Dismissed

M/S Deepak Automobiles v. Bharat Petroleum Corporation Limited.

Gujarat HC26 Aug 2019SCA/11707/2014

Case brief

AI extract

What is this about?

The High Court of Gujarat dismissed a writ petition challenging the termination of a petroleum dealership. Finding tampering of dispensing units established through unimpeachable inspection reports and photographic evidence, the Court held there was no procedural irregularity and refused interference.

What did the court decide?

Petition dismissed; notice discharged; interim relief vacated; Civil Applications disposed of accordingly.

M/S Deepak Automobiles Vs Bharat Petroleum… — Contract and Commercial Disputes | Gujarat HC (2019)

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C/SCA/11707/2014 ORDER

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 11707 of 2014

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With CIVIL APPLICATION (FOR DIRECTION) NO. 1 of 2014 With CIVIL APPLICATION (FOR ORDERS) NO. 2 of 2014 With CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2019

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================================================================

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M/S DEEPAK AUTOMOBILES

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Versus

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BHARAT PETROLEUM CORPORATION LIMITED. & 1 other(s)

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================================================================ Appearance:

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MR HARNISH V DARJI(3705) for the Petitioner(s) No. 1 MR SN SOPARKAR, SENIOR ADVOCATE assisted by MR MITUL K SHELAT(2419) for the Respondent(s) No. 1,2

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================================================================

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CORAM: HONOURABLE MR.JUSTICE A.Y. KOGJE

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Date : 26/08/2019

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ORAL ORDER

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1.This petition under Article 226 of the

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Constitution of India is filed challenging the decision
of the Executive Director (Retail) dated 19.08.2014 in

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the appeal filed under Clause 8.9 of the Marketing
Discipline Guidelines, 2012 (“MDG” for short).

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2.The matter is pending since 2014. On several
occasions, learned Advocate for the petitioner was

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accommodated at his request. Today, the matter was

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specifically fixed on 02.30 Board. When the matter is
called out, learned Advocate for the petitioner is once

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Page 1 of 11

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C/SCA/11707/2014 ORDER

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again absent. No sick note or leave note is filed.
Hence, with assistance of the learned Senior Advocate for
the respondents, the matter is taken up.

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3.The subject matter involves a retail outlet of
the respondent company which was sealed on 21.03.2013 on
account of certain irregularities found during inspection
by the representatives of the respondent-company and
ultimately, such dealership agreement came to be
terminated.

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4.In the petition, grounds are raised that order
of termination of dealership dated 19.08.2014 was never
served upon the petitioner and though the petitioner is
still operating petrol pump, the respondents are trying
to take over possession forcefully. It is the case of
the petitioner that time and again, the petitioner
himself made complaint to the Maintenance Contractor with
regard to jumping of points in the dispensing units and
as and when the Maintenance Contract was carrying out
maintenance activities, he never raised any objection
with regard to alleged irregularities. It is the case of
the petitioner that the dispensing units are sealed by
the Weight and Measurement Department and it cannot be
disputed that at the time of inspection, all the seals of
the Weight and Measure Department were found intact.

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Page 2 of 11

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C/SCA/11707/2014 ORDER

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4.1It is the case of the petitioner that the MDG
issued by the Public Sector Marketing Companies which
were issued on 08.02.2013 provided for action for short
delivery of the products and therefore, the sales through

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the concerned dispensing units are to be suspended

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forthwith and after recalibration, restamping and
reexamination, sales can be permitted. Therefore, there
is no question of terminating the agreement and taking
over of forceful possession.

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5.Learned Senior Advocate for the respondent-

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company submitted that it is a case of malpractice, where
during inspection, panchnama was carried out and the same
was signed by the representative of the petitioner and
therefore, contents of the panchnama cannot be doubted.
It is submitted that thorough examination of the
dispensing units was carried out and it was found that
pulsar of the dispensing units was tampered with. It is
submitted that additionally attached wires were found on

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the pulsar device which is conclusive indication of

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tampering of the dispensing units and therefore, such
tempering led to short deliveries of petroleum products
to the consumers. It is submitted that such irregularity
is a serious one and therefore, being in breach of terms
of the agreement, the company was entitled to take action
of terminating the agreement.

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Page 3 of 11

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C/SCA/11707/2014 ORDER

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5.1Learned Senior Advocate for the respondent-

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company drew attention of the Court to the photographs
taken of the tampered pulsar device and submitted that
comparison of untampered device clearly shows that the
pulsar device was attached with additional wire and
additional device.

