Madhya Pradesh High Court
M/S M.P. Bombay Auto Service Through Its ... vs Bharat Petroleum Corporation Limited ... on 13 February, 2024
Author: Vivek Rusia
Bench: Vivek Rusia
- : 1 :-
W.P. Nos. 19872/2022 & 10506/2022
IN THE HIGH COURTOF MADHYA PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
WRIT PETITION No. 19872 of 2022
BETWEEN:-
M/S M.P. BOMBAY AUTO SERVICE THROUGH ITS PROPRIETOR SHRI
GIRIRAJ DAS MUNDRA S/O SHRI SHRIKISHAN JI MUNDRA, AGED
ABOUT 66 YEARS, OCCUPATION: BUSINESS 170 PIPLIARAO BHOLARAM
USTAD MARG INDORE (MADHYA PRADESH)
.....PETITIONER
(SHRI PIYUSH MATHUR, LEARNED SENIOR ADVOCATE WITH SHRI
MADHUSUDAN DWIVEDI, ADVOCATE FOR THE PETITIONER.)
AND
BHARAT PETROLEUM CORPORATION LIMITED THROUGH ITS
MANAGING DIRECTOR BHARAT BHAWAN 4 AND 6 CURRIMBHOY
1.
ROAD BALLARD ESTATE P.B. NO. 688 MUMBAI MAHARASTHRA
(MAHARASHTRA)
TERRITORY MANAGER, INDORE RETIAL TERRITORY BHARAT
2. PETROLEUM CORPORATION LTD A.B. ROAD. MANGLIA, DISTRICT
INDORE. (MADHYA PRADESH)
.....RESPONDENTS
(SHRI SATISH CHANDRA BAGADIYA, LEARNED SENIOR ADVOCATE WITH
SHRI DILIP KSHIRSAGAR, ADVOCATE FOR THE RESPONDENTS.)
WRIT PETITION No. 10506 of 2022
BETWEEN:-
M/S M.P. BOMBAY AUTO SERVICE THROUGH ITS PROPRIETOR SHRI
GIRIRAJ DAS MUNDRA S/O SHRI SHRIKISHAN JI MUNDRA, AGED
ABOUT 66 YEARS, OCCUPATION: BUSINESS R/O 170 PIPLIARAO
BHOLARAM USTAM MARG (MADHYA PRADESH)
.....PETITIONER
(SHRI PIYUSH MATHUR, LEARNED SENIOR ADVOCATE WITH SHRI
MADHUSUDAN DWIVEDI, ADVOCATE FOR THE PETITIONER.)
AND
- : 2 :-
W.P. Nos. 19872/2022 & 10506/2022
BHARAT PETROLEUM CORPORATION LIMITED THROUGH ITS
1. MANAGING DIRECTOR BHARAT BHAWAN 4 AND 6 CURRIBHOY
ROAD BALLARD ESTATE MUMBAI (MAHARASHTRA)
TERRITORY MANNAGER, INDORE RETAIL TERRITORY, BHARAT
2. PETROLEUM CORPORATION LTD. A.B. ROAD, MANGLIA, (MADHYA
PRADESH)
.....RESPONDENTS
(SHRI SATISH CHANDRA BAGADIYA, LEARNED SENIOR ADVOCATE WITH
SHRI DILIP KSHIRSAGAR, ADVOCATE FOR THE RESPONDENTS.)
Reserved on : 29.01.2024
Pronounced on : 13.02.2024
These petitions having been heard and reserved for order, coming
up for pronouncement this day, this Court pronounced the following:
ORDER
As the controversy involved in both these two petitions is identical,
therefore, they are being decided by this common order. For the sake of
convenience, the facts narrated in W.P. No.19872/2022 are being taken into
consideration.
The petitioner has filed the present petition being aggrieved by
show-cause notice dated 13.6.2022 passed by respondent No.2.
