HIGH COURT OF CHHATTISGARH AT BILASPUR WritADDealNo.361 of 2010 APPELLANTS: Respondents RESPONDENTS: Petitioner tndian Oil Corporation Ltd. and others. Versus Mahamaya Service Center JUDGMENT FOR CONSIDERATION Sd/- JQDGE 01-01.2011 HON'BLE SHRI R.N. CHANDRAKAR. J 3 <^y-<-6_ Sd/- R^.Chandrakar Judge J. POSTFOR JUDGMENT ON 3"JANUARY, 2011 8d/- Dhirendra Mishar Judge HIGH COURT OF CHHATTISGARH AT BILASPUR WritADpealNo.361 of 2010 APPELLANTS: Respondents RESPONDENT: Petitioner Present: 1. Indian Oil Corporation Limited, A Registered Company, Registered Office at G-9, Ali Yavar Jang Marg, Bandra East, Mumbai — 400 051, Branch Office at Indian 011 Bhawan Divisional Office, VIP Road, Telibandha, Raipur (CG) 2. The Executive Director (Retail Sales) Indian Oil Corporation Ltd. Indian 011 Bhawan, G-9, Ali Yavar Jang Marg, Bandra East, Mumbai (Maharashtra) Pin-400 051. 3. Senior Divisional Retail Sales Manager & Coinstituted Attorney Branch Office at Indian Oil Bhawan Divisional Office, VI P Road Telibandha, Raipur (CG) Versus Mahamaya Service Center, Through : Proprietor, Kailash Kumar Khetan, S/o Shri Natthu Lal Khetan, Aged about 31 years, R/o Khetan Medical Hall, Hospital Chowk, Sakti, Distt. Janjgir- Champa (CG) Shri PS Koshy, counsel for the appellants. Shri Prateek Sharma, counsel forthe respondent. Division Bench: Hon'ble Shri Dhirendra Mishra & Hon'ble Shri R.N. Chandrakar. JJ. JUDGilVIENT (Delivered on_2^.January, 2011) The following judgment of the Court was delivered by Dhirendra Mishra, J. 1. This writ appeal is directed against the order dated 9 September, 2010 passed in WP(c) No. 1668/2009 whereby learned Single Judge has E;:- '^^A^ allowed the writ petition of the respondent and set aside the order dated 9 March, 2009 (Annexure P/1) passed by the appellate authority - Indian Oil Corporation Ltd., Mumbai and quashed the termination order dated 10th September, 2008 (Annexure P/15). 2. Briefly stated, facts of the case are that an agreement was executed between the respondent and the Indian 011 Corporation Ltd. (in short "IOCL") on 11.12.2006 and the respondent was appointed as Dealer of Retail Outlet (RO) at Birra.Distt. Janjgir-Champa for sale of petrol and High Speed Diesel (MS & HSD). The officials of the IOCL carried out inspection of the RO of the respondent-Dealer on 20th October, 20Q7 and conducted Marker Test on sample of petrol and diesel (MS/HSD). The Marker Test for MS sample passed, however, for HSD sample of the RO failed. Sales and supplies of the RO of the Dealer were suspended by the Corporation. During inspection, samples of MS/HSD (6 samples of MS and 3 samples of HSD) as also Tank Lorry retention sample of the last supply were collected. The inspecting team took all the samples with them and no retention sample was left with the Dealer. The Marker Test of the retention sample was carried on 22.10.2007 at Bishrampur Depot in the presence of IOCL officials, the transporter and the respondent-Dealer, and the retention sample of HSD of the RO again failed in Marker Test. However, the Dealer did not agree to the result and put up a remark in the report that "result is not pink', and signed the report. The Dealer was served with a show cause notice dated 7.11.2007 to explain the reasons for not turning up for witnessing the retesting of the sample at Nishatpura Lab, Bhopal on 2 November, 2007, to which the Dealer submitted his reply. He was again directed to be present at Nishatpura Lab, Bhopal on 20.12.2007. However, testing l. was not done on the said date. The Dealer also objected that no sample has been given to him and the sample taken by the IOCL is 60 days old and requested for new sampling. However, retesting was conducted on 21.12.2007 in the absence of the Dealer and report of Annexure P/9 was prepared. The Dealer was served with a show cause notice dated 28.2.2008, to which he submitted his reply on 11.3.2008 (Annexure P/13). Thereafter, by order dated 10th September, 2008 (Annexure P/15) allotment of ROof the respondent-Dealer was terminated. The Dealer preferred an appeal against the order of termination before the appellate authority and the same was again dismissed vide order dated 9th March, 2009 (Annexure P/1). The Dealer challenged the order of Annexure P/1 as well as the termination order in the High Court and hiswrit petition has been dismissed by the impugned order. 