Letters Patent Appeal No.349 OF 2007
(In the matter of an Appeal Under Clause 10 of the Letters
Patent of the High Court of Judicature at Patna. )
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1. THE BHARAT PETROLEUM CORPORATION LTD through its
Chairman cum Managing Director, Bharat Bhawan, 4 & 6
Currimbhoy Road, Ballard Estate, P.B. No. 688 Mumbai- 4000011.
2. The General Manager, Bharat Petroleum Corporation Limited,
Gulam Sah Anwar Road, Kolkata
3. The Area Marketing Manager, Bharat Petroleum Corporation
Limited, Ashiyana Chamber, 4th Floor, Exhibition Road, Patna
4. The Territory Manager (Retail Outlet), Bharat Petroleum Corporation
Ltd. Patna P.O.- Pakari Via- Anisabad, Patna- 800002.
—Appellants (Respondents)
Versus
M/S SINGH SERVICE STATION through its Partner Sri Braj
Nandan Singh, Son of Late Ramchandra Singh, resident of Village-
Mukundpur, P.S.-Ekma, District- Saran
———-Respondent (Petitioner)
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For the Appellant :- Mr. Sanjay Singh, Adv.
Mr. Sanjeev Kr. Singh, Adv.
For the Respondent :- Mr. Y.V. Giri, Sr. Adv.
Mr. Anil Kr. Sinha, Adv.
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PRESENT
THE HON’BLE MR. JUSTICE NAVIN SINHA
THE HON’BLE MR. JUSTICE DINESH KUMAR SINGH
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Navin Sinha & Heard learned counsel for the appellant and
Dinesh Kumar
Singh, JJ, learned counsel for the respondent.
I.A. No. 3862 of 2010 has been filed by the
appellants for substituting the original writ petitioner
Brajnandan Singh who is stated to have been deceased
on 17.1.2009, by his legal heirs and other partners of
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the dealership firm. The deceased had earlier been
authorized by the other partners to pursue matters
before this Court on behalf of the partnership.
Having considered the submissions on behalf of
the parties, the I.A. application is allowed.
M/s Singh Service Station a partnership firm is
a dealer of the petroleum products of the appellant. On
13.10.2006 an inspection was carried out at the petrol
pump located at Ekma in the district of Saran (Chapra).
The weights and measure unit seal was found tampered
delivering short supply of high speed diesel by 100 ml in
every five litres from dispensing unit no. 3. The totaliser
seal of high speed diesel unit no. 2 was found broken
delivering short by 120 ml in five litres. The connecting
rod of high speed diesel dispensing unit- 1 was found
loose. The connecting rod of motor spirit dispensing
unit-1 was found loose and the motor spirit dispensing
unit-2 was delivering short by 180 ml in five litres. The
inspection report directed the dealer to suspend
supplies of motor spirit and high speed diesel oil till re-
verification of weights and measure in presence of the
company officials. A sample of the product was taken
from the underground tanks for laboratory test. The
inspection report stated that no retention sample was
available at the petrol pump as the reference sample of
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the tank lorry was not retained.
The motor spirit sample failed to meet the
standards in laboratory test.
A show cause notice was issued to the
respondent, duly replied, after which the dealership was
terminated by order dated 20.12.2006 and which was
assailed by the respondent in C.W.J.C. No. 692 of 2007.
The writ application was allowed holding that
under the Marketing Discipline Guidelines a container
box was required to be supplied by the company to the
dealer for retaining the tank lorry reference samples and
which had not been done. On the reasoning, that the
company failed to provide the container box and in
absence of availability of reference sample it could not
be held that adulteration had taken place at the petrol
pump only. Noticing the submission that there had
been no allegations in a long dealership termination was
held to be harsh without an opportunity to mend ways.
Learned counsel for the appellant submitted
that the respondent has admitted the tampering and
breaking of the totaliser seal and tampering of the
weights and measure meter unit seal as noticed in
paragraph 6 of the judgment. Likewise, the loose
connecting rods are also admitted as noticed in
paragraph 7 of the judgment. The defence of an
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inadvertent break of the seals during Diwali was
considered and rejected by the appellant. Once the
charge stood admitted nothing further was required to
be proved. To maintain these was the responsibility of
the dealer under the contract agreement, Marketing
Discipline Guidelines. The breakage of the seal was a
ground for termination of dealership under the
Marketing Discipline Guidelines. The container box had
been supplied to all dealers and it was for the
respondent to prove that it had not been supplied to
him. It was the responsibility of the dealer under the
Marketing Discipline Guidelines Clause 2.5 (f) to make
available the reference sample for test at a later stage.
The motor spirit sample collected has failed the
laboratory test. The termination was therefore in
accordance with law.
