Jharkhand High Court

Bharat Petroleum Corporation ... vs Sharma Filing Station on 22 March, 2021

                           1


IN THE HIGH COURT OF JHARKHAND AT RANCHI
               L.P.A. No.569 of 2018
                         ------
 Bharat Petroleum Corporation Limited, a Government of India
 Undertaking, through its Territory Manager (Retail) namely Shri Neeraj
 Kumar Jaria, Aged about 39 years, Son of Dinesh Kumar Jaria having its
 office at 3rd Floor, Nile Complex, Old H.B. Road, Kantatoli Chowk,
 Ranchi, P.O.-GPO, P.S.-Lower Bazar, District-Ranchi-834001
                                               ....    .... Appellant
                           Versus
1. Sharma Filing Station, NH-6, Ashwarpur, Bharagora, P.O. Bharagora,
   P.S.-Bharagora, District-East Singhbhum, Jharkhand through its
   Authorised Signatory Sri Anil Kumar Choubey, son of Shri Uma
   Shankar Choubey, resident of Ashwarpur, Bharagora, P.O. Bharagora,
   P.S.-Bharagora, District-East Singhbhum
2. Deputy Manager-Sales (Retail), Bharat Petroleum Corporation Limited,
   Goods Shed Road, P.O.-Tatanagar, P.S.-Tatanagar, District East
   Singhbhum-831002
3. The Sales Officer, Bharat Petroleum Corporation Limited, Goods Shed
   Road, P.O.-Tatanagar, P.S.-Tatanagar, District East Singhbhum-831002
                                                ....   .... Respondents
                        ------
CORAM : HON'BLE THE CHIEF JUSTICE
              HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
                        ------
For the Appellant         : Mr. Mrinal Kanti Roy, Advocate
For the Respondents       : Mr. Deepak Sinha, Advocate
                          : Ms. Rakhi Sharma, Advocate

                                ------
C.A.V. on 30.09.2020                      Delivered on 22/03/2021
Per Sujit Narayan Prasad, J.

The matter has been heard through video conferencing with the

consent of learned counsel for the parties. They have no complaint about

any audio and visual quality.

L.P.A. No.569 of 2018

The instant appeal is under Clause-10 of the Letters Patent of the

Patna High Court directed against the order/judgment dated 14.06.2018

passed by the learned Single Judge of this Court in W.P.(C) No.6378 of

2014, by which, the writ petition has been allowed by quashing the order

dated 31.07.2017, whereby and whereunder, the writ petitioner has been

restrained to deal with the customers and suppliers of the respondent as

also restrained to deal with any of the products of the respondent and

neither the writ petitioner will be able to claim itself to be dealer of the

respondent Company under any circumstances whatsoever.

2. The brief facts of the case which required to be enumerated read

hereunder as:-

The writ petitioner is a dealer, duly been appointed by the Bharat

Petroleum Corporation Ltd, in short „BPCL‟, involved in purchasing,

receiving, storing and selling of Motor Spirit and High Speed Diesel Oil

(MS & HSD), in the name and style of "Sharma Filling Centre" situated at

NH-6, Anishwarpur, Baharagora, East Singbhum, Jharkhand, since the

year 2005.

The writ petitioner has entered into an agreement for carrying out

the business on 24.05.2005 for a period of 15 years operative till

23.05.2020 and thereafter, has started supply of the aforesaid products to

the Company. The writ petitioner has carried out supply of „MS & HSD‟

without any complaint from any quarter.

The writ petitioner has pleaded that having found difficulty with

regard to giving excess delivery by Dispensing Unit being DU No.BY L&T

9299, a request was made to the Inspector, Weight and Measures

Department, Ghatsila, East Singhbhum vide its letter dated 23.02.2013 as

also deposited the requisite fee of Rs.750/- to conduct re-verification of

the said DU No.BY L&T 9299 which was giving excess delivery.

The writ petitioner was informed by the Weights and Measures

Department, Ghatsila that for re-verification and stamping verification, fee

is required to be deposited and only after due repair of the machinery and

after re-verification and stamping of the same, the supply of oil should be

started.

The Quality and Control Cell (QCC) of the respondent Company

has conducted a surprise inspection on 26.02.2013, wherein, it has been

found that sealing wire on metering unit of one DU No.BY L&T 9299 was

found broken and MS & High Speed Diesel was dry at the time of the

inspection.

A report was prepared mentioning therein that the sale from the said

DU was suspended till further advice from the territory.

The respondent‟s Company, thereafter, has issued a show cause

on 11.04.2013 to explain as to why action should not be taken against the

writ petitioner including termination of the aforesaid agreement for

commission of alleged irregularities to the effect:-

(i) In DU No.BY L&T 9299, the sealing wire on metering unit is

found broken and;

(ii) MS & Hi-Speed Diesel were dry at the time of inspection.

The writ petitioner, on receipt of the aforesaid notice dated

11.04.2013, replied vide letter dated 25.04.2013 explaining therein by

denying the allegation as also mentioning in the aforesaid reply that on

23rd February, 2013, a request was made to the Weights and Measures

Inspector to re-verify the respective DU No.BY L&T 9299 with fee receipt

no.726085 and the same has been verified on 28.02.2013 by the Weights

and Measures Inspector and to that effect due certificate was issued.