3. Shri PS Koshy, learned counsel for the appellants-IOCL has challenged the impugned order mainly on the ground that the procedure of Marker Test was introdyced through Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Amendment Order, 2007 (for short "the Amendment Order, 2007"), whereby the Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 was amended. "Marker Test" was defined in Clause 2(f1)of the Amendment Order of 2007 and for heading "Sampling of Product", the heading "Sampling of Product and Testing" was substituted. After heading and before sub- clause (1), sub-clause (1A) was inserted. Further, in sub-clause (1), for the word "authorized", "where the product does not contain marker under sub-clause (1A), theauthorized officer'^ was substituted. Thus, 4 from the aforesaid amendment, it is evident that the procedure for testing of the product prescribed in the Order of 2005 was applicable only in cases where on Marker Test, the product is not found with the marker content. Since HSD sample collected from the ROofthe Dealer was found with marker content, the procedure prescribed in the rest of the clauses of the Order of 2005 had no application i.e. the procedure prescribed for testing of the product in para-2 onwards had no application and the Marker Test procedure could not be discarded on the ground of technical faults. 4. On theother hand, Shri Prateek Sharma, learned counsel for the respondent-Dealer has supported the impugned order. 5. We have heard learned counsel for the parties and perused the impugned order. 6. Learned Single Judge, after reproducing the original clauses of the Order of 2005 and Clause (8) of the Amendment Order of 2007 published by Notification dated 12.1.2007 has held that there is no change/amendment in sub-clause (2) of Clause (8) of the Order of 2005, which provides for giving of one sample of High Speed Dieset to the Dealer and thus, sub-clause (2) of CIause (8) of the Order of 2005 remains unamended and the same ought to have been given full effect to. 7. The question for our consideration is - (i) whether after insertion of Clause (1A) before Clause (1) of the original Clause (8) of the Order of 2005, the procedure prescribed from sub-clause (2) onwards became redundant and it was not required to be foltowed?, and (ii) whether .-ii-'y' ^Ssss^' learned Single Judge was justified in quashing the order of termination of the RO of the Dealer for not following the procedure prescribed in sub-clause (2) of Clause (8) of the Order of 2005? 8. After Amendment Order of 2007, the relevant portion of amended Clause (8) reads as under: "8. Sampling of Product and Testing: (1A) The authorized officer under clause 7 shall draw the sample from the tank, nozzle, vehicle or receptacle, as the case may be, in the test kit and test the product with aid of test kit, to check whether the product contains any traces of marker. If such traces are found in the product, the authohzed officer shall record the same in thplicate which shall be jointly signed by him and the dealer or transporter or concemed person or his representative, as the case may be, and give one copy of such recording to the dealer or transporter or concerned person or his representative and another copy to the oil company concerned, as the case may be. (1) Where the product does not contain marker under sub-clause (1A), the authorized officer under clause 7 shall draw the sample from the tank, nozzle, vehicle or receptacle, as the case may be, in clean aluminum containers to check whether density and other parameters of the product conform to the requirements of Bureau of Indian Standards specifications number IS 2796 and IS 1460 for motor spirit and high speed diesel respectively. Where samples are drawn from retail outlet, the relevant tank-truck sample retained by the dealer as per clause 3(b) would also be collected for laboratory analysis. ^^—.^;^ /y^ "^. VS9sm...,. ,. •'••^..:..