{"id":115570,"date":"2009-01-14T00:00:00","date_gmt":"2009-01-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/ms-janatha-trading-company-vs-indian-oil-corporation-ltd-on-14-january-2009"},"modified":"2019-02-04T23:06:24","modified_gmt":"2019-02-04T17:36:24","slug":"ms-janatha-trading-company-vs-indian-oil-corporation-ltd-on-14-january-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/ms-janatha-trading-company-vs-indian-oil-corporation-ltd-on-14-january-2009","title":{"rendered":"M\/S.Janatha Trading Company vs Indian Oil Corporation Ltd on 14 January, 2009"},"content":{"rendered":"
Kerala High Court<\/div>\n
M\/S.Janatha Trading Company vs Indian Oil Corporation Ltd on 14 January, 2009<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nOP.No. 22544 of 2002(H)\n\n\n1. M\/S.JANATHA TRADING COMPANY,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. INDIAN OIL CORPORATION LTD.,\n                       ...       Respondent\n\n2. THE DEPUTY GENERAL MANAGER (MARKETTING)\n\n3. THE SENIOR DIVISIONAL MANAGER\n\n                For Petitioner  :SRI.K.JAJU BABU\n\n                For Respondent  :SRI.E.K.NANDAKUMAR\n\nThe Hon'ble MR. Justice S.SIRI JAGAN\n\n Dated :14\/01\/2009\n\n O R D E R\n                                S. Siri Jagan, J.\n                =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-=\n                          O.P. No. 22544 of 2002\n                =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=\n                  Dated this, the 14th January, 2009.\n\n                               J U D G M E N T\n<\/pre>\n
      Petitioner is a dealer of the 1st respondent-Oil Company for sale<\/p>\n
of    petroleum products          manufactured       by the 1st respondent<\/p>\n
Company. By Ext. P1, the petitioner was directed to show cause why<\/p>\n
action should not be taken against the petitioner under the dealership<\/p>\n
agreement\/Marketing Discipline Guidelines, on account of the<\/p>\n
samples taken by the Anti Adulteration Cell from the retail outlet of<\/p>\n
the petitioner having tested negative in quality. The petitioner filed<\/p>\n
Ext. P2 reply to the same in which, inter alia, he requested that the<\/p>\n
tank lorry sample and retention sample from the supply point in<\/p>\n
respect of the product supplied to the petitioner also may be<\/p>\n
subjected to lab test and compared             with the test report of the<\/p>\n
sample taken from the retail outlet on 19-1-2002, before taking any<\/p>\n
further action. In the same, he also requested for a re-test of the<\/p>\n
sample taken from the outlet. Although, by Ext. P4, re-test of the<\/p>\n
second sample taken from the petitioner’s outlet was ordered, the<\/p>\n
other request of the petitioner to subject the sample from the tanker<\/p>\n
lorry and the supply point to lab test was not acceded to.          Thereafter,<\/p>\n
by Ext. P6, the dealership agreement with the petitioner was<\/p>\n
terminated on the ground that the petitioner was found guilty of<\/p>\n
adulteration of the petroleum products supplied to them on the basis<\/p>\n
of the test report forwarded by the Anti-Adulteration Cell.                The<\/p>\n
petitioner is challenging Ext. P6 in this original petition and seeking<\/p>\n
the following reliefs:\n<\/p>\n<\/p>\n
      “i)    Issue a writ of certiorari or other appropriate writ, order or
\n      direction, calling for the records leading to Ext. P6 and quash the
\n      same;\n<\/p><\/blockquote>\n
O.P. No. 22544\/2002                   -: 2 :-<\/span><\/p>\n
      ii)    direct the respondents to restore the dealership and supply
\n      and sales to the petitioner’s retail outlet forthwith;\n<\/p><\/blockquote>\n
      iii)   stay the operation of Ext. P6 and restore supply and sales to
\n      the petitioner’s retail outlet, pending disposal of the original
\n      petition.”<\/p><\/blockquote>\n
      2. The contention of the petitioner is that the action against the<\/p>\n
petitioner being under Marketing Discipline Guidelines, a copy of<\/p>\n
which has been produced as Ext. P8, the procedure prescribed in Ext.<\/p>\n
P8 should also be complied with before finding the petitioner guilty.<\/p>\n
He points out that the Marketing Discipline Guidelines contemplated<\/p>\n
testing of three samples, namely, the sample drawn from the outlet,<\/p>\n
sample taken from the tanker lorry and the samples kept at the supply<\/p>\n
point in respect of the particular supply to the dealer through the<\/p>\n
