Punjab-Haryana High Court
M/S Indra Filling Station vs Union Of India And Others on 3 August, 2023
Neutral Citation No:=2023:PHHC:099781
CWP-25361-2018 -1- 2023:PHHC:099781
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
204 CWP-25361-2018
Date of Decision: 03.08.2023
M/s Indra Filling Station ...Petitioner
Versus
Union of India and Others ...Respondents
CORAM: HON'BLE MR. JUSTICE JAGMOHAN BANSAL
Present : Mr. Aashish Chopra, Sr. Advocate with
Ms. Nitika Sharma, Advocate
for the petitioner.
Mr. Akshay Bhan, Sr. Advocate with
Mr. Ashish Kapoor, Advocate and
Mr. Sushant Kareer, Advocate
for respondents No.2 to 4.
****
JAGMOHAN BANSAL, J. (Oral)
1. The petitioner through instant petition under Articles 226/227
of Constitution of India is seeking setting aside of order dated 08.06.2018
(Annexure P-30) whereby dealership has been terminated and order dated
12.09.2018 (Annexure P-36) whereby appeal filed by the petitioner against
order of termination has been dismissed.
2. The brief facts of the case which are necessary for the
adjudication of the present petition are that the petitioner through its partner
was allotted petrol pump in 1972 and an agreement was entered into
between petitioner and respondent i.e. Indian Oil Corporation (for short
'corporation'). On 28.01.2018, the officials of respondent conducted
inspection at the outlet. A report dated 28.01.2018 was prepared in the
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presence of the petitioner and officials of the respondents. The relevant
extracts of the report read as :
FORM NO. SL 5(S)
Dated: 05.02.2018
INDIAN OIL
RETAIL OUTLET INSPECTION REPORT
DO/RO/HO
Dealer's Name and Address:
INDRA FILLING STATION,
JALANDHAR CANTT
Divisional Office: JALANDHAR
Date of Inspection: 28.01.18
SALES PERFORMANCE
As given by FO & DO
from time to time
2. XX XX
3. COMMENTS/SUGGESTIONS
3.1 Dispensing Pumps 02 Nos. of MRD/MPP
(01 of GVR & 01 of
D/coayne)
3.2 Emblem Posts Monotil available
3.3 Sales Room Sale Factory
3.4 Fitting Needs Improvement
3.5 Delivery Needs Improvement
3.6 Pump Island Granite Slab bro Km
3.7 Lube Display Needs Improvement
Sd/- for Indra Filling Station
XX XX XX XX
9.0 ANY OTHER SUGGESTION:-
IOCL PSO Team reached the RO alongwith DO Office
(Shri Rahul Jain and Shri Raj Vishwarkarma and DU
Vendor (both GVR & Gems) were called at site. W&M
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officials also reached the spot.
Variation in Mb Nozzle of GVR DU was observed. It
gave cross delivery of + 50 ml/ 5 ltr in feeding mode and
start (-50 ml/5ltr) in direct mode.
Seals of Pulsar was broken and Pulsar checked. As per
vendor who was present, no, additional fifty was found in
GVR & Gonu DU. Both vendors have given their report
on date. Photograph of Pulsar cards were taken and is
annexed alongwith the report.
3. On 29.01.2018, in continuation of inspection of 28.01.2018,
another inspection was conducted. The entire dispute is confined to report
prepared on 29.01.2018. As per petitioner, an inspection report bearing
No.73371 was prepared in the presence of an official of Legal Metrology
Department whereas as per respondent, report bearing No.73368 was
prepared on 29.01.2018. Dichotomy between both the reports is stark. For
the ready reference, relevant extracts of reports bearing No.73371 and
73368 are reproduced as below:
Report No.73371
DETAILS OF WORK CARRIED OUT BY SERVICE
ENGINEER :-
During joint inspection with IOCL Team and W.M.
Officer Shri Krishan Lal opened all Pulsars and found
no anv external fitting visually found all Pulsars Cards
are OK, all measurement and Sealings on Pulsar Card
are OK.
DETAIL OF REMARKS BY DEALER:
DU is OK
Report No.73368
DETAILS OF WORK CARRIED OUT BY SERVICE
ENGINEER :-
During joint inspection with IOCL Team found
sealing wire on Pulsars A1 and B2 Breaked and
also found Resoldering work on both A1 and B2
Pulsars.