^-:J:' (2) The authorized officer shall take and seal six samples of one liter each of the motor spirit or three samples of one liter each of the high speed diesel. Two samples of motor spirit or one of high speed diesel would be given to the dealer or transporter or concerned person under acknowledgement with instructions to preserve the sample in his safe custody till the testing or jnvestigations are completed. Two samples of Motor Spirit or one of High Speed Diesel shall be kept by the concerned oil company or department and the remaining two samples of Motor spirit or one of High Speed Diesel would be used for laboratory analysis; (3) The sample label shall be jointly signed by the authorized officer who has drawn the sample, and the dealer or transporter or concerned person or his representative and the sample label shall contain informatjon as regards the products, name of retail outlet, quantity of sample, date, name of the authorized officer, name of the dealer or transporter or concerned person or his representative; (4)The authorized officer shall forward thesample of the product taken within ten days to any of the laboratories mentioned in Schedule III or to any other such laboratory when it may be notified by the government in the Official Gazette for this purpose, for analyzing with a view to checking whether the density and other parameters of the product conform to the requirements of Bureau of Indian Standards specifications number 18 2796 and IS 1460 for motor spirit and high speed diesel respectively. (5) The laboratory mentioned in sub-clause (4) shall furnish the test report to the authorized officer n within twenty days of receipt of sample at the laboratory. (6) The authorized officer shall communicate the test result to the dealer or transporter or concerned person and the oil company, as the case may be, within five days of receipt of test results from the laboratory for appropriate action." 9. Shri PS Koshy on the basis of amendment in Clause (8) of the Order of 2005 argued that the procedure for testing of the product prescribed in the Order of 2005 was applicable only in cases where on Marker Test, the product is not found with the markercontent. Since HSD sample collected from the RO of the Dealer was found with the marker content, the procedure prescribed for testing ofthe product in para-2 onwards of Clause (8) had no application. 10. From perusal of the procedure followed by the authorized officer during inspection, it is clear that the sampling and retesting was done as per procedure contained in sub-clause (1) onwards. From perusal of the order of the appellate authority also, it is clear that the procedure as provided under Clause (8) is to be followed whether the product is found with the marker content or not. If sub-clause (1) of Clause (8), as amended after Amendment Order of 2007 is to be interpreted as argued by learned counsel for the appellants i.e. the procedure prescribed in sub-clause (1) and subsequent clauses are to be followed only where on Marker Test, the product is not found with the marker content, in that case, even drawing sample for retesting would not be necessary, where the product contains the marker after conducting Marker Test. Such interpretation of the amended Clause 8(1) would result in serious 8 injustice to the Dealer as after the authorized officer records a finding in his report that the product contains marker content, the same would be final and the Dealer would have no opportunity to challenge the findings recorded in the Marker Test and he would have no any remedy of asking for retesting. 11. We are in agreement with the finding of learned Single Judge that there is no change/amendment in sub-clause (2) of Clause (8) of the Order of 2005, which provides for giving of one sample of HSD to the dealer and the same ought to have been given fulleffect to. 12. In the instant case, there is total non-compliance of sub-clause (2) of Clause (8) of the Order of 2005. Admittedly, retesting of the preserved sample was done in the absence of the Dealer on 21.12.2007 behind the back of the Dealer and without notice to him. Clause 2.5 (D) of the MDG, 2005, referred to in para-15 of the impugned order, provides for retention of the sample by the dealer, so as to afford him an opportunity to cross check the report prepared by the officers by retesting. is.After hearing learned counsel for the parties and after carefully examining the impugned order, we are of the opinion that the learned Single Judge has rightly allowed the writ petition and quashed the order ofthe appellate authority as.well as the order terminating the dealership of Retail Outlet of the respondent-Dealer. There is no substance in this appeal, the same deserves to be and is, accordingly, dismissed. Sd/- Dhirendra JVIishar Judge Sd/- R.N.Chandrakar Judge Khan