IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 13TH JULY 2011 / 22ND ASHADHA 1933 WP(C).No. 2231 of 2007(N) --------------------------------------- PETITIONER(S): ------------------------- V.P. ABDUL RAHIMAN, MANAGING PARTNER, M/S. HAJEE M.BAVOOTTY, INDIAN OIL DEALER, KOZHIKODE. BY ADVS. SRI.T.S.RADHAKRISHNA PILLAI, SRI.T.R.RAJEEV. RESPONDENT(S): --------------------------- 1. THE DISTRICT COLLECTOR, KOZHIKODE. 2. THE DISTRICT SUPPLY OFFICER, KOZHIKODE. 3. SR.DIVISIONAL RETAIL SALES MANAGER, INDIAL OIL CORPORATION LTD., KOZHIKODE DIVISIONAL OFFICE, FEROKE, KOZHIKODE. R1 & R2 BY GOVERNMENT PLEADER SRI. ANTONY MUKKATH R3 BY ADV. SRI.A.M.SHAFFIQUE, SENIOR ADVOCATE, BY ADV. SRI.E.K.NANDAKUMAR, SRI.A.K.JAYASANKAR NAMBIAR, SRI.ANIL D. NAIR. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 13/07/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.2231/2007 N APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF LETTER DTD. 13/01/07 ISSUED BY 3RD RESPONDENT. P2: COPY OF LETTER DTD. 16/01/07 OF PETITIONER TO THE 3RD RESPONDENT. P3: COPY OF DIRECTION ISSUED BY LEGAL METROLOGY DEPARTMENT. P4: COPY OF CERTIFICATE ISSUED BY AUTHORITIES AFTER STAMPING THE EQUIPMENTS. P5: COPY OF REPORT DTD. 21/12/06 IN ANNEXURE III. P6: COPY OF CERTIFICATE ISSUED BY SAFE INDIA MARKETING SERVICE DTD. 23/12/06. P7: COPY OF PROCEEDINGS NO.CS.1.108/07 DTD. 16/1/07 OF 2ND RESPONDENT. P8: COPY OF LETTER DTD. 20/01/07 OF 3RD RESPONDENT. P9: COPY OF LETTER DTD. 19/02/07 ISSUED BY 3RD RESPONDENT. RESPONDENT'S EXHIBITS: R3(A): COPY OF THE ORDER DTD. 20/01/2007 PASSED BY THE 3RD RESPONDENT. /TRUE COPY/ P.A.TO JUDGE Kss S.SIRI JAGAN, J. ================== W.P.(C).No. 2231 of 2007 ================== Dated this the 13th day of July, 2011 J U D G M E N T The petitioner is an agent of Indian Oil Corporation and a keresone dealer appointed under the Keresone Control Order, 1966. The 3rd respondent conducted an inspection of the petitioner's business premises on 13.1.2007 and found out certain irregularities and issued Ext.P1 notice to the petitioner directing the petitioner to explain the discrepancies referred to therein. By Ext.P2, the petitioner submitted an application out of which in respect of the second discrepancy there was no valid explanation to the satisfaction of the 3rd respondent. Therefore, by Ext.R3(a) order, the 3rd respondent imposed on the petitioner fine of ` 25,000/- and suspension of supplies for 15 days. Subsequently, the petitioner was issued with Ext.P7 order by the 2nd respondent, wherein the authorisation issued to the petitioner was suspended for the very same reasons mentioned in Ext.P1. It is under the above circumstances, the petitioner has filed this writ petition seeking the following reliefs; “(i) to call for the records leading to Exts.P1 and P7 and quash the same by issue of a writ of Certiorari or other appropriate writ, direction or order; (ii) to issue a writ of Mandamus directing Respondents 2 and 3 to restore the K.W.D. by ordering Status Quo Ante as on 13.1.07.” 2. The 3rd respondent has filed a counter affidavit, wherein it w.p.c.2231/07 2 is submitted that Ext.P2 explanation furnished by the petitioner to Ext.P1 was considered and the 3rd respondent, by Ext.R3(a), a fine of ` 25,000/- and suspension of sales and supply for 15 days were imposed on the petitioner for the irregularities found out. According to the 3rd respondent, the petitioner himself admitted in the explanation that he was guilty of the second discrepancy mentioned in Ext.P1. 3. I have considered the rival contentions in detail. 4. Ext.P1 reads thus: “This has reference to the inspection carried out by the undersigned on date. The following discrepancies were observed: 1. Inadequate fire protection system – Working on totally unsafe condition. 2. Valid Legal Metrology Certificates not available for the measuring equipments. 3. Physical stock is not tallying with the book balance. Phy. Stock 200 lts. against book balance of 547 lts. The above discrepancies are of very serious in nature and are punishable under MDG 2005. Appendix III s.l.No.1 and 5. You are requested to give your explanation within 7 days from this date for the above discrepancies. We are suspending the sales and supplies to you with immediate effect and the final decision will be taken after receipt of your reply.” Ext.P2 is the explanation of the petitioner, which reads thus: “Kind attention is invited to the cited, intimating some of the alleged irregularities noticed in the SKO Depot, during the inspection conducted on 13.01.07, and calling for our explanation in the matter. Our detailed explanation on the various defects alleged are offered as follows:- (i) Inadequate Fire Protection system: We are to submit that on the time of inspection there were Four Red Painted Fire Buckets filled w.p.c.2231/07 3 with sand and Two numbers of fire extinguishers one with DCP and one with liquid form in working condition. Further as instructed by you, we made the necessary changes, the