctness of allegations levelled by the

petitioner and, therefore, the very reason assigned for

rejecting the representation/reply of the petitioner,

terminating Transport Agreement and forfeiting security of

the petitioner, is contrary to the true factual matrix and,

therefore, petition deserves to be allowed. He has further

submitted that petitioner has full faith in higher authorities of

.

HPCL and thus, in alternative he has prayed for referring the

dispute to the Higher authorities of the Corporation for

deciding afresh after setting aside the impugned show cause

notice and decision of termination of Transport Agreement

and forfeiting the security.

10. It has been submitted on behalf of petitioner

that petitioner has not been blacklisted or his Transport

Agreement has not been terminated for commission of any

illegal act or in violation of Oil Industry Transport Discipline

Guidelines, but Transport Agreement has been terminated

for acting as a whistle blower against the illegal activities in

Nalagarh Depot and, therefore, termination of Transport

Agreement is malafide, arbitrary and illegal and an act of arm

twisting to pressurize the petitioner to keep quite. Whereas

petitioner had raised voice on various issues and the version

of the petitioner has been affirmed by the verdict of the

Courts as another Writ Petition CWP No. 3542 of 2021 filed

by the petitioner has also been allowed vide judgment dated

6.9.2021 and Review Petition No. 102 of 2021, preferred

therein has also been dismissed vide order dated 23.11.2021

by the Division Bench of this High Court.

.

11. Petition has been opposed mainly on the

ground that issue involved in present case, i.e. termination of

Transport Agreement, falls in the domain of private law and

impugned decision is a post contract decision taken for

breach of terms of the agreement and is governed by law of

contract and falls in domain of private law and for

adjudication of issues of private law, petition under Article

226 of the Constitution of India, is not maintainable. In

support of this plea, reliance has been placed on

pronouncement of the Supreme Court in K.K. Saksena Vs.

International Commission on Irrigation and Drainage and

others (2015) 4 SCC 670, referring its paras 43 and 44,

which read as under:-

"43. What follows from a minute and careful

reading of the aforesaid judgments of this Court is that if a person or authority is a "State" within the meaning of Article 12 of the Constitution, admittedly a writ petition under Article 226 would lie against such a person or body. However, we may add that even in such cases writ would not lie

to enforce private law rights. There are catena of judgments on this aspect and it is not necessary to refer to those judgments as that is the basic principle of judicial review of an action under the

.

administrative law. Reason is obvious. Private law

is that part of a legal system which is a part of Common Law that involves relationships between

individuals, such as law of contract or torts.

Therefore, even if writ petition would be maintainable against an authority, which is "State"

under Article 12 of the Constitution, before issuing any writ, particularly writ of mandamus, the Court has to satisfy that action of such an authority,

which is challenged, is in the domain of public law

as distinguished from private law.

44. Within a couple of years of the framing of the Constitution, this Court remarked in Election Commission of India v. Saka Venkata Subba

Rao, AIR 1953 SC 210 that administrative law in India has been shaped in the English mould.

Power to issue writ or any order of direction for "any other purpose" has been held to be included

in Article 226 of the Constitution 'with a view apparently to place all the High Courts in this

country in somewhat the same position as the Court of the King's Bench in England. It is for this reason ordinary "private law remedies" are not enforceable through extraordinary writ jurisdiction, even though brought against public authorities (See Administrative Law, 8th Edn., H.W.R. Wade

& C.F. Forsyth, p. 656). In a number of decisions, this Court has held that contractual and commercial obligations are enforceable only by ordinary action and not by judicial review."

.

12. In rebuttal to the aforesaid contention, learned

counsel for the petitioner has submitted that respondent-

Corporation is a public Corporation and work of

transportation of bulk of petroleum products is a Government

largess and process of allotment by way of tender and

termination thereof, including post contract termination for

alleged breach of contract has to be completely transparent

and as per public policy, decision must be reasoned based

on true and correct facts and as in present case the reasons

assigned for termination and forfeiture are contrary to

factual matrix, the rejection of present petition by treating it

as a petition belonging to domain of private law would be

against public policy resulting into miscarriage of justice.

13. Learned counsel for the petitioner, in support of

his contention that present petition is maintainable despite

the issue in question is having fragrance of belonging to

domain of private law, has referred pronouncements of the

Supreme Court in Mahabir Auto Stores and others Vs.

