Heard Sri, H.R. Misra, learned counsel for the petitioner, Sri Ashok Nigam, Additional Solicitor General of India assisted by Sri S.K. Mishra, Advocate and Sri Prakash Padia, Advocate, appearing for the Petroleum Corporation.
Petitioner before this Court was appointed as the agent for sale of oil and oil products of Indo-Burmah Petroleum Corporation Limited. The Retail Outlet of the petitioner was situated at Sant Ravidas Nagar (Bhadohi). A surprise checking at the Retail Outlet of the petitioner was carried out by a duly authorised Company namely M/s SGS India Private Limited on 30.8.2008. Marker Test was carried out in respect of high speed diesel oil available at the Retail Outlet which failed. The petitioner failed to produce Tank Lorry Sample (TT Sample). The petitioner on the same date was informed that the Marker Test of the sample would be held again on 05.09.2008 at the chemical laboratory, Mughalsarai. The petitioner was admittedly present at the time of second Marker Test carried out at Mughalsarai on 5.9.2008. In the Marker Test at the laboratory, the sample drawn from the outlet again failed. A report in that regard was also communicated to the petitioner and a notice was issued to explain as to why the agency of the petitioner be not terminated. The competent authority determined the agency of the petitioner under order dated 31.03.2009.
Not being satisfied, the petitioner filed an appeal in accordance with the Marketing Discipline Guidelines (effective from 01.8.2005) before the appellate authority. The appeal has also been dismissed by means of the order dated 04.11.2009. It is against these two orders that the present writ petition has been filed.
According to the petitioner, in accordance with the Marketing Discipline Guidelines specifically Clause 2.5 laying down the general point to be observed in all cases, if the agent has not supplied the TT Sample, it is mandatory that the Retail Outlet sample should have been tested and compared with the reports pertaining to Supply Point Location Sample and it is only thereafter that any action could be taken against the dealer.
According to the petitioner, he at the time of testing of the sample at Mughalsarai on 05.09.2008 had produced the Tank Lorry Samples (TT Sample) and had specifically requested for the Supply Point Location Sample being similarly examined. His request for the purpose was not considered. It is then submitted that even if the samples of the tank lorry was not available and the test and compassion with the Sample of Supply Point must have been carried out. The respondents could not have held the petitioner responsible for the adulteration in absence of such procedure having been followed. Therefore, no punishment could have been effected. The guidelines lay down the different punishments which are to be inflicted in different contingencies with regard to (a) the failure of the Retail Outlet Sample and passing of the TT Sample. (b) Failure of the Retail Outlet Sample and failure of the TT Sample and (c) Failure of the Retail Outlet Sample, TT Sample and Supply Point Sample. According to the petitioner, it is only in the first case that the agent can be punished, in the second case, the transport contractor is liable to be punished while in the third case no action is to be taken against anyone.
Sri Prakash Padia, learned counsel appearing for the Corporation in reply points out that with the failure of the Marker Test adulteration of the product is established beyond doubt. He submits that a Division Bench of this Court in the case of M/s. Kishore Auto Sales and others vs. Bharat Petroleum Corporation Ltd. Varanasi and others reported in [2010 (6) ADJ 711 (DB)] in paragraph 19 after reproducing the Clause 9 of the motor spirit and high speed diesel oil (Regulation of Supply, Distribution and Prevention of Malpractices) Rule 2005 has specifically opined in paragraph 20 as follows:
As noticed above paragraph 12 of the Government order relied by the petitioner and filed as Annexure-4 to the writ petition also indicates that if in the marker test the product fails there is no necessity of any further chemical analysis. In the present case, when the test was held on 3.12.2008, marker was found present hence, there was no further requirement of density analysis or any other analysis. The Control Order 2005 and the Government order clearly relies on the marker test for finding out adulteration, no error has been committed by the Corporation in cancelling the agreement relying on the marker test. Thus the submission that density and other specification was to be checked as per Indian Standard Specification Numbers is not applicable in the facts of the present case.
It is stated that the said judgement of the Division Bench stands approved by the Hon'ble Supreme Court with the dismissal of Special Leave to Appeal (Civil) No. 21238 of 2010 in M/s. Kishore Auto Sales and others vs. Bharat Petroleum Corporation Ltd. Varanasi and others decided on 9.8.2010.
He then submits that it is the responsibility of the retail agent to retain the TT Samples and if for the reasons best known to the agent, he failed to hand over the TT Sample at the time of surprise checking, the production of the TT Sample at any later point of time cannot be accepted nor the same be tested in view of the specific provision in the Marketing Discipline Guidelines Clause 2.5 (f). He explains that the defence now pleaded for the TT Samples being not produced at the time of surprise checking need not be considered and for the same, the action of the Corporation cannot be faulted with.
With regard to the Supply Depot sample, he points out that from the records, it is established that the last supplies were received by the petitioner from the depot on 23.7.2008 while the surprise checking of the Retail Outlet when the Marker Test failed had been conducted on 30.8.2008. (Ref: page 61 of the present writ petition). He submits that under the Marketing Discipline Guidelines Samples at the supply depot are required to be maintained for a period of one month only at the maximum. Since in the facts of the case, the surprise checking of the Retail Outlet was on a date which was beyond 30 days of the last supply being received by the petitioner, the Corporation could not have asked for the supply depot samples nor they were available as such. He, therefore, submits that in the facts of the case adulteration being proved and there being no possibility of verification of the TT Sample and the Supply Depot Sample, the punishment inflicted upon the petitioner because of the adulteration found at the Retail Outlet cannot be faulted with.