Since 24.02.2013, the sale from respective DU was suspended as

advised by Weights and Measures Inspector.

Further, it has been referred therein that sale of Hi-Speed Diesel is

almost nil in most of the RO due to huge gap in pricing with HSD.

As far as MS is concerned, the potential is about 3 KL to 4 KL a

month with an assurance that the sale as per the required quantity will be

done in future.

Further, query has been made by the respondent with respect to

irregularities in point no.4(i), which has again been replied by the writ

petitioner vide letter dated 25.04.2013 annexing therein the letter dated

23.02.2013 addressed to the Weights and Measures Inspector for re-

verification and further clarified the said point no.4(i) by referring therein

that "if in Du No. BY L&T 9299, sealing wire was found broken, it might be

purely due to heavy rust and force used by the Inspection Officer". The DU

was regularly been checked up but not its seal and wires.

On 23.02.2013, during routine delivery check, it has been found

erratic delivery from above said machine and thereafter, it has immediately

been informed to the concerned Officer of the respondent-BPCL and

Weights and Measures Inspector for re-verification of the said machine.

The respondent Company after receipt of the aforesaid letter from

the writ petitioner has again made correspondence to the writ petitioner on

07.05.2013 asking the writ petitioner to explain as to why the letter

addressed to the Weights and Measures Department, Ghatsila was not

produced before the Inspection Officials on 26.02.2013.

Apart from that, another letter was issued by the respondent

Company on 07.05.2013 addressed to the Inspector, Weights & Measures

Department, Ghatsila to intimate him about the genuineness of the letter

dated 23.02.2013 as also about the observations during the visit of the

inspected site.

The aforesaid communication has been answered by the writ

petitioner clarifying therein that the authorized DSW Mrs. Lakshmi Rana

who was present at the petitioner‟s premises was not aware of the said

letter dated 23.02.2013 addressed to the Inspector, Weights & Measures

Department, Ghatsila and therefore, the said letter could not be produced

during the course of such inspection.

The respondent Company has again made correspondence to the

Weights and Measures Department, Ghatsila, Jharkhand on 05.08.2013

seeking confirmation as to whether the facts narrated by the writ petitioner

in letter dated 25.04.2013 was good and found the same in order.

The Inspector, Weights and Measures Department, Ghatsila, on

receipt of the aforesaid letter, has explained vide letter dated 16.08.2013

the fact about re-verification and also mentioned that the metering unit is

very old and outdated and needs to be replaced.

It is the case of the writ petitioner that even in spite of the letter of

the Inspector, Weights and Measures, Department, Ghatsila having been

received, the order of suspension of supply from the concerned DU has

not been lifted.

The concerned Company having not been satisfied with the reply,

has issued the order dated 31.07.2017 terminating the contract and

restraining the supply of MS & HSD to the petitioner‟s unit.

3. The writ petitioner initially has approached to this Court seeking

relief to the effect for a direction upon the respondent to start the supply of

the Motor Spirit and High Speed Diesel Oil (MS & HSD)) in terms of the

agreement executed on 24.05.2005 but during the pendency of the writ

petition since the decision has been taken to terminate the contract vide

order dated 31.07.2017, as such, the order of termination of the contract

has been assailed by filing the interlocutory application being I.A.No.7104

of 2017 seeking leave of this Court to amend the prayer made in the writ

petition by inserting the prayer for quashing of the order dated 31.07.2017

which has been allowed by the learned Single Judge of this Court while

disposing of the aforesaid interlocutory application being I.A.No.7104 of

2017 vide order dated 26.02.2018.

4. The learned Single Judge has allowed the writ petition by quashing

the order dated 31.07.2017 which is impugned in this intra-court appeal

preferred by the Bharat Petroleum Corporation Limited (BPCL) inter-alia

on the ground that the allegation of commission of irregularities as per the

contract which contains a condition as under Clause-9 and 13(a)thereof,

for which, the opportunity of hearing was provided and after the reply

having found to be not satisfactory, the conscious decision has been taken

by the competent authority.

5. It has been submitted that although the contract does not contain

any condition to provide an opportunity of hearing but ample opportunity

has been provided which has been put-forth but the said reply has not

been found to be satisfactory rather the writ petitioner has tried to mislead

the authority by fabricating the documents with the connivance of the

Weights and Measures Department about re-verification vide request

dated 23.02.2013 but the requisite fee has been deposited only on

27.02.2013 while the inspection by the appellant‟s Company has been

conducted on 26.02.2013, wherein the aforesaid irregularities have been

found.

The writ petitioner has taken the plea of re-verification of one DU

No.BY L&T 9299 but he has not produced any document pertaining to the

very first verification and when there is no report pertaining to the first

verification, there is no question of any re-verification.

The document dated 23.02.2013 has been made which is by way of

afterthought and more surprisingly, requisite fee has not been deposited

rather the same was deposited only after the inspection which was

conducted on 26.02.2013, therefore, the writ petitioner has not only

committed irregularities contrary to the condition of contract and the

Marketing Discipline Guidelines but also tried to mislead the authority.