1. Facts of the case, in short, are as under :
The petitioner is a proprietorship firm running the business of selling
and supplying Motor Spirit (Petrol) and HSD (Diesel) since last 25 years
by virtue of dealership awarded by respondent Oil Company. The last
dealership agreement was executed on 18.8.2018 for a period of 5 years
i.e. up to 22.12.2023.
2. A complaint was made against the petitioner in Police Station
- : 3 :-
W.P. Nos. 19872/2022 & 10506/2022
Kishanganj, District Indore on the basis of which a raid was conducted by
the Police on 11.10.2021 during the unloading of petrol and diesel from
Tanker bearing Registration No. MP-09-HG-9027 to MP-09-HJ-9027.
Prima facie adulteration was found in the petroleum product, therefore,
samples were drawn and thereafter, FIR was registered on 14.10.2021 at
Police Station Kishanganj at Crime No. 727/2021 u/s. 420 and 120-B of
the IPC read with Section 3 and 7 of the Essential Commodities Act, 1955
(hereinafter referred to as "the Act of 1955" for short) against Suresh
Kushwaha, Chandraprakash Pandey, Vijay Kumar Mundara and Rakesh
Agrawal. The aforesaid incidence was highlighted in the media, thus the
authorities of Bharat Petroleum Corporation Ltd. (BPCL) visited the retail
outlet of the petitioner on 15.10.2021 and carried out the inspection. They
also drawn the samples of petrol and diesel and sent to the Quality
Assurance Laboratory, Mangliya. On the basis of the aforesaid incidence,
the sale and supply of the products were suspended w.e.f. 15.10.2021.
Thereafter, show-cause notice was issued on 3.11.2021 by the Territory
Manager to the petitioner based on the incidence that took place on
11.10.2021 and some minor irregularities relating to Register w.e.f.
14.10.2021 noticed by the team of the respondents. Along with the show-
cause notice, the report given by Quality Assurance Laboratory was also
provided to the petitioner.
3. Meanwhile, the son of the proprietor of the petitioner firm applied
for anticipatory bail before this Court which was granted on 23.11.2021.
The petitioner submitted the reply to the show-cause notice on 6.12.2021
denying each and every allegation and also explained each and every
aspect of the said incidence.
4. The confiscation proceedings were also initiated by the District
- : 4 :-
W.P. Nos. 19872/2022 & 10506/2022
Magistrate, Indore under the provisions of Motor Spirit and High Speed
Diesel (Regulation of Supply, Distribution and Prevention of Malpractices)
Order, 2005 read with Section 3 and 7 of the Act of 1955. In exercise of
powers conferred u/s. 6A of the Act of 1955 the Tanker bearing
Registration No. MP-09-HJ-9027 has been ordered to be confiscated with
a fine of Rs.10,000/- vide order dated 4.1.2022 by the Additional Collector.
The petitioner deposited the fine amount of Rs.10,000/- and got release of
the Tanker on 10.1.2022.
5. After receipt of the reply to the show-cause notice the petitioner was
provided personal hearing by sending notice dated 31.1.2022. The
petitioner appeared before the competent authority on 14.2.2022 and
explained all the facts and grounds taken in the reply to show-cause notice.
The petitioner again sought permission for personal hearing which was
provided on 8.3.2022 before the Head Retail, West at Western Regional
Office at Mumbai. The petitioner waited for almost one month and when
no order was passed, submitted the representation to the respondents for
resumption of sale and supply from the aforesaid retail outlet. Before
taking any final decision, the respondents initiated the proceedings for
allotment the retail outlet of the petitioner to other dealer on adhoc basis
by issuing letter dated 13.4.2022. Being aggrieved by the aforesaid letter,
the petitioner preferred W.P. No.10506/2022 before this Court in which
vide order dated 11.5.2022 this Court restrained the respondents from
further proceedings. According to the petitioner, the respondents became
annoyed because of the aforesaid interim order dated 11.5.2022 and issued
the supplementary show-cause notice in relation to the same cause of
action for which show-cause notice dated 3.11.2021 had already been
issued. Hence, the petitioner filed the present petition challenging the
- : 5 :-
W.P. Nos. 19872/2022 & 10506/2022
supplementary show-cause notice dated 13.6.2022.