To similar effect is the stand taken by the Union of India and it is their case that Marker Test is a comprehensive test for proving adulteration in the petroleum product to that extent that there can be no dispute. It has been clarified that Marker Test has been discontinued only because of the necessary quantity of requisite chemical being not available. The authenticity of the Marker Test was never in doubt.
Sri H.R. Misra, Senior Advocate, in rejoinder, submits that for non-supply of the TT Sample punishment of Rs. 25,000/- alone has been provided under the Marketing Discipline Guidelines and, therefore, in the facts of the case, in absence of testing of the tank lorry sample and the Retail Out sample, the punishment as inflicted cannot be legally sustained.
I have heard learned counsel for the parties and have examined the records of the present writ petition.
From the Division Bench of this Court in the case of Kishore Auto Sales and others (supra) relevant paragraph whereof has already been quoted herein above (which have since been affirmed by the Supreme Court). It cannot be disputed that with the failure of the Marker Test both at the retail outlet and the laboratory at Mughalsarai of the petroleum product available at the Retail Outlet of the petitioner, adulteration is established beyond reasonable doubt. It is not the case of the petitioner that despite failure of the Marker Test the Corporation could not have come to a conclusion that the product of Retail Outlet was adulterated.
This Court, in these circumstances, has no hesitation to hold that the product at the Retail Outlet of the petitioner being adulterated, is not in issue in the present proceedings. What is being contended before this Court that because that non testing of TT Samples and the supply depot samples, the punishment of cancellation of the agency of the petitioner is not justified in view of the Marketing Discipline Guidelines in violation of Clause 2.5 (f) and the different punishments which have been provided thereunder. The letter of the Corporation dated 29.3.2007 provides for 3 different punishments in failure of samples drawn from the Retail Outlet, TT Sample and Supply Depot.
In order to appreciating the aforesaid contention, this Court may record that under the Marketing Discipline Guidelines, a procedure has been provided for testing of the product at the Retail Outlet and drawing of the samples and testing of the same at the designated laboratory/location for Marker Testing again.
The samples drawn at the Retail Outlet of the petitioner admittedly failed in the Marker Test. Samples were drawn from the nozel of the dispensing unit and after due information to the petitioner were tested again at the designated laboratory/location for Marker Testing at Mughalsarai. The petitioner was present at the time of testing at the laboratory. Since TT Sample was not provided by the petitioner at the time of surprise checking of the Retail Outlet on 30.8.2007, the Officers of the Corporation were justified in not accepting the TT Samples as are stated to have been presented by the petitioner at the time of testing at the laboratory in view of the specific condition provided for under sub-clause (f) of clause 2.5 of the Marketing Discipline Guidelines which reads as follows:
Wherever tank lorry sample is not retained/made available by the dealer to the inspecting officials at the time of drawal of sample from the RO, the same would not be considered for testing at a later stage. In such case, the result of the RO sample will be compared with the supply point sample and action if any will be initiated against the dealer only.
Therefore, in the facts and circumstances of the case, testing of TT Sample at the laboratory could not be carried out only because of the fault of the petitioner in not handing over the TT Sample at the time of surprise checking i.e. on 30.8.2008 for whatever reason it may be.
So far as the testing of the supply point sample is concerned, from the records, it is established that the last supply received by the petitioner from the supply point was on 23.7.2008 while the surprise checking at the Retail Outlet had taken place on 30.8.2008 i.e. 1 month and 7 days of the last supplies. The supply point in terms of the guidelines is required to retain the supply samples only for a maximum period of 30 days. Therefore, in the facts of the case, samples from the supply point being could not be asked for nor where even otherwise available. The question of supply point samples being tested did not arise. For the same also the Corporation cannot be faulted with.
This takes the Court as to what can be the punishment upon the agent on said fact situation.
In the opinion of the Court because of non-testing of the TT Samples and the supply samples at the laboratory for the reasons recorded above, it cannot be said that the sample of tank lorry or that of the supply point have failed in the Marker Test. What remains on record, is the failure of the product of the Retail Outlet at the time of surprise checking and the failure of the Retail Outlet Sample in the Marker Test at the designated laboratory. Adulteration of the product at the retail outlet of the petitioner is established beyond doubt. As per the Marketing Discipline Guidelines, Appendix-A Item No. 1 on the product being found adulterated, the punishment of termination of agency alone is provided for. It is therefore held that in the facts of the case, the action taken by the Corporation is strictly in accordance with the Marketing Discipline Guidelines.
Petitioner has placed reliance upon the judgement of the Supreme Court in the case of Hindustan Petroleum Corporation Limited and Others vs. Super Highway Services and another reported in (2010) 3 SCC 321 for the proposition that where guidelines have not been strictly adhered to the order of cancellation of the dealership cannot be sustained. There can be no quarrel with the proposition laid down by the Apex Court as noted above.
There has been no violation of the Marketing Discipline Guidelines in the facts of the case. On the contrary, the Corporation has followed the procedure in testing of the product at the petitioner's Retail Outlet as also in the testing of the sample at the laboratory. There being no sample of tank lorry or of the supply point available on the relevant date, the question of their examination did not arise.
In the facts and circumstances of the case, this Court finds no illegality in the order impugned. No interference is warranted under Article 226 of the Constitution of India.
Writ petition lacks merit and is, accordingly, dismissed.
Order Date :- 18.1.2012 Puspendra