Madras High Court
M/S.R.V.N.Agencies vs Indian Oil Corporation Limited on 22 May, 2025
Author: D.Bharatha Chakravarthy
Bench: D. Bharatha Chakravarthy
2025:MHC:1198
W.P.No.1302 of 2010
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Orders reserved on : 23.04.2025
Orders pronounced on : 22.05.2025
CORAM :
THE HON'BLE MR.JUSTICE D. BHARATHA CHAKRAVARTHY
W.P.No.1302 of 2010
M/s.R.V.N.Agencies,
Rep. by its Partner,
Janarthanan .. Petitioner
Versus
1. Indian Oil Corporation Limited,
Rep. by its General Manager,
Retail Sales, Indian Oil Bhavan,
134, Nungambakkam High Road,
Chennai - 600 034.
2. The Executive Director,
Indian Oil Corporation Limited,
Marketing Division, Southern Region,
'Indian Oil Bhavan',
139, Mahatma Gandhi Road,
(Nungambakkam High Road),
Chennai - 600 034. .. Respondents
1/15
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W.P.No.1302 of 2010
Prayer : Writ Petition filed under Article 226 of the Constitution of India
praying for a Writ of Certiorari to call for the entire records leading to the
impugned order of termination TNLA/TERM, dated 30.12.2009 and quash
the same.
For Petitioner : Mr.T.V.Krishnamachari,
Senior Counsel,
for by Mr.V.K.Elango
For Respondents : Mr.T.Rajaraman, Senior Counsel,
for Mr.R.Ravi
ORDER
This Writ Petition is filed with a prayer to call for the records leading
to the impugned order of termination, dated 30.12.2009, and to quash the
same.
2. The petitioner asserts that they have been licensees of a retail
petroleum outlet since 1977. A Retail Outlet Dealership Agreement was
entered into. In 2009, a representative of the first respondent visited their
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outlet. During this visit, no discrepancies were found in the stock
maintained in the godown. However, in the office room, some customers
had left their oil tins open, as they were accustomed to using them whenever
needed. The representative drew samples from the sold-out open tins
belonging to a customer. Subsequently, a show-cause notice was issued on
08.06.2009. It is alleged that in the Servo 2T Supreme samples drawn, the
viscosity was 5% lower, measuring 50.017 cSt against the required 55.63
cSt. Therefore, relying on the Marketing Discipline Guidelines, 2005, the
above show-cause notice was issued. Following the issuance of the show-
cause notice, the petitioner filed an interim application under Section 9 of
the Arbitration and Conciliation Act, 1996, and also W.P.No.1098 of 2010,
challenging the Marketing Discipline Guidelines, 2005. However, the
impugned order of termination, dated 30.12.2009, was passed. The present
Writ Petition challenges this order.
3. The respondents resist the Writ Petition by filing a counter-
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affidavit. The respondents contend that Clause - 5 of the Dealership
Agreement allows for termination if there is a breach of conditions. The
petitioner was duly heard, and an opportunity for a personal hearing was
also provided; his reply to the show-cause notice was considered, leading to
the issuance of the impugned order. The assertion that the sample was not
drawn from the point of sale is incorrect, as officials confirmed that the
samples were drawn in the presence of the Manager of the retail outlet,
Kulanginathan, who also affixed his signature on the sample tag. Bills were
issued, and payments for the samples taken by the officials were collected.
The samples were tested and found adulterated and not up to standards.
Consequently, the dealership is terminated. Therefore, the Writ Petition
lacks merit and is liable to be dismissed.
4. Heard Mr.T.V.Krishnamachari, learned Senior Counsel for the
petitioner, and Mr.T.Rajaraman, learned Senior Counsel for the
respondents.
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5. Apart from the other grounds, the learned Senior Counsel for the
petitioner would primarily rely upon the show-cause notice dated
08.06.2009. The show-cause notice categorically states that the official
visited the retail outlet on 27.03.2009 and drew Servo 2T Supreme samples.
It is further noted that the samples were tested on 02.04.2009 and did not
meet the specifications. The learned Senior Counsel, then drawing upon the
furnished test report, which is a computer-generated document, would point
out that the test report shows that the sample was drawn on 02.04.2009.
Whereas, as per the show-cause notice, it was drawn on 27.03.2009.
Though the inspection lot number is mentioned, further details are not
provided. The name and place of the sample are also mentioned as RAVI
1005. It also states that the batch number of the sample is not furnished.
Therefore, it can be seen that the respondents cannot confirm that the sample
tested to be wanting on specifications belongs to the petitioner. In the
absence of this, the impugned order of termination is untenable.
