[Cites 9, Cited by 0]
Rajasthan High Court - Jodhpur
M/S Rajputana Freight Carrier vs Indian Oil Corporation Limited on 30 January, 2026
[2026:RJ-JD:3520]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 22645/2025
M/s Rajputana Freight Carrier, Plot No. 40, ZSB-BJS Colony,
Jodhpur (Raj.)- Through Its Partner - Gopal Singh Chauhan S/o
Late Shri Kan Singh Chauhan, Aged 65 Years. Resident Of Plot
No. 40, ZSB-BJS Colony, Jodhpur (Raj.).
----Petitioner
Versus
1. Indian Oil Corporation Limited, Through Its Chairman And
Managing Director, Indian Oil Bhawan, G-9, Ali Yavar Jung
Marg, Bandra (East), Mumbai, Maharashtra.
2. Executive Director (Operations), Indian Oil Corporation
Limited, Indian Oil Bhawan, G-9, Ali Yavar Jung Marg,
Bandra (East), Mumbai, Maharashtra.
3. Chief General Manager (Operations), Rajasthan State
Officer, Indian Oil Corporation Limited, Ashok Chowk,
Adarsh Nagar, Jaipur (Raj.).
----Respondents
For Petitioner(s) : Mr. Sunil Joshi.
Mr. Ritu Raj Singh Rathore.
For Respondent(s) : Mr. Nishant Bora.
Ms. Abhilasha Bora.
Mr. Dheeraj Jangid
HON'BLE MR. JUSTICE SUNIL BENIWAL
REPORTABLE
Order
Conclusion of Arguments &
Reserved on : 15/01/2026
Pronounced on : 30/01/2026
1. This writ petition has been filed by the petitioner with the
following prayer :-
"In view of the foregoing facts and circumstances, it is
most respectfully prayed that this Hon'ble Court may
graciously be pleased to :
i. issue a writ or certiorari or any other appropriate writ,
order or direction calling for the records of the impugned
guidelines version 4.0 issued by the respondent corporation
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and to quash portion of the clause 8.2.2 of the ITDG
(Annx 8) which states that 'complicity of the carrier shall be
deemed to be existent in case of Duplicate Dip Rod' the
same being illegal, arbitrary ultra vires constitution of
India and void in law.
ii. Call for the entire record of the case and by an
appropriate writ, order or direction, quash and set aside the
impugned show cause notice dated 28.08.2024 (Annx.2) and
the impugned order dated 16.10.2025 (An.1) passed by the
Chief General Manager (Operations), Rajasthan State
Office, Jaipur;
iii. Direct the respondents to restore the petitioner firm's
transport contract and security deposit forthwith;
iv. Direct the respondents further to remove the name of the
petitioner firm and its tank trucks from the blacklist
maintained by the Corporation;
v. Declare that the impugned action of the respondents is
arbitrary, illegal and violative of Article 14 and 19(1)(g) of
the Constitution of India;
vi. Pass such other and further writ(s), order(s), or
direction(s) as may be deemed just, proper and expedient in
the facts and circumstances of the case, in favour of the
petitioner firm; and
vii. Allow this writ petition throughout with exemplary
costs, in the interest of justice."
2. The facts, as narrated in the present writ petition, are that
the petitioner is indulged in transportation of petroleum products.
The petitioner was awarded a contract by the respondent -
Corporation on 15.09.2021. As per the terms and conditions of the
contract, the petitioner was required to abide by the Industry
Transport Discipline Guidelines ('ITD Guidelines'). It is submitted
that the contract was executed on 17.05.2022 and same was valid
upto 15.05.2027. In terms of the said contract, the petitioner
deployed fleet of ten Tank Trucks ('TT'). It is submitted that a
sudden inspection was carried out on 04.05.2024 by Location In-
charge and Safety officer and during such sudden inspection, it
was found that one TT bearing No. RJ-19-GD-8064 was found to
be having a Duplicate Dip Rod ('DDR'). During inspection, it was
noted that the DDR was not matching with the calibration chart.
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The respondent-Corporation, while taking note of such incident,
proceeded to take action in terms of the ITD Guidelines and issued
a show cause notice to the petitioner on 21.08.2024 while alleging
that the petitioner-firm has violated Clause 8.2.2 of ITD Guidelines
(Version 4.0).
2.1 The petitioner submitted its reply to the said show cause
notice on 23.11.2024, wherein it was categorically stated that dip
rod was not kept intentionally in the TT. It was further stated that
dip rod was not kept for any undue advantage or any malefic
intention and might have been retained in the TT cabin mistakenly
by the crew. The TT in question never reported shortage and
therefore, requested that the reply may be considered
sympathetically and condone the inadvertent error.
