IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18-11-2011 CORAM THE HON'BLE MR.JUSTICE N.PAUAL VASANTHAKUMAR W.P.Nos.16275 and 16276 of 2011 and M.P.No.1 and 1 of 2011 R.Baarathi ... Petitioner in both W.Ps. Vs. 1. The Chairman and Managing Directorate Hindustan Petroleum Corporation Limited, No.17, Jamshedji Tata Road, Mumbai 400020 2. The General Manager, Hindustan Petroleum Corporation Limited Thalamuthu Natarajan Buildings, IVth floor Egmore, Chennai 600 008. 3. The Senior Regional Manager, Hindustan Petroleum Corporation Limited, No.A,16/38, Sivaprakasam Road, Anna Nagar, Tennur, Trichy 620 017. 4. The Senior Sales Officer, Hindustan Petroleum Corporation Limited, Namakkal Sales Area, Namakkal. ... Respondents in both W.Ps. Prayer in W.P.No.16275 of 2011: Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorari calling for the records in Inspection report proceedings dated 11.01.2011 on the file of the fourth respondent and quash the same. Prayer in W.P.No.16276 of 2011: Petition filed under Article 226 of the Constitution of India praying to issue a writ of Certiorari calling for the records in Show Cause Notice No.GVN/RET dated 12.02.2011 on the file of the third respondent and quash the same. https://hcservices.ecourts.gov.in/hcservices/ For Petitioner : Mr.K.Kumar (in both petitions) Senior Counsel for Mr.R.Rathna Kumar For Respondents : Mr.Ravi Ananda Padmanabhan (in both petitions) COMMON ORDER In W.P.No.16275 of 2011, the petitioner has prayed to quash the Inspection report dated 11.01.2011 on the file of the fourth respondent and in W.P.No.16276 of 2011, the very same petitioner has challenged the show cause notice issued by the third respondent calling upon the petitioner to show cause as to why action cannot be taken against the petitioner for violations of Clause Nos.27, 28, 38 and 42 of the Dealership agreement. 2. Since the issue raised in both these cases are one and the same and both the writ petitions are filed by the same petitioner, these writ petitions are disposed of by this common order. 3. The facts necessary for disposal of the writ petition are as follows: (a) The Hindustan Petroleum Corporation Limited called for applications from public for Retail Outlet Dealership in MS/HSD for various locations in Tamil Daily Newspaper "Dina Thanthi" dated 25.05.2009 and the retail outlet Sl.Nos.224 falls under the Government of India Marketing Plan of 2009-2010. The petitioner applied for the retail outlet dealership for Thiruchengode on 23.06.2009 and after due process of selection, she was awarded the retail outlet dealership. (b) The petitioner located the said retail outlet by following all the legal requirements and formalities. The Oil Corporation directed the petitioner to enter into a registered agreement of sub- lease on monthly rent of Rs.4,000/- towards the demised premises. The pump and dispensing units were provided by the Oil Corporation and according to the petitioner, the Oil Corporation supplied defective pumps and dispensing units to the petitioner's new retail outlet. (c) According to the petitioner, the first load of the petroleum products were received on 30.07.2010 and the retail outlet was commissioned for sales and supply was effected only on 20.08.2010. During the period from 30.07.2010 to 11.01.2011, the petitioner has received 16 loads of petroleum products namely MS/HSD on different dates through Oil tankers. On 11.1.2011, the petitioner has paid a https://hcservices.ecourts.gov.in/hcservices/ sum of Rs.1,50,015/- through RTGS to the HPCL for a fresh load of petroleum products, which amount is lying with the Oil Corporation to the credit of MSK enterprises. (d) Petitioner alleges that she has not been imparted any practical training nor was furnished with any materials as to the working and running of the business of petroleum products. It is alleged that except for the approval of the leased site, opening of the retail outlet and for carrying out inspections, the officials of the respondent or their agents never visited the retail outlet. (e) It is stated in the affidavit that one transport operator namely, M/s.R.S.Transport service of Velayuthampalayam, Karur, approached the petitioner for credit, as they were in need of bulk petroleum products for consumption. The credit facility was availed by the said operator to the tune of Rs.4,41,596.74. According to the petitioner, from February 2011, the Corporation has not supplied any material. The