DETAIL REMARKS BY SERVICE ENGINEER :
Inspection done at the presence of W.M.officer and IOCL
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Officer Mrs. Survi and Engg. Officer Mr. Vishav Karma.
DETAIL REMARKS BY DEALER
Note : For further verification of both Pulsar Card will
be sent to GILBARCO VEEDER ROOT."
4. The samples drawn at the time of inspection were sent to the
office of Original Equipment Manufacturer (OEM). The original equipment
manufacturer prepared its report dated 14.03.2018 in the presence of
representative of the petitioner as well as Corporation. The test report dated
14.03.2018 was furnished with respect to pulsar cards A1 and A2 whereas
as per inspection report dated 29.01.2018, resoldering work was found on
pulsar card A1 and B2. An official of the corporation in criminal
proceedings initiated by petitioner has confirmed that as per record, samples
were drawn qua pulsars A-1 and B-2 whereas report was received with
respect to pulsar card A1 and A2. It is apt to notice that on 01.02.2018, new
pulsar card was inserted and DU was made operational. It was done in the
absence of IOC officials.
5. Prior to receipt of report from OEM, the respondent issued
show cause notice dated 07.02.2018 calling upon the petitioner to show
cause as to why dealership agreement should not be terminated. The
petitioner filed its reply and respondent on the basis of report received from
OEM as well as inspection report came to a conclusion that there was
soldering on the part of petitioner, thus, there is tampering with the
equipment, thus, dealership agreement is liable to be terminated. The
respondent vide impugned order dated 08.06.2018 (Annexure P-30)
terminated dealership agreement. The petitioner preferred CWP No.15781
of 2018 before this Court which came to be disposed of vide order dated
04.07.2018 relegating the petitioner to the Appellate Authority. The
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petitioner preferred an appeal before Appellate authority which came to be
dismissed vide order dated 12.09.2018. The findings recorded by Appellate
Authority qua inspection and test report read as :
Appellant's Contention F:
BECASE the report No 73368 dated 29.01.2018
(Annexure P-9) which has been made on the basis of the
impugned order dated 08.06.2018, has itself been
discredited by the LMO Jaiandhar. Further Also,
allegation in the report No 73368 Dated 29.01.2018
(Annexure P-9) Stand disproved in view of the reports
dated 28.01.2018 and 29.01.2018 of the respondent No.3
(Annexure P-2 & 3) as well as report dated 14.03.2018
(Annexure P-29), in addition to the fact that no variation
in the stock has been reported.
Observation :
I observe that there are contradictory claims/reports on
record, in this matter which ought to have been brought
to a logical conclusion before arriving at a decision.
Basically two different reports of the same date i.e.
29.01.2018 were made by OEM which has created
confusion in the entire event. However there are two
fundamental issues which form the base of this case;
a. Inspite of inconsistencies observed in the
process, it is recorded and accepted by the
appellant in the report no. 73368 dt 29.01.2010
that irregularities wee observed by the team in the
pulsars of GVR unit. The appellant has also
acknowledged that the same pulsars were taken
out and sent to lab for testing which he witnessed.
The lab report for these pulsars confirmed
tampering.
b. The appellant was fully aware that the
suspected pulsars of GVR DU were taken by the
IOC team for testing and as such, GVR DU was
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not to be operated even if IOC DO team did not
explicity communicate the to the appellant. First,
he failed to inform of this fact to the inspecting
team on 05.02.2018 and second he got the pulsars
changed on 01.02.2018 without any format
communication from respondent no.1 & 2. This
inter alia points to involvement of appellant in
hiding the facts."
6. Mr. Chopra, Senior Advocate inter alia contends that there is
stark contradiction between reports No.73371 and 73368 which were
allegedly prepared on the same date. As per report No.73371, all pulsars
were found intact and no external fitting was found. Pulsar cards were also
found 'OK' and seal on pulsar cards was also perfect whereas contradictory
report on the same date has been prepared and his signatures have been
obtained by deceit. The report No.73371 bears signatures of Legal
Metrology Officer whereas report No.73368 does not bear signatures of
Legal Metrology Officer. In view of Para 5.1.2(b) of Marketing Discipline
Guidelines, any inspection report in the absence of Legal Metrology Officer
is invalid. The Assistant Controller, Legal Metrology, Jalandhar vide
communication dated 03.04.2018 has confirmed that report No.73368 dated
29.01.2018 is not in the knowledge of the Legal Metrology Officer. The
report No.73371 prepared by Inspector is absolutely correct. The report
No.73368 is disclosing inspection of A1 and B2 pulsar whereas test report
has been received with respect to pulsar A1 and A2. Original Equipment
Manufacturer i.e. Gilbarco Veeder Root in its communication dated
28.03.2018 has stated that new pulsar card was inserted on 01.02.2018,
however, this fact was not mentioned in the report due to pressure of IOC
officials.