2.2 The petitioner was later called for personal hearing on
03.02.2025 and thereafter the impugned order dated 16.10.2025
was passed, wherein the entire fleet including the disputed TT was
blacklisted for a period of two years. The blacklisting of TT bearing
No.RJ-19-GD-8064 was w.e.f. the date of suspension i.e. from
04.05.2024 till 03.05.2026 and the blacklisting of rest nine TTs
were made effective from 17.10.2025 and till 16.10.2027. Being
aggrieved by the impugned order dated 16.10.2025, the present
writ petition has been filed.
3. Learned counsel for the petitioner while arguing the writ
petition made the following submissions :-
(i) The Counsel started the line of arguments by bringing the
attention of the Court towards the fact that as per the
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communication dated 16.10.2025 (Annex.1) entire fleet of tank
trucks belonging to the petitioner has been blacklisted for two
years, on account of a duplicate dip rod, found in one of the tank
trucks.
(ii) On 28.08.2024 (Annex.2), a show cause notice was issued to
the petitioner on the ground that on 04.05.2024, Location In-
charge and safety officer on surprise inspection, found that, out of
the two, one truck bearing No.RJ-19-GD-8064 was found with
duplicate dip rod. It was found that dip line was not matching with
the calibration chart. The said TT was unloaded and challan was
cancelled.
(iii) On 02.06.2024, the petitioner sent an email clarifying that it
was not aware about the duplicate dip rod.
(iv) If at all action for blacklisting was required to be taken, the
same ought to have been done qua the TT in which DDR was
found and not qua the complete fleet.
(v) There has been blatant violation of ITD Guidelines. As per
the guidelines, only the TT which was found to be tampering with
standard fittings including 'calibration' shall be blacklisted. It does
not mention that entire fleet will be blacklisted.
(vi) Proper investigation was not carried out by the respondents.
The investigation should have been conducted by the Weight &
Measurement Department but the same was not carried out.
(vii) There is no justification or damage or quantifiable loss
portrayed by the respondents in order to take such a harsh action.
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(viii) It was pointed out that after almost 110 days of issuing show
cause notice, the hearing was conducted and the impugned order
dated 16.10.2025 was passed after 531 days from the date of
incident. The petitioner's TT was released after 385 days from the
date of incident. No action was taken for 8 months from the date
of issuing show cause notice.
(ix) The manner in which the Corporation proceeded clearly
shows the malafide intent to punish the present petitioner. The
incident is alleged to have occurred on 04.05.2024 and the
Corporation took almost three months to issue show cause notice
on 28.08.2024. Thereafter, the petitioner was called upon for
personal hearing after another six months on 03.02.2025 despite
the fact that the petitioner submitted its reply on 10.11.2024. The
petitioner was called for hearing on 03.02.2025 and thereafter, the
Corporation took another eight months to finally pass the
impugned order. The conduct of the Corporation, while dealing
with the present issue, speaks volumes about the fairness of the
Corporation in treating the present case. The malafides of the
respondent - Corporation is writ large and therefore, the
impugned order deserves to be quashed and set-aside. At this
stage, learned counsel for the petitioner fairly conceded that if at
all the Corporation had observed any such unauthorised dip rod in
a particular TT, as in the present case, the Corporation could have
blacklisted that particular TT. However, under the garb of such an
action, blacklisting the entire fleet cannot be said to be justified or
reasonable.
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Learned counsel for the petitioner has relied on a circular
dated 31.12.2024, which provides timeline for taking action in
case any malpractices is noted pertaining to any TT or contractor.
While referring to the manner in which the Corporation has
proceeded, it is submitted that the Corporation has breached the
apparent timeline as indicated in the said circular and therefore,
the impugned action deserves to be quashed and set-aside.
(x) Learned counsel for the petitioner has also placed on record
additional affidavit. Along with the additional affidavit, the minutes
of the proceedings dated 03.02.2025 has been placed on record to
indicate that there was no evidence of any wrongful use of DDR.
Based on the above submissions, learned counsel for the
petitioner contended that the action taken against the present
petitioner is highly disproportionate to the alleged incident. It is
submitted that even assuming, without admitting that a DDR was
found in one of the TT, the respondent-Corporation was not
justified in blacklisting the entire fleet, more particularly in view of
the fact that there was no material before the Corporation to
establish that the DDR was used which resulted in loss to the
Corporation or to any other party. In absence of any evidence of
misuse, the penalty imposed is highly disproportionate.
(xi) Learned counsel for the petitioner has given a proposal
stating that the petitioner is willing to accept the order of
blacklisting qua TT No. RJ-19-GD-8064 i.e. the vehicle from which
the DDR was recovered, provided the Corporation agrees to allow
the other nine TTs to operate.
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In support of the arguments raised by learned counsel for
the petitioner, reliance has been placed on the following
judgments :-
(1)- UMC Technologies Pvt. Ltd. Vs. Good Corporation
of India & Anr. : SLP (Civil) No.14228/2019,
decided on 16.11.2020.
