HONOURABLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION NO.20492 OF 2014 DATE: 14-08-2014 Between:
M/s.Sai Shanthi Filling Station, Bharat Petroleum Dealers At premises No.9-141/1, 9-142 & 143/2, Plot No.6,7 & 7 (part) Sy.No.730/1, Premvijaya Nagar, Mirzalguda, Malkajgiri, Secunderabad, rep.by its Proprietor, M.Raghava Rao, S/o.Jagannadham, Aged 55 years, r/o.Plot No.39 & 40, Krupa Complex Bus Stand, Safilguda, Hyderabad.
… Petitioner And Bharat Petroleum Corporation, A Government of India Enterprises, rep.by its Managing Director, having its Regd.Office at Bharat Bhavan, 4 & 6, Cummbhoy Road, Ballard Estate, P.B.No.688, Mumbai and another …. Respondents This Court made the following :
HONOURABLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION NO.20492 OF 2014 ORDER:
On 10.6.2014, inspection was conducted by the Mobile Lab in the premises of the petitioner retail outlet and drawn samples of MS for testing and on an analysis, Mobile Lab noticed that the samples drawn has failed in distillation test. Having found the said illegalities, the Mobile Testing Lab have sealed four nozzles described as A1, A2, B1 and B2. Subsequently, petitioner was served with show-cause notice dated 03.07.2014 calling for his explanation. Petitioner by his representation dated 10.07.2014 requested for some additional time for submitting his explanation and on 15.7.2014 explanation was submitted. As the matter stands at this stage, after the inspection of the premises of the petitioner’s retail outlet, the supplies for the entire outlet were stopped w.e.f. 11.06.2014 and aggrieved thereby this writ petition is instituted.
2. Learned counsel for the petitioner submits that no order of suspension is passed suspending the supplies and no decision is communicated in writing of suspension of supplies and in the absence of a written order in exercise of powers vested in para 5.1 appended to Marketing Discipline Guidelines, the supplies cannot be stopped. Learned counsel for the petitioner also made submissions on merits contending that there was no adulteration and the allegations were falsely made. However, the allegation of adulteration is yet to be finalized by the respondent corporation and it is premature to go into that issue at this stage.
3. Learned standing counsel submits that having found the illegalities in running of the retail outlet, the Mobile Lab team has submitted a report and they have also seized the nozzles and, therefore, the supply was suspended. Learned standing counsel submits that in accordance with the provision contained in para 7.4 appended to Market Discipline Guidelines, the Mobile Laboratory is entitled to suspend the supplies of petitioner’s retail outlet. Further test conducted proved the illegalities in operation of the outlet. He, therefore, submits that power to stop supplies is traceable to the said provision and, therefore, it is validly done.
4. To appreciate the contentions of the learned counsels, it is useful to extract the provision contained in para 7.4(a) and 7.6.1 of Marketing Discipline Guidelines. It reads as under:
“7.4 – Testing of samples
(a) MS/HSD samples The samples shall be subjected to clinical tests including density as mentioned in the MS/HSD Control Order. Tests to be carried out are: MS –Appearance, colour (* visual), Density at 15C, Distillation, HSD – Appearance, colour (visual), Density at 15 C, Distillation, KV at 40 C.
ii) Sales and supplies are to be suspended by Mobile Lab in the event of failure of sample in Lab test.
7.6.1 Certification
a) The Test Reports for MS/HSD shall be made as per Annexure – 12/12(a) and 13 /13(a) respectively. Five copies of the Test Reports shall be made which will be distributed as follows:
i) To the Retail Outlet
ii) To the concerned Divisional/Territory/ Regional Office of the OMCs.
iii) State Level Co-ordinator
iv) To the concerned Technical/Quality Control Department of the OMCs
v) To Mobile Laboratory
b) If the sample fails, the meter reading of all the dispensing units and the dip readings of the Tank(s) of the concerned product shall be recorded in the Report (Annexure 12 or 13 as applicable) and the dealer shall be advised to suspend the sales of the concerned product.
c) The above instruction shall be recorded under the “Remark” column of the Test Report and the Dealer’s signature with seal shall be obtained on all copies of the Test Report.
d) The Mobile Lab Officer shall inform the State Level Coordinator immediately regarding failure of sample and action taken. ”
8.1. All irregularities (mentioned in chapter-5_ are classified into three categories, i.e., Critical, Major and Minor
5. The Marketing Discipline Guidelines would show that suspension can be resorted to if there is an adulteration. In the instant case, there is no order of suspension. Para 8.1 deals with critical irregularities and the action that can be taken on the proved allegations of critical irregularities. In the instant case, after the inspection was carried out by the Mobile Lab, the Mobile Lab recorded the illegalities noticed in operation of the retail outlet and the report would show that four nozzles through which the petrol was dispensed with were sealed. The report is silent on sealing of nozzles through which HSD was dispensed with. However, after submission of the said report, all supplies for the retail outlet of the petitioner were stopped.
6. As seen from the extracted portion of the Marketing Discipline Guidelines, the power to suspend sales and supplies are vested in the Mobile Lab, which decision has to be taken on the spot after testing the samples in the Mobile Lab. As noticed from the report of the Mobile Lab, power to suspend was not invoked and has not ordered suspension of supplies, but nozzles described as A2, B2, B1 and A1 alone were sealed. Thus, there was no order of suspension of sales and supplies. In the absence of an order of suspension of sales and supplies by exercising relevant provision of the Marketing Discipline Guidelines, respondent-corporation could not have denied supplies to the petitioner. Thus, the very action of denying supplies to the petitioner is illegal.
7. However, it is to be noticed that Mobile Lab found adulteration in petrol nozzles and found that such adulteration emanates from the storage tank. Hence, four nozzles and storage tank were seized. In the further tests conducted, in the Regional Laboratory, tests proved that there was adulteration. Accordingly, show cause notice was issued to the petitioner on 03.07.2014 and the matter is under consideration to take further action. Thus, as prima facie material would disclose adulteration in petrol discharge and hence tank as well as four nozzles were sealed, and as the petrol stored in the tank found to be adulterated, the question of permitting the petitioner to operate the petrol nozzles at this stage does not arise. However, since there was no order of suspension of sales and supplies, no adulteration was noticed in the diesel outlets and as the nozzles of diesel outlet were not sealed, the respondent corporation could not have stopped sales and supplies of other petroleum products of the petitioner outlet.
8. Having regard to the above findings, the writ petition is disposed of, directing the respondent corporation to restore supplies of HSD and other petroleum products other than petrol and permit the petitioner to operate HSD nozzles till appropriate action as warranted by Marketing Discipline Guidelines is taken against the petitioner outlet. There shall be no order as to costs. Miscellaneous petitions if any pending in this writ petition shall stand closed.
JUSTICE P.NAVEEN RAO Date: 14.08.2014 kkm HONOURABLE SRI JUSTICE P.NAVEEN RAO WRIT PETITION NO.20492 OF 2014 DATE: 14-08-2014 kkm