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5.2Learned Senior Advocate for the respondent-
company submitted that the petitioner has been contesting
unsuccessfully the proposed action of the respondent-
company even from the stage of show cause notice.
However, at none of the stages, this Court has
entertained such petitions.

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5.3It is lastly submitted that after termination

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of the contract with the petitioner, third party has
already entered into an agreement and the retail outlet
is being operated under such agreement since long.

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6.Having heard learned Senior Advocate for the
respondent-company and having perused documents on
record, it is found that a separate application is filed
to join third party in the petition, which is numbered as
Civil Application No.1 of 2019. So far, no orders are
passed on such application.

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7.The representatives of the respondent-company,

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Page 4 of 11

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C/SCA/11707/2014 ORDER

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in due course of their inspection, found certain
irregularities, for which show cause notice dated
24.06.2013 was issued. The irregularities which were
detected by the Retail Team on 05.06.2013 are narrated

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below:-

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“i.The Pulsar assembly of MPD1, Hi-speed
Nozzle A3, MS Nozzle, B2, Speed Nozzle B1,
Hi-speed Nozzle B3 and HSD Nozzle B4,
pulsars were tampered.

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ii. The Pulsar assembly of MPD1, Speed Nozzle A1, MPD1, MS Nozzle A2, MPD1, HSD Nozzle A4, were not only tampered, but there were additional wires and fittings attached below the circuit board too. Housed inside the Pulsar assembly.

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iii.The Joint observation note of the
Ahmedabad team (Retail), Company Fitter's
report and Gilbarco Veeder root's
Engineer'sreportdated05.06.2013
confirms that there was “Electronic Pulsar
Card tampering” along with “additional
fittings”.

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iv.All the pulsar assembly and the additional
fittings along with the circuit board were
taken into custody. The pulsar assembly
was not found sealed at the time of the
inspection. The MPD was sealed at
totalizer readings as per the ROIR report
on date. The seal number of the random
plastic seals used to seal MPD1 were

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Page 5 of 11

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C/SCA/11707/2014 ORDER

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9216397 and 9216292.”

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8.As a result, the respondent-company, finding

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breach to be of serious nature, proposed to take action
against the petitioner. The reply was given on
19.07.2013. In the meantime, the petitioner also
challenged issuance of show cause notice by filing SCA
No.10361 of 2013, which came to be withdrawn under order
dated 08.07.2013. After considering reply in the show
cause notice and after giving personal hearing to the
petitioner, the respondent-company came to conclusion
that the irregularities of serious nature have been
committed and therefore, passed order on 11.02.2014
terminating the dealership. The conclusions are as
under:-

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“VII.You are aware that under the said
Dealership Agreement, only on your
faithfully observing and performing all
the stipulations in the agreement required
to be performed by you, this Corporation /
BPCL was to do its best to supply with
requirement of Motor Spirit and HSD and
other petroleum products for resale of the
same to our customers from our aforesaid
RPO.

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VIII.You will agree that since you have
failed to observe and perform the
stipulation of the said Dealership
Agreement as was supposed to be performed

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Page 6 of 11

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C/SCA/11707/2014 ORDER

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by you and you have infact committed
breaches of the agreement, under the
dealership/ licence agreement, you are not
entitled to ask BPCL to sell BPCL's
products to you and we are not under any
obligation to supply petroleum products to
you for re-sale thereof from our aforesaid
RPO.

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IX.Due to breaches and irregularities
committed by you as stated above, we have
completely lost trust and faith on you and
we are not interested in carrying on
business with you by selling petroleum
products through you as a Dealer /
Licencee of this Corporation / BPCL.

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X. We thus find that your said reply / explanation dated 19.07.2013 and

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submission made during personal hearing on
14.10.2013 against the irregularities /
breaches / charges stated in our said show
cause letter dated 24.6.2013 are not
satisfactory for reasons stated above.
Consideringyoursaidreplyand
submission, it is clear that you have
committed breaches of the terms of said
Dealership / Licence Agreement. Each of
such breach independently and separately
entitles us to terminate the said
Dealership or Licence Agreement. Since the
breaches of the terms of the Dealership
Agreement are of very serious in nature,
we regret that it has been decided to
terminate the above said Dealership

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Page 7 of 11

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C/SCA/11707/2014 ORDER

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Agreement dated 01.10.2008 in pursuance of
clause 13(a)(vii) and we hereby terminate
the same with immediate effect i.e. with
effect from 11th February 2014.

