Letters Patent Appeal No.349 OF 2007 (In the matter of an Appeal Under Clause 10 of the Letters Patent of the High Court of Judicature at Patna. ) ****** 1. THE BHARAT PETROLEUM CORPORATION LTD through its Chairman cum Managing Director, Bharat Bhawan, 4 & 6 Currimbhoy Road, Ballard Estate, P.B. No. 688 Mumbai- 4000011. 2. The General Manager, Bharat Petroleum Corporation Limited, Gulam Sah Anwar Road, Kolkata 3. The Area Marketing Manager, Bharat Petroleum Corporation Limited, Ashiyana Chamber, 4th Floor, Exhibition Road, Patna 4. The Territory Manager (Retail Outlet), Bharat Petroleum Corporation Ltd. Patna P.O.- Pakari Via- Anisabad, Patna- 800002. ---Appellants (Respondents) Versus M/S SINGH SERVICE STATION through its Partner Sri Braj Nandan Singh, Son of Late Ramchandra Singh, resident of Village- Mukundpur, P.S.-Ekma, District- Saran ----------Respondent (Petitioner) ****** For the Appellant :- Mr. Sanjay Singh, Adv. Mr. Sanjeev Kr. Singh, Adv. For the Respondent :- Mr. Y.V. Giri, Sr. Adv. Mr. Anil Kr. Sinha, Adv. ****** P R E S E N T THE HON'BLE MR. JUSTICE NAVIN SINHA THE HON'BLE MR. JUSTICE DINESH KUMAR SINGH ****** Navin Sinha & Dinesh Kumar Singh, JJ, Heard learned counsel for the appellant and learned counsel for the respondent. I.A. No. 3862 of 2010 has been filed by the appellants for substituting the original writ petitioner Brajnandan Singh who is stated to have been deceased on 17.1.2009, by his legal heirs and other partners of 2 the dealership firm. The deceased had earlier been authorized by the other partners to pursue matters before this Court on behalf of the partnership. Having considered the submissions on behalf of the parties, the I.A. application is allowed. M/s Singh Service Station a partnership firm is a dealer of the petroleum products of the appellant. On 13.10.2006 an inspection was carried out at the petrol pump located at Ekma in the district of Saran (Chapra). The weights and measure unit seal was found tampered delivering short supply of high speed diesel by 100 ml in every five litres from dispensing unit no. 3. The totaliser seal of high speed diesel unit no. 2 was found broken delivering short by 120 ml in five litres. The connecting rod of high speed diesel dispensing unit- 1 was found loose. The connecting rod of motor spirit dispensing unit-1 was found loose and the motor spirit dispensing unit-2 was delivering short by 180 ml in five litres. The inspection report directed the dealer to suspend supplies of motor spirit and high speed diesel oil till re- verification of weights and measure in presence of the company officials. A sample of the product was taken from the underground tanks for laboratory test. The inspection report stated that no retention sample was available at the petrol pump as the reference sample of 3 the tank lorry was not retained. The motor spirit sample failed to meet the standards in laboratory test. A show cause notice was issued to the respondent, duly replied, after which the dealership was terminated by order dated 20.12.2006 and which was assailed by the respondent in C.W.J.C. No. 692 of 2007. The writ application was allowed holding that under the Marketing Discipline Guidelines a container box was required to be supplied by the company to the dealer for retaining the tank lorry reference samples and which had not been done. On the reasoning, that the company failed to provide the container box and in absence of availability of reference sample it could not be held that adulteration had taken place at the petrol pump only. Noticing the submission that there had been no allegations in a long dealership termination was held to be harsh without an opportunity to mend ways. Learned counsel for the appellant submitted that the respondent has admitted the tampering and breaking of the totaliser seal and tampering of the weights and measure meter unit seal as noticed in paragraph 6 of the judgment. Likewise, the loose connecting rods are also admitted as noticed in paragraph 7 of the judgment. The defence of an 4 inadvertent break of the seals during Diwali was considered and rejected by the appellant. Once the charge stood admitted nothing further was required to be proved. To maintain these was the responsibility of the dealer under the contract agreement, Marketing Discipline Guidelines. The breakage of the seal was a ground for termination of dealership under the Marketing Discipline Guidelines. The container box had been supplied to all dealers and it was for the respondent to prove that it had not been supplied to him. It was the responsibility of the dealer under the Marketing Discipline Guidelines Clause 2.5 (f) to make available the reference sample for test at a later stage. The motor spirit sample collected has failed the laboratory test. The termination was therefore in accordance with law. Counsel for the respondent strenuously urged that in absence of a container box having been supplied, a cross reference with the quality of the product supplied by the appellant and that collected from the underground tank it could not be said with certainty that the appellant had not failed to supply quality product. Reliance