(2)- M/s Atts Associates Vs. Bharat Petroleum
Corporation Ltd. & Ors. : Writ-C No.16713/2022,
decided on 11.10.2022 (Allahabad HC).
(3)- Gyanendra Kumar Vs. Union of India & Ors. :
Writ-C No.28993/2024, decided on 10.02.2025
(Allahabad HC).
(4)- M/s Radhika Logistics Vs. Union of India & Ors. :
Writ Petition No.7144/2023, decided on
03.06.2024 (Telangana HC).
(5)- M/s. Laxmi Petroleum Vs. Indian Oil Corporation
Ltd. & Ors. : SBCWP No.826/2015, decided on
18.02.2015 (Rajasthan HC).
4. Per contra, learned counsel appearing for the respondents
made following submissions :-
(i) The sudden inspection was carried out on 04.05.2024 and
the DDR was found in one of the TT of the petitioner bearing No.
RJ-19-GD-8064. On reporting of the said incident, a show cause
notice was issued. While referring to the show cause notice, it is
submitted that the reasons were very clearly spelled out in the
notice, wherein it was indicated that there was shortage found on
the compartment of TT and secondly, the DDR was also found at
the time of inspection. While referring to ITD Guidelines, it is
submitted that there is a deeming clause, which provides that if a
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DDR or calibration chart is found, the complicity of the carrier
should be deemed to be existent and the whole contract
comprising of all TTs can be terminated. It is submitted that the
petitioner was fully aware about the guidelines and therefore, the
Corporation was fully justified in invoking the said clause.
(ii) While referring to Clause 9(b) of the Contract Agreement, it
is submitted that the petitioner has agreed to comply with and
give full cooperation to the Company in meeting the requirements
of prevailing 'Marketing Discipline Guidelines' as applicable to
them. In view of the said clause, the petitioner has accepted the
decisions taken under the ITD Guidelines and therefore, on
account of the alleged incident, the petitioner is estopped from
questioning the decision taken by the Corporation in invoking ITD
Guidelines.
(iii) While referring to the conditions of the Guidelines, as is
available on Pg.85, more particularly Clause (8), it is submitted
that the entire fleet would be blacklisted in the case of three major
contingencies and one of it being DDR / Calibration chart.
(iv) Learned counsel for the respondents while responding to the
issue of delay caused in passing the impugned order, submitted
that after the sudden inspection was carried out in the month of
May, 2024, the matter was investigated and after the investigation
was concluded, a show cause notice was issued in August, 2024.
Reply was received from the petitioner on 10.11.2024 and
thereafter, he was called for hearing on 03.02.2025. Before the
decision could finally be taken, two of the officers came to be
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transferred and therefore, the proceedings were started afresh
and the petitioner was given fresh notice on 01.10.2025 and
07.10.2025. However, the petitioner did not choose to appear and
thereafter decision was made on 16.10.2025 after considering the
reply filed by the petitioner as well as after considering the
statement of representative of the petitioner made on 03.02.2025.
(v) While responding to the arguments with regard to the breach
of timeline as indicated in the Circular dated 31.12.2024, learned
counsel for the respondents submitted that the circular is not
applicable in the present case as the alleged incident occurred on
04.05.2024, whereas the circular came to be issued on
31.12.2024. It is submitted that the circular would be applicable
only in relation to the incident, which occurred after the issuance
of the said circular and therefore, the petitioner cannot take any
assistance of the said circular.
(vi) It is submitted that the petitioner has completely failed to
provide any proper explanation as to why two dip rods were found
in the TT in question. The explanation as submitted by the
petitioner in its reply dated 10.11.2024 simply states that a DDR,
as a useless iron rod, was found, however, he was not aware of
the source from which such rod was obtained. The reply further
indicated that the said iron rod does not fall in the category of a
dip rod, as the markings on it are in positive numbers and that if
such rod was used, excess product would be required to be
delivered and no person would be using it as this would result in
direct loss to the transporter or driver.
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(vii) While referring to such contents it is argued by learned
counsel for the respondents that as a matter of fact, the petitioner
has admitted that such dip rod was recovered at the time of
inspection, which was carried out on 04.05.2024. It is submitted
that in view of such specific admission, the only issue which
requires consideration of this Court is as to whether on noticing
such act, the action of the Corporation is justified or not.
(viii) In support of such submissions, learned counsel for the
respondents has placed reliance on following judgments :-
(1)- The Empire Jute Co. Ltd. & Ors. vs. The Jute
Corporation of India Ltd. & Ors., reported in (2007) 14
SCC 680.
(2)- State of U.P. & Ors. Vs. Bridge & Roof Co. (India)
Ltd., reported in (1996) 6 SCC 22.