tanker lorry and compare the results of all the three before a dealer<\/p>\n
can be found guilty of adulteration. According to him, in this case,<\/p>\n
only one sample has been tested, that was from the outlet alone.<\/p>\n
There is no comparison of the results of the tests of the other two<\/p>\n
samples in this case. But, he frankly admits that in so far as the<\/p>\n
tanker lorry sample kept by him was not properly sealed, he cannot<\/p>\n
now validly claim that the test results of the tanker lorry sample<\/p>\n
should also be compared with now.                 But he    submits that  the<\/p>\n
respondents were bound to compare the test results of the supply<\/p>\n
location sample with the test result of the sample from the outlet<\/p>\n
before the petitioner can be found guilty under the Marketing<\/p>\n
Discipline Guidelines.\n<\/p>\n
      3. The prayers of the petitioner are stoutly opposed by the<\/p>\n
learned standing counsel for the respondents with the help of a<\/p>\n
counter affidavit and an additional counter affidavit filed in this case.<\/p>\n
The contention of the respondents is that the action taken against the<\/p>\n
petitioner is not under the Marketing Discipline Guidelines.              The<\/p>\n
O.P. No. 22544\/2002              -: 3 :-<\/span><\/p>\n
inspection of the petitioner’s outlet and drawing of samples were by<\/p>\n
the Anti Adulteration Cell under the Motor Spirit and High Speed<\/p>\n
Diesel (Regulation of Supply, Distribution and Prevention of<\/p>\n
Malpractices) Order, 2005, which is the successor of the earlier order<\/p>\n
of 1998. According to counsel for the respondents, the said order<\/p>\n
does not contemplate testing of the supply location sample as<\/p>\n
provided in the Marketing Discipline Guidelines.              The Anti<\/p>\n
Adulteration Cell team inspected the petitioner’s outlet, took samples<\/p>\n
from the petitioner’s outlet, tested the same, found it to be negative<\/p>\n
for quality and forwarded it to the respondents for appropriate action<\/p>\n
under the Marketing Discipline Guidelines.       Since the test result<\/p>\n
proved that there was adulteration in the sample, Ext. P1 show cause<\/p>\n
notice was issued and after considering the contentions of the<\/p>\n
petitioner and taking into account the fact that earlier also, the<\/p>\n
petitioner was found guilty of adulteration of LDS on 13-10-2001, the<\/p>\n
dealership agreement with the petitioner was terminated. According<\/p>\n
to learned counsel for the respondents, the procedure prescribed<\/p>\n
under the Marketing Discipline Guidelines is not applicable to the<\/p>\n
action initiated by the Anti Adulteration Cell under the order<\/p>\n
mentioned above. The said order prescribes a separate procedure of<\/p>\n
sampling and testing and the Anti Adulteration Cell is expected to<\/p>\n
follow only that procedure and following that procedure, the test<\/p>\n
results of the samples from the petitioner’s outlet was forwarded to<\/p>\n
the respondents, on which action was taken. According to counsel,<\/p>\n
once the Anti Adulteration Cell forwards the results, the respondents<\/p>\n
are expected only to take further action on the basis of that report and<\/p>\n
further there is no question of complying with any other procedure<\/p>\n
prescribed under the Marketing Discipline Guidelines.        He further<\/p>\n
submits that this Court, in the decision in     Pratheesh Fuels       v.<\/p>\n
O.P. No. 22544\/2002              -: 4 :-<\/span><\/p>\n
Indian Oil Corporation, 2002(1) KLJ 186 held that even principles<\/p>\n
of natural justice have to be subservient to public interest as the well<\/p>\n
being of citizens are the ultimate aim of the regulations. He points<\/p>\n
out that the entire action taken by the respondents is for the purpose<\/p>\n
of   ensuring that the interests     of the citizens are protected and<\/p>\n
therefore public interest demands that for non-compliance with any<\/p>\n
procedure under the Marketing Discipline Guidelines, if at all<\/p>\n
applicable, which itself is   disputed, the petitioner should not be<\/p>\n
absolved of the misconduct committed by him in selling adulterated<\/p>\n
fuel to the public.\n<\/p>\n
      4. Counsel for the petitioner points out that the reliance on the<\/p>\n
2005 order itself is misplaced in so far as the sampling in this case<\/p>\n
was on 19-1-2002 at which time what was applicable was the 1998<\/p>\n
order, which did not even contemplate forwarding of any test report<\/p>\n
by the Anti-Adulteration Cell to the respondents for any action under<\/p>\n
the Marketing Discipline Guidelines and as such the contention of the<\/p>\n
respondents that they are bound to accept the test result forwarded<\/p>\n
by the Anti-Adulteration Cell itself cannot be accepted at all.<\/p>\n
      5. I have considered the rival contentions in detail.<\/p>\n
      6. From Ext. P2 reply of the petitioner to Ext. P1 notice, I find<\/p>\n
that immediately on receipt of Ext. P1 show cause notice itself, the<\/p>\n
petitioner had submitted Ext. P2, in which there was a categoric<\/p>\n
request that the tank lorry sample and supply point samples should be<\/p>\n
subjected to test and its report should be compared with the test<\/p>\n
report of the outlet sample.     It is not disputed before me by the<\/p>\n
respondents that the supply location sample had not been tested and<\/p>\n
compared with the test report forwarded by the Anti Adulteration Cell<\/p>\n
to the respondents.      It is also not disputed before me by the<\/p>\n
respondents that in Ext. P8 Marketing Discipline Guidelines, a<\/p>\n
O.P. No. 22544\/2002                  -: 5 :-<\/span><\/p>\n
procedure of comparing the test result of the outlet sample with the<\/p>\n
supply location sample is contemplated before action is taken under<\/p>\n
Marketing Discipline Guidelines. If the respondents themselves had<\/p>\n
initiated the proceedings against the petitioner under the Marketing<\/p>\n
Discipline Guidelines, they could not have found the petitioner guilty,<\/p>\n
unless they compared the test result of the outlet sample with the<\/p>\n
supply location sample and found that both of them tallied.<\/p>\n
      7.       Ext.   R3(b)   produced      by   the   respondents     is the<\/p>\n
communication from the Anti Adulteration Cell to the respondents<\/p>\n
which reads thus:\n<\/p>\n<\/p>\n
      “This has reference to the inspection carried out at your Retail
\n      Outlet, Janatha Trading Co., Vadakkencherry, Palghat Dist., Kerala
\n      on 19.01.2002.\n<\/p><\/blockquote>\n
      We are enclosing herewith the copies of the test reports of
\n      MS\/HSD samples drawn from the RO. HSD sample drawn failed
\n      in distillation test. Therefore, necessary action may be taken as
\n      per MDG-2001.\n<\/p><\/blockquote>\n
      Kindly confirm action taken to DG, AAC, New Delhi with a copy to
\n      us.”\n<\/p><\/blockquote>\n
                                              (Underlining supplied)<\/p>\n
Therefore, what was under contemplation by the Anti Adulteration<\/p>\n
Cell was further proceedings as per Marketing Discipline Guidelines,<\/p>\n
2001. In fact, Ext. P1 show cause notice was issued to the petitioner<\/p>\n
for action as per the dealership agreement\/Marketing Discipline<\/p>\n
Guidelines.<\/p><\/blockquote>\n
      8. In this connection, it must be noted that the supply location<\/p>\n
sample is to be mandatorily preserved by the respondents themselves<\/p>\n
in respect of every supply made from the supply location to the<\/p>\n
dealers.    That sampling could not have been done by the Anti<\/p>\n
O.P. No. 22544\/2002               -: 6 :-<\/span><\/p>\n
Adulteration Cell for obvious reasons.      Therefore, when the Anti<\/p>\n
Adulteration Cell forwarded the test result of the outlet sample for<\/p>\n
further action under the Marketing Discipline Guidelines, I am of<\/p>\n
opinion that such action could have been completed only after<\/p>\n
following the      procedure prescribed in the Marketing Discipline<\/p>\n
Guidelines for action by the respondents themselves, if they had<\/p>\n
initiated action before the petitioner could have been found guilty of<\/p>\n
any adulteration. One of the conditions mentioned in the Marketing<\/p>\n
Discipline Guidelines, Ext. P8, admittedly, is that the supply location<\/p>\n
sample test results have to be compared with the test result of the<\/p>\n
outlet sample. In spite of repeated assertion by the counsel for the<\/p>\n
respondents that in so far as the 2005 order or the 1998 order does<\/p>\n
not contemplate such a procedure, I am unable to accept that<\/p>\n
contention in view of the fact that the respondents could not have<\/p>\n
taken any action against the petitioner except under the Marketing<\/p>\n
Discipline Guidelines. In fact, in this connection, the contention of the<\/p>\n
