IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN TUESDAY, THE 20TH OCTOBER 2009 / 28TH ASWINA 1931 WP(C).No. 30424 of 2008(V) -------------------------------------- PETITIONER: ------------------- M/S M.P. FAKRUDEEN SAHIB, DEALER, HINDUSTAN PETROLEUM CORPORATION LTD., THODUPUZHA, IDUKKI DISTRICT -685 587, REP. BY IT PROPRIETOR. BY ADVS. MR.RENJITH B.MARAR, MR.L.RAJESH NARAYAN, SMT.LAKSHMI.N.KAIMAL. RESPONDENTS: ------------------------ 1. HINDUSTAN PETROLEUM CORPORATION LTD., 17, JAMSHEDJI TATA ROAD, MUMBAI 400 020, REP. BYITS EXECUTIVE DIRECTOR. 2. SENIOR REGIONAL MANAGER, HPCL LTD., ERNAKULAM NORTH P.O., ERNAKULAM -18,. 3. UNION OF INDIA, REP. BY SECRETARY, TO GOVERNMENT OF INDIA, MINISTRY OF PETROLEUM AND NATURAL GAS, CENTRAL SECRETARIAT, NEW DELHI. R1 & R2 BY ADVS. MR.E.K.NANDAKUMAR, MR.A.K.JAYASANKAR NAMBIAR, MR.K.JOHN MATHAI, MR.P.BENNY THOMAS, MR.ANIL D. NAIR, MR.V.J.ANAND, R3 BY MR.P.PARAMESWARAN NAIR,ASST.S.G. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/08/2009, THE COURT ON 20/10/2009 DELIVERED THE FOLLOWING: W.P.(C). NO.30424/2008-V: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE COMMUNICATION DTD. 26/09/07 ISSUED TO THE PETITIONER BY THE RESPONDENTS. EXT.P.2: COPY OF THE REPRESENTATION DTD. 16/10/07 BEFORE THE R.2. ISSUED BY THE PETITIONER. EXT.P.3: COPY OF THE NOTICE DTD. 30/10/07 ISSUED BY THE R.1. TO THE PETITIONER. EXT.P.4: COPY OF THE REPLY DTD. 07/11/07 BEFORE THE R.2. SUBMITTED BY THE PETITIONER. EXT.P.5: COPY OF THE ORDER DTD. 21/12/07 ISSUED BY THE R.2. TO THE PETITIONER. EXT.P.6: COPY OF THE JUDGMENT IN W.P.(C).NO.14054/08 OF THIS HONOURABLE COURT DTD. 22/05/08. EXT.P.7: COPY OF THE ORDER DTD. 19/06/08 TO THE PETITIONER TERMINATING THE DEALERSHIP OF THE AGREEMENT OF THE PETITIONER. EXT.P.8: COPY OF THE APPEAL UNDER NOTE-IV OF CHAPTER 6 OF MDG-2005 DTD. 07/07/08 SUBMITTED BEFORE THE R.1. BY THE PETITIONER. EXT.P.9: COPY OF THE JUDGMENT DTD. 11/07/08 IN W.P.(C).NO.20903/08 OF THIS HONOURABLE COURT. EXT.P.10: COPY OF THE ORDER DTD. 03/10/08 BEFORE THE EXECUTIVE DIRECTOR RETAIL AND APPELLATE AUTHORITY. EXT.P.11: COPY OF THE RELEVANT EXTRACT OF MARKETING DISCIPLINE GUIDELINES 2005. EXT.P.12: COPY OF THE AGREEMENT DTD. 03/05/1982. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE. Prv. THOTTATHIL B. RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C).No.30424 of 2008-V = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 20th day of October, 2009. JUDGMENT 1.The petitioner challenges Exts.P1, P3, P7 and P10 by which the petroleum dealership contract that it had with the first respondent petroleum company, stands cancelled. 2.On 26.9.2007, the petitioner was issued Ext.P1 requiring it to suspend the sales and supplies of all products till further advice. This was on the ground that a particular sample drawn from the retail outlet of the petitioner failed to meet the specification for final boiling point and the company had noticed that the petitioner had not properly retained tank-truck retention samples as per Marketing Discipline Guidelines, 'MDG', for short. This ultimately led to the final appellate decision rendered as per Ext.P10, though in WPC30424/2008 -: 2 :- between, Ext.P3 decision rendered without hearing the petitioner was drawn as recorded by this Court in Ext.P6 judgment. 3.In support of this writ petition, the petitioner has contended and it was argued on its behalf that the terms of the MDG have been erroneously applied and the terms of the contract between the parties as evidenced by Ext.P12 produced along with I.A. 182/2009, would show that the petitioner is not liable to be penalised for the cancellation of the contract. It is also pointed out that the allegation against the petitioner does not stand on any ground referable to the MDG. It was further argued that the plea of the petitioner regarding the possibility of drawing as second sample from the tank ought to have been conceded to by the company. 