Allowed

M/S the National Auto Supply Company v. Hindustan Petroleum Corporation Limited and 2 Others

Allahabad HC21 Aug 2019WRIC/2889/2019

Case brief

AI extract

What is this about?

The High Court quashed an order terminating the petitioner's dealership because the Corporation terminated it without following the mandatory procedure to obtain an independent opinion from the original equipment manufacturer.

What did the court decide?

The impugned order terminating the dealership is quashed, the dealership is restored, and the petitioner is entitled to fuel supply as per the original agreement.

M/S the National Auto Supply Company Vs Hindustan… — Service and Employment | Allahabad HC (2019)

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Court No. - 1

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Case :- WRIT - C No. - 2889 of 2019

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Petitioner :- M/S The National Auto Supply Company Respondent :- Hindustan Petroleum Corporation Limited And 2 Others Counsel for Petitioner :- Sudhanshu Kumar,Swapnil Kumar Counsel for Respondent :- C.S.C.,Vikas Budhwar,Yogendra Kumar

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Hon'ble Ramesh Sinha,J. Hon'ble Ajit Kumar,J.

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Heard Sri Sudhanshu Kumar, learned counsel for the petitioner, Sri Vikas Budhwar, learned counsel appearing on behalf of respondent nos. 1 & 2, Sri Dinesh Kumar Tiwari, learned Standing Counsel for respondent no. 3, Sri Yogendra Kumar, learned counsel for Union of India and perused the records.

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By means of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 17.07.2017 passed by Chief Regional Manager and duly constituted attorney, the respondent no. 1, terminating the petitioner's dealership of petrol/ diesel which was continuing under the agreement dated 01.08.2002.

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Briefly stated facts of the case are that some spot inspection was carried out at the petrol pump unit being run by the petitioner under the agreement and in the report there was a remark mentioned that some extra wire was found connected in the mother board of 1 pulsar unit in dispensing unit make Gilbarco Sr. No. HQ10018. The said dispensing unit was found suspected for tampering in the pulsar card which was seized by the inspecting team. While the said report was sent for due verification by the Manufacturer, even before the report could be received, a show cause notice got served upon the petitioner regarding the same and the petitioner was held to be guilty of his conduct in terms of the contract of agreement as he violated, according to the respondent, certain clauses of dealership agreement.

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The show cause notice dated 23.06.2017 stood replied by the petitioner vide detailed reply dated 07.07.2017 in which he took specific stand that the mother board in fact was got repaired and reinstalled by the manufacturer itself and there was no mischief detected by the petitioner and hence the petitioner cannot be held guilty for violating terms and conditions of the agreement. However, the respondents proceeded to hold petitioner guilty of the same and accordingly terminated the dealership of the petitioner under the order impugned.

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The present writ petition was filed with specific ground of violations of provisions contained under Marketing Discipline Guidelines made effective since 08.01.2018 by the Corporation itself in which vide clause 5.1.4 it is specifically provided that in cases of unauthorized fittings in the dispensing units or any tampering being detected, before any action is taken, the independent opinion shall be obtained of the original equipment manufacturer and it is after receiving and examining the report that it would ultimately form opinion and suitable decision will be taken by the Corporation.

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We further find that in the counter affidavit analysis report of the original manufacturer has been appended too, in which a specific report of outcome of the analysis/ investigation has been expressed as under:

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" Analysis and Investigation:

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The controller card was connected to our standard test setup and observed the card is working Normal. The software checksum is verified and found OK.

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Conclusion:-

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The controller Card is original and some green colour wire is fixed at the motor connectors. The presence of this wire alone cannot produce short delivery."

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From the arguments as have come to be advanced by learned counsel for the petitioner and the pleadings as have been raised and documents that have been brought on record, we are clearly satisfied to this extent that the action was taken by terminating the dealership of the petitioner de hors the procedure prescribed under the guidelines bearing clause no. 5.1.4 as nothing has come up in the counter affidavit to show that any opinion/ report was there regarding tampering with the mother board by connecting additional wire in the mother board installed by the original manufacturer and obviously not so because the report is of 20.09.2017 as annexed along with the counter affidavit confirms the same. However, the decision terminating the dealership was taken on 17.07.2017 itself and so on that account itself the order impugned is liable to be revoked. Besides above, we further find that since the investigation report has already come in which no tampering has been detected and it has been expressed that mere presence of a wire alone cannot be a proof of short delivery of the fuel to be supplied to the customers, it goes without saying that even the remark that had occurred in the inquiry/ spot inspection report had virtually evaporated.

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Learned counsel for the petitioner besides above, has further placed reliance upon the violation of principle of natural justice as expressed in the Division Bench judgment of M/s. Kamal Kant Automobiles & Anr v. Hindustan Petroleum Corporation Ltd. & Ors 2019 (3) ADJ 307 (DB) and further in the case of M/s. Ghazipur Petrol Supply Co., Ghazipur v. Hindustan Petroleum Corporation Ltd. & Anr 2019 (6) ADJ 487 (DB) . There is no dispute about the proposition of law as discussed in those judgments, as in earlier part we have already held that the order terminating the dealership was bad for non compliance of the procedure prescribed and therefore, the judgments are fully applicable, but in the present case we further find that since the report has come in form of the order terminating the dealership all the cannot be sustained in law.

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In view of the above, writ petition succeeds and is allowed .

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The order dated 17.07.2017 (Annexure No. 12 to the writ petition) passed by respondent no. 1 terminating the dealership of the petitioner is hereby quashed. The dealership of the present petitioner stands restored and the petitioner shall be entitled to supply of the fuel as per the original agreement forthwith.

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Order Date :- 21.8.2019 IrfanUddin

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(Ajit Kumar, J.) (Ramesh Sinha, J.)

M/S the National Auto Supply Company v. Hindustan Petroleum Corporation Limited and 2 Others

Case brief

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M/S the National Auto Supply Company v. Hindustan Petroleum Corporation Limited and 2 Others

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