The Indian Oil ... vs Ranjith Filling Station,Medak ...
2024 Latest Caselaw 1154 Tel

Telangana High Court

The Indian Oil ... vs Ranjith Filling Station,Medak ... on 19 March, 2024

     THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
                         AND
     THE HON'BLE SHRI JUSTICE ANIL KUMAR JUKANTI

                 WRIT APPEAL No. 169 of 2014

JUDGMENT:

(Per the Hon'ble the Chief Justice Alok Aradhe)

Mr. Deepak Bhattacharjee, learned Senior Counsel for

the appellant.

Mr. P. Girish Kumar, learned Senior Counsel represents

Mr. Shaik Jeelani Basha, learned counsel for the

respondents.

2. This intra court appeal arises from an order dated

11.12.2013 passed by the learned Single Judge by which

W.P.No.28062 of 2013 preferred by the respondents has been

allowed.

3. Facts giving rise to filing of this appeal briefly stated are

that sometime in April, 2011, the appellant appointed

respondent No.1 firm (hereinafter referred to as "the firm") as

dealer in Petrol (Motor Spirit) and High Speed Diesel Oil

(Retail Outlet). Thereafter, an agreement was executed

between the firm and the appellant - The Indian Oil ::2::

Corporation Limited (hereinafter referred to as "the

Corporation") and the firm has been operating the retail

outlet under the aforesaid agreement. Admittedly, the firm is

bound by the Marketing Discipline Guidelines.

4. An inspection was conducted on 05.02.2013 by the

Anti Adulteration Cell of the Corporation. During inspection

one additional unauthorized electronic fitting in Midco MMSH

1112 ASPI 07ECO591V in dispensing unit was found. The

samples were collected and thereafter by an order dated

06.02.2013, the firm was advised not to dispense fuel from

the dispensing unit.

5. The firm was required to submit an explanation,

pursuant to which a detailed explanation was submitted.

The firm expressed ignorance about the alleged additional

unauthorized fitting in the dispensing unit. It was further

stated that as per the samples taken prior to opening of the

dispensing unit and thereafter, it was found that delivery was

accurate and there was no variation in the delivery. The firm

was also afforded an opportunity of personal hearing.

However, the Corporation by an order dated 16.09.2013 ::3::

inter alia held that the firm is guilty of violation of the

dealership agreement as well as Clause 5.4.1 of the

Marketing Discipline Guidelines and accordingly, terminated

the dealership of the firm.

6. The aforesaid order was challenged by the firm in

W.P.No.28062 of 2013. The learned Single Judge by an order

dated 11.12.2013 has inter alia held that there is no material

on record to indicate as to at what point of time the

unauthorized unit was inserted into the dispensing unit and

how the firm is manipulating the distribution of fuel. It was

further held that no material was brought on record to

disclose the unauthorized access to the equipment by the

firm. It was further found that it is not the allegation of

the Corporation that the firm has tampered with the seals.

It was further held that the officials of the Weights and

Measures Department have inspected the retail outlet

periodically and found the seals to be intact. The learned

Single Judge therefore set aside the order dated 16.09.2013

and has allowed the writ petition. In the aforesaid factual

background, this intra court appeal has been filed.

::4::

7. Learned Senior Counsel for the appellant has submitted

that the order passed by the learned Single Judge is contrary

to law and facts of the case. It is further submitted that on

termination of the contract of dealership, the appropriate

remedy for the firm was to invoke the arbitration clause, as

provided under the arbitration agreement.

8. On the other hand, learned Senior Counsel for the

respondents has supported the order passed by the learned

Single Judge.

9. We have considered the rival submissions made on

both sides and have perused the record.

10. The competent authority in its order has recorded the

finding, which has been referred to by the learned Single

Judge in paragraph 20 of the impugned order. The same is

extracted below for the facility of reference:

"(i) "They found everything to be normal and within the permissible limits. The explanation offered by you in this regard is factually correct and acceptable" (para 5 in page 6 of the order).

(ii) "Therefore it can be safely concluded that there is no impact of the said additional fitting for delivery of the ::5::

product. Apart from the alleged unauthorized fitting found in the Midco Dispensing unit everything was in permissible limits. The explanation offered by you is factually correct and convincing". (para 6 of page 6)

(iii) "Your explanation that the no variation in so far as delivery of fuel is concerned is acceptable". (first para of page 7)

(iv) "It is true that as per our records you have been carrying on the business as per the terms and conditions of the Dealership agreement until the above referred irregularities were detected by Anti Adulteration Cell -

Southern Region on 05.02.2013"."

11. The explanation put-forth by the firm has been rejected

on the ground that it was not possible to insert an

unauthorized unit without the consent of the firm. The

learned Single Judge, however, has recorded a finding in

paragraph 22 of the impugned order that there is no finding

in the order passed by the competent authority as to when

the unauthorized unit was inserted in the dispensing unit

and how the firm is manipulating the distribution of fuel.

It was further held that there is no material on record to hold

that the firm in any manner has tampered with the seals.

The learned Single Judge also took note of the fact that the

seals were found to be intact on the periodical inspection of ::6::

the officials of the Weights and Measures Department. It was

also held that by the insertion of the aforesaid unauthorized

unit, the firm has indulged in short delivery of fuel. It was

also found that delivery of fuel was accurate prior to checking

of the unit and even after checking. Therefore, the learned

Single Judge recorded a finding that the possibility that the

supplier himself has supplied that particular cable in the

dispensing unit cannot be ruled out. It was also held that no

effort was made to ascertain from the supplier whether there

was some significance in insertion of such unit and it was

inserted for proper functioning of the unit. For the

aforementioned reasons, the learned Single Judge has found

that the order of termination of dealership of the firm is

based on surmises and conjectures that the firm has

indulged in short delivery of fuel. There is no material on

record to draw such an inference and accordingly, the writ

petition has been allowed.

12. The learned Single Judge has meticulously appreciated

the material available on record and recorded a finding that

the firm did not indulge in short supply of fuel. In view of the ::7::

fact that the seals in the dispensing unit were found to be

intact during the time of inspection and there is no finding

that the firm indulged in short supply of fuel even at the time

of inspection, the supply of fuel was found to be proper.

No effort has been made by the Corporation to enquire from

the supplier about the installation of additional unauthorized

electronic fitting in dispensing unit. The findings recorded by

the learned Single Judge cannot be either said to be perverse

or based on no material.

13. For the aforementioned reasons, we do not find any

ground to differ with the view taken by the learned Single

Judge.

14. In the result, the writ appeal is dismissed.

Miscellaneous petitions, pending if any, stand closed.

No order as to costs.

__________________ ALOK ARADHE, CJ

________________________ ANIL KUMAR JUKANTI, J Date: 19.03.2024 ES