Madhya Pradesh High Court
M/S Sahni Fuels Through Proprietor Shri ... vs Indian Oil Corporation Ltd. on 28 March, 2025
Author: Anand Pathak
Bench: Anand Pathak, Hirdesh
1
IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR
BEFORE
HON'BLE SHRI JUSTICE ANAND PATHAK
&
HON'BLE SHRI JUSTICE HIRDESH
ON THE 28th OF MARCH, 2025
WRIT APPEAL NO. 869 of 2025
M/S SAHNI FUELS
Vs.
INDIAN OIL CORPORATION LIMITED & ORS.
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APPEARANCE:
Shri MPS Raghuvanshi - Senior Advocate with Shri
Harshvardhan Topre - Advocate for the appellant.
Shri Sankalp Sharma - Advocate for the respondents on advance
notice.
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JUDGMENT
Per: Justice Anand Pathak
1. The present appeal under Section 2 (1) of the Madhya Pradesh
Uchcha Nyayalaya (Khand Nyaypeeth Ko Appeal) Adhiniyam, 2005
is preferred by the appellant (hereinafter referred to as "the
petitioner") being crestfallen by the order dated 05-02-2025 passed
by learned Single Judge in Writ Petition No.13222 of 2024;
whereby, the writ petition preferred by the petitioner was disposed
of with direction to the petitioner to appear before concerned
authority which has issued show cause notice and to present its case
in the light of the judgment of Apex Court in the case of Union of
India and another Vs. Kunisetty Satyanarayana, (2006) 12 SCC
28.
2. Precisely stated facts as surfaced from the pleadings and discussion
are that petitioner is a registered dealer with the Indian Oil
Corporation and is selling petroleum products (Petrol/Diesel) at
Shivpuri. It appears that representative of respondent Company
made a visit on 12-04-2023 at the Petrol Pump of petitioner
company and found certain irregularities which were recorded in
letter dated 14-04-2023 (Annxure P/7 of writ petition) which were
to be rectified by the petitioner company.
3. It appears that said rectification was carried out partly by petitioner,
therefore, vide letter dated 17-07-2023 respondent company
observed this and found that clause 12 was violated and for item
No.2,4&6 warning was given. For item No.9 matter was kept in
abeyance for guidance from the higher authority and for item No.12
as per Marketing Discipline Guidelines (MDG) clause 8.3(i), sales
and supply was suspended for 15 days. Reason was that field
officer was not allowed to check the delivery from his 5 liters
calibrated measure issued by Weights and Measurement Inspector.
4. Petitioner aggrieved by such suspension of sales and supply,
therefore, filed writ petition No.21102 of 2023 which was disposed
of vide order dated 05-02-2025 and one of the reliefs claimed by the
petitioner was given to the petitioner about e-locking charges which
were earlier tried to be recovered from the petitioner was dispensed
with.
5. It appears that on 24-07-2023 respondent company tried to enforce
Marketing Discipline Guidelines (MDG) for suspension of sales and
supply of petroleum products for 15 days but that was objected by
the petitioner company by force. Therefore, compelled by the
circumstances, respondent company issued a show cause notice
dated 19-02-2024 (part of Annexure P/1 of writ petition) in which
point of violation of dealership agreement was raised. Reply was
filed by the petitioner. Vide show cause notice dated 29-04-2024
(Annexure P/1 of writ petition) respondent company again called
the petitioner for personal hearing.
6. Being aggrieved by the said show cause notice petitioner company
filed writ petition bearing No.13222 of 2024 in which vide order
dated 22-05-2024 interim relief was granted by which petitioner was
directed to participate and cooperate in the proceedings but passing
of final order was stayed. After reply being filed by the respondents
petitioner was heard finally and impugned order is passed.
Therefore, petitioner is before this Court.
7. It is the submission of learned senior counsel appearing for the
petitioner that learned Writ Court erred in passing the impugned
order looking to the fact that it is contrary to the MDG because
respondents had to issue the show cause notice within fifteen days
from stoppage of sales and supply of petroleum products and said
fifteen days time period has not been adhered to, therefore, caused
illegality.
8. It is further submitted that the respondent company cannot apply
their own yardstick regarding making available 5 liters conical
measure. It is to be approved by Weights and Measurement
Department.
9. Another point raised by learned senior counsel appearing for the
petitioner that arbitration clause exists in clause 62(A) of the
agreement executed between the parties, therefore, appropriate
remedy could have been referral of matter to the arbitrator.
10. Per contra, learned counsel for the respondent company opposed
the prayer. According to counsel for the respondents, it is a case of
mischief coupled with non-cooperation in the proceedings. Earlier
inspection was carried out by the officers of the respondent
company in which certain irregularities were found and for
correction of irregularities, direction was given in which certain
irregularities were partly rectified and certain irregularities still
existed, therefore, invoking clause 8.3(i) of MDG suspension of
sales and supply of petroleum products for 15 days was carried out.
