Rajasthan High Court - Jodhpur

M/S Shree Rajendra Agro Service ... vs Indian Oil Corporation Ltd on 9 May, 2023

Bench: Pushpendra Singh Bhati

[2023/RJJD/013634]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Writ Petition No. 4160/2023

M/s Shree Rajendra Agro Service Centre, Through Its Proprietor Mahendra Kumar Mewara S/o Sukha Ram Mewara, Aged About 39 Years, Resident Of Ramdevra Gali, At Post Sindru, Sumerpur, Pali (Raj.).

----Petitioner Versus

1. Indian Oil Corporation Ltd., Through Its Chief Manager, Jodhpur Divisional Officer, Sector 12, Chopasani Housing Board, Jodhpur-342008.

2. Divisional Retail Sales Head, Divisional Office Indian Oil Bhawan, Plot No.1162-63, Sector No.11, Hiran Magri, Udaipur - 313002.

3. M/s Gilbarco Veedeer Root India Pvt Ltd., Through Its Head /director Art Guild House, B Wing, 1St Floor Pheonix Market City, L.b.s. Road, Kurla West, Mumbai - 400 070.

                                                                 ----Respondents


For Petitioner(s)         :     Mr. Lakshya Singh Udawat
For Respondent(s)         :     Mr. Nishant Bora

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Judgment

Reserved on 03/05/2023 Pronounced on 09/05/2023

1. This writ petition under Article 226 of the Constitution of

India has been preferred claiming the following reliefs:

"It is, therefore, humbly and respectfully prayed that this writ petition of the petitioner may kindly be allowed and record of the case may kindly be called for:-

1. By an appropriate writ, order or direction, the order of termination of dealership retain outlet dated 10.02.2023 (Annex.14) passed by the respondents may kindly be quashed and set aside.

[2023/RJJD/013634] (2 of 9) [CW-4160/2023]

2. Any other appropriate writ, order or direction which this Hon'ble Court may deem just and proper in the facts and circumstances of the case may kindly be passed in favour of the petitioner.

3. Costs of the writ petition may kindly be awarded to the petitioner."

2. Brief facts of the case, as placed before this Court by learned

counsel for the petitioner, are that the petitioner-Firm has been

operating a Retail Outlet/Petrol Pump Dealership (RO) at Village -

Sanderao, District-Pali, Rajasthan in pursuance of the agreement

entered between the petitioner and respondent-Corporation on

16.04.2019. The petitioner has two Dispensing Units (DU) i.e.

MIDCO and GILBARCO VEEDER ROOT (GVR).

2.1. Upon the petitioner's RO faced certain difficulties on

15.12.2020, the petitioner contacted the concerned persons,

namely, Shri Atul Kumar and Shri Chetan Pandya, whereupon the

petitioner was instructed to restart the DU in order to rectify the

hindrance in operation. However thereafter, the MDT Committee

visited the RO of the petitioner-Firm on 30.12.2020 for inspection

of the said RO regarding certain errors (Error E09 and E28). Upon

the said inspection by the Committee, the authorities shut down

the DU in question.

2.2 Thereafter, the IOCL Retails Outlet MDT Inspection Report

dated 30.12.2020 was prepared, stating therein that no

manipulation or error has been found in the RO.

2.3. Subsequently, the Original Equipment Manufacturer (OEM)

submitted a Lab Analysis Report - Rev.1.0 on 25.02.2021 wherein

it was stated that E09/E28 errors were observed from 30.09.2020

[2023/RJJD/013634] (3 of 9) [CW-4160/2023]

to 30.12.2020; it was also stated therein that the manipulation

was found in Dispensing Units (DU) of the RO in question.

Thereafter, the concerned Officials, on 12.04.2021, arrived at the

RO in question for the purpose of investigation, and collected all

the relevant documents from the RO in question for Lab test.

Thereafter, another Lab Analysis Report dated 23.08.2021 was

submitted by the Original Equipment Manufacturer (OEM), wherein

it was stated that no external component/device was found.

2.4. Thereafter, the respondents issued a letter/notice dated

08.09.2021 to the petitioner, while concluding that based on the

DU error log analysis and investigation, it was established that the

DU has been manipulated for delivery of fuel, and asked the

petitioner-Firm to file reply thereto within 10 days regarding to the

aforementioned allegation; failing which the proceedings, as per

Marketing Disciplinary Guidelines-2012, were stipulated to be

initiated.