(3)- Surajpur Indane Gas Sewa vs. Indian Oil
Corporation Ltd. & Ors. : Writ-C No.13636/2025,
decided on 02.05.2025 (Allahabad HC)
(4)- M/S Saini Cargo Vs. Indian Oil Corporation Ltd. &
Anr. : W.P.(C) No.4753/2020, decided on 02.11.2023
(Delhi High Court)
5. Learned counsel for the respondents has raised preliminary
objection with regard to maintainability of the present writ petition
on the ground of having alternative remedy of approaching the
arbitrator. While referring to the Clause 18 of the contract
agreement, it is contended that the present writ petition is not
maintainable, which specifically provides for appointment of
Arbitrator.
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6. While responding to the arguments advanced by learned
counsel for the respondents, learned counsel for the petitioner
submitted that the question of alternative remedy would not arise
in the present writ petition as the petitioner in the present writ
petition has sought quashing of Clause 8.2.2 of ITD Guidelines and
therefore, the objection with regard to maintainability of the writ
petition is required to be rejected.
6.1 The circular dated 31.12.2024 was issued to safeguard the
interest of the contractors and further provides the procedure for
fair, transparent and time-bound adjudication of the dispute and
therefore, the same is required to be adhered even in cases where
the incident has occurred prior to issuance of the circular.
6.2 The respondents have not placed any material on record or
established the fact that there was any misuse of the DDR, which
resulted in loss to the respondent - Corporation or to any third
person.
6.3 The guidelines, more particularly Clause 8.2.2 is sought to
be applied in a wrong manner and as a matter of fact, the correct
interpretation would indicate that only the TT from which a DDR is
recovered is to be blacklisted and not the entire fleet.
7. Heard learned counsel for the parties and perused the
material available on record.
8. It would be appropriate to first deal with the preliminary
objection raised with regard to the maintainability of the present
writ petition. Learned counsel appearing on behalf of the
Corporation has raised objection with regard to maintainability of
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the present writ petition on the ground of alternative remedy of
raising dispute before the arbitrator in terms of Clause 18 of the
contract agreement.
8.1 Learned counsel for the petitioner while replying to the said
objection has referred to prayer No.1 of the writ petition, wherein
the petitioner has challenged Clause 8.2.2 of the ITD Guidelines.
8.2 Considering the fact that the petitioner has prayed for
quashing of Clause 8.2.2 of the ITD Guidelines so also considering
the grounds raised in support of such prayer, this Court is not
inclined to dismiss the writ petition on the preliminary objection
raised by learned counsel for the respondent-Corporation. This
Court deems it appropriate to decide the writ petition on merits.
8.3 So far as judgments cited by the respondents in the case of
Bridge & Roof Co. (supra), Surajpur Indane Gas Sewa (supra)
and The Empire Jure Co. Ltd. (supra) are concerned, the same
would not be applicable to the present case since, as discussed in
the preceding paras, the existence of arbitration clause does not
bar the present writ petition, more so when the clause 8.2.2 of the
ITD Guidelines is under challenge.
9. The undisputed facts in the present writ petition are that a
contract for transportation of petroleum product was executed
between the petitioner and the respondent-Corporation. In terms
of the said contract, the petitioner deployed as many as ten TTs. A
sudden inspection was carried out on 04.05.2024 and in one TT
out of the fleet of ten TTs, more particularly, TT No. RJ-19-GD-
8064, a DDR was recovered. The petitioner in its reply has though
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termed the DDR as an unwanted iron bar, however, the factum of
recovery of such rod is not disputed. As a matter of fact, learned
counsel for the petitioner has submitted that even if it is treated
as a DDR then too he has no objection to the blacklisting of that
particular TT bearing No.RJ-19-GD-8064. However, under the garb
of that, the entire fleet could not have been blacklisted. That
apart, the arguments as advanced by learned counsel for the
petitioner that no loss was caused to the Corporation on account
of such DDR, further indicates that there is no serious quarrel
amongst the parties with regard to recovery of said DDR.
9.1 Learned counsel for the respondents while referring to the
show cause notice have though alleged that there was some
shortage in one of the compartment of the TT, however, they have
not emphasized much on the said issue. The additional affidavit
filed by the petitioner along with the minutes of the proceedings
dated 03.02.2025 also indicate that there was no evidence or any
final adjudication made in order to establish the fact that the DDR
was misused and any shortage in the petroleum product was
noted by the Corporation.
9.2 Considering the above facts, this Court does not find any
material to accept the contention of learned counsel for the
respondent that there was a loss caused to the Corporation on
account of using the DDR.
10. The only question, therefore, requires consideration of this
Court is as to whether the recovery of DDR in one of the TT would
result in blacklisting of the entire fleet of the contractor or not.