petitioner also denied signing of dealership agreement with the Petroleum Corporation Limited and the signed copy was also furnished to the petitioner to follow the conditions contained therein. (f) On 10.10.2010, the officials of the Oil Corporation inspected the petitioner's retail outlet and submitted a report stating that civil works, namely (i) Driveway (ii) Toilet (iii) Free Air Service (iv) Sales Room are under construction. The second inspection was carried out on 11.01.2011. In the Inspection report dated 11.01.2011 it is stated by the Officials that Positive stock variation of 5816 Ltrs. in MS was observed, which was beyond the permissible limits. Based on the said report dated 11.1.2001 retail outlet licence was suspended until further orders. (g) The petitioner was directed to submit an explanation within seven days pursuant to which on 24.01.2011, the petitioner submitted a reply and stated the difficulties faced in the dealership business and requested to revoke the order of suspension. The order of suspension was not revoked. A further show cause notice dated 12.02.2011 was issued seeking reply as to why action, as deemed fit, including as provided under Clause No.55(K), cannot be taken against the petitioner for violation of Clause Nos.27, 28, 38 and 42 of the Dealership Agreement. The petitioner, after the receipt of the said show cause notice, sent a letter to the third respondent seeking a copy of the dealership agreement and also prayed for time to file a reply, followed with a reminder dated 08.04.2011. According to the petitioner, the said copy of the agreement was not furnished and the reply also has not been submitted. (h) Challenging the Inspection Report dated 11.01.2011 and the show cause notice dated 12.02.2011, these writ petitions are filed https://hcservices.ecourts.gov.in/hcservices/ contending that without furnishing a signed copy of the agreement calling for objections for violation of various clauses in the agreement is improper, and the automatic suspension of sales by order dated 11.01.2011 is without jurisdiction and the dealership agreement dated 30.07.2010 is not maintainable, and the show cause notice failed to take into account the factors for the delay caused by the respondent, viz., timely and uninterrupted supply of petroleum products, despite the payment for the value of products. It is alleged that the show cause notice was issued based on the unilateral finding of the inspection team without application of mind and is liable to be set aside. 4. The respondent Corporation has filed a counter affidavit contending that the writ petition is pre-mature as the petitioner has rushed to this Court before passing final orders. The petitioner has suppressed the material facts, particularly about the signing of dealership agreement on 30.07.2010. Clause 66 of the dealership agreement, contains a clause seeking reference to arbitration, if there is any dispute. The petitioner can only invoke the arbitration clause, if she is aggrieved and the writ petition is not maintainable. On merits, it is submitted that the petitioner on the basis of her application, appeared for interview on 21.10.2009 and became the first empanelled candidate and she was issued with a letter of intent dated 09.02.2010. The Corporation applied for NOC with the district authorities and after getting the same, which was granted on 21.05.2010, the dealership agreement was signed between the Corporation and the petitioner on 30.07.2010 and the outlet was commissioned on the same day. The functional aspects of operation of outlet were briefed to the dealer at the time of commissioning. Thereafter, inspection was carried out on 10.10.2010 and on 11.01.2011. Various irregularities like positive stock variation of 5816 ltrs. in MS/DSR was found among other deficiencies. Based on that, the impugned letter dated 18.01.2011 was issued, for which, the petitioner submitted a reply on 24.01.2011 and the said reply was found as not satisfactory. The second final show cause notice was issued on 12.02.2011 and the petitioner, instead of submitting explanation has rushed to this Court at the premature stage. 