6. The appellant Company after taking into consideration these

aspects of the matter has cancelled the contract but the learned Single

Judge, without appreciating these aspects of the matter, has quashed and

set aside the decision by which, the contract has been cancelled by

considering the letter dated 23.02.2013 made to the Inspector, Weights

and Measures Department regarding excess delivery but without

considering that if that letter was of re-verification then where was the

original verification report as because the content of the letter dated

23.02.2013 begins with the caption subject for re-verification of the unit

and once the letter has been written for re-verification, then certainly there

must be the original verification report.

The learned Single Judge ought to have been taken into

consideration these aspects of the matter in order to see the genuineness

of the fact and the reason assigned by the writ petitioner.

Further, the learned Single Judge has not appreciated the fact that

when the letter dated 23.02.2013 has been issued for re-verification of the

unit, what prevented the writ petitioner to deposit the requisite fee and why

it has been deposited only on 27.02.2013 i.e., one day after the date of

inspection i.e., on 26.02.2013.

7. According to the learned counsel for the appellant that the learned

Single Judge has further failed to appreciate that even accepting the show

cause contains two irregularities that is:-"(i) In DU No.9299 the sealing

wire on metering unit is found broken and (ii) MS (Motor Spirit) and Hi-

Speed Diesel were dry at the time of inspection". But the order of

termination is also on the ground of using the said DU whose sealing wire

was found broken.

8. According to the learned counsel, even accepting that the ground

about sealing wire having found to be broken has not been mentioned in

the show cause, can the decision of the authority for cancellation of the

contract will vitiate if the two other grounds are already available being

sufficient reason to terminate the contract.

He, therefore, submits that the learned Single Judge, in exercise of

power of issuance of Writ of Certiorari, has exceeded its jurisdiction in

replacing the fact finding arrived at by the concerned competent authority

by substituting the said view with its own view, which cannot be said to be

proper taking into consideration the scope of Writ of Certiorari.

Therefore, according to him, the order passed by the learned Single

Judge is not sustainable in the eye of law and the same is fit to be

quashed and set aside.

9. Per contra, Mr. Deepak Sinha, learned counsel appearing for the

writ petitioner, has submitted that there is no error in the impugned order,

according to him, the learned Single Judge has appreciated the fact by

taking into consideration the letter written by the writ petitioner to the

Weights and Measures Inspector of the Weights and Measures

Department, Ghatsila dated 23.02.2013 asking the concerned authority to

re-verify the unit which clearly goes to suggest that the dispensing unit

was not in workable condition and once the writ petitioner has already

taken the endeavour by making due information to the concerned

authority of the Weights and Measures Department, the same cannot be

said to be falsified merely on account of the fact that the requisite fee has

not been deposited immediately on the date of making such request.

The learned Single Judge has further considered the fact that the

inspection was conducted on 26.02.2013 in which two irregularities have

been found which has been referred by the writ petitioner to the Weights

and Measures Department on 23.02.2013 and considering the aforesaid

aspect of the matter, the learned Single Judge is correct in making

interference with the decision of the authority, by which, the contract has

been terminated.

He further submits that the learned Single Judge has also taken into

consideration the fact that the ground for termination of contract is not

based only upon the reason which has been sought to be explained by the

writ petitioner but also on the ground to which the writ petitioner has never

been provided an opportunity.

He, on the basis of these facts submits that the learned Single

Judge after taking into consideration all these aspects of the matter is

correct in interfering with the impugned decision, hence, the same may

not be interfered with.

10. This Court after having heard the learned counsel for the parties

and perused the documents available on record as also the finding

recorded in the impugned order, deem it fit and proper to refer certain

undisputed facts before entering into the legality and propriety of the

impugned order.

11. The admitted fact herein is that the writ petitioner has entered into

an agreement on 24.05.2005 with the appellant Corporation to sale Motor

Spirit and Hi-Speed Diesel. The agreement contains the various conditions

including the condition as under condition no.13(a) for termination of the

agreement for the reason assigned therein.

One of the conditions as contained in condition no.13(d) is that if

licensees commit breach of any covenant and/or stipulation in this licence,

the Company shall not be bound to observe and perform its obligation

hereunder, for ready reference, condition as contained in condition nos.9,

13(a)(v), 13(a)(vii) and 13(a)(viii) are being referred hereinbelow:-

"(9) Neither the Licensees nor the Licensees servants or agents shall interfere in any way with the working parts of the pumps or other equipment provided by the Company."

"13(a)(v) If the Licensees for any reason other than due to the Company's default fail to maintain supply to the public through the said facilities for any period exceeding 24 hours.

13(a)(vii) If the Licensees shall be guilty of a breach of any of the covenants and stipulation on their part contained in this agreement.

13(a)(viii) If the Licensees shall commit or suffer to be committed any act which in the opinion of the Marketing Director of the Company for the time being in Mumbai or any other person nominated for this purpose by the Company is prejudicial to the interest or good name of the Company or its products. The decision of such officer or person shall be final and binding on the Licensees."

It further appears from condition no.12 which stipulates that the

Lincence may be terminated without assigning any reason whatsoever by

either party giving to the other not less than ninety days notice in writing to

expire at any time of its intention to terminate it and upon the expiration of

any such notice this Licence shall stand cancelled and revoked. The

requisite period of notice may be reduced or waived by mutual consent.

It further appears from the Marketing Discipline Guidelines

contained under Chapter-8 that irregularities have been classified into

three categories i.e., Critical, Major and Minor.