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10.1 In order to appreciate this issue, it would be appropriate to
reproduce clause 8.2 of the Oil Industry Transport Discipline
Guidelines (Version 4.0) (Annex.8) :-
"8.2 Penalties for malpractices / irregularities
8.2.1 Malpractices / irregularities will cover any of the
following:
a. Unauthorized deviation from specified route / unauthorized
delay / unauthorized en-route stoppage / not reaching
destination / over speeding / en-route switching off VMU/
unauthorized removal of VMU / use of VMU on other vehicles.
b. TT crew found in intoxicated state while on duty.
c. Irregular reporting of TT at loading location without
permission of the location.
d. Refusal to carry loads allocated by the location.
e. Reported case of non-wearing of retractable seat belt while
driving.
f. Driving vehicle without cleaner/helper.
g. Non-functioning of Fire Extinguisher carried by TT.
h. Polluting environment due to product spillage from tilting or
leaky vehicles on road, in case of accident / unsafe driving.
i. Accident involving injury or damages to the facilities at the
work place.
j. Fatal accident at the work place.
k. Tampering with standard fittings of TT including the sealing,
security locks, security locking system, calibration, Vehicle
Mounted Unit or its fittings/fixture
l. Unauthorized use of TT for products other than the
petroleum products for which it has been engaged.
m. Entering into contract based on forged documents / false
information.
n. Entering into an agreement for the same TT with other oil
companies
o. Irregularities under W&M Act.
p. Not lodging FIR with the Police in case of accident, not
informing / submitting accident report to the Oil Company about
the accident.
q. Pilferage / short delivery of product.
r. Any act of the carrier / carrier's representative that may be
harmful to the good name / image of the Oil Company, its'
products or its services.
8.2.2 Penalties upon detection of malpractice /
irregularities
The carrier shall attract penalties for the malpractice /
irregularities as given below and the TT mentioned in the following
instances shall be suspended / blacklisted along with TT crew.
However, an investigation, wherever required, shall be conducted
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and if the malpractice / irregularity is established then penal
actions stipulated as under shall be taken, including blacklisting :
Clause Type of malpractice / Penalty against number of instance
No. irregularity
First Second Third
8.2.2.1 (a) Reported non-wearing TT shall be TT shall be TT shall be
of retractable seat belt suspended suspended blacklisted.
while driving. for one for six
(b) Repetitive / Habitual week. months.
Over speeding.
(c) Driving Without cleaner/
helper
8.2.2.2 (a) Established repetitive TT shall be TT shall be
unauthorized stoppage en suspended blacklisted.
route. for six
(b) Established repetitive months.
unauthorized diversion
from specified route.
(c) Refusal to carry loads
allocated by the location.
(d) Irregular reporting of
TT at loading permission of
the location.
8.2.2.3 Short delivery of product TT shall be
for established malpractice. blacklisted.
8.2.2.4 (a) Non-availability/non- TT shall be TT shall be TT shall be
functioning of TT fire suspended suspended blacklisted.
extinguisher. for one for six
(b) TT crew found in week. months.
intoxicated state while on
duty.
(c) Not wearing uniform.
(d) Not wearing PPEs at
loading/unloading
locations.
8.2.2.5 (a) Established tampering / TT shall be
damaging of VMU. blacklisted.
(b) Established
disconnection of power /
cable of VMU enroute.
(c) Removal of VMU from
original mounting.
8.2.2.6 Accident at the location TT shall be TT shall be
leading to injury of persons suspended blacklisted.
or damages to the facilities. for six
months.
8.2.2.7 Polluting environment due TT shall be TT shall be
to product spillage from TT. suspended blacklisted.
for six
months.
8.2.2.8 Established case of TT shall be
pilferage/non-delivery of blacklisted.
product.
8.2.2.9 Fatal accident at the work TT shall be
place. blacklisted.
8.2.2.10 Irregularities under W&M TT shall be
Act. blacklisted.
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8.2.2.11 Tampering with standard TT shall be
fittings of TT including the blacklisted.
sealing, security locks,
security locking system,
Calibration.
8.2.2.12 Unauthorized use of TT TT shall be
outside the contract. blacklisted.
8.2.2.13 Entering into contract TT shall be
based on forged documents blacklisted.
/ false information.
8.2.2.14 Entering into an agreement TT shall be
for the same TT with other blacklisted.
oil companies.
8.2.2.15 Not lodging FIR with the TT shall be
Police in case of accident, blacklisted.
not informing / submitting
accident report to the Oil
Company about the
accident.
of the Oil Company, its'
products or its services.
8.2.2.16 Any act of the carrier / As decided
carrier's representative that by the
may be harmful to the good company
name / image
During the validity of transportation contract, in the first instance
of blacklisting for a transporter, as per the above provisions,
damage of Rs.1 Lakh will be imposed on the Transporter apart
from blacklisting of the involved TT. In second instance of
blacklisting, a damage of Rs.3 Lakhs will be imposed and the
involved TT will be blacklisted. In third instance of blacklisting, a
damage of Rs 5 Lakhs will be imposed and 25% of the remaining
TTs will be blacklisted along with the involved TT. In fourth
instance, a penalty of Rs. 8 Lakhs will be imposed and 50% of
remaining TTs will be blacklisted along with involved TT. In case of
any further incident of malpractice, the entire fleet will be
blacklisted and the SD will be forfeited and the transportation
contract will be terminated. The percentage of TT blacklisted will
be in proportion of own & attached offered and will be rounded off
to the higher numerical.