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From the conjoint reading of inspection reports No.73368,
73371 and test report, it comes out that there was manipulation on the part
of IOC officials and they have obtained report as per their suitability. The
endeavour of IOC official was to terminate dealership agreement and for the
said purpose they have manipulated documents.
7. Per contra, Mr. Akshay Bhan, Senior Advocate submits that
inspection report 73368 bears signatures of dealer/petitioner. In the report,
it was specifically noticed that sealing wires on pulsars A1 and B2 have
been broken and resoldering work was done. The first inspection report
dated 28.01.2018 is disclosing variation in nozzle and there was -50 ml
delivery against 5 ltrs oil delivery under direct mode. There was no
malafide on the part of officials of IOC. The original equipment
manufacturer had prepared report in the presence of petitioner and it
candidly proved that there was no proper soldering of the pins.
As per policy of the Corporation, actual loss to customer is not
necessary. Dealership is liable to be terminated if there is tampering with
equipment. Indian Oil Corporation Ltd. cannot control each and every
petrol pump, thus, it is necessary to maintain high standard. Letter of OEM
is confirming that official of OEM had found tampering in the equipment.
The adjudicating and appellate authority have recorded categoric findings
and this Court cannot interfere until and unless there is violation of
procedure or misreading of evidence or patent illegality. This Court cannot
re-appreciate evidence and record findings qua facts.
To buttress his contention, learned Senior Advocate relies upon
judgment of Hon'ble Supreme Court in Syed Yakoob vs. K. S.
Radhakrishnan and others, 1964 AIR (Supreme Court) 477 and Division
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Bench judgment of this Court in Indian Oil Corporation Limited and ors.
vs. Punjab Motor Store and ors, (LPA-441-2022, decided on 29.09.2022).
11. I have heard the arguments of learned senior counsels for the
parties and with their able assistance perused the record.
12. Para 5.1.2(b) of the Guidelines as relied upon by the petitioner
read as :
"(b) With Weights & `measures department Seals
tampered
W&M department seals are put on metering unit
and Totaliser unit with the help of a sealing wire
and a lead seal which is embossed by W&M
inspector.
The seal would be deemed tampered in the
following cases also:
1. Seal itself is missing
2. Different seal has been put other than
embossed by W&M inspector.
3. Sealing wire is broken and not in one piece.
In addition other situations which can lead to
manipulation of delivery/quantity/totaliser may
also be treated as tampering.
In such cases, views and opinions of W&M
authorities would be obtained and the opinion
rendered by the W&M department should be final.
Based on the opinion of W&M authorities, penal
action to be taken even if the delivery is found to
be correct or excess."
Para 5.1.4 of the Guidelines as relied upon by the respondent
read as:
"5.1.4 Additional/unauthorized fittings/gears
found in dispensing units/tampering with
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dispensing unit.
Any mechanism/fittings/gear found fitted in the
dispensing unit which is likely to manipulate the delivery.
Addition, Removal, replacement or manipulation of any
part of the dispensing Unit including any mechanism,
gear, microprocessor chip/electronic parts/OEM
software will be deemed as tampering of the dispensing
unit.
In such cases, views and independent opinion of the
original equipment manufacturer would be obtained and
suitable decision taken.
In case of this irregularity, sales from the concerned
dispensing unit to be suspended, DU sealed. Samples to
be drawn of all the products and sent to lab for testing."
13. A two Judge Bench of Hon'ble Supreme Court in M.P. Power
Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd.,
(2023) 2 SCC 703 has adverted with ambit and scope of interference in
contractual matters. The Court has held :
"82. We may cull out our conclusions in
regard to the points, which we have framed:
82.1. It is, undoubtedly, true that the writ
jurisdiction is a public law remedy. A matter, which
lies entirely within a private realm of affairs of
public body, may not lend itself for being dealt with
under the writ jurisdiction of the Court.
