IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID TUESDAY, THE 3RD FEBRUARY 2009 / 14TH MAGHA 1930 WP(C).No. 5511 of 2007(F) ----------------------------------- PETITIONER: ------------------ KOOLATH MOHAMMED, KEROSENE WHOLESALE DEALER NO.2, (INDIAN OIL CORPORATION), MANJERI, MALAPPURAM DISTRICT, REP. BY ITS MANAGING PARTNER, KOOLATH MOHAMMED. BY ADV .MR M.M.ABDUL AZIZ MR.M.A.ABDUL HAKHIM MR.T.S.RADHAKRISHNA PILLAI MR.T.R.RAJEEV RESPONDENTS: ----------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, FOOD CIVIL SUPPLIES & CONSUMER AFFAIRS DEPARTMENT, THIRUVANANTHAPURAM. 2. THE DISTRICT COLLECTOR, MALAPPURAM. 3. THE DISTRICT SUPPLY OFFICER, MALAPPURAM. 4. THE TALUK SUPPLY OFFICER, ERNAD. 5. THE INDIAN OIL CORPORATION, DIVISIONAL OFFICE, KOZHIKODE, REP. BY THE SENIOR DIVISIONAL RETAIL KOZHIKODE, REP. BY THE SENIOR DIVISIONAL RETAIL SALES MANAGER, MANNARPADAM, FEROKE, KOZHIKODE. 6. THE DEPOT. MANAGER, IOC FEROKE, KOZHIKODE. R1 TO R4 BY GOVERNMENT PLEADER MR. SHYSON P. MANGUZHA R5 & R6 BY ADV. MR.A.M.SHAFFIQUE MR.E.K.NANDAKUMAR MR.A.K.JAYASANKAR NAMBIAR MR.ANIL D. NAIR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/02/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.5511 of 2007 APEENDIX Petitioner's Exhibits: Ext.P1 : True copy of letter No. K. CLT KM dated 20.6.67 Ext.P2 : True copy of order dated 17.2.86 Ext.P3 : True copy of order dated 7.6.2006 Ext.P4 : True copy of order of 3rd respondent dated 25.9.2006 Ext.P5 : True copy of order or 3rd respondent dated 27.9.2006 Ext.P6 : True copy of letter of 5th respondent dated 8.10.2006 Ext.P7 : True copy of communication dated 17.11.06 Ext.P8 : True copy of representation dated 18.12.06 Ext.P9 : True copy of demand draft dated 12.12.06 Ext.P10:True copy of Fax message Ext.P11:True copy of proceeding of 2nd respondent dated19.12.06 Ext.P12:True copy of letter dated 19.12.2006 Ext.P13:True copy of the letter dated 19.3.07 Ext.P14: True copy of the order dated 15.11.2007 in W.P.(C) No. 31343/2007(F) of this Hon'ble court. Ext.P15: True copy of the letter dated. 3.11.2007 issued by the Food Secretary to the State Level Co-ordinator for Oil Companies Ext.P16: True copy of the extract of Marketing Discipline Guidelines, August, 2005 Respondent Nos. 5&6s' Exhibits: Ext.R5(a) :True copy of the Dealership Agreement for Kerosene/LDO entered into between the petitioner and the respondent. Ext.R5(b): True copy of Notification No. P – 19011/1/2005 – IOC dated 17.11.2005 Ext.R5(c):True copy of the Annexure III to notification dated 17.11.05 WPC No.5511 of 2007 Ext.R5(d) : True copy of the circular No.98-12/2005 RO/6002 dated 29.12.2005 Ext.R5(e) : True copy of the policy dated 09.10.2006 issued by the respondent Corporation /True Copy/ P.A. To Judge HARUN-UL-RASHID, J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P.(C) No. 5511 OF 2007 ~~~~~~~~~~~~~~~~~~~~~~~ Dated this the 3rd day of February, 2009 JUDGMENT The petitioner is a kerosene wholesale dealer. He was conducting sale and distribution of kerosene in Malappuram district. The authorities noticed irregularities on the part of the petitioner in not lifting kerosene during March and April, 2001. The second respondent, thereupon, after issuing show cause notice, initiated proceedings for violation of Clause 6 of the Kerala Kerosene Control Order, 1968. The District Collector cancelled the licence issued to the petitioner under the Control Order and also ordered to forfeit the entire security deposit. The order was passed on 17.5.2003. The petitioner preferred appeal before the Commissioner of Civil Supplies. The appellant authority confirmed the order passed by the District Collector and dismissed the appeal. In the revision preferred by the petitioner the Government revised the orders passed by the two authorities and, on facts, held that there is no lapse on the part of the petitioner in not lifting kerosene for the month of March and April, 2001. The Government also held that there was some adverse circumstances, which prevented him from lifting stock during the period and the irregularity in lifting the stock, therefore, is WPC No. 5511 of 2007 : 2 : unintentional. The revision was allowed. The orders under challenge are set aside. 