Under the head Critical Irregularities, the nature of allegation

levelled against the writ petitioner is under the said heading since the

Critical Irregularities also includes if the seals of the metering unit found

tampered in the dispensing pumps and the action in case of any Critical

Irregularities would be termination at the first instance, for ready reference

all regularities i.e., Critical, Major and Minor are being referred

hereinbelow which reads hereunder as:-

"8.2 Critical Irregularities: The following irregularities are classified as critical irregularities:

(i)     Adulteration of MS/HSD (5.1.1)
(ii)    Seals of the metering unit found tampered in the dispensing
        pumps. {5.1.2(b)}

(iii) Totalizer seal of dispensing unit tampered or deliberately making the totalizer non functional or not reporting to the company if totalizer is not working. (5.1.3 read with 5.1.2)

(iv) Additional/Unauthorized fittings and gears inside the

dispensing units/tampering with dispensing units.(5.1.4)

(v) Unauthorized storage facilities (5.1.5)

(vi) Unauthorized purchase/sales of products. (5.1.6)

(vii) Tank lorry carrying unauthorized product found under decantation at the RO (5.1.7) Action:

Termination at the FIRST instance will be imposed for the above irregularities.

8.3 Major Irregularities: The following irregularities are classified as major irregularities:

(i) Refusal by the dealer to allow drawl of samples/carry out inspections.(5.1.8)

(ii) Non availability of reference density at the time of inspection.

(5.1.90

(iii) Selling of normal MS/HSD as branded fuels. (5.1.10)

(iv) Stock variation beyond permissible limits but sample passing quality tests. (5.1.11)

(v) Non maintenance of records since last inspection. (5.1.12)

(vi) Overcharging of MS/HSD/CNG/Auto LPG (5.1.13)

(vii) Non provision of clean facility. (5.1.14.b).

(viii) Dealer operating the automated RO in manual mode without authorization. (5.1.16) Action: Except in case of (iii) & (vii) Suspension of sales and supplies for 15 days for the first irregularity, 30 days for the second irregularity, and a third offence would lead to termination of the dealership.

Action in case of (iii) above would be as under:-

In the first instance OMC would impose a penalty of recovery of differential price since last inspection. Termination will be the action in case of 2nd instance.

Action in case of (vii) above would be as under:-

Penal action will be taken in case during the inspection (a) Toilet is found to be not clean or (b) Water is not available or (c) Latch on the toilet door is not available/not working.

In the first instance Rs.10000/-, Second instance Rs.20000/-, Third instance Rs.25000/- and Fourth instance onwards (i) Rs.30000/- or 45 % of the monthly dealer commission (based on average of last 6 months), whichever is higher and (ii) suspension of Sales and supplies for 7 days or rectification of the defect in toilet, whichever is later. 8.4 Minor Irregularities: The following irregularities are classified as minor irregularities:

(i) Short delivery with Weights & Measures Departments' seals intact where the dealer has not informed the OMC of this defect. {5.1.2(a)}

(ii) Non maintenance of specified records where records from last inspection are maintained but prior records are not available. (5.1.12)

(iii) Non provision of facilities like air, Telephone and first aid box.

(5.1.14.a)

(iv) Miscellaneous.

(a) Non display of authorized Retail Selling prices of MS/HSD/CNG/AUTO LPG. (5.1.15)

(b) Non display of density, opening stock of the day, sticker ensuring Zero before delivery on dispensing unit, name of

product on each nozzle of MPD, contact details of authorized persons to be contacted in case of Complaint/Grievance/Emergency. (5.1.17)

(d) Poor housekeeping. (5.1.17)

(e) Driveway Salesman at the ROs not in uniform/wearing badges. (5.1.17) (One or more irregularity under the above category a, b, c, d or e will be considered as one irregularity only for the purpose of taking action).

Action: (except in case of (i) above):- Warning-cum- guidance letter in the first instance, Rs.10000/- per irregularity on second instance and Rs.25000/- per irregularity on third instance onwards.

Action in case of (i) above would be as under:-

First instance: warning letter to be issued.

Second instance within one year of 1st instance: Rs.10000/- per nozzle found delivering short.

Third and subsequent instances within one year of 1st instance: Rs.25000/- per nozzle found delivering short."

12. The writ petitioner has started carrying out its business. One

inspection was conducted on 26.02.2013 by the appellant Corporation and

found as per the inspection report that the sealing wire on metering unit of

DU No.BY L&T 9299 is found broken. The nozzle of this DU is sealed with

plastic seal no.5593724. The samples from both HSD tanks have been

collected for testing in Lab.

The appellant Corporation has issued notice to the writ petitioner for

the alleged breaches i.e.,(i) In DU No.BY L&T 9299, the sealing wire on

metering unit is found broken and (ii) MS & Hi-Speed Diesel were dry at

the time of inspection with a further direction to submit reply within 15

days from the date of receipt of the show cause.

The writ petitioner has made due reply denying the allegations and

also referring therein the letter dated 23.02.2013 addressed to the

Weights and Measures Inspector said to have been issued for re-

verification of the dispensing unit.