It was a separate proceeding in which impact of guidelines was
invoked because of particular conduct. However, so far as
termination of dealership is concerned it is a holistic approach
taken by the respondent company because of the conduct meted out
to the officers of the respondent company by the petitioner. He
refers the incident when officers of respondent company tried to
enforce MDG guidelines regarding suspension of sales and supply
on 24-07-2024 then interruption and commotion was created over
the site and company officials could not execute the MDG.
Therefore, a detailed show cause notice has been given because
respondents do not intend to carry dealership of petitioner.
11. It is further submitted that show cause notice has been given and
petitioner was called upon to appear and present its case over the
anxiety raised in the show cause notice. It is the duty of petitioner to
appear before the concerned authority and raise all the grounds as
available to the petitioner and thereafter respondent company shall
decide about the termination of dealership and/or to proceed in
some other manner including passing of final order.
12. So far as remedy of arbitration is concerned once final order is
passed then parties have option of going to arbitration for dispute
resolution. At this stage, arbitration cannot invoked. He relied upon
the judgment of Apex Court in the case of Kunisetty
Satyanarayana (supra) to bring home the analogy that against
show cause notice it is appropriate for the parties to submit to the
jurisdiction and place all the documents and their response for
adjudication. Against show cause notice, writ petition is not
maintainable.
13. Learned counsel for the respondent company supported the
impugned order also and submits that learned Writ Court gave
opportunity to the petitioner to appear before the authorities. There
is no illegality into it.
14. Heard learned counsel for the parties at length and perused the
documents appended thereto.
15. It is a case where petitioner is taking exception to the show cause
notice issued by the respondent company regarding termination of
dealership because of conduct as referred above. So far as
contention regarding MDG guidelines is concerned, it appears that it
is the guidelines (Annexure P/3) to ensure handling of products of
retail outlet by ensuring quality/quantity control measures in correct
perspective while adhering to the statutory and other regulations.
Since respondents companies are marketing petroleum products and
therefore, they uniformly conceptualized a marketing discipline
guidelines by which the basic object of sampling procedure and
testing of product is to ensure that MS and HSD sold by retail outlet
is the same product which has been supplied to them by their
principal oil company. Therefore, to ensure discipline (as the
nomenclature suggests) in marketing practices this guideline has
been devised. In the said guidelines, if any deviation is caused, then
the consequences are prescribed. Therefore, contention that after
suspension of sale and supply of petroleum products show cause
notice ought to be given is misplaced because that is in respect of
adherence to the MSG only. Here, matter is different. Once the
compliance of MSD was not ensured because of the disruption by
the petitioner company (as alleged by the respondents), then the
discretion to proceed further lies with the respondent company.
Therefore, if show cause notice is issued, then it need not to be
given within 15 days of suspension of sale and supply.
16. So far as impugned show cause notice is concerned, it seeks
response from the petitioner company about the whole course of
events as unfolded in last two years and petitioner has to present its
case by showing its bona fides and placing all documents and
response as per law. It would be too early to postulate any mala
fides or bonafides on the part of parties, unless unfolded before the
competent authority. In the case of Kunisetty Satyanarayan
(supra) the observations are as under :-
"It is well settled by a series of decisions of this Court that
ordinarily no writ lies against a charge sheet or show-
cause notice vide Executive Engineer, Bihar State Housing
Board vs. Ramdesh Kumar Singh and others JT 1995 (8)
SC 331, Special Director and another vs. Mohd. Ghulam
Ghouse and another AIR 2004 SC 1467, Ulagappa and
others vs. Divisional Commissioner, Mysore and others
2001(10) SCC 639, State of U.P. vs. Brahm Datt Sharma
and another AIR 1987 SC 943 etc."
17. Therefore, in the conspectus of facts and circumstances of the case
under the discretionary and limited jurisdiction under Article 226 of
the Constitution of India regarding marshaling of factual details, it
is apposite that the petitioner be relegated back to the authorities to
submit its response and thereafter respondent company shall be at
liberty to pass appropriate order in accordance per law.
18. So far as plea of arbitration is concerned, that is always available
with the parties once final order is passed. Respondents may
proceed as per law, if any final order has not been passed yet.
19. It is made clear that this Court has not expressed any opinion on
merits of the case and the matter shall be heard on its own merit
without being influenced by any extraneous consideration.
However it is made clear that petitioner shall have to submit to the
jurisdiction of authority without delay and shall make an attempt to
conclude the proceeding at the earliest, if not already concluded.
20. Accordingly, the impugned order passed by learned Writ Court is
hereby affirmed and appeal stands dismissed.
(ANAND PATHAK) (HIRDESH)
Anil* JUDGE JUDGE
ANIL KUMAR
CHAURASIYA
2025.04.03
14:50:10
+05'30'