2. The licence of the petitioner, consequent to the orders passed by the authorities, stood suspended for the period from 6.4.2001 (i.e. date of the District Collector's order) till Ext.P3 revision order passed by the Government on 17.6.2006. On the basis of ExtP3 order, the District Supply Officer issued Ext.P4 order dated 25.9.2006 restoring the licence of the petitioner. Ext.P4 is followed by Ext.P5 order, ordering allotment of specified quantity of kerosene stated therein to the petitioner. Exts.P4 and P5 were duly informed by the officials to the 5th respondent also, the Depot Manager of the 6th respondent company. Ext.P6 is the order passed by 5th respondent on 8.10.2006. Ext.P5 communication was referred in Ext.P6. Ext.P6 proceeds on the basis that the licence was under suspension since March-April 2001, for not uplifting the kerosene materials meant for public distribution system. By not lifting the stock, it is stated therein that dealer has violated agreement condition entered into with the company. It is also informed by the company that before commencing of supply to the petitioner they intend to carry out a detailed investigation since dealer have not reported any problem for uplifting the stock. For the purpose of carrying out an investigation, a request was made to the authority, the District WPC No. 5511 of 2007 : 3 : Supply Officer, not to make any allocation of kerosene till a confirmation is sent from the office. In reply to Ext.P6, the District Collector informed 5th respondent that the licence was renewed and stock was alloted to the petitioner by order dated 27.9.2006 and therefore, requested to the company to complete the process required to lift the stock alloted to him before the date stated in the order. 3. Subsequently, the petitioner tried to get allotment of the stock. He approached the District Collector and submitted Ext.P8 representation, he remitted the amount required for lifting the stock. Ext.P9 is the demand draft. The District Collector by Ext.P10 communication dated 18.12.2006 informed the company that so far no allotment was made to the petitioner though allotment was ordered as per allotment order dated 7.12.2006 and requested the company to release the stock against the allotment. The company again passed Ext.P12 order dated 19.12.2006 stating their earlier stand that since the dealer did not lift the stock for the period March-April 2001, he had violated the agreement condition and also pointed out that as per the company policy, the dealerships remaining inoperative for a period of more than 3 years will not be revived. 4. Ext.P6 and Ext.P12 issued by the 5th respondent Corporation is under challenge in this writ petition. The 5th respondent WPC No. 5511 of 2007 : 4 : resisted prayers of the petitioner. In the counter affidavit, it is contented, inter alia, that the licence issued to the petitioner by the statutory authority has been under suspension since February 2000 pursuant to proceedings of the Taluk Supply Officer, Tirur, that the wholesale depot at Manjeri village has been under suspension since March, 2001 and same has not been functional. The 5th respondent produced Ext. R5(c) notification, which provides that dealerships/distributionships which are inoperative from a date prior to 1.4.2002 will not be considered for revival and the dealerships/distributionships remaining inoperative for the period more than 3 years will not be revived. The 5th respondent also produced Ext. R5(b) notification, Ext.R5(d) circular and Ext.R5(e) policy conditions and contended that Ext.R5(d) and Ext.R5(e) unequivocally provided that dealerships inoperative from a date prior to 1.4.2002 will not be considered for revival and that dealerships remaining inoperative for more than 3 years will not be revived. Therefore, the petitioner is not entitled to allotment of stock from the company. It is also contended that supply of kerosene is governed by the terms of Ext.R5(a) agreement and also the policy directions issued by the Government and followed by the respondent corporation in the matter of marketing of petroleum products. WPC No. 5511 of 2007 : 5 : 5. Clause 6 of the of the Kerala Kerosene Control Order, 1968 reads as follows: Cancellation, suspension and modification of licence and Appeals - (1) The Commissioner, District Collector or any other Officer authorised by the Commissioner may after giving the wholesale dealer an opportunity of stating his case and for reasons to be recorded in writing - (a) modify, suspend or cancel any licence granted under this Order either for any breach of the terms and conditions of the licence [or for contravention of the provisions of any order issued by a competent authority