The explanation has been furnished that the aforesaid unit was not

in workable condition for which requisite fee was made for re-verification

of the aforesaid unit by making correspondence on 23.02.2013 addressed

to the Weights and Measures, Inspector, Weights and Measures

Department, Ghatsila, Jharkhand and as such, no fault lies on the part of

the writ petitioner.

The aforesaid show cause has found to be unsatisfactory by the

appellant Corporation on the following grounds:-

(i) That if any correspondence said to have been issued by the

writ petitioner on 23.02.2013 addressed to the Weights and

Measures Inspector, why it has not been brought to the notice

of Inspecting Team who has conducted Inspection on

26.02.2013 and;

(ii) The writ petitioner has failed to explain as to why the requisite

fee for re-verification has not been deposited along with

requisite dated 23.02.2013 and why it has been deposited on

27.02.2013, only after the date of inspection i.e., 26.02.2013.

The appellant Company has considered the letter dated 23.02.2013

and taking into consideration the conduct of the writ petitioner about

deposit of the requisite fee only after the date of inspection i.e., on

26.02.2013 as afterthought and as such, cancelled the contract.

13. The question which is required to be considered by this Court on

the basis of the argument advanced on behalf of the parties as referred

hereinabove i.e.:-

(i) The issue of maintainability of the writ petition;

(ii) Whether the reply of the writ petitioner held to be

unsatisfactory by the appellant suffers from error;

(iii) Whether non-deposit of requisite fee along with letter dated

23.02.2013, can be said to be justifiable explanation by the writ

petitioner;

(iv) Whether was it not required by the writ petitioner to apprise

the Corporation about the letter dated 23.02.2013 to the Inspecting

Team on 26.02.2013 i.e., the date of inspection;

(v) Whether if on one ground no show cause has been issued,

can the entire order will vitiate, if the other irregularities, the principle

of natural justice has been observed and;

(vi) Whether the High Court in exercise of power of Writ of

Certiorari, can substitute the view of the authority with its own view.

14. So far as the issue no.(i) about maintainability of the writ petition on

the ground of availability of alternative remedy of appeal which was one of

the issues agitated before the Writ Court but the said plea has not been

addressed to this Court and therefore, this Court is not going into the

aforesaid issue.

15. The issue nos.(ii), (iii) and (iv) are interlinked with each other,

therefore, these issues are being considered together hereinbelow.

The sole explanation furnished by the writ petitioner that there is no

laches on his part mainly because the correspondence has been made to

the Weights and Measures Inspector, Weights and Measures Department,

Ghatsila, Jharkhand as on 23.02.2013 for re-verification of the unit.

By taking such plea, the writ petitioner has tried to impress upon

the appellant Corporation that once the due information has been

furnished to the Weights and Measures Inspector about deficiency in the

said unit, if no action has been taken by the Weights and Measures

Inspector, why the writ petitioner will be penalized.

The question is that the reason is furnished by a party, the same

must have nexus with its conduct to show the bonafide.

Herein, it is the specific case of the writ petitioner that in absence of

deposit of requisite fee, the verification or re-verification of the concerned

unit cannot be conducted by the Weights and Measures Inspector but very

surprisingly, he has only made an application on 23.02.2013 without any

requisite fee for so called re-verification of the unit.

Further, the writ petitioner has kept himself silent in depositing the

requisite fee rather he has only deposited the requisite fee on 27.02.2013

i.e., the next following day of the date of inspection conducted by the

appellant Corporation which was on 26.02.2013.

The question is why and under what circumstances, the writ

petitioner kept silent from 23.02.2013 to 26.02.2013 and only deposited

the requisite fee on 27.02.2013. The writ petitioner has furnished no

explanation to that effect and as such, in absence of any sufficient

explanation in this regard, the reasoning furnished by the writ petitioner to

the effect that the application has been made on 23.02.2013 for re-

verification of the unit without depositing the requisite fee cannot be said

to be acceptable, as such, it has rightly not been accepted by the

appellant Corporation.

The matter would have been different if the writ petitioner would

have made application on 23.02.2013 along with requisite fee on the

same date or at least on the following date considering the fact that as per

the terms of contract, the dispensing unit may not be stopped or there

may not be excess supply or less supply of the fuel but he has chosen not

to do so rather he has deposited the requisite fee of Rs.750/- on

27.02.2013 i.e., after the inspection having been conducted on

26.02.2013.

Further, it requires to refer herein that when on 26.02.2013, the

Inspection Team of the appellant Corporation has visited the writ

petitioner‟s Company for conducting the inspection, no such information or

no such document has been produced before the Inspecting Team for its

satisfaction, however, reason has been assigned that the person who at

the time of making such letter or depositing the requisite fee was not

aware with the aforesaid fact but that reason cannot be said to be proper,

it is for the reason that if a party is found to have committed any

irregularity, it is upon the party to come out with convincing reason for its

acceptance. Herein after inspection on 26.02.2013 when show cause

notice has been issued then in its reply it is being explained about

ignorance of such letter by the employee who was on duty in the outlet on

the date of inspection. But the same is having no substance as because

even as per agreement it was incumbent upon the dealer to apprise the

Corporation about any alteration in the Dispensing Unit which is prohibited

as per condition no.7(a) of the Agreement which reads hereunder as:

"7(a) The Licensees shall be responsible to see that full and proper measure is delivered from the pumps installed by the Company on the said premises and shall have no recourse against the Company for any loss, damages, cost, charge or expenses which the Licensees may at any time suffer by reason of the pumps delivering wrong measure or by reason of the Motor Spirit or HSD becoming contaminated in any way. If at any time the pumps, shall be delivering wrong measure or shall develop any other defect the Licensees shall forthwith report such defect in writing to the Company and subject to sub-clause (b) hereunder shall not operate the defective pump or pumps further until the defect shall have been remedied."