Counsel for the respondent strenuously urged
that in absence of a container box having been supplied,
a cross reference with the quality of the product
supplied by the appellant and that collected from the
underground tank it could not be said with certainty
that the appellant had not failed to supply quality
product.
Reliance was placed on Clause 2.6 of the
Marketing Discipline Guidelines to urge that it was the
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obligation of the company to supply the container box.
Reliance was further placed on a judgment of the
Supreme Court in (2010) 3 SCC 321 (Hindustan
Petroleum Corporation Limited And Others VS.
Super Highway Services and Another) at paragraph
31 which reads as follows:-
” The cancellation of dealership
agreement of a party is a serious business
and cannot be taken lightly. In order to
justify the action taken to terminate such
an agreement, the authority concerned has
to act fairly and in complete adherence to
the rules/guidelines framed for the said
purpose. The non-service of notice to the
aggrieved person before the termination of
his dealership agreement also offends the
well-established principle that no person
should be condemned unheard. It was the
duty of the petitioner to ensure that
Respondent 1 was given a hearing or at
least serious attempts were made to serve
him with notice of the proceedings before
terminating his agreement.”
We have considered the respective submission
of the parties.
The case of Super Highway Services (supra)
relied upon by the respondent is distinguishable on its
own facts. It related to violations of procedures of
natural justice. Such is not the case presently.
This Court, in matters as the present is not
concerned with the final decision but with the decision
making process.
Section 58 of the Indian Evidence Act, 1972
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provides that facts admitted need not be proved. Once
the respondent admits the giving of a show cause and
reply to the same, combined with that the totaliser seal
was broken and the weights and measure meter unit
seal was tampered, the connecting rods were loose, and
the explanation of inadvertent breakages and wear and
tear respectively, has been disbelieved by the appellant
on facts, there is no occasion for this Court to interfere
with such decision in the writ jurisdiction. The matter
pertains to a contractual relationship and actions taken
under the dealership agreement, marketing discipline
guidelines cannot be classified as arbitrary.
The petitioner contends that one day prior to
the inspection i.e., on 12.10.2006 he had allegedly
intimated to the weights and measures department that
the seals were broken and tampered and claims to have
suspended sales the same day. On the contrary, the
inspection report dated 13.10.2010 states that the
dealer was directed to suspend sale. If he had already
stopped sales as is contended on his behalf, there was
no occasion for the inspection team to direct him to
suspend sales. If he had in fact actually suspended
sales on 12.10.2006, it was for him to prove the same
from the totaliser reading of the sales figures on
12.10.2006 with the totaliser reading at the time of
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inspection on 13.10.2006 that there had been no sale.
These were all issues of facts for which the foundation
had to be laid by the respondent himself.
The law stands well settled that if an order be
severable between the good part and the bad part, and
the bad part of the order can be set aside without
interfering with the good part, it would not vitiate the
whole order unless the two parts of the order were
inextricably connected and incapable of separation.
In the present case, the allegations of broken
totaliser seal, tampered weights and measures unit seal
and loose connecting rod stands admitted. There were
admittedly violations of the Marketing Discipline
Guidelines and the dealership agreement. The former
rendered the dealership liable to termination. Whether a
container box has been supplied or not and the quality
of product supplied by the appellant loose their
relevance. If the termination is sustainable on the
earlier three grounds it will not be vitiated for
uncertainty on the fourth ground. This Court has
already held that there is no material to demonstrate
that the respondent had stopped sales after the seals
were tampered or the connecting rods became loose.
His defence that the damage to the seals took place
during cleaning on the occasion of Diwali is purely an
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afterthought. Diwali fell on 21.10.2006. The allegations
are on 13.10.2006. His defence raises more questions
than its answers. It is common knowledge that such
cleaning in accordance with Hindu ritual is done on the
day of Diwali or at best a day or two earlier.
The Supreme Court in AIR 1972 Supreme
Court 32 “Channabasappa Basappa Happali vs. State of
Mysore) considering a challenge to punishment on
admitted charges in a departmental proceedings held in
the relevant extract of Paragraph-5 as follows:-
“5. ………….The Police constable
here was not on his trial for a criminal offence.
It was a departmental enquiry, on facts of
which due notice was given to him. He
admitted the facts. In fact his counsel argued
before us that he admitted the facts but not
his guilt. We do not see any distinction
between admission of facts and admission of
guilt. When he admitted the facts, he was
guilty …………”
The impugned order dated 2.4.2007 is set
aside. The appeal stands allowed.
Patna High Court (Navin Sinha, J.)
Dated 20th of April 2010
P. Kumar/NAFR
(Dinesh Kumar Singh, J.)