IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR TUESDAY, THE 4TH JANUARY 2011 / 14TH POUSHA 1932 WP(C).No. 11697 of 2004(P) -------------------------------------- PETITIONER: ------------------- P.HUSSAIN, S/O.HASSANKUTTY, AGED 51 YEARS, HELPER GRADE-I, MAVELI STORE, KARUVANTHURUTHI, FEROKE, KOZHIKODE DISTRICT. BY ADVS. SRI.T.SETHUMADHAVAN, SRI.PUSHPARAJAN KODOTH, SRI.K.JAYESH MOHANKUMAR. RESPONDENTS: ------------------------ 1. THE REGIONAL MANAGER, KERALA STATE CIVIL SUPPLIES CORPORATION LIMITED, REGIONAL OFFICE, INDIRA GANDHI ROAD, KOZHIKODE. 2. THE CHAIRMAN AND MANAGING DIRECTOR, KERALA STATE CIVIL SUPPLIES CORPORATION LIMITED, P.B.NO.2030, MAVELI BHAVAN, GANDHI NAGAR, KOCHI - 682 020. 3. THE SECRETARY, MINISTRY OF PETROLEUM AND NATURAL GAS, GOVERNMENT OF INDIA, NEW DELHI. R1 & R2 BY ADV. SRI.LAKSHMI NARAYAN, S.C, R3 BY SRI.T.P.M.IBRAHIM KHAN,ASST.S.G OF INDIA, SRI. T.K.BIJU, C.G.C. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04/01/2011, ALONG WITH W.P.(C). NOS. 25355 OF 2005 AND 31899/2005, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.11697/2004-P: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE ORDER DT. 28/12/1998 BEARING NO.GSR 772 (E) ISSUED BY THE R.3. EXT.P.2: COPY OF THE MEMO OF CHARGES DTD. 03/05/01 WITH THE STATEMENT OF ALLEGATION ISSUED BY R.1. EXT.P.3: COPY OF THE EXPLANATION SUBMITTED BY THE PETITIONER TO THE R.1. DT. 12/06/2001. EXT.P.4: COPY OF THE ORDER OF THE R.1. DTD. 18/07/2002. EXT.P.5: COPY OF THE APPEAL MEMORANDUM SUBMITTED BY THE PETITIONER BEFORE THE R.2. DT. 31/08/2002. EXT.P.6: COPY OF THE REPORT SUBMITTED BY THE JUNIOR MANAGER (INSPECTION) DT. 22/07/2000. EXT.P.7: COPY OF THE PROCEEDINGS DT. 12/05/2003 ISSUED BY THE R.2. EXT.P.8: COPY OF THE APPEAL MEMORANDUM SUBMITTED BY THE PETITIONER BEFORE THE SECRETARY OF FOOD AND CIVIL SUPPLIES, THIRUVANANTHAPURAM DT. 14/08/2003. EXT.P.9: COPY OF THE COMMUNICATION DT. 20/02/2004 RECEIVED BY THE PETITIONER FROM THE R1.. EXT.P.10: COPY OF THE ORDER DTD. 08/02/2000 PASSED BY THE R.2. EXT.P.11: COPY OF THE CERETIFICATE ISSUED BY THE BHARAT PETROLEUM CORPORATION LTD. DT. 10/07/2002. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE. Prv. T.R. Ramachandran Nair, J. - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) Nos. 11697/2004-P, 25355/2005-R & 31899/2005-V - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 4th day of January, 2011. JUDGMENT All these writ petitions concern a common question and therefore they are disposed of by a common judgment. 2. The petitioners in all these writ petitions are employees of the Kerala State Civil Supplies Corporation, viz. the first respondent. The petitioners were employed in different Maveli Stores run by the Corporation. The Corporation is conducting petrol bunks in different places. The petitioners were deputed during different periods to these petrol bunks. 3. The challenge raised in these writ petitions is against the proceedings issued under various orders, ordering recovery of various amounts as liabilities from the petitioners, stating that the same represents the value of the shortage in the stock of motor spirit and high speed diesel. Exts.P2 to P17 in W.P.(C) No.31899/2005 are the copies of the memo of charges. Exts.P18 to P27 are the explanations to the memo of charges wherein the petitioners explained that the total evaporation loss/handling wpc 11697/04, 25355/05 & 31899/2005 2 loss was within the permissible limits provided in the Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) Ordinance, 1998. Rejecting the contentions of the petitioners, proceedings were issued as per Exts.P28 to P32 which were challenged in appeals Exts.P33 to P39. 4. In W.P.C) No.11697/2004 the final order passed in the proceedings has been produced as Ext.P7 which is an order passed by the Chairman and Managing Director of the Corporation in the appeal filed by the petitioner. Even though the petitioner filed Ext.P8 as a further appeal before the Secretary to Government, the first respondent informed the petitioner that against Ext.P7 order of the second respondent no further appeal is maintainable. 5. Similar orders are under challenge in W.P.(C) No.25355/2005. 6. Heard learned Counsel Shri T. Sethumadhavan appearing for the petitioners, Smt. Renjini, learned counsel appearing for the first respondent Corporation and learned Standing Counsel appearing for the third respondent. 7. Learned counsel appearing for the petitioners submitted that the Central Government, in exercise of the powers conferred by Section 3 of wpc 11697/04, 25355/05 & 31899/2005 3 the Essential Commodities Act, 1995 issued Ext.P1 produced in these writ petitions, viz. the Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) Order, 1998. My attention was invited to the definition of 'dealer' in clause 2(c), 'malpractices' in clause 2(e) and 'stock variation' in clause 2(k) of Ext.P1 order and they are re-produced below: “2(c) “Dealer” means a person appointed by an Oil Company purchase, receive, store and sell motor spirit and high speed diesel whether or not in conjunction with any other business, and shall include representatives/employees or agents. 