fire protection system has been completely overhauled by approved servicing agents 'Safe India Marketing Services' and kept it in our godown. A copy of the letter issued by the agency is enclosed. The fire Extinguishers have been replaced with powder form as per the directions and exhibited properly. In the circumstances it may kindly be seen that the depot is now working in a totally sale condition. (ii) Valid legal Metrology certificate for Measuring equipments:- The Measuring equipments were produced in the Legal Metrology Office for stamping two or three times and they have been giving dates and extension dates owing to their official engagements. On last Dec.30, we were asked to bring the equipments on 05.01.07, and this date was extended again to 17th. However, in order to comply with your directions, we have re-placed the entire measuring materials with new ones, on the date of inspection that is 13.01.2007 itself. All of them are stamped and new ones. Since the delay occurred was not intestinal and as we have complied with the directions the mistake occurred may be pardoned. We will guard against all such lapses in further. (iii) Difference in physical stock and book balance: According to the inspection note, it is pointed out that though the book balance of Kerosene Oil in the depot was 547 liters, the physical balance was 200 liters only. The reason for this difference is explained as follows: According to the system in force for more that last 40 years the Kerosene wholesale dealers are entitled for leakage @ 1% on the total sales and stock. This leakage is allowed by the Civil Supplies Department in their price fixation statement also. According to the standing instructions of the Government of Kerala and Food and Civil Supplies Department we are not entitled to reduce the leakage every day after sales. The inspecting Officers of the Department alone are competent to reduce the quantity at the time of inspection, after physical verification. If no inspection is conducted the leakage admissible is reduced by the month end in the total abstract and got attested by the Taluk Supply Office concerned. The method of inspection of stock by departmental officer are as follows: i. Opening stock at the time of inspection (Book Balance) ii. Total sales from 1st of the month (or previous inspection) Till inspection. iii. Book balance. iv. Physical Stock in verification. w.p.c.2231/07 4 v. Admissible leakage on sales. vi. Difference if any. (If there is difference in physical stock with that of the stock assessed after allowing leakage – action is initiated by the Civil Supplies Department). In this case, we are explaining our position as follows: Open stock of SKO on 01.01.2007 47 Ltrs. Total receipts in Jan. 2007 till the time of inspection 36000 Ltrs. Total 36047 Ltrs Total issues from 1.7.07 to 13.01.07 35500 Ltrs Book Balance on 13.01.07 547 Ltrs . Leakage admissible @ 1% on 35500 Ltrs. 355 Ltr. Physical stock to be found after separating the leakage 547 – 355 = 192 Ltrs. Actual physical stock found = 200 Ltrs. The difference comes to only 8 Ltrs., which is only marginal and excusable in respect of a wholesaler. From the above explanation it may kindly be seen that the actual difference in stock was only 8 Ltrs. Which is only a marginal one. The leakage element allowed by Government was not taken into account and hence the difference (Photocopy of our monthly abstract signed by Taluk Supt. Officer, Kozhikode for the last 6 months is enclosed for kind perusal, which shows the admission of leakage of allowance). In the circumstances explained above, it may kindly be seen that defects as per item 1 and 2 have already been rectified and the stock difference alleged is not correct. Considering these aspects and the circumstances of the case, we most humbly request you not to take any action against us, and request you to revoke the suspension of sales and supplies ordered on us with immediate effect. Kindly note that we were in the PDS SKO field over since the inspection (sic) of Rationing in Kerala, and we have got a good and appreciable service record with IOC and C.S Department as well.” From the same itself it is evident that the petitioner has admitted the second discrepancy, for which only the punishment has been w.p.c.2231/07 5 imposed on the petitioner. This Court passed an interim order on 23.2.2007, which reads as follows: “A counter affidavit is placed on record. It is directed that if the petitioner remits the fine due, he will be permitted to continue in the operation, subject to the result of this writ petition. Such demand and payment will be without prejudice to contentions in the writ petition. The fine shall be paid on or before 27.2.2007.” In view of the said order and my findings above, the petitioner is not entitled to any further relief in the matter. Therefore, the writ petition is disposed of in terms of the interim order dated 23.2.2007. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge