IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY FRIDAY, THE EIGHTEENTH DAY OF DECEMBER, TWO THOUSAND NINE WRIT PETITION No.16256 of 2002 Between: M/s. Ramakrishna Filling Station, Reptd., by its Proprietor-K.Vijay Kumar, S/o.Mahadev, 42 yrs, Ravulacheruvu Katta, Manthani Post, Karimnagar District. … Petitioner And: I.B.P. Company Ltd., reptd., by its Additional Divisional Manager, S.D.Road, Secunderabad and another. … Respondents. Counsel for the Petitioner: Sri C.V.Mohan Reddy, Senior Counsel. Counsel for the Respondents: Sri Kaveti Srikant for Sri Deepak Battacharjee. This Court made the following: ORDER:- This Writ Petition is filed for a Mandamus to set aside proceedings, dated 25-8-2002, issued by respondent No1,whereby the petitioner was visited with the penalties of suspending the sales and supplies of the retail outlet for 30 days and a fine of Rs.20,000/-. On 22nd June, 2002 (wrongly mentioned as 22nd May, 2002 in the impugned order) a team from Anti- Adulteration Cell, Chennai, inspected the retail outlet of the petitioner and carried out certain tests. On the basis of the said tests, show-cause notice, dated 3-7- 2002 was issued to the petitioner, calling upon it to show cause as to why action should not be taken in terms of the dealership agreement. It is stated in the said show-cause notice that MS density variations were found beyond permissible limits (variation of + 0.0035); and that the MS sample failed to meet the specifications in distillation test. The petitioner submitted its explanation, wherein it is stated that they have observed variation in density between the stock in lorry tank and that mentioned in challan; and that the U.G.tank sample was not taken. The petitioner made a request to send the retention sample of MS available with it for comparison with the mother sample available with the supplying point for a test by the appropriate laboratory in the presence of the proprietor of the petitioner. The petitioner specifically requested for informing the time, date and place of testing in advance to enable its proprietor to witness the test. By the impugned order passed on 25-8-2002, the respondents have imposed the above-mentioned penalties on the petitioner. Questioning the said order, the petitioner filed the present Writ Petition. A counter-affidavit was filed by the Additional Divisional Manager of respondent No.1-company, wherein various allegations leveled by the petitioner have been denied. It is reiterated that as the samples taken from the petitioner’s outlet failed the density and distillation tests, the above mentioned penalties have been imposed. At the hearing, Sri C.V.Mohan Reddy, learned Senior Counsel appearing for the petitioner, submitted that as per the Government of India guidelines, the respondents have to follow specific procedure in testing the samples in laboratories. He placed reliance on Guideline Nos.2.4 and 2.5, which, to the extent they are relevant, are reproduced hereunder: “2.4. The sample(s) shall be sent to the Lab., within ten days of drawl. The Laboratory shall carry out tests as specified under enclosure © and make available their reports within ten days of receipt of sample at laboratory. Should sample fail to meet the specification, an explanation of the dealer shall be called for in writing within seven days, giving details of failure and enclosing copies of the test reports. 2.5. Should the dealer choose to get the retention samples tested, the procedure given below would be followed: a) Dealer to send the corresponding retention samples of Retail Outlet tanks and the tank trunk samples to the supply location. b) The supply location in-charge would forward the samples given in 2.5(a) along with corresponding supply location retention sample to the same Oil Industry lab where the original sample was tested, within the time frame stipulated earlier. c) In case the dealer/representative chooses to be present at the time of retesting, the same shall be permitted, with the testing being carried out using duly calibrated equipment. d) … …”. It is not in dispute that in its explanation, the petitioner, while denying the allegation that the samples drawn from its RO failed to meet the tests, made a specific request to send the retention sample available with them for being tested in another laboratory in their presence. For this purpose, the petitioner has requested the respondents to inform the time, date and place of testing to enable them to witness the test. In the impugned order it is stated that the respondents have accepted the petitioner’s request and forwarded the retention sample for retesting at CPCL, Chennai; and that the test result indicated that the sample failed the RON (boiling) test. Neither in the impugned order, nor in the counter-affidavit the respondents have asserted that the retention sample was retested in the presence of the proprietor or representative of the petitioner. As rightly pointed out by the learned Senior Counsel, the guidelines referred to above provide for certain safeguards to the licensees running retail outlets against registering cases on the basis of false allegations. Therefore, the procedure prescribed in the guidelines shall be treated as mandatory. Failure to follow the prescribed procedure leads to arbitrariness. In the present case, the respondents, admittedly, failed to follow this mandatory procedure by purporting to conduct retest with reference to the retention sample collected from the petitioner without prior intimation to it and behind its back. Therefore, the impugned order passed, based on such test report, cannot be sustained in law. The proceedings sheet shows that as a condition for granting interim order, this Court directed the petitioner to deposit Rs.20,000/-. It is stated that the petitioner has already deposited that amount. Though, in strict sense, the petitioner is not liable to pay that amount as the impugned order is held to be unsustainable, in view of the fact that the said amount was paid as far back as August, 2002 and respondent No.1was stated to have been taken over by the Indian Oil Corporation, I find it appropriate to permit the successor company to retain the said amount. It is, however, made clear that retention of the said amount shall not be understood as imposition of penalty on the petitioner. Subject to the above, the impugned order is set aside and the Writ Petition is accordingly allowed. ------------------------------------ C.V.NAGARJUNA REDDY,J Date:18-12-2009 MNR