2(e) “Malpractices” shall include the following acts of omission and commission in respect of motor spirit and high speed diesel: I. adulteration II. pilferage III. stock variation IV. unauthorised exchange V. unauthorised purchase VI. unauthorised sale VII. unauthorised possession VIII. over-charging IX. sale of 0ff-specification products 2 (k) “stock variation” means variation beyond the norms for permissible variation in stocks as given in Schedule II.” wpc 11697/04, 25355/05 & 31899/2005 4 It is pointed out that Schedule II to the said order provides for the norms for stock variation which are permissible and the petitioners never exceeded the said limit. It is therefore contended that as the employees are also covered by the definition of 'dealer', the proceedings taken against them cannot be sustained at all. 8. Exts.P28 to P32 produced in W.P.(C) No.31899/2005 are the orders passed by the authority concerned. Similar orders have been passed in all these writ petitions and the reasoning adopted is the same. The stand taken therein appears to be that the Civil Supplies Corporation comes within the definition of 'dealer' and therefore the benefit of Ext.P1 will available only to the dealer and the petitioners cannot rely upon the same. Significantly, in none of these orders there is a finding that the stock variation is in excess of the permissible limits provided in Ext.P1. 9. Learned counsel for the Corporation invited my attention to the averments contained in the counter affidavit filed in W.P.(C) No.31899/2005, wherein in para 6 it is stated that the petitioners have no right to enjoy the permissible stock variation due to handling loss. Here, the Kerala State Civil Supplies Corporation is the dealer and also the investor. wpc 11697/04, 25355/05 & 31899/2005 5 Hence the profit and loss that may outcome in doing the business shall go to the Corporation. The rate of evaporation/handling loss is the limit admissible all over India including Kerala, where the temperature is at a lower level when compared to the other States in India. It is further mentioned that the paid employees of the Corporation do not come under the definition of the dealer and the evaporation loss/handling loss permissible is not allowable to the employees of the Corporation. It is therefore contended that in the above circumstances, the order was issued to recover the cost of petroleum products found short in the petrol bunks from all the employees equally according to their tenure of job in the bunk. 10. Therefore, the issue to be decided is whether the petitioners will come within the definition of 'dealer' under the order Ext.P1. The definition of 'dealer' therein clearly mentions that it shall include representatives/employees or agents. Therefore, there cannot be any iota of doubt that employees also will come within the definition of 'dealer' in clause 2(c) of Ext.P1 order. It is not the person appointed by the Oil company to purchase, receive, store and sell motor spirit and high speed diesel alone, that is covered by the said definition. The definition of 'malpractices' is contained under clause 2(e) and 'stock variation' is wpc 11697/04, 25355/05 & 31899/2005 6 defined in clause 2(k) which means variation beyond the norms for permissible variation in stocks as given in Schedule II. Therefore, what is important to consider is the meaning of stock variation provided in Schedule II. There is no plea by the Corporation that the stock variation is beyond the permissible limits contained in the schedule. Evidently, as the employees like the petitioners will come within the definition of 'dealer', it is clear that if the stock variation is within the permissible limits in Schedule II, it cannot be a malpractice. Hence, automatically there cannot be any obligation on the part of the petitioners to recoup the alleged loss due to stock variation. In that view of the matter, the stand taken by the Corporation cannot be accepted. 11. Learned counsel for the third respondent also submitted that the order Ext.P1 was in force earlier which was reissued in the year 2005 and the permissible limits provided therein are applicable to dealers, etc. 12. Therefore, the writ petitions are allowed. The impugned orders are quashed. It is pointed out that some of the employees have retired from service. There will be a direction to the Corporation to release the recovered amount from any of the petitioners herein and in respect of the persons who have retired from service, the retirement benefits, if they have wpc 11697/04, 25355/05 & 31899/2005 7 been withheld, due to the pendency of the writ petitions, will be released expeditiously. No costs. (T.R. Ramachandran Nair, Judge.) kav/