But no such report was made by the writ petitioner to the

Corporation in terms of the aforesaid Clause.

Therefore, according to our considered view the explanation,

furnished by the writ petitioner, has rightly not been considered fit to be

acceptable by the appellant Corporation.

16. So far as the issue no.(v) is concerned which pertains to in case of

multiple irregularities committed by the party apart from the aforesaid

multiple irregularities if the final decision has been taken in addition to that

multiple irregularities and no such occasion has been provided to explain

for the irregularities in addition to the multiple irregularities referred in the

show cause, can the entire decision of the authorities be vitiated.

The answer of this Court would be in negative as because if the

show cause contains sole allegation of irregularities then the principle of

natural justice has to be satisfied but if there are multiple allegations about

commission of irregularities and if one of the irregularities have not found

mentioned in the show cause, the entire decision would not vitiate, if the

reason explained by the parties with respect to irregularities which has

been referred in the show cause has been found to be not satisfactory.

Herein the show cause includes two allegations i.e.,:-"(i) In DU

No.9299 the sealing wire on metering unit is found broken and (ii) MS

(Motor Spirit) and Hi-Speed Diesel were dry at the time of inspection".

However, the order of termination of contract dated 31.07.2017 has

also been passed on the basis of the irregularities i.e., the particular DU

was being used by the writ petitioner in spite of sealing wire on metering

unit having been broken but on this ground alone, the entire order of

cancellation of contract will not vitiate since the other allegation i.e., DU

No.9299, the sealing were on metering unit is found broken and MS and

Hi-Speed Diesel were dry at the time of inspection have been found to be

proved after providing due opportunities of hearing to the writ petitioner

which has found to be not satisfactory and therefore, even if one

irregularity has not been mentioned in the show cause, the charges or

irregularities proved on the basis of the other charges or irregularities

contained in the show cause, the entire decision of the termination of

contract will not be vitiated.

17. So far as the issue no.(vi) which pertains to whether the High Court

in exercise of power of Writ of Certiorari, can substitute its view contrary

to the view taken by the administrative authority.

To answer this issue, this Court deems it fit and proper to discuss

about the principle of Writ of Certiorari by the High Court sitting under

Article 226 of the Constitution of India.

In this regard, reference may be made to the judgment rendered by

the Hon‟ble Apex Court in the case of Syed Yakoob vs. K.S.

Radhakrishnan and Ors., A.I.R. 1964 Supreme Court 477. Paragraph

no.7 of the said judgment is being reproduced hereinbelow:

"The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Art. 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal Acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Art. 226 to issue a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v. Ahmad Ishaque, 1955-1 SCR 1104 : ((S) AIR 1955 SC 233); Nagendra Nath v. Commr. Of Hills Division, 1958 SCR 1240 : (AIR 1958 SC

398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168.

In Hari Vishnu Kamath vs. Ahmad Ishaque and Ors., AIR 1955

Supreme Court 233, the Hon'ble Supreme Court has held as hereunder

in paragraph no.21:

".............to the character and scope of the writ of certiorari and the conditions under which it can be issued, the following propositions may be taken as established: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it. (2) Writ of certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal even if they be erroneous. This is on the principle that a Court which has jurisdiction over a subject-matter has jurisdiction to decide wrong as well as right, and when the Legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior Court were to rehear the case on the evidence and substitute its own findings in certiorari."

In Sawarn Singh and Anr. vs. State of Punjab and Ors., (1976) 2

SCC 868 their Lordships, while discussing the power of writ under Article

226 of the Constitution of India for issuance of writ of certiorari, has been

pleased to hold at paragraph nos.12 and 13 as hereunder:

"12. Before dealing with the contentions canvassed, it will be useful to notice the general principles indicating the limits of the jurisdiction of the certiorari jurisdiction can be exercised only for correcting errors of jurisdiction committed by inferior courts or tribunals. A writ of certiorari can be issued only in the exercise of supervisory jurisdiction which is different from appellate jurisdiction. The Court exercising special jurisdiction under Article 226 is not entitled to act as an appellate Court. As was pointed out by this Court in Syed Yakoob's case (supra)

13. In regard to a finding of fact recorded by an inferior tribunal, a writ of certiorari can be issued only if in recording such a finding, the tribunal has acted on evidence which is legally inadmissible, or has refused to admit admissible evidence, or if the finding is not supported by any evidence at all, because in such cases the error amounts to an error of law. The writ jurisdiction extends only to cases where orders are passed by inferior courts or tribunals in excess of their jurisdiction or as a result of their refusal to exercise jurisdiction vested in them or they act illegally or improperly in the exercise of their jurisdiction causing grave miscarriage of justice."