Indian Oil Corporation and others, (1990) 3 SCC 752, LIC

of India and another Vs. Consumer Education and

Research Centre and others (1995) 5 SCC 482 and

.

judgment dated 21.06.2019 passed by a Division Bench of

High Court of Gujarat in Special Civil Application No. 7814 of

2019, titled as Aakash Exploration Services Limited through

Director Heman Navinbhai Haria Vs. Oil and Natural Gas

Corporation Limited.

14. After going through aforesaid pronouncements,

it cannot be safely concluded that arbitrariness/malafide can

shift the matter belonging in private law field to public law

field and in all such cases whether public law or private law

governs the rights, it depends upon the facts and

circumstances of the case and for which, there cannot be

any straight jacket formula. Public authorities are expected

to act for public good and in public interest. The impact of

every action is also on public interest. It imposes public law

obligation and impresses with that character upon public

authority. Therefore, in case, challenge is made on the

ground of violation of Article 14 by alleging that the impugned

act is arbitrary, unfair or unreasonable, the fact that the

dispute also falls within the domain of contractual obligation

would not relieve the State or its instrumentality of its

obligation to comply with the basic requirements of Article

.

14. To this extent, the obligation is of a public character

invariably in every case irrespective of there being any other

right or obligation in addition thereto. An additional

contractual obligation cannot divest the claimant of the

guarantee under Article 14 of non-arbitrariness at the hands

of the State or its instrumentality in any of its actions. Even

in commercial contracts where there is a public element, it is

necessary that relevant considerations are taken into

account and the irrelevant consideration discarded. Even in

contractual matters public authorities have to act fairly; and if

they fail to do so, approach under Article 226 would always

be permissible because that would amount to violation of

Article 14 of the Constitution. Further the arms of the High

Court are not shackled with technical rules or procedure.

The action of the State, its instrumentality, any public

authority or person whose actions bear insignia of public law

element or public character are amenable to judicial review

and the validity of such an action would be tested on the

anvil of Article 14. While exercising the power under Article

226 the Court would circumspect to adjudicate the disputes

arising out of the contract depending on the facts and

.

circumstances in a given case.

15. In an appropriate case, a Writ Petition against

the State or an instrumentality of the State, arising out of

contractual obligation is maintainable. While entertaining an

objection as to the maintainability of a writ petition, the Court

should bear in mind the fact that the power to issue

prerogative writs vests under Article 226 of the Constitution

of India, which is plenary in nature and is not limited by any

other provisions of the Constitution. The High Court having

regard to the facts of the case, has a discretion to entertain

or not to entertain a writ petition. The Court has imposed

upon itself certain restrictions in the exercise of this power,

and this plenary right of the High Court to issue a prerogative

writ will not normally be exercised by the Court to the

exclusion of other available remedies unless such action of

the State or its instrumentality is arbitrary and unreasonable

so as to violate the constitutional mandate of Article 14 or for

other valid and legitimate reasons, for which the Court thinks

it necessary to exercise the said jurisdiction.

16. In present case, public element is involved

.

because a decision of an authority of an institution, covered

under Article 12 of the Constitution of India, terminating the

contract on account of post-contract events is under

challenge. Such action under public policy, is expected to be

transparent, reasonable, rationale and non-arbitrary.

Petitioner has not only raised issue, but has also been able

to prove illegalities and irregularities in functioning of

officials/officer of the Corporation as evident from

pronouncements rendered by this Court in CWP No. 3542 of

2021 and CWP No. 628 of 2019. But the authority has

rejected the claim of the petitioner and has terminated the

agreement without verifying the true facts.

17. For reference, following portion of verdict in

CWP No. 628 of 2019 and CWP No. 3542 of 2021 would be

relevant.

CWP No. 628 of 2019 (SB)

"37. Accordingly, this petition is allowed to the extent that acceptance of the tenders of the private respondents for the purpose of work allotted to

them by respondents No.1 and 2 based upon Notice Inviting Tenders (Annexure P-1), is held to be bad and the same is also ordered to be quashed and set aside having been obtained on

.

the basis of procured calibration certificate."

CWP No. 3542 of 2021 (DB)

"27....therefore, in the peculiar circumstances of

the case, we for the time being deem it expedient in the interest of justice to pass the following directions:

The Board of Directors of HPCL is directed to constitute a special team of its officials, holding sufficiently high ranks and unconnected with the

affairs of finalization of contract in issue between

HPCL and Sai Roadways, to inquire into all the issues involved in the instant case and to take appropriate action against the wrong doers, if any,

in accordance with law. This entire exercise shall be completed within a period of 6 weeks from the date of this judgment and compliance shall be

reported to this Court."