Above damages imposed are in addition to the recovery of
the product quantity found short or recovery due to contaminated
product involving the cost of product, expenses and losses incurred
as determined by the company.
However, in case, complicity of the transporter is
established even in first instance of malpractice, the entire
fleet will be blacklisted, contract terminated & carrier
blacklisted along with forfeiture of SD.
The blacklisting of TTs shall be on Industry basis.
In the following irregularities, the complicity of the
carrier shall be deemed to be existent and the whole
contract comprising of all the TTs belonging to the
concerned carrier shall be terminated, security deposit
forfeited and the concerned carrier & their all TTs shall be
blacklisted on Industry basis :
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1. False/hidden compartment, unauthorized fittings or
alteration in standard fittings affecting Quality and
Quantity.
2. Illegal/un-authorized duplicate keys of security locks.
3. Duplicate dip rod / calibration chart, the guidelines
provide for strict action."
Clause 8.2 deals with the malpractices / irregularities. Clause
8.2.1(o) deals with 'irregularities under W&M Act'; Clause 8.2.1(q)
deals with 'Pilferage / short delivery of product; and Clause
8.2.1(r) deals with 'any act of the carrier / carrier's representative
that may be harmful to the good name / image of the Oil
Company, its' products or its services.'
Clause 8.2.2.11 provides for blacklisting of the TT (Transport
TT) in case of tampering with standard fittings of TT including the
sealing, security locks, security locking system, calibration. Clause
8.2.2 further provides for certain penalties including blacklisting of
TT in case of first instance, second instance, third instance, fourth
instance and also for blacklisting of entire fleet. It also provides
that in case, complicity of the transporter is established even in
the first instance of the malpractices, entire fleet will be
blacklisted, contract terminated and carrier blacklisted along with
forfeiture of SD.
10.2 In addition to the above provision, blacklisting of TTs is
proposed on industry basis and there is a deeming clause, which
provides that in case of certain irregularities, the complicity of the
carrier shall be deemed to be existent and the whole contract
comprising of all the TTs belonging to the concerned carrier shall
be terminated, security deposit forfeited and the concerned carrier
and their all TTs shall be blacklisted on industry basis. The three
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contingencies, on which such deeming clause has been made
applicable includes DDR / Calibration chart.
10.3 Learned counsel for the petitioner has emphasized that
action of blacklisting of entire fleet could be taken after the
complicity is established. It is submitted that in the present case,
the complicity has not been established and in absence thereof,
the respondent - Corporation was not justified in blacklisting the
entire fleet.
10.4 Learned counsel for the respondent-Corporation submitted
that, in the present case, a deeming clause is applicable and, once
a DDR is recovered from a TT, the question of establishing
complicity does not arise. Therefore, the action taken by the
respondent-Corporation is fully justified. It is to be noted that, in
the present case, the recovery of a DDR is not disputed. Although,
in the reply filed by the petitioner to the show-cause notice, it has
been stated that only an unwanted iron rod was recovered and not
a DDR, such an explanation is not acceptable. This is more so
because the petitioner, in its reply, stated that the said iron rod
contained positive markings and that, if such a dip rod were used,
it would result in the delivery of excess petroleum product. It was
further stated that no transporter would use such a rod, as it
would directly result in losses to the transporter. This assertion, by
itself, is sufficient to indicate that the rod recovered was, in fact, a
DDR containing specific markings. The relevant part of the reply
dated 10.11.2024 is reproduced as under :-
" ......... ukirksy foHkkx ls tkudkjh djus ij crk;k fd DIP uacj
,d DIP ugha gS ;g dsoy u'V djus ;ksX; NM gS dSfyczs"ku ds
le; pkj&ikap xkfM+;ksa ds pkVZ ds vuqlkj fu"kku lkFk yxk;s tkrs
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gSa mls le; bl xkM+h dh DIP ij xyr fu"kku yx x;k Fkk
ftldks u'V djus ds fy, Mªkboj dks crk;k x;k Fkk fd foHkkx us
DIP uacj nks pkVZ ds vuqlkj lR;kfir djds fn;k rFkk mlh ls
lIykbZ nh tk jgh gSA
blls lkQ tkfgj gS fd ;g ,d dsoy vuqi;ksfx NM+ gS u dh
dksbZ nwljh DIP ukirksy foHkkXk n~okjk bldh tkap fjiksVZ vkus ij
o xkM+h esa ikuh Hkjdj psd djus ij gh lgh tkudkjh feysxhA
esjs QeZ esa yxHkx 30 ifjokjksa dk jkstxkj gS desVh n~okjk xkM+h dks
psd djus ij dksbZ Hkh deh ugha ikbZ xbZ Fkh xkM+h dk gj psacj o