2.4.1. The petitioner-Filed replied the said letter/notice along with

the relevant service report on 16.09.2021, and stated that no

device was ever found in the RO to derive the conclusion of

manipulation by way of spurious external device. The respondents

however, again issued a notice on 15.12.2021 with regard to the

same DU error, while proposing termination of petitioner-Firm's

dealership as per clause 5.1.4 of the Marketing Disciplinary

Guidelines-2012; the same was received by the petitioner through

E-mail on 24.12.2021. The petitioner filed a detailed reply to the

said notice, along with the relevant documents on 29.12.2021

through Email and R.P.A.D.

[2023/RJJD/013634] (4 of 9) [CW-4160/2023]

2.5 However, against the aforementioned notice dated

15.12.2021, the petitioner-Firm preferred S.B.C.W.P No.543/2022

before this Hon'ble Court, which was disposed of on 10.02.2022

by a Coordinate Bench of this Hon'ble Court, with a direction to

the respondent-Corporation to give opportunity of hearing to the

petitioner-Firm, along with some technical expert, so as to enable

the petitioner to put forth its case in its proper perspective.

2.6. Thereupon, the petitioner, vide letter dated 14.05.2022,

informed the respondent-Corporation with regard to passing of the

aforementioned order dated 10.02.2022; whereupon, in

compliance of the aforesaid order dated 10.02.2022, the

respondent-Corporation conducted the personal hearing of the

petitioner on 07.10.2022. However subsequently, the respondent-

Corporation vide the impugned order dated 10.02.2023

terminated the dealership retail outlet of the petitioner-Firm;

aggrieved thereby, the present petition has been preferred

claiming the afore-quoted reliefs.

3. Learned counsel for the petitioner submitted that the

impugned order is violative of the clause 5.1.4 read with clause

8.2 of the Guidelines-2012, wherein it was provided that in order

to attract the impugned action, it is necessary that any type of

mechanism or fitting or gear has been found in a condition that is

fitted to the DU for manipulation of delivery of fuel.

3.1 He further submitted that no substantial proof or the service

history records were available to establish that the ECAL connector

has been manipulated with any external spurious device.

[2023/RJJD/013634] (5 of 9) [CW-4160/2023]

3.2. Learned counsel also submitted that the inspection was

conducted on 15.12.2020 and notice to show cause was given

after expiry of a period of one year, and therefore, the entire

action of the respondents is clearly contrary to the Guidelines-

2012; hence, as per learned counsel, the impugned termination

order is liable to be quashed and set aside.

3.3. Learned counsel also submitted that the report on GILBARO

VEEDER ROOT (GVR) is completely incorrect, so far as it concludes

the manipulation of the dispensing unit, and thus, the respondents

have wrongly passed the impugned order on the basis of the said

report. He further submitted that the entire problem has arisen

due to some manufacturing defects in the Dispensing Units (DU)

of the RO in question.

3.4. Learned counsel further submitted that the IOCL Retail

Outlet MDT Inspection Report dated 30.12.2020 stated that no

irregularity was found in RO in question, but despite the same, the

respondents passed the impugned termination order, which is

unsustainable in the eye of law.

3.5. In support of his submissions, learned counsel relied upon

the following judgments:

(a) E. Venkatakrishna Vs Indian Oil Corporation & Anr.

(2000) 7 SCC 764 and;

(b) Harbanslal Sahnia & Anr. Vs Indian Oil Corporation &

Ors., (2003) 2 SCC 107.

4. On the other hand, learned counsel appearing on behalf of

the respondents, while opposing the aforesaid submissions made

on behalf of the petitioner, submitted that the impugned

[2023/RJJD/013634] (6 of 9) [CW-4160/2023]

termination order was passed on the basis of the report of Original

Equipment Manufacturer, wherein the petitioner's RO was opined

to have suffered with manipulation of the DU, and therefore, once

the allegation in question is proved, then the respondents were

left with no other option, but to pass the impugned termination

order, which is justified in law.