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XI.In view of above facts and circumstances,
you or your servants cease to have any
rights whatsoever to enter or remain on
Corporation's / BPCL's said Retail
Petroleum Outlet premises or to use the
facilities (i.e. MS/Speed/Hi Speed Diesel
pumps / storage tanks, pipes and fittings
and all other facilities erected and
facilities provided by BPCL at the Retail
Outlet. You are therefore advised not to
enter into said Retail Outlet premises
and/or use the aforesaid facilities
henceforth.

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XII.Our Mr. Nilabh Nishchhal along with his
team shall be at said Corporation's /
BPCL's Retail Petroleum Outlet on 12th
February 2014 at about 1100 hours when you
and / or your authorized representative
may be present at the Retail Outlet for
the limited purpose of taking away of your
articles, if any, lying at the Retail
Outlet, failing which the same will be
kept by us in such place and in such
manner as we may deem fit and proper at
your risk and cost. The stock of Petroleum
products lying at the Retail Outlet would
be taken, quality tested and necessary
credit for the same would be given to you
in Statement of Account.

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Page 8 of 11

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C/SCA/11707/2014 ORDER

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XIII.This letter is issued without any
prejudice to any other right this
Corporation has against you under the said
Dealership Agreement.“

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9.Against this order also, the petitioner filed

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SCA No.2471 of 2014, which also came to be disposed of by
order dated 21.02.2014, directing to file appeal under
MDG, 2013. It is thereafter the impugned order has been
passed in appeal proceedings under Clause 8.9 of MDG,
2013 (sic). The impugned order records that proper
opportunity of hearing has been given and the petitioner
is also effectively represented by a lawyer. Therefore,
in the opinion of this Court, there does not appear to be
any procedural irregularity in the present proceedings,
where show cause notice is issued, reply is filed, a
decision is taken and communicated, against which the
appeal under Clause-8.9 was filed and decided under the
impugned order. Consistently finding of fact has been
recorded that case of tampering has been made out against
the petitioner in an inspection carried out on 05.06.2013
and in the joint observation note of the same day, which
was signed by the dealer himself, following is recorded:-

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“Today, inspection was carried out by the Sales
Officer and Engineering Officer, Ahmedabad city
at M/s Deepak Automobile, Paladi, Ahmedabad.
The stamping of all 16 nozzles were scheduled

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Page 9 of 11

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C/SCA/11707/2014 ORDER

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today, and BPCL Fitter, Mr.Rajendrabhai
B.Jadhav was testing the nozzles and preparing
for the sealing. There are 2 midco and 1
gilbarco MPD. The Midco MPD was thoroughly
checked after opening the panels and even the
pulsar assembly. Mr.Jadhav was unable to open
the Gilbarco MPD, hence Engineer's from GVR
(Gilbarco Veeder Root) were called to open up
the pulsar assembly for checking. Mr.Omkar
Goswami and Mr.Rakesh Dhavle from GVR came and
opened up the pulsar assembly of all 8 Nozzles
in the 4X8X2 Gilbarco MPD.

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During the inspection, it was found that the
pulsar assembly of MPD1, Hi-Speed Nozzle A3, MS
Nozzle B2, Speed Nozzle B1, Hi-speed Nozzle B3
AND HSD Nozzle B4, pulsars were tampered.

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For MPD1, SPEED Nozzle A1, MPD1, MS Nozzle A2,
MPD1, HSD nozzle A4, pulsars were not only
tampered, there were additional wires and
fittings attached below the circuit board,
housed inside the Pulsar assembly.

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All the pulsar assembly and the additional
fittings along with the circuit board are taken
into custody. The pulsar assembly was found
not sealed at the time of inspection.”

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10.This finding of fact has been confirmed by the
decision making authority as well as the appellate
authority. From the photographs, to which attention of
this Court is drawn, the Court can make out visually the
difference between the tampered device and the original

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Page 10 of 11

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C/SCA/11707/2014 ORDER

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device, i.e. pulsar chip. The Court is also of the
opinion that no error can be found in the consistent
findings given by the authorities. The facts of this
case do not call for any interference. The petition
therefore stands dismissed. Notice is discharged.
Interim relief, if any, stands vacated. No order as to
costs.

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11.In view of the order passed in the main matter,
Civil Applications do not survive. Disposed of
accordingly.

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(A.Y. KOGJE, J)

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SHITOLE

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Page 11 of 11

M/S Deepak Automobiles v. Bharat Petroleum Corporation Limited.

Case brief

What is this about?

What did the court decide?

M/S Deepak Automobiles v. Bharat Petroleum Corporation Limited.

Case brief

What is this about?

What did the court decide?

What the court decided

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