under section 3 of the Essential Commodities Act (Act 10 of 1955) which is for the time being enforced] or for any other good and sufficient reasons [Provided that where the licence is considered necessary to be suspended during the pendency or in contemplation or proceedings for cancellation of his licence, it shall not be necessary to give any such opportunity to the licensee for stating his case] (b) order the realisation of the value of Kerosene found [to be short or in excess] and (c) order the forfeiture of the whole or any part of the amount remitted by the wholesale dealer as security under sub-clause 5 of clause 5 WPC No. 5511 of 2007 : 6 : 6. The District Collector initiated proceedings against the dealer under the clause 6 of the Order for the reason that he had deliberately withdrawn from lifting the stock for the month of March and April, 2001. Ultimately, the proceedings culminated in passing an order by the District Collector, who entered the finding that the non liftment was deliberate or intentional and therefore, there is breach of terms and conditions of the licence. His licence was cancelled. The licence was under suspension during the pendency of the proceedings before the District Collector. The suspension was from 6.4.2001. The petitioner preferred appeal and appeal was also ended in dismissal. Ultimately, in the statutory revision filed by the dealer, the order of the District Collector and the Commissioner were set aside and the Government as the revisional authority held that there is no breach of licence condition and that the non lifting of the stock during the said period was not intentional and therefore, orders passed by authorities are liable to be set aside. Ext.P3 order was passed on 7.6.2006. The proceedings were initiated in 2001 and attained finality on 7.6.2006. The petitioner is prevented from operating the licence for the period from 6.4.2001 to 7.6.2006. 7. The reason stated by the 5th respondent for not releasing the stock even after getting knowledge about what transpired in the WPC No. 5511 of 2007 : 7 : meantime is strange. In spite of request made by the District Collector on several occasions, 5th respondent vide Ext.P6 refused to make any allocation to the petitioner stating that the petitioner violated the dealership agreement condition entered into with the Indian Oil Corporation. Again, in Ext.P12 order, the 5th respondent restated the same stand and further informed the District Collector that as per the Government of India Policy, dealerships remaining inoperative for more than 3 years will not revived. 8. On the basis of facts and circumstances of this case, which I have narrated in detail above, the reason stated for non allocation of stock to the petitioner cannot stand. The alleged violation of the conditions of the agreement and fact that dealership remained inoperative for more than 3 years are consequential. Orders passed by the two authorities that there is breach of conditions of the licence was found improper by the final revisionary authority. So, as long as there is no violation of the terms of licence for non lifting of stock for the period March and April, 2001, the suspension of licence from 6.1.2001 till 7.6.2006 is illegal. It is the statutory authorities under the Order, suspended the licence and subsequently cancelled, which was later found that cancellation is illegal. In this background, I do not see any reason to uphold the contentions of the 5th respondent that there is WPC No. 5511 of 2007 : 8 : violation of the dealership agreement conditions and the policy conditions. Literally and academically, there is violation, so far as the company is concerned. But the fact remains is that it is the authorities orders which were subsequently found illegal that led to non-lifting of the stock by the petitioner. In spite of the request made by the District Collector on several occasions stating the true facts, the 5th respondent did not care to take any steps to remedy the damages caused to the petitioner. Therefore, it is the duty of the 5th respondent as well to correct the mistakes and damage done to the petitioner. I, therefore, quash Exts.P6 and P12 orders and direct the 5th respondent to release the stock as per the monthly allotment made by the statutory authority to the petitioner immediately, at any rate, within a period of one month from today. The writ petition is disposed of accordingly. (HARUN-UL-RASHID, JUDGE) KMD