5. The learned Senior Counsel appearing for the petitioner submitted that the petitioner has not signed the agreement dated 30.7.2010 and signature was obtained from the petitioner in the printed format and copy of the agreement said to have been executed on 30.7.2010 was also not furnished and only after the request made, the same is now furnished and therefore breach of clauses contained in the agreement cannot be alleged against the petitioner, particularly when she is a new comer in the field of sale of petroleum products as a retailer. The learned Senior Counsel also submitted that in view of the said facts the show cause notice issued to cancel the dealership itself is not maintainable and the https://hcservices.ecourts.gov.in/hcservices/ petitioner need not go for arbitration as stated in the counter affidavit. The learned counsel also cited few judgments in support of his contention to the effect that if the facts are not in dispute, even if alternate remedy is provided, this Court can entertain the writ petition to quash the impugned order and therefore the impugned orders are liable to be set aside. 6. The learned counsel for the respondents on the other hand submitted that the petitioner is a law graduate practised as an Advocate before being selected as retail dealer and the alleged contention raised that she has not signed the agreement is only an after-thought. It is also argued that only after signing the agreement, any dealer will be permitted to commence the operation. The learned counsel also produced the original agreement signed by the petitioner and Senior Regional Manager, Trichy, dated 30.7.2010 and submitted that if the petitioner is disputing the signature as submitted by the learned Senior Counsel, the same can be established only before the Arbitrator, which is provided under clause 66 of the agreement and she can very well opt for raising the issue before the Arbitrator. The learned counsel also submitted that for the notice dated 18.1.2011 petitioner gave her reply and stated that in order to avoid short supply for critical condition and customer's dismay, the petitioner decided to purchase the MS from the nearby outlet TLUS HP quota at Tiruvannamalai without any mischievous intention and the same is a mistake. The learned counsel submitted that the petitioner having admitted her mistake, cannot now argue that she is not aware of the terms and condition of the agreement. The learned counsel further argued that the impugned order dated 12.2.2011 is only a show cause notice calling for explanation and the petitioner can very well submit her explanation for violation of clauses 27, 28, 38 and 42 of the Dealership agreement. 7. I have considered the rival submissions made by the learned Senior Counsel for the petitioner as well as the learned counsel for the respondents. 8. The point arises for consideration in these writ petitions is whether the writ petitions filed challenging the inspection report dated 11.1.2011 and the show cause notice issued to the petitioner dated 12.2.2011, are maintainable. 9. The only contention emphasised by the learned Senior Counsel appearing for the petitioner is that the petitioner is not aware of the terms and conditions contained in the agreement dated 30.7.2010. On a perusal of the original agreement which was produced before this Court it is evident that the petitioner has signed the agreement and the said signature is not disputed. https://hcservices.ecourts.gov.in/hcservices/ 10. The contention that whether the signature was obtained from the petitioner in a printed format without filling the same and the petitioner has not given consent and signed the agreement are all factual disputes, which cannot be decided in the writ petition. It is well settled in law that if the facts are in dispute, writ petition is not maintainable and the remedy open to the party is to approach the appropriate Civil Court/Arbitration Tribunal to lead evidence and establish the factual aspect. 11. The following judgments can be usefully cited for the proposition of law that disputed questions of facts cannot be agitated in writ proceeding filed under Article 226 of the Constitution of India. In the decision reported in (2006) 4 SCC 501 (P.R.Murlidharan v. Swami Dharmananda Theertha Padar) the Honourable Supreme Court held that jurisdiction under Article 226 would remain effective and meaningful only when it is exercised prudently and in appropriate situation, and writ of mandamus cannot be sought for, especially when determination of the questions involved did not merely involve interpretation of documents alone, but require adducing of oral evidence, and writ proceedings cannot be a substitute for a civil suit. In the decisions reported in AIR 1976 SC 475 : (1976) 