petitioner that what was applicable was not the 2005 order but the<\/p>\n
1998 order, which did not even contemplate forwarding of the test<\/p>\n
result by the Anti-Adulteration Cell to the respondents for any action,<\/p>\n
but, only contemplated prosecution by the Anti-Adulteration Cell by<\/p>\n
themselves, which the Anti-Adulteration Cell had not chosen to do in<\/p>\n
this case. Therefore, admittedly, the petitioner was found guilty of<\/p>\n
adulteration without complying with the procedure prescribed under<\/p>\n
the Marketing Discipline Guidelines, which I have already held the<\/p>\n
respondents should have mandatorily complied with before the<\/p>\n
petitioner could have been found guilty.          The reliance by the<\/p>\n
respondents on the decision in Pratheesh Fuels’ case (supra) is<\/p>\n
misplaced. The facts of that case are not at all comparable with the<\/p>\n
facts of this case.    There, the contention was that the very same<\/p>\n
O.P. No. 22544\/2002              -: 7 :-<\/span><\/p>\n
samples were not subjected to a fresh laboratory test and the<\/p>\n
petitioner in that case was not intimated about the results. Further,<\/p>\n
counsel for the petitioner relies on the Supreme Court decision in<\/p>\n
Harbanslal Sahnia & another v. Indian Oil Corporation Ltd. &<\/p>\n
others, (2003) 2 SCC 107 to show that where there is failure of<\/p>\n
principles of natural justice in cases of termination of dealership<\/p>\n
which is the bread and butter of the dealer, the court should<\/p>\n
necessarily interfere. Here is a case where the petitioner has been<\/p>\n
found guilty without complying with the procedure prescribed by the<\/p>\n
respondents themselves in their own Marketing Discipline Guidelines.<\/p>\n
The very intention of prescribing comparison between the test result<\/p>\n
of the supply location sample with that of the outlet sample is to<\/p>\n
obviate the possibility of any manufacturing defect at the supply point<\/p>\n
itself.    Therefore, the respondents themselves had in their<\/p>\n
contemplation a possibility of the supply itself being defective. When<\/p>\n
they themselves contemplate ruling out such a possibility before<\/p>\n
finding a dealer guilty of adulteration, I do not think that the<\/p>\n
petitioner    could have been found guilty without ruling out that<\/p>\n
possibility,   especially when   the    respondents   themselves   had<\/p>\n
prescribed such elaborate procedure for finding a dealer guilty.<\/p>\n
Further, nothing prevented the respondents from testing the supply<\/p>\n
location sample also because all along that sample was in their<\/p>\n
possession and nothing whatsoever prevented them from testing the<\/p>\n
same also and comparing the result with the result forwarded by the<\/p>\n
Anti-Adulteration Cell. In the above circumstances, in the absence of<\/p>\n
test result of the supply location sample, I am      satisfied that the<\/p>\n
petitioner could not have been found guilty of adulteration as has<\/p>\n
been done by Ext. P6.\n<\/p>\n
       In the above circumstances Ext. P6 is quashed.              The<\/p>\n
O.P. No. 22544\/2002                -: 8 :-<\/span><\/p>\n
respondents are directed to re-start the supply and sales to the<\/p>\n
petitioner’s retail outlet within a period of one month from the date of<\/p>\n
receipt of a copy of this judgment.\n<\/p>\n
      The original petition is allowed as above.\n<\/p>\n<\/p>\n
                                           S. Siri Jagan, Judge.\n<\/p>\n
Tds\/<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court M\/S.Janatha Trading Company vs Indian Oil Corporation Ltd on 14 January, 2009 IN THE HIGH COURT OF KERALA AT ERNAKULAM OP.No. 22544 of 2002(H) 1. M\/S.JANATHA TRADING COMPANY, … Petitioner Vs 1. INDIAN OIL CORPORATION LTD., … Respondent 2. THE DEPUTY GENERAL MANAGER (MARKETTING) 3. THE SENIOR DIVISIONAL MANAGER For Petitioner :SRI.K.JAJU […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-115570","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nM\/S.Janatha Trading Company vs Indian Oil Corporation Ltd on 14 January, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/ms-janatha-trading-company-vs-indian-oil-corporation-ltd-on-14-january-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"M\/S.Janatha Trading Company vs Indian Oil Corporation Ltd on 14 January, 2009 - 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