In Heinz India (P) Ltd. and Anr. vs. State of U.P. and Ors., (2012)

5 SCC 443 their Lordships have been pleased to hold at paragraph nos.66

and 67 as hereunder:

"66. That the court dealing with the exercise of power of judicial review does not substitute its judgment for that of the legislature or executive or their agents as to matters within the province of either, and that the court does not supplant "the feel of the expert" by its own review, is also fairly well settled by the decisions of this Court. In all such cases judicial examination is confined to finding out whether the findings of fact have a reasonable basis on evidence and whether such findings are consistent with the laws of the land.

67. In Dharangadhara Chemical Works Ltd. v. State of Saurashtra this Court held that decision of a tribunal on a question of fact which it has jurisdiction to determine is not liable to be questioned in proceedings under Article 226 of the Constitution unless it is shown to be totally unsupported by any evidence. To the same effect is the view taken by this Court in Thansingh Nathmal case where this Court held that the High Court does not generally determine questions which require an elaborate examination of evidence to establish the right to enforce for which the writ is claimed."

In Thansingh Nathmal vs. The Superintendent of Taxes, Dhubri

& Ors., A.I.R. 1964 1419 Supreme Court, Hon'ble Supreme Court has

been pleased to hold that the High Court does not jointly determine

question which requires elaborate examination of evidence to establish

the right to enforce for which the writ is claimed.

In Pepsico India Holding (P) Ltd. vs. Krishna Kant Pandey,

(2015) 4 SCC 270 their Lordships, while discussing the scope of Articles

226 and 227 of the Constitution of India in the matter of interference into

the finding of the Tribunal, has been pleased to hold by placing reliance

upon the judgment rendered in Chandavarkar Sita Ratna Rao vs.

Ashalata S. Guram, (1986) 4 SCC 447 at para-17 as hereinbelow:

"17. In case of finding of facts, the court should not interfere in exercise of its jurisdiction under Article 227 of the Constitution. Reference may be made to the observations of this Court in Bathutmal Raichand Oswal V. Laxmibai R. Tarta where this Court observed that the High Court could not in the guise of exercising its jurisdiction under Article 227 convert itself into a court of appeal when the legislature has not conferred a right of appeal. The High Court was not competent to correct errors of facts by examining the evidence and reappreciating. Speaking for the Court, Bhagwati, J, as the learned Chief Justice then was, observed at page 1301 of the report as follows:

The special civil application preferred by the appellant was admittedly an application under Article 227 and it is, therefore, material only to consider the scope and ambit of the jurisdiction of the High Court under that article. Did the High Court have jurisdiction in an application under Article 227 to disturb the findings of fact reached by the District Court? It is well settled by

the decision of this Court in Waryam Singh v. Amarnath that the ......... power of superintendence conferred by Article 227 is, as pointed out by Harries, C.J., in Dalmia Jain Airways v. Sukumar Mukherjee to be exercised most sparingly and only in appropriate cases in order to keep the subordinate courts within the bounds of their authority and not for correcting mere errors. This statement of law was quoted with approval in the subsequent decision of this Court in Nagendra Nath Bose V. Commr. Of Hills Division and it was pointed out by Sinha, J., as he then was, speaking on behalf of the court in that case:

It is thus, clear that the powers of judicial interference under Article 227 of the Constitution with orders of judicial or quasi-judicial nature, are not greater than the power under Article 226 of the Constitution. Under Article 226 the power of interference may extent to quashing an impugned order on the ground of mistake apparent on the face of the record. But under Article 227 of the Constitution, the power of interference is limited to seeking that the tribunal functions within the limits of its authority."

Recently, the Hon‟ble Apex Court in General Manager, Electrical

Rengali Hydro Electric Project, Orissa and Others vs. Giridhari Sahu

and Ors., (2019) 10 SCC 695 has delved upon the issue about scope of

issuance of writ of certiorari by the High Court and has laid down that, if

the finding recorded by the court is erroneous and based upon perversity,

the order is fit to be quashed/set aside.

18. It is settled position of law as has been pronounced by the Hon‟ble

Apex Court in the judgments referred hereinabove that the High Court can

only exercise the power of Writ of Certiorari having its limited scope in a

case where on the face of the order, there is apparent error or there is

violation of principle of natural justice or any decision contrary to the

statutory provision but herein, this Court has not found violation of

principle of natural justice, so far as the two allegations as have been

referred in the show cause, rather this Court has found from the record

that the appellant Corporation has provided ample opportunities firstly by

issuing show cause and secondly by providing an opportunity to clarify the

fact about not apprising about the letter dated 23.02.2013 to the

Inspecting Authority who had conducted raid on 26.02.2013 as also to

apprise as to why the requisite fee had not been deposited on 23.02.2013

and why it had been deposited on 27.02.2013, this goes to show that the

principle of natural justice has rightly been followed by the appellant

Corporation. Further, there is no ground taken of violation of the statutory

provision.

19. The learned Single Judge ought to have been taken into

consideration the very scope of issuance of Writ of Certiorari as has been

laid down by the Hon‟ble Apex Court hereinabove before interfering with

the decision of the Administrative Authority by substituting the view with its

own view, therefore, the learned Single Judge while quashing the

impugned decision dated 31.07.2017 cannot be said to be justified.