4.1. Learned counsel further submitted that in case of any

problem in the Dispensing Unit, the complaint has to be booked

through E-ledger; once the complaint is registered, the service

engineer visits the retail outlet to attend such complaint.

4.2. Learned counsel also submitted that the Original Equipment

Manufacturer (GILBARCO VEEDER ROOT) has filed its reports on

25.02.2021 and 23.08.2021, which clearly reveal that the

Dispensing Unit has been manipulated for delivery of fuel.

4.3. Learned counsel further submitted that the petitioner has

violated clause 42 of the Guidelines-2012, because if the dealer

does not follow the instructions/guidelines issued by the

respondents, pertaining to the marketing discipline and safe

practices for supply and storage of the products, then as per the

agreement, the concerned dealership is liable to be terminated.

Thus, as per learned counsel, the present petition deserves to be

dismissed.

5. Heard learned counsel for the parties as well as perused the

record of the case, along with judgments cited at the Bar.

6. This Court observes that the dealership agreement was

executed between petitioner and respondent on 16.04.2019. The

petitioner had faced certain difficulties, whereupon the MDT

[2023/RJJD/013634] (7 of 9) [CW-4160/2023]

Committee visited the RO regarding the errors in question.

Thereafter, first report was prepared, wherein no

manipulation/error in the form of external spurious has been

found. Subsequently, the Original Equipment Manufacturer (OME)

has submitted its reports, indicating therein that the manipulation

has been done in RO; on the basis whereof, the impugned

termination order was passed, after affording the petitioner

adequate opportunity of hearing, as per law.

7. This Court further observes that in the present case, when

the errors were found for the first time, the complaint was booked

through E-ledger, whereupon the MDT Committee visited the RO

for inspection only, and thereafter, prepared a report dated

30.12.2020.

8. This Court also observes that the service report and MDT

Committee Inspection Report were prepared only on the basis of

inspection, without any technical assistance; thereafter, the errors

in questions were sent for testing at Original Equipment

Manufacturer (OEM) Lab, whereupon, it was clearly found that the

Manipulation of the Dispensing Unit (DU) was done for

disconnecting the original E-car connector of the Dispensing Unit

(DU) with external spurious device; the Dispensing Unit (DU) was

manipulated for delivery of fuel

Relevant portion of the said report dated 23.08.2021 is

reproduced as hereunder:

"DU ERROR LOG ANALYSIS AND INVESTIGATION Findings:

[2023/RJJD/013634] (8 of 9) [CW-4160/2023]

➢ The Automation error logs were analyzed for the period of "30th Sep 2020 to 30th Dec 2020".

(Analysis Time Period).

         ➢      E28/E09 errors were observed on following days
         •      "14th Oct 2020, 23rd - 24th October 2020, 29th
         - 30th October 2020,
         •      27th Nov 2020 - 15th Dec 2020 and 15th -
         29th Dec 2020"
         ➢      The repetitive series of data pattern shown by

the E-28/E-09 errors establish a modus operandi of Ecal cable disconnection from the CPU Ecal port.

➢ Based on the analysis of the DU Error Logs during the Analysis Time Period and a review of our service records during the same Analysis Time Period, we note that no technical issues were observed on the dispensing unit which could result in the occurrence of the E-28/E-09 errors. It is clarified for the avoidance of doubt that based on the DU service records analyzed from complaints captured in GVR IFS service management system which is integrated with the oil company complaint management system, no service requests were raised by the dealer during the Analysis Time Period.

INVESTIGATION AND ANALYSIS RESULTS ➢ Manipulation of the dispensing unit was done by disconnecting the original Ecal connector of the DU with an external spurious device."

9. This Court further observes that as per the clause 42 of the

Guidelines-2012, the Dealer shall, at all times, faithfully, promptly

and diligently observe and perform and carry out, at all times, all

directions, instructions, guidelines and orders given or as may be

given from time to time by the Corporation or its representatives

on safe practices and Marketing discipline and/or for the proper

carrying on of the Dealership of the Corporation; failing which, as

[2023/RJJD/013634] (9 of 9) [CW-4160/2023]

per clause 45, the Corporation shall be at liberty at its entire

discretion to terminate the agreement forthwith upon or at any

time, after the stipulated failures on the part of the Dealer.

10. The judgment cited at the Bar by the learned counsel for the