6. Shri Piyush Mathur, learned senior counsel appearing for the
petitioner, submits before adjudication on show-cause notice, the issuance
of second show-cause notice after lapse of more than 8 months from the
date of incidence is nothing but revenge attitude of the respondents
because the petitioner filed W.P. No.10506/2022. This is nothing but an
attempt to fulfill the lacuna in the proceedings initiated by them in
pursuant to a show-cause notice dated 3.11.2021. The petitioner has
already submitted an objection to the show-cause notice by submitting that
the procedure prescribed under Clause 8 of Marketing Discipline
Guidelines, 2012 (MDG) issued by all the oil companies have not been
followed. The said MDG provides that show-cause notice is required to be
issued within 30 days and the same is required to be decided within 45
days. It is further submitted that as per Clause 8.5.6 of the MDG in respect
of all the alleged irregularities, a show-cause notice within 30 days from
the date of inspection will be issued to the dealer and if the sample of the
MS/HSD were drawn during inspection, the the show-cause notice will be
issued within 30 days of the test results. Therefore, in violation of these
provisions the supplementary show-cause notice is not tenable and liable to
be quashed. The respondents be directed to take final decision only in
respect to the allegations made in the first show-cause notice.
7. So far as W.P. No.10506/2022 is concerned, Shri Mathur, learned
senior counsel, submits that unless the decision is taken in the first show-
cause notice, the respondents have no authority to appoint a new dealer.
8. After notice, the respondents have filed the reply raising preliminary
objection that the writ petition at the stage of show-cause notice is not
maintainable and liable to be dismissed. The respondents also raised an
- : 6 :-
W.P. Nos. 19872/2022 & 10506/2022
issue of territorial jurisdiction in view of Clause 19 and 20 of the DPSL
Agreement. According to the respondents, there is an arbitration clause in
the agreement and the disputed questions of facts cannot be decided in a
writ petition. It is submitted that the surprise inspection was done by the
Police wherein Tanker bearing Registration No. MP-09-HJ-9027 was
found unloading petrol and diesel and thereafter the FIR was registered.
This incidence was never informed by the petitioner to the
respondent/company which they came know about this incidence when the
matter was reported by the media and immediately an inspection was
carried out on 15.10.2021 at site in which negative stock variations were
found beyond permissible limit, hence the sale and supply were suspended.
Both the Tankers bearing Registration Nos. MP-09-HG-9027 and MP-09-
HJ-9027 belong to sons of proprietor of petitioner firm - Ajay Mundara
and Vijay Kumar Mundara. On the issue of first show-cause notice, the
petitioner has already filed the reply and the opportunity of hearing has
been provided twice and for which the petitioner has no grievance. The
petitioner is aggrieved by the issuance of supplementary show-cause
notice. According to the respondents, after perusing the reply of the
petitioner, new facts have emerged thereby warranting issuance of
supplementary show-cause notice on additional grounds such as
unauthorized sale and purchase of the product. The BPCL checked the
vehicle tracking system and came to know that Tank Trolley Vehicle
Tracking system of the vehicle bearing Registration No. MP-09-HG-9027
revealed that the said vehicle never left the retail outlet (RO) on 7.10.2021
and remained there till 1.41 pm. on 12.10.2021. Therefore, the said tank
lorry was never decanted as falsely stated by the petitioner. Accordingly,
on additional grounds supplementary show-cause notice has rightly been
- : 7 :-
W.P. Nos. 19872/2022 & 10506/2022
issued and for which time has also been given to the petitioner to submit
the reply. The petition is premature and the same is liable to be dismissed.