Further, the nature of allegation levelled against the writ petitioner

since being referred in the agreement with a condition that if any of the

conditions of the agreement will be violated or breach thereof, the decision

would be taken for termination of the contract but herein, the authorities

after taking into consideration the nature of allegation and after following

the principle of natural justice with respect to the allegations referred in the

show cause have taken decision to terminate the contract, therefore, this

Court in exercise of power conferred under Article 226 of the Constitution

while issuing the Writ of Certiorari by showing interference in the

impugned decision would not be proper taking into consideration the fact

that the explanation furnished by the writ petitioner has not found to be

satisfactory.

20. This Court has also considered the nature of one of the allegations

as per show cause which pertains to, neither the licensee nor the

licensees servants or agents shall interfere in any way with the working

parts of the pumps or other equipment provided by the Company as would

be evident from Clause-9 of the „BPCL Agreement‟ which will come in the

category of Critical Irregularities, since the same pertains to tampering in

the working parts of the outfit or other equipment, in that view of the

matter, when the aforesaid irregularities have been established basis upon

which the order of termination of contract has been passed, the said

decision of the authority cannot be said to be improper taking into

consideration the reply of the writ petitioner which has been found to be

not satisfactory.

21. Before parting with the order, this Court deem it fit and proper to

consider the judgments upon which the reliance has been put by the

learned counsel for the writ petitioner first in the case of SACI Allied

Products Ltd., U.P. Vrs. Commissioner of Central Excise, Meerut,

(2005) 7 SCC 159.

Learned counsel has relied upon paragraph-15 and 16 of the

aforesaid judgment in order to substantiate his argument that the notice

issuing authority cannot go beyond the show cause but this Court after

having made the elaborate discussion hereinabove on the basis of the fact

and after going across the show cause notice has found that reference of

two irregularities as has been referred herein which has been replied by

the writ petitioner and after the reply having found to be not satisfactory, a

decision has been taken for termination of the contract and therefore, it is

not the case where it can be said that the authorities have deviated from

the show cause as because two of the charges/irregularities have been

found to be proved by taking into consideration the reply furnished by the

writ petitioner, hence, this judgment is not acceptable in the facts of this

case.

So far as the judgment rendered in Godrej Industries Ltd. & Anr.

Vrs. Commissioner of Central Excise, Mumbai & Anr., (2008) 17 SCC

471 of which para-3 has been relied upon, wherein, it has been laid down

that any decision taken if found beyond the scope of show cause notice,

the same cannot be sustained but as has been discussed hereinabove,

since we have reached to the finding that two of the irregularities have

been found to be mentioned in the show cause notice which has duly

been replied having not found to be satisfactory and hence, merely for one

irregularity, even if it has not been referred in the show cause, the entire

decision of the authorities will not vitiate, however, the matter would have

been different if it a case of only one irregularity but that is not the case

herein, hence, this judgment is not applicable in the facts of the present

case.

So far as the judgment rendered in the case of Hindustan

Petroleum Corp. Ltd. & Ors. Vrs. Super Highway Services & Anr.,

(2010) 3 SCC 321, of which paragraph-31 has been relied upon, wherein

it has been laid down that cancellation of a dealership agreement of a

party is a serious business and cannot be taken lightly. In order to justify

the action taken to terminate such agreement, the authority concerned

has to act fairly and in complete adherence to the rules/guidelines framed

for the said purpose. The non-service of notice to the aggrieved person

before the termination of his dealership agreement also offends the well-

established principle that no person should be condemned unheard. It

was the duty of the petitioner to ensure that Respondent No.1 was given a

hearing or at least serious attempts were made to serve him with notice of

proceedings before terminating his agreement.

Herein, on the basis of the fact, this judgment is also not applicable

because it is not a case wherein the principle of natural justice has not

been followed.

Further, it is also not the case herein that the contract has been

terminated very lightly rather the contract has been terminated by taking

into consideration the breaches of the condition of contract, to the effect:-

"(i) In DU No.9299 the sealing wire on metering unit is found broken

and (ii) MS (Motor Spirit) and Hi-Speed Diesel were dry at the time of

inspection", for which, due show cause notice has been issued but the writ

petitioner has furnished his reply which having not found to be satisfactory

and further after considering the fact that the nature of irregularities is

under the heading "Critical Irregularities" as per the dealership guidelines,

which provides for termination of contract if irregularity found to be proved,

herein the irregularities have been found to be established after

consideration of reply and as such, the decision has been taken to

terminate the contract, hence on fact, this judgment is not applicable.

22. This Court has gone across the impugned judgment and found that

the learned Single Judge has not considered the facts in the right

perspective as has been discussed in detail hereinabove and therefore,

according to our considered view, the judgment impugned in this appeal

cannot be held to be sustainable in the eyes of Law.

23. Therefore, this Court after taking into consideration the facts in

entirety as discussed hereinabove, is of the view that the order passed by

the learned Single Judge suffers from error, accordingly, quashed and set

aside.

24. In the result, writ petition being W.P.(C) No.6378 of 2014 stands

dismissed.

25. Accordingly, the instant appeal stands allowed.

26. In consequent to disposal of this appeal, Interlocutory Application

being I.A.No.6847 of 2019 stands disposed of.

       I agree                                (Dr. Ravi Ranjan, C.J.)


(Dr. Ravi Ranjan, C.J.)
                                             (Sujit Narayan Prasad, J.)
Rohit/-.A.F.R.