was placed on Clause 2.6 of the Marketing Discipline Guidelines to urge that it was the 5 obligation of the company to supply the container box. Reliance was further placed on a judgment of the Supreme Court in (2010) 3 SCC 321 (Hindustan Petroleum Corporation Limited And Others VS. Super Highway Services and Another) at paragraph 31 which reads as follows:- “ The cancellation of dealership agreement of a party is a serious business and cannot be taken lightly. In order to justify the action taken to terminate such an agreement, the authority concerned has to act fairly and in complete adherence to the rules/guidelines framed for the said purpose. The non-service of notice to the aggrieved person before the termination of his dealership agreement also offends the well-established principle that no person should be condemned unheard. It was the duty of the petitioner to ensure that Respondent 1 was given a hearing or at least serious attempts were made to serve him with notice of the proceedings before terminating his agreement.” We have considered the respective submission of the parties. The case of Super Highway Services (supra) relied upon by the respondent is distinguishable on its own facts. It related to violations of procedures of natural justice. Such is not the case presently. This Court, in matters as the present is not concerned with the final decision but with the decision making process. Section 58 of the Indian Evidence Act, 1972 6 provides that facts admitted need not be proved. Once the respondent admits the giving of a show cause and reply to the same, combined with that the totaliser seal was broken and the weights and measure meter unit seal was tampered, the connecting rods were loose, and the explanation of inadvertent breakages and wear and tear respectively, has been disbelieved by the appellant on facts, there is no occasion for this Court to interfere with such decision in the writ jurisdiction. The matter pertains to a contractual relationship and actions taken under the dealership agreement, marketing discipline guidelines cannot be classified as arbitrary. The petitioner contends that one day prior to the inspection i.e., on 12.10.2006 he had allegedly intimated to the weights and measures department that the seals were broken and tampered and claims to have suspended sales the same day. On the contrary, the inspection report dated 13.10.2010 states that the dealer was directed to suspend sale. If he had already stopped sales as is contended on his behalf, there was no occasion for the inspection team to direct him to suspend sales. If he had in fact actually suspended sales on 12.10.2006, it was for him to prove the same from the totaliser reading of the sales figures on 12.10.2006 with the totaliser reading at the time of 7 inspection on 13.10.2006 that there had been no sale. These were all issues of facts for which the foundation had to be laid by the respondent himself. The law stands well settled that if an order be severable between the good part and the bad part, and the bad part of the order can be set aside without interfering with the good part, it would not vitiate the whole order unless the two parts of the order were inextricably connected and incapable of separation. In the present case, the allegations of broken totaliser seal, tampered weights and measures unit seal and loose connecting rod stands admitted. There were admittedly violations of the Marketing Discipline Guidelines and the dealership agreement. The former rendered the dealership liable to termination. Whether a container box has been supplied or not and the quality of product supplied by the appellant loose their relevance. If the termination is sustainable on the earlier three grounds it will not be vitiated for uncertainty on the fourth ground. This Court has already held that there is no material to demonstrate that the respondent had stopped sales after the seals were tampered or the connecting rods became loose. His defence that the damage to the seals took place during cleaning on the occasion of Diwali is purely an 8 afterthought. Diwali fell on 21.10.2006. The allegations are on 13.10.2006. His defence raises more questions than its answers. It is common knowledge that such cleaning in accordance with Hindu ritual is done on the day of Diwali or at best a day or two earlier. The Supreme Court in AIR 1972 Supreme Court 32 “Channabasappa Basappa Happali vs. State of Mysore) considering a challenge to punishment on admitted charges in a departmental proceedings held in the relevant extract of Paragraph-5 as follows:- “5. ………….The Police constable here was not on his trial for a criminal offence. It was a departmental enquiry, on facts of which due notice was given to him. He admitted the facts. In fact his counsel argued before us that he admitted the facts but not his guilt. We do not see any distinction between admission of facts and admission of guilt. When he admitted the facts, he was guilty …………” The impugned order dated 2.4.2007 is set aside. The appeal stands allowed. Patna High Court Dated 20th of April 2010 P. Kumar/NAFR (Navin Sinha, J.) (Dinesh Kumar Singh, J.)