1 SCC 292 (Arya Vyasa Sabha and Others v. Commissioner of Hindu Charitable and Religious Institutions & Endowments, Hyderabad and Others); AIR 2003 SC 1060 : (2003) 2 MLJ 49 : (2003) 4 SCC 317 (Rourkela Shramik Sangh v. Steel Authority of India Ltd. And Another); (2001) 7 SCC 1 (Steel Authority of India Ltd. v. National Union Waterfront Workers); (2006) 9 SCC 256 (Himmat Singh v. State of Haryana and Others); (2007) 7 MLJ 687 (Food Corporation of India v. Harmesh Chand); 2005 (5) CTC 695 (SC) (S.D.O.Grid Corporation of Orissa Ltd. v. Timudu Oram); (2011) 2 SCC 782 (Kanaiyalal Lalchand Sachdev v. State of Maharashtra) etc., also the Honourable Supreme Court held that disputed facts cannot be decided in writ petition and parties can approach the appropriate forum. In the decisions reported in (1976) 2 SCC 167 (Bisra Lime Stone Co. v. Orissa State Electricity Board) and (1996) 6 SCC 22 (State of U.P. v. Bridge & Roof Company (I) Ltd.) it was held that if the parties are having a right to go for arbitration, that is a good ground not to entertain the writ petition under Article 226 of the Constitution of India. 12. The decision cited by the learned Senior Counsel for the petitioner reported in 2010 WLR 624 (M/s.Hindustan Petroleum Corporation Ltd. & Another v. Geetha Kasturirangan & Others) (DB) is clearly distinguishable. In the said case, violation of mandatory procedure in not sending the samples to the Lab was noticed and the termination of dealership, quashed by the learned single Judge, was upheld. In W.A.No.731 of 2006 dated 20.6.2006 (DB) (Indian Oil Corporation Ltd. v. Bommai Kadhirvelu & Others) entertaining writ petition was upheld on the ground that the dealership was terminated https://hcservices.ecourts.gov.in/hcservices/ on the basis of non-existent grounds by following the judgment of the Supreme Court reported in 2003 (1) CTC 189 (Harbanslal Sahnia v. Indian Oil Corporation Ltd) (SC). In this case there is a factual dispute about the signing of dealership agreement between the petitioner and Oil Corporation as well as service of a copy of the dealership agreement. 13. I had an occasion to consider similar issue in the decision reported in 2011 (2) CWC 593 (Sangeeth Textiles Ltd. v. Cotton Corporation of India Limited) and declined to entertain the writ petition on the ground that the disputed questions of fact and availability of alternate remedy of moving for arbitration. 14. In the explanation submitted to the suspension order dated 24.1.2011 petitioner has admitted her mistake and she has only stated that the mistake is neither wilful nor intentional and she being first time dealer, she is not well-versed with the business dealings and she has pleaded for showing compassion and to revoke the suspension order. The said aspect has to be decided only by the respondent Corporation and this Court is not competent to decide the said issue in this writ petition. 15. For the foregoing reasons and in the facts and circumstances of this case, I am of the firm view that these writ petitions are not maintainable and the writ petitions are liable to be dismissed and accordingly dismissed as not maintainable. Petitioner is granted two weeks time to give explanation to the show cause notice, if she has not submitted reply as on date. If the petitioner is not willing to submit explanation and pursue her contention as contended in these writ petitions, it is open to the petitioner to approach for appointing an Arbitrator as contained in Clause 66 of the agreement dated 30.7.2010. The writ petition is dismissed with the above observation. No costs. Connected miscellaneous petitions are also dismissed. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar Vr https://hcservices.ecourts.gov.in/hcservices/ To 1. The Chairman and Managing Directorate Hindustan Petroleum Corporation Limited, No.17, Jamshedji Tata Road, Mumbai 400020 2. The General Manager, Hindustan Petroleum Corporation Limited Thalamuthu Natarajan Buildings, IVth floor Egmore, Chennai 600 008. 3. The Senior Regional Manager, Hindustan Petroleum Corporation Limited, No.A,16/38, Sivaprakasam Road, Anna Nagar, Tennur, Trichy 620 017. 4. The Senior Sales Officer, Hindustan Petroleum Corporation Limited, Namakkal Sales Area, Namakkal. 2 CCs to Mr.R.Rathnakumar, Advocate, SR.70676 and 70675 1 CC to Mr.K.Ravi Anantha Padmanaban, Advocate, SR.70774 W.P.NOs.16275 & 16276/2011 EV(CO) SRA(22/11/2011) https://hcservices.ecourts.gov.in/hcservices/