HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.23489 of 2003 Date : 28.08.2009 Between : M/s.Premodaya, Bharat Petroleum Corporation Dealers, Buchireddipalem, Nellore District, rep. by its Managing Partner. …..Petitioner And The Bharat Petroleum Corporation Ltd., Nellore, rep. by its Territory Manager (Retail) & another. …..Respondents HON'BLE SRI JUSTICE R. SUBHASH REDDY WRIT PETITION No.23489 of 2003 ORDER : The petitioner, who is a dealer in Petroleum products of Bharat Petroleum Corporation Limited, has filed this writ petition, challenging the validity of the order dated 05.11.2003, issued by the respondents in Letter No.NLR/TRT/Premodaya. 2. By the aforesaid order, respondents have suspended the supply of all petroleum products to the petitioner-dealer, apart from imposing a fine of Rs.20,000/- , as a measure of penalty on the allegation of adulteration. 3. One Sri G.Yohan Kumar, stated to be a member of Anti Adulteration Squad, visited the outlet of petitioner on 26th August 2003, and drawn the samples of MS and HSD for testing. On the ground that the lab test reports dated 03.09.2003 revealed that the MS sample drawn from MS tank on 26th August 2003, has failed in Research Octane Number test (RON), the petitioner was issued notice dated 16.10.2003 to explain the reasons for such failure of the sample. For the said notice, petitioner has filed his explanation, dated 29.10.2003, denying the allegation made against him, and further, it is stated that he is not aware as to what was the RON at supply location, and while making the supply also, the invoice is silent about RON. In the said explanation, while referring to the Marketing Discipline Guidelines notified by the Government, it is stated that the sampling procedure is not conducted as per the procedure contemplated in the guidelines. While stating that any action on such allegation will result in bringing down the reputation, the petitioner has requested to drop further action. 4. Referring to the notice and explanation filed by the petitioner, merely stating that the explanation offered by the petitioner is not convincing and the test report of the MS sample drawn does not meet the specifications with reference to RON test, as such, the allegation of adulteration is proved, order is passed, suspending the sale of all petroleum products at the retail outlet of petitioner, in addition to imposing a fine of Rs.20,000/-. 5. Heard Sri E.Manoher, learned Senior Counsel appearing for the petitioner and also Sri O.Manoher Reddy, learned Standing Counsel appearing for the respondents. 6. It is submitted by learned Senior Counsel Sri E.Manoher, that in the absence of indication of any RON at the supply point, by merely stating that the samples drawn did not meet the specifications with regard to RON, no allegation of adulteration could have been levelled against the petitioner. It is further submitted that though there are a set of marketing guidelines issued by the Oil Company itself for drawl of sample and further procedure, same are not followed in the present case. It is submitted that in addition to the guidelines, the sampling is also governed by the provisions under the Control Order i.e. Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) Order, 1998, which also provides procedure for drawing the samples, but the respondents have not followed the said procedure. It is submitted that as per the procedure referred above, six samples were to be drawn of one litre each from each tank of the retail outlet, but in the instant case, only one sample is drawn by the respondents, and on the ground that the said sample did not meet the specifications, allegation of adulteration is made. It is further submitted that in any event, though the petitioner has filed explanation giving the reasons for variation in specification with regard to RON, without recording any valid reason, the impugned order is passed. Lastly, it is submitted that even a show cause notice was not issued, either for suspension of sales, or for imposition of fine. 7. On the other hand, it is submitted by Sri O.Manoher Reddy, learned Standing Counsel appearing for the respondent-Oil Company, that the sampling procedure was followed as per the Marketing Discipline Guidelines, and immediately, the sample was sent to the laboratory, and the report indicated the specification of RON at 77.5, whereas the specification as per the Bureau of Indian Standards was 88. It is stated that the order passed by the Territory Manager is as per the marketing guidelines and also the Control Order referred above, and submitted that there are no grounds to interfere with the same. 8. To consider the said arguments of the learned counsel for the parties, at the outset, it is to be noticed that after inspection on 26.08.2003, the petitioner was given notice only to explain the reasons as to why the sample has failed in RON test. The order impugned for suspension of sales and imposing fine of Rs.20,000/- is passed only on the basis of notice dated 16.10.2003, but in the said notice, there is no indication of either suspension of sales or imposition of fine on the allegation of adulteration. In that view of the matter, this Court is of the opinion that the order impugned for suspension of sales is passed without giving proper opportunity to the petitioner. Further, it is also to be noted that as per the guidelines notified by the Oil Company, there is a procedure indicated for collecting and testing the samples. From the guidelines, it is clear that while drawing the samples, six samples of one litre each are to be drawn from the tank of the retail outlet and out of the said six samples, two samples are to be retained by the dealer, two samples are to be sent to the Division/Territory/Regional office and two samples are to be sent to the nearest oil laboratory for testing. Even Clause (5) of the Motor Spirit and High Speed Diesel Order, 1998, which provides for sampling of product, also prescribes the procedure for drawing samples of six to test the quality of Motor Spirit and High Speed Diesel. Looking at the facts of the present case, from a reading of the laboratory report, it is clear that respondents have not followed the said procedure for drawing samples. In any event, having regard to the explanation, dated 29.10.2003, offered by the petitioner, in which, he has categorically stated that there was no indication of RON at supply point, either in the invoice or in any other document, this Court is of the view that his explanation is not considered before passing the order imposing penalty. 9. The learned Senior Counsel appearing for petitioner, in support of his argument, has placed reliance on an earlier judgment of this Court[1], wherein, a learned Single Judge of this Court has held that for making an allegation of adulteration, sampling and testing is to be done strictly in accordance with the prescribed procedure. Further, it is submitted that in every case where there are variances in characteristics in test report, it cannot readily be inferred that there is adulteration. A perusal of the judgment referred above would support the case of the petitioner as much as the impugned order is passed in identical set of facts. Further, this Court, at the stage of admission, has suspended the impugned order and the said order has been in force since then. As much as this Court is of the opinion that the respondents have not followed the sampling procedure as indicated in the Marketing Disciplinary Guidelines and also the provisions of the Motor Spirit and High Speed Diesel Order, 1998, the action taken by the respondents based on the procedure, which is not in accordance with law, is not justifiable. In addition to the same, the impugned order is passed without giving proper opportunity to the petitioner, as there was no indication of either suspension of sales or imposition of fine, in the notice dated 16.10.2003. As such, this Court is also of the opinion that the order is passed violating the principles of natural justice. For the aforesaid reasons, the impugned order is liable to be set aside. 10. Accordingly, the writ petition is allowed. The order dated 05.11.2003, passed in Letter No.NLR/TRT/Premodaya, is set aside. No order as to costs. ______________________ R. SUBHASH REDDY, J 28th August 2009 ajr [1] 2008 (6) ALD 670