82.2. The principle laid down in Bareilly
Development Authority [Bareilly Development
Authority v. Ajai Pal Singh, (1989) 2 SCC 116] that
in the case of a non-statutory contract the rights are
governed only by the terms of the contract and the
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decisions, which are purported to be followed,
including Radhakrishna Agarwal [Radhakrishna
Agarwal v. State of Bihar, (1977) 3 SCC 457], may
not continue to hold good, in the light of what has
been laid down in ABL [ABL International Ltd. v.
Export Credit Guarantee Corpn. of India Ltd.,
(2004) 3 SCC 553] and as followed in the recent
judgment in Sudhir Kumar Singh [State of U.P. v.
Sudhir Kumar Singh, (2021) 19 SCC 706 : 2020 SCC
OnLine SC 847].
82.3. The mere fact that relief is sought under
a contract which is not statutory, will not entitle the
respondent State in a case by itself to ward off
scrutiny of its action or inaction under the contract,
if the complaining party is able to establish that the
action/inaction is, per se, arbitrary.
82.4. to 82.6. XXXX XXXX XXXX
82.7. The existence of an alternate remedy, is,
undoubtedly, a matter to be borne in mind in
declining relief in a writ petition in a contractual
matter. Again, the question as to whether the writ
petitioner must be told off the gates, would depend
upon the nature of the claim and relief sought by the
petitioner, the questions, which would have to be
decided, and, most importantly, whether there are
disputed questions of fact, resolution of which is
necessary, as an indispensable prelude to the grant
of the relief sought. Undoubtedly, while there is no
prohibition, in the writ court even deciding disputed
questions of fact, particularly when the dispute
surrounds demystifying of documents only, the Court
may relegate the party to the remedy by way of a
civil suit.
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82.8. XXXX XXXX XXXX
82.9. The need to deal with disputed questions
of fact, cannot be made a smokescreen to guillotine a
genuine claim raised in a writ petition, when actually
the resolution of a disputed question of fact is
unnecessary to grant relief to a writ applicant.
82.10. XXXX XXXX XXXX
82.11. Termination of contract can again arise
in a wide variety of situations. If for instance, a
contract is terminated, by a person, who is
demonstrated, without any need for any argument, to
be the person, who is completely unauthorised to
cancel the contract, there may not be any necessity
to drive the party to the unnecessary ordeal of a
prolix and avoidable round of litigation. The
intervention by the High Court, in such a case, where
there is no dispute to be resolved, would also be
conducive in public interest, apart from ensuring the
fundamental right of the petitioner under Article 14
of the Constitution of India. When it comes to a
challenge to the termination of a contract by the
State, which is a non-statutory body, which is acting
in purported exercise of the powers/rights under
such a contract, it would be over simplifying a
complex issue to lay down any inflexible rule in
favour of the Court turning away the petitioner to
alternate fora. Ordinarily, the cases of termination of
contract by the State, acting within its contractual
domain, may not lend itself for appropriate redress
by the writ court. This is, undoubtedly, so if the
Court is duty-bound to arrive at findings, which
involve untying knots, which are presented by
disputed questions of facts. Undoubtedly, in view of
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ABL [ABL International Ltd. v. Export Credit
Guarantee Corpn. of India Ltd., (2004) 3 SCC 553] ,
if resolving the dispute, in a case of repudiation of a
contract, involves only appreciating the true scope of
documentary material in the light of pleadings, the
Court may still grant relief to an applicant. We must
enter a caveat. The Courts are today reeling under
the weight of a docket explosion, which is truly
alarming. If a case involves a large body of
documents and the Court is called upon to enter
upon findings of facts and involves merely the
construction of the document, it may not be an
unsound discretion to relegate the party to the
alternate remedy. This is not to deprive the Court of
its constitutional power as laid down in ABL [ABL
International Ltd. v. Export Credit Guarantee Corpn.
of India Ltd., (2004) 3 SCC 553]. It all depends upon
the facts of each case as to whether, having regard to
the scope of the dispute to be resolved, whether the
Court will still entertain the petition
From the conspectum of above cited judgment, it can be
easily gleaned that there is no bar to entertain writ petition in
contractual matter though contract is a non-statutory contract.