4.Per contra, the learned counsel for the company argued that in terms of the requirement to maintain high standards of petroleum products, WPC30424/2008 -: 3 :- the termination of the contract may not be interfered with unless it is to be faulted on a jurisdictional issue or any ground relatable to administrative perversity so shocking that it does not stand to common sense. It was also argued that even without the petitioner having maintained the availability of seals and tags as per MDG, it cannot, in any manner, saddle the company with any responsibility. It is accordingly argued that there is no ground to interfere with the impugned order. 5.In answer to Ext.P1, the petitioner issued Ext.P2 taking the stand that it had not committed any malpractice with regard to the products and it is supplying the products given by the company. The supply is effected by tank truck contractors and that tank truck retention samples are properly collected in Aluminium containers kept in wooden boxes “without seals and tags as per MDG-2005 since the same exhausted.” The petitioner, accordingly, wanted the tank truck retention WPC30424/2008 -: 4 :- sample which is collected and kept by it be sent for laboratory test along with the second sample kept in the premises. Obviously, even at that stage, the facts stood admitted that the petitioner did not maintain the availability of seals and tags as per MDG-2005, though the plea is that the same was exhausted. No ground is shown in any material on and after Ext.P2, mulcting the company with the responsibility of not making available the seals and tags. When seals and tags are required for the purpose of ensuring certainty of the samples which are drawn at every point of time when supplies are made, it does not lie for the petitioner to contend that samples have been drawn and kept without seals and tags and those samples should be sent for laboratory test. 6.When Ext.P3 was issued rejecting the request for such examination and a detailed order issued as to the termination of the dealership, the petitioner moved this Court contending that it WPC30424/2008 -: 5 :- was not given an opportunity of pre-decisional hearing. It was accordingly that Ext.P7 was issued firstly, listing the matter for hearing afresh and thereafter, giving a detailed decision stating that the petitioner's request cannot be acceded to and that the termination of dealership agreement is proper and valid. 7.Against the aforesaid decision issued by the Senior Regional Manager, the petitioner filed Ext.P8 appeal to the Executive Director of the Company. Advertence to that memorandum of appeal categorically shows that the fact that seals and tags as per MDG were not available in the outlet of the petitioner is not disputed, though the petitioner pleads that there was no adulteration committed and there is possibility of accumulation of slurry and water in the underground tank which was installed five years back. 8.Among its plea projected in Ext.P8, the WPC30424/2008 -: 6 :- petitioner contends that the company was informed that the tank truck retention samples are properly collected in Aluminium containers, though without seals and tags as per MDG. The excuse is that the seals and tags which were supplied were exhausted. As already noted, the petitioner does not accuse the company of having, in any manner, refused to issue or make available the seals and tags. It does not also, in any manner, accuse the company in the matter of having drawn the samples which failed in the test. 9.Having held as above, it would be unreasonable for this Court to substitute any possible view or allowance being offered to the petitioner, more particularly because, the substance in relation to which the dealership agreement is made, deserves to be dealt with not only as an essential commodity, but also one, for the utility of which, very high standards have to be maintained. This is the minimum required. Viewed WPC30424/2008 -: 7 :- in that angle, the impugned action cannot be treated as baseless or groundless. I do not find any ground to interfere with the impugned action in exercise of the visitorial jurisdiction of this Court under Article 226 of the Constitution. 10.In the result, this writ petition fails and it is accordingly dismissed. No costs. THOTTATHIL B.RADHAKRISHNAN, JUDGE. Sha/161009