18. Present petition cannot be rejected out rightly

only on the ground that termination of agreement is a matter

related to breach of terms of the contract after award of the

contract. The impugned decision is an administrative

decision taken by an officer of the Corporation which must be

transparent and reasoned based on true facts. Judicial

review of such decision is permissible. Respondent No. 2 in

impugned communication dated 14.2.2020 has wrongly

stated that petitioner had removed/stopped plying of two

.

trucks without any specific reason and also that he did not

inform the stoppage/removal of two trucks and had stopped

plying these vehicles without reasons whereas petitioner in

each and every communication had been stating the reasons

for withdrawal/stopping/discontinuing his trucks from plying

under the Transport Agreement and those reasons have

been found merit worthy on adjudication by the Court in

CWP No. 628 of 2019 as well as CWP No. 3542 of 2021.

Therefore, reasons assigned for termination of contract, that

allegations raised by the petitioner were baseless, incorrect

and was a futile attempt to divert the main issue of stoppage

of TTs, is factually incorrect and, therefore, impugned

termination of contract for the reasons assigned in the

communication dated 14.2.2020 is not sustainable.

19. It has also been contended on behalf of

respondent-Corporation that for having arbitration clause in

the Transport Agreement, Writ Petition is not maintainable

rather petitioner should have taken steps for appointment of

arbitrator in terms of clauses of Transport Agreement for

redressal of grievances.

20. Petition was filed in the month of March, 2020

.

and reply thereto was filed on 21.12.2020. No such

objection was ever taken either in reply or otherwise till the

stage of addressing arguments and, therefore, in my opinion

respondent-Corporation has no right to raise this issue at this

juncture, on the ground of waiver. Therefore, plea raised on

behalf of respondents with respect to arbitration clause is

rejected.

21. Lastly, it is contended on behalf of respondents

that for breach of contract petitioner is entitled only for

damages and, therefore, remedy available for the petitioner

is somewhere else, but not present Writ Petition. In the

peculiar facts and circumstances, background of the dispute

arisen between the parties and verdict of this High Court in

CWP Nos. 628 of 2011 and 3542 of 2021, I find that present

matter involved issues which are more than breach of

contract simplicitor and, therefore, petition should have been

entertained and has rightly been entertained by this Court

and is not liable to be dismissed on this count.

22. Corporation has no mechanism to test the

validity of order, passed at first level, within institution.

Contract contains arbitration clause, but none of the parties

.

is interested to refer the matter for Arbitration. That is why

no such objection has been taken in reply of the Corporation.

Therefore, issue in reference in petition can be adjudicated in

a petition preferred under Article 226 of the Constitution.

23. I am of the considered opinion that Corporation

must evolve a mechanism for testing of veracity and validity

of order passed by lowest or lower authority/officer by higher

authority/officer with adherence of norms of Natural Justice.

As on date no such arrangement/provision has been brought

in my notice. Therefore, also review of decision of the

concerned authority under Article 226 of the Constitution is

warranted. However, Corporation is also directed to evolve

such mechanism in future.

24. In view of aforesaid discussion, present petition

is allowed and impugned communication dated 14.2.2020 is

quashed and set-aside and the Director (Marketing), HPCL,

Hindustan Bhavan, 8, Shoorji Vallabhdas Marg, P.B. No. 155

, Mumbai , Maharashtra , Mumbai , 400001, is directed to

decide the issue afresh after giving due opportunity of

hearing, and if desired, permitting filing of fresh written

response to the show cause notice, in the light of

.

observations made hereinabove as well as verdict in CWP

No. 628 of 2019 and CWP No.3542 of 2021. Respondent

No.4 shall take decision on or before 14.02.2022.

25. It is made clear that setting aside order/letter

dated 14.02.2020 shall not entitle the petitioner to consider

revival of Transport Agreement. However, in case higher

authority fails to take a decision by 14.02.2022 as discussed

and directed in present petition, the Transport

Contract/Agreement shall be considered to have been

revived w.e.f. 15.02.2022.

Petition stands disposed of in aforesaid terms

alongwith pending applications, if any.

                                             (Vivek Singh Thakur),
    7th January, 2022                               Judge.





    (Keshav)