14. Hon'ble Supreme Court in Syed Yakoob's case (supra) has
adverted with scope of interference under Article 226 against orders of
Courts and Tribunals. The Hon'ble Supreme Court has held that finding of
fact cannot be reopened. Writ Court can interfere if Tribunal has refused to
admit admissible evidence or admitted inadmissible evidence or finding is
based on no evidence or there is error of law or procedure has not been
followed. The relevant extracts of the aforesaid judgment read as :
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"7. The question about the limits of the jurisdiction of
High Courts in issuing a writ of certiorari under Article
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, 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
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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 Article 226 to issue
a writ of certiorari can be legitimately exercised (vide
Hari Vishnu Kamath v. Syed Ahmad Ishaque [(1955) 1
SCR 1104] Nagandra Nath Bora v. Commissioner of
Hills Division and Appeals Assam [(1958) SCR 1240]
and Kaushalya Devi v. Bachittar Singh [AIR 1960 SC
1168]
15. From the perusal of record and arguments of both sides, it
comes out that dispute is confined to inspection reports No.73368 and
73371. As per petitioner, inspection report No. 73371 is a genuine piece of
document and 73368 cannot be relied upon. Report No.73368 is not bearing
signatures of inspector Legal Metrology whereas report No.73371 is bearing
signatures of official of Legal Metrology. The petitioner is further disputing
test report on the ground that samples were drawn qua pulsars A1 and B2
whereas test report is disclosing pulsars A1 and A2.
The adjudicating authority as well as Appellate Authority has
dealt with issues raised by the petitioner. The Appellate Authority, as
noticed hereinabove in Para 5, has returned categoric findings qua issues
raised before this Court. As per petitioner, inspection report bearing
signatures of Legal Metrology Officer is genuine whereas as per respondent
inspection report even not bearing signatures of Inspector Legal Metrology
is valid because it is bearing signatures of the dealer/petitioner. It is
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undisputed fact that as per test report of OEM, there is resoldering i.e.
tampering with original equipment. OEM in its communication has
confirmed authenticity of inspection report 73368 as well as tampering
found on the inspection. As per policy of the Corporation, if there is
tampering with the equipment, dealership is liable to be terminated. Para
5.1.2(b) of the Guidelines as relied upon by the petitioners does not mandate
that seal should be opened in the presence of officers of Legal Metrology
Department. In any case, it cannot vitiate entire proceedings.
The questions raised by petitioner are purely questions of fact
and Hon'ble Supreme Court time and again has held that in contractual
matters, the High Court cannot interfere unless and until there is malafide or
violation of prescribed procedure or violation of principles of natural justice
or the findings recorded are apparently either based upon no evidence or
contrary to the evidence.
16. In the present case, the test report which was prepared in the
presence of petitioner is undisputed, however, inspection reports are
disputed. The test report was prepared in the presence of petitioner who at
that stage did not raise objection qua pulsar A2 vis-a-vis B2. The petitioner
remained silent and subsequently raked this issue which is nothing more
than an afterthought ruse on the part of petitioner. In the inspection report
No.73371, there is nothing about drawing of samples whereas inspection
report 73368 talks of samples. Had samples not been drawn, there was no
question of testing.
17. Furthermore, the questions raised by petitioner are disputed
questions of fact. There is neither mala fide on the part of one particular
official of the respondent nor violation of principles of natural justice or
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prescribed procedure nor any other glaring infirmity. There is no
consideration of irrelevant evidence or ignorance of material evidence on
record. The Appellate Authority has recorded categoric findings qua
objections raised by petitioner. Thus, there is no ground warranting
interference of this Court under Articles 226/227 of the Constitution of
India.
In view of above facts and findings, this Court does not find
any substance in the petition. The petition deserves to be dismissed and
accordingly dismissed.
18. Before parting with the judgment, it would be apt to notice that
Inspection Report No.77371 dated 29.01.2018 is alleged to have been
prepared in the presence of Indian Oil Corporation's official. Indian Oil
Corporation has not carried out any investigation qua said officer. It would
be unfair on the part of Indian Oil Corporation if no enquiry is conducted to
this effect and thereafter, if necessary, an appropriate action is taken against
erring official.
(JAGMOHAN BANSAL)
JUDGE
03.08.2023
anju
Whether speaking/reasoned Yes/No
Whether Reportable Yes/No
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