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6. Per contra, Mr.T.Rajaraman, learned Senior Counsel for the
respondents, submits that the Writ Petition is not maintainable as there are
alternative arbitration remedies under the agreement and an appellate
remedy under the rules. He submits that the pleading regarding the
mismatch of the sample report is not explicitly raised in the grounds made in
the affidavit filed in support of the Writ Petition and, therefore, was not
answered. The learned Senior Counsel submits that more than 15 years have
passed, and at this distant point, not every record may be available. He
submits that when the sample is admittedly taken from the office room, the
petitioner's assertion that it belongs to the customer is ex facie unacceptable.
Therefore, he submits that the Writ Petition be dismissed.
7. I have considered the rival submissions made on either side and
examined the material records of the case.
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8. The first submission made on behalf of the learned Senior Counsel
for the petitioner is that there is an alternate remedy; therefore, the petitioner
should be relegated to it. However, in this case, the impugned order of
termination was passed on 30.12.2009, and the Writ Petition was
entertained, an interim order was also granted, and the matter has been
pending before this Court for the past ten years. Thus, this is not an
appropriate case to relegate the petitioner to avail themselves of the
alternative remedies. Therefore, the case must be considered on its merits.
9. With reference to the ground that is raised, the grounds o, p, and q
are extracted below:
"o. There are serious material discrepancies between the
show cause notice dated 08.06.2009 and the impugned
order of termination dated 30.12.2009. This has vitiated
the impugned order.
p. It is settled law that the impugned order of termination
the respondents cannot improve the case by trying to refer
to some materials not referred to in the show cause notice
dated 08.06.2009.
q. The samples said to have been taken on 27.03.2009 and
said to have been sent for lab report on 02.04.2009, the
show cause notice dated 08.06.2009 and the petitioner's
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reply dated 23.07.2009 and personal hearing dated
18.08.2009 and the alleged impugned order of termination
dated 30.12.2009 are all based on the Marketing
Discipline Guidelines 2005, which has been struck down
by the Hon'ble High Court of Karnataka by its judgment
dated 13.01.2010 as arbitrary and unconstitutional."
Thus, it cannot be said that the pleading was completely omitted,
although it could have been articulated more effectively.
10. Therefore, the respondents were given additional time to produce
the materials related to the samples. From the records submitted, the image
of the test report is extracted below:-
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11. Similarly, the image of the sample analysis report is also
reproduced hereunder:-
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Thus, it can be seen that the test report and the analysis report do not
match.
12. As per the test report, the sample drawn date is 02.04.2009;
however, the sample was drawn on 27.03.2009. The sample receipt date is
also given as 02.04.2009, while it was received on 27.03.2009. Even the lot
release date is recorded as 02.04.2009, which is inaccurate if considered
alongside the other report. The lot number is noted as 790000827513, but
there is no column referencing the lot number in the test report. The number
is scribbled at the bottom of the report; however, in the remarks column, a
different number is mentioned as I:179420.
13. Regarding the petitioner, it is stated that their Divisional Office is
located only in Trichy. In the test report, it can be seen that Trichy and
S.K.Murugavel were initially mentioned, but this was subsequently struck
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off. Even in the counter-affidavit, no particulars are provided regarding who
conducted the inspection, when the sample was drawn, and when it was
tested. Therefore, when a reasonable doubt or apprehension is expressed as
to whether the sample referred to in the show-cause notice and the test report
belongs to the petitioner or not, and in the absence of any supporting
material from the respondents to confirm that the correct sample was tested
and considered in relation to the petitioner, I believe that the impugned order
cannot be sustained. It is also noted that this Writ Petition dates back to
2010. An interim order was granted initially concerning the termination
order, and 15 years have now passed without any misconduct or deficiency
being reported in relation to the said dealership.
14. In view thereof, this Writ Petition deserves to be allowed. The
impugned order of termination, dated 30.12.2009, stands quashed. There
shall be no order as to costs.
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22.05.2025
Neutral Citation: yes
grs
To
1. The General Manager,
Indian Oil Corporation Limited,
Retail Sales, Indian Oil Bhavan,
134, Nungambakkam High Road,
Chennai - 600 034.
2. The Executive Director,
Indian Oil Corporation Limited,
Marketing Division, Southern Region,
'Indian Oil Bhavan',
139, Mahatma Gandhi Road,
(Nungambakkam High Road),
Chennai - 600 034.
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D.BHARATHA CHAKRAVARTHY, J.
grs
22.05.2025
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