After having heard the learned counsel for the parties I have also
perused the material available on record.
9. Chapter 8 of the MDG deals with the action to be taken OMC under
the MDG. All types of irregularities are classified into three categories viz.
Critical irregularities; major irregularities; and minor irregularities. The
critical irregularities, if found proved, termination at the first instance will
be imposed. For major irregularities, suspension is provided for 15 days
for first irregularity and 30 days for the second and termination on the third
irregularity. Likewise for minor irregularities, much lesser punishment is
provided like warning and fine of Rs.10,000/- and 25,000/-. Clause 8.5.2
of the MDG provides that all cases of irregularities needs to be established
before any action is taken against a dealer. Clause 8.5.3 says that in case of
two or more irregularities are detected at the same time at the same RO,
each of the irregularities should be accounted as an instance against the
respective class of irregularity and suitable action will be taken for each of
the irregularity thereby giving a compounding effect.
10. Shri Mathur, learned senior counsel for the petitioner, has placed
reliance on Clause 8.5.6 of the MDG which says that in respect of all
irregularities, a show-cause notice within 30 days from the date of
inspection will be issued to the dealer indicating all the irregularities and
15 days' time to the dealer for submitting the reply. Upon receipt of the
reply to the show-cause notice, the authorized officer of the OMC will
review the charges leveled and the reply received and pass a speaking
order preferable within a period of 45 days from the receipt of the reply. In
respect of his contention Shri Mathur has placed reliance over the
- : 8 :-
W.P. Nos. 19872/2022 & 10506/2022
judgment of the apex Court in the case of Allied Motors Ltd. V/s. Bharat
Petroleum Corporation : (2012) 2 SCC 1, in which, the apex Court has
quashed the second show-cause notice.
11. According to the respondents, after considering the reply to the first
show-cause notice submitted by the petitioner, some more irregularities
have been revealed which warranted an explanation by issuing the
supplementary show-cause notice. From the reply submitted by the
petitioner, it has been revealed that the sales were continued until
15.10.2021 when the sales and supplies were suspended upon inspection
by the BPCL. The BPCL dispatched tank lorry of MS and HSD product
between 7.10.2021 and 15.10.2021. The petitioner came up with the reply
that the load that came on 11.10.2021 is the same load that came on
7.10.2021 and according to the respondents, this is contradicting the
receipts of the product acknowledged by way of signature on the invoice
and which comes under the category of unauthorized sale/purchase of the
petroleum products in breach of DPSL agreement. Therefore, this is not a
second show-cause notice but it is in continuation of the first show-cause
notice in which certain facts revealed on the basis of the reply and the
documents filed by the petitioner, it has right been issued as supplementary
show-cause notice. Clause 8.5.2 of the MDG mandates that all cases of
irregularities needs to be established before any action is taken against the
dealer. Only an explanation has been called from the petitioner and
thereafter, the respondents shall decide as to whether it is a case of critical,
major or minor irregularities. The petitioner has already filed a detailed
reply to this show-cause notice on 9.7.2022 and the petitioner was called
for personal hearing also on 2.9.2022 by issuing notice dated 17.8.2022
and immediately the petitioner approached by way of present petition. This
- : 9 :-
W.P. Nos. 19872/2022 & 10506/2022
Court vide order dated 12.9.2022 has stayed the further proceedings,
otherwise same would have been completed till date. In view of the above,
I do not find any ground to interfere with the second show-cause notice
12. In view of the foregoing discussion, these petitions deserve to be and
are hereby dismissed. However, the interim order dated 11.5.2022 passed
in W.P. No. 10506/2022 shall remain in force for a period of next two
months and in the meanwhile, the respondents shall conclude the
proceedings in pursuant to the show-cause notice.
( VIVEK RUSIA )
JUDGE
Alok/-
Date: 2024.02.15 10:12:30 +05'30'