E ykWfdax flLVe fcYdqy lgh ik;k x;k ,slh fLFkfr esa ml NM+
dks bl xkM+h ds fy, dksbZ mi;ksx ugha gS xkM+h ds lkFk daiuh dk
izfrfuf/k Hkst dj odZ"kkWi esa xkM+h dk batu Bhd djok dj psd
djus ij gh irk pysxk fd bl NM+ dk dksbZ mi;ksx gS ;k ugha
gSA
;g gS fd tc rd xkM+h dks ikuh Hkjdj psd ugha fd;k tkrk rc
rd ;g xyr gS fd dip ukirksy foHkkx n~okjk tkjh dh tkrh gSa
rks NM+ ds ckjs esa lgh tkudkjh ukirksy foHkkx nsxk
bruk cM+k fu.kZ; iw.kZ tkap fd, cxSj djuk izkd`frd U;k; ds
fo#n~/k gS ;g gS fd xkM+h dks Bhd djok dj ukirksy foHkkx ds
vf/kdkfj;ksa n~okjk dSfyczs"ku Vkoj ij psd djus dh d`ik djsa
ftlls eq>s U;k; fey lds eq>s iw.kZ fo"okl gS fd vki eq>s U;k;
ls oafpr ugha j[ksaxsA eSa esfMdy ifjfLFkfr;ksa ds dkj.k O;Lr jgk
esjh QeZ MSME LVkVZvi QeZ gS tks daiuh n~okjk tkjh fd, x,
fu;eksa ds vuqlkj dk;Z djus esa fo"okl j[krh gSa esjs VªkaliksVZ dh
dHkh dksbZ f"kdk;r ugha vkbZ
vr% vkils fuosnu gS fd tc rd xkM+h esa ikuh Hkjdj psd ugha
fd;k tkrk gS o ukirksy foHkkx n~okjk lR;kfir ugha fd;k tkrk
rc rd "kks dsl uksfVl dks fujLr djokus dh d`ik djsaA "
Learned counsel for the petitioner also raised an issue
regarding the fact that the DDR was not counter-checked by the
Weight and Measurement Department and that, in the absence of
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such verification, the Corporation could not have arrived at the
impugned conclusion.
10.5 The arguments as advanced by learned counsel for the
petitioner appear to be attractive on first count. However, a close
scrutiny would indicate that such requirement would arise only if
there were some manipulation in the reading of dip record which
requires reconfirmation from the Weight and Measurement
Department. In the present case, the recovery of two DDR and
one not matching with the calibration chart was sufficient in itself
to establish the fact that a manipulated dip rod was recovered in
one of the TT owned by the contractor. The recovery of one such
DDR automatically attracted Clause 8.2.2 of the ITD Guidelines.
10.6 Learned counsel for the petitioner has submitted that Clause
8.2.2 more particularly the provision, which provides for
blacklisting of entire fleet is required to be declared as an invalid
on the ground of being irrational, which permits the Corporation to
blacklist the entire fleet. Such condition is highly disproportionate
to the irregularities committed.
10.7 It is to be noted that Clause 8.2.2 specifically provides
different types of penalties in case of different irregularities. There
are certain eventualities when a particular TT can be blacklisted.
As many as 16 different eventualities, which would invite
blacklisting of TTs are mentioned in Clause 8.2.2, from 8.2.2.1 to
8.2.2.16.
10.8 Considering the gravity of three different malpractices
namely (i) False/hidden compartment, unauthorized fittings or
alteration in standard fittings affecting Quality and Quantity; (ii)
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Illegal/un-authorized duplicate keys of security locks; (iii)
Duplicate dip rod / calibration chart, the guidelines provide for
strict action.
A perusal of these three eventualities would indicate that the
framers of the guidelines have considered these three
malpractices of such a grave nature, for which deeming provision
has been added. These conditions appear to have been introduced
to ensure that there is no adulteration in petroleum products so
also to ensure that the transporters do not indulge in malpractices
which directly effect the image and reputation of all these OMCs.
This Court finds no reason to treat the guidelines to be
unreasonable or irrational in any manner.
11. Learned counsel for the petitioner has placed heavy
reliance on the judgment passed by the Division Bench of
Allahabad High Court in the case of M/s. Atts Associates
(supra), in support of his submission that the respondent
authorities could not proceed without adhering to Clause 8.2.2 so
also without completing its investigation and could not invoke
deeming clause. Learned counsel for the petitioner has relied on
para 17 & 18 of the said judgment. On perusal of the same, it is to
be noted that the said case is clearly distinguishable on fact. In
the said case, show cause notice was issued, however, nothing
was indicated as to what penalty the Corporation was intending to
propose. On account of this patent flaw in the show-cause notice,
the action itself was found to be unreasonable and against basic
principles of fairness. In the present case, show cause notice
dated 28.08.2024 clearly indicates that the petitioner was made
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aware of the irregularities noted during sudden inspection on
04.05.2024 and the provision itself was quoted in the show cause
notice so also the consequence of entire fleet being blacklisted
was specifically mentioned.
Considering the above fact, the judgment cited by learned
counsel for the petitioner is clearly distinguishable on facts.
11.1 In the case of UMC Technologies Private Limited (supra),
the Apex Court quashed the order of blacklisting on the ground
that SCN issued did not convey the intent of blacklisting which is
against the position of law that if the penalty to be imposed is
blacklisting then the SCN must clearly stipulate so, in order to
provide sufficient opportunity of hearing to the party.
So far as present matter is concerned, the guidelines clearly
mention about blacklisting as a penalty/punishment whereas in
the case of UMC Technologies Private Limited (supra), there was
no condition in the tender which provided blacklisting as a
consequence of breach nor the SCN issued was clear in proposing
the action of blacklisting. The petitioner herein has been given
sufficient opportunity of hearing as not only SCN was issued but a
personal hearing was also held after clearly stipulating the clause
of guidelines applicable so also the consequence of blacklisting.
11.2 In the case of Gyanendra Kumar (supra) the SCN was set
aside on the count that it was issued beyond the timeline provided
in the guidelines applicable therein.
In the present case, learned counsel for the petitioner has
relied upon circular dated 31.12.2024 which provides for time
frame to complete the entire process. This Court notes that the
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said circular came to be published after the cause of action arose
in the present case therefore, the said circular is not applicable in
the present case. Even upon non-applicability of the said circular,
this Court does not deny that process must be completed within a
reasonable time however, in the present case the respondent has
proceeded following the applicable guidelines so also the
procedure, therefore, this Court is of the opinion that the time
taken to pass the impugned order cannot be a ground to set aside
the same.
11.3 In the case of M/S Laxmi Petroleum (supra) the order of
blacklisting was set aside on the ground that the petitioner therein
was not provided fair opportunity of hearing as the allegation on
basis of which the petitioner was blacklisted was never put to its
notice therefore, it could not produce its stand/submission qua the
same.
This Court is of the opinion that the said judgment is not
applicable to the present matter as the petitioner herein was very
well informed about the allegations through the SCN. Moreover,
the petitioner was provided fair opportunity of hearing as well by
providing personal hearing.
11.4 In the case of M/S Radhika Logistics (supra), the
Telangana High Court while applying the doctrine of proportionality
quashed the blacklisting order on the count that the impugned
order therein was passed without any reasoning and justification
which shocked the conscience of the Court. It was observed that
there was no finding or reasoning with regard to complicity on the
part of the petitioner on basis of which the entire fleet and crew
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was blacklisted despite the recovery of non-standard rod been
made from only one TT.
This Court is of the opinion that the findings of the said
judgment cannot be applied to the present set of circumstances as
herein the impugned order is not only well-reasoned but has been
passed after dealing with the stand of the petitioner so also the
relevant applicable clause. Moreover, the Telangana High Court in
aforesaid case, remanded the for fresh decision after affording
opportunity of hearing whereas in the present matter, in the
considered opinion of this Court, the petitioner has been given fair
opportunity to put forth its stand before the authorities. So far as
the principle of proportionality is concerned, as discussed in the
preceding paras, the authors of the guidelines have provided
different penalties for as many as 16 situations, thus, it cannot be
said the penalty stipulated in guidelines is without application of
mind or irrational or not-proportional. It is only in certain
circumstances that the complicity of the contractor is deemed to
exist and a perusal of the said circumstances reflect that they are
grave in nature thus, in the opinion of this Court, the doctrine of
proportionality would not help the petitioner in the present case.
11.5 In the case of M/S Saini Cargo (supra), the Delhi High
Court while dealing with identical issue declined to interfere with
the blacklisting order as firstly, the Courts cannot sit as an
appellate authority over the decisions taken by the authority
unless the same is extremely perverse, secondly, author of the
agreement is best person to interpret the contract and thirdly, the
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petitioner therein could not rebut the presumption provided under
the guidelines regarding complicity of the carrier.
This Court is in agreement with the observations made by
the Delhi High Court. It is noted that in the present case too,
nothing has been placed on record by the petitioner to rebut the
presumption of complicity.
12. In view of the discussion made above, this Court does not
find any infirmity in the decision to blacklist the entire fleet of TT,
as the same is in line with the ITD Guidelines. Accordingly, the
present writ petition is dismissed.
13. Pending application(s), if any, stand(s) disposed of.
(SUNIL BENIWAL),J
Rmathur/-
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