Allowed

Bharat Petroleum Corporation Limited through Its Territory Manager Retail Shri Neeraj Kumar Jaria v. Sharma Filling Station through Its Authorised Signatory Sri Anil Kumar Choubey

Jharkhand HC22 Mar 2021LPA/569/2018

Case brief

AI extract

What is this about?

Intra-court appeal against a Single Judge order quashing termination of a petrol pump dealership for a broken metering-unit seal and dry stock. The Division Bench held the dealer's explanation unsatisfactory, that omission of one ground from the show cause did not vitiate the order, and that certiorari could not substitute the authority's view.

What did the court decide?

Impugned judgment of the learned Single Judge quashed and set aside; writ petition W.P.(C) No.6378 of 2014 dismissed.

Bharat Petroleum Corporation Limited… — Contract and Commercial Disputes | Jharkhand HC (2021)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI L.P.A. No.569 of 2018

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Bharat Petroleum Corporation Limited, a Government of India Undertaking, through its Territory Manager (Retail) namely Shri Neeraj Kumar Jaria, Aged about 39 years, Son of Dinesh Kumar Jaria having its office at 3^rd Floor, Nile Complex, Old H.B. Road, Kantatoli Chowk, Ranchi, P.O.-GPO, P.S.-Lower Bazar, District-Ranchi-834001

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…. Appellant

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Versus

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1. Sharma Filing Station, NH-6, Ashwarpur, Bharagora, P.O. Bharagora, P.S.-Bharagora, District-East Singhbhum, Jharkhand through its Authorised Signatory Sri Anil Kumar Choubey, son of Shri Uma Shankar Choubey, resident of Ashwarpur, Bharagora, P.O. Bharagora, P.S.-Bharagora, District-East Singhbhum

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2. Deputy Manager-Sales (Retail), Bharat Petroleum Corporation Limited, Goods Shed Road, P.O.-Tatanagar, P.S.-Tatanagar, District East Singhbhum-831002

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3. The Sales Officer, Bharat Petroleum Corporation Limited, Goods Shed Road, P.O.-Tatanagar, P.S.-Tatanagar, District East Singhbhum-831002

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.... .... Respondents

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CORAM : HON’BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD

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For the Appellant	: Mr. Mrinal Kanti Roy, Advocate
For the Respondents	: Mr. Deepak Sinha, Advocate
	: Ms. Rakhi Sharma, Advocate

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C.A.V. on 30.09.2020 Delivered on 22/03/2021

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Per Sujit Narayan Prasad, J.

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The matter has been heard through video conferencing with the consent of learned counsel for the parties. They have no complaint about any audio and visual quality.

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L.P.A. No.569 of 2018

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The instant appeal is under Clause-10 of the Letters Patent of the Patna High Court directed against the order/judgment dated 14.06.2018 passed by the learned Single Judge of this Court in W.P.(C) No.6378 of 2014, by which, the writ petition has been allowed by quashing the order

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dated 31.07.2017, whereby and whereunder, the writ petitioner has been restrained to deal with the customers and suppliers of the respondent as also restrained to deal with any of the products of the respondent and neither the writ petitioner will be able to claim itself to be dealer of the respondent Company under any circumstances whatsoever.

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2 . The brief facts of the case which required to be enumerated read hereunder as:-

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The writ petitioner is a dealer, duly been appointed by the Bharat Petroleum Corporation Ltd, in short „BPCL‟, involved in purchasing, receiving, storing and selling of Motor Spirit and High Speed Diesel Oil (MS & HSD), in the name and style of “Sharma Filling Centre” situated at NH-6, Anishwarpur, Baharagora, East Singbhum, Jharkhand, since the year 2005.

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The writ petitioner has entered into an agreement for carrying out the business on 24.05.2005 for a period of 15 years operative till 23.05.2020 and thereafter, has started supply of the aforesaid products to the Company. The writ petitioner has carried out supply of „MS & HSD‟ without any complaint from any quarter.

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The writ petitioner has pleaded that having found difficulty with regard to giving excess delivery by Dispensing Unit being DU No.BY L&T 9299, a request was made to the Inspector, Weight and Measures Department, Ghatsila, East Singhbhum vide its letter dated 23.02.2013 as also deposited the requisite fee of Rs.750/- to conduct re-verification of the said DU No.BY L&T 9299 which was giving excess delivery.

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The writ petitioner was informed by the Weights and Measures Department, Ghatsila that for re-verification and stamping verification, fee is required to be deposited and only after due repair of the machinery and after re-verification and stamping of the same, the supply of oil should be

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started.

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The Quality and Control Cell (QCC) of the respondent Company has conducted a surprise inspection on 26.02.2013, wherein, it has been found that sealing wire on metering unit of one DU No.BY L&T 9299 was found broken and MS & High Speed Diesel was dry at the time of the inspection.

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A report was prepared mentioning therein that the sale from the said DU was suspended till further advice from the territory.

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The respondent‟s Company, thereafter, has issued a show cause on 11.04.2013 to explain as to why action should not be taken against the writ petitioner including termination of the aforesaid agreement for commission of alleged irregularities to the effect:-

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(i) In DU No.BY L&T 9299, the sealing wire on metering unit is found broken and;

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(ii) MS & Hi-Speed Diesel were dry at the time of inspection.

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The writ petitioner, on receipt of the aforesaid notice dated 11.04.2013, replied vide letter dated 25.04.2013 explaining therein by denying the allegation as also mentioning in the aforesaid reply that on 23^rd February, 2013, a request was made to the Weights and Measures Inspector to re-verify the respective DU No.BY L&T 9299 with fee receipt no.726085 and the same has been verified on 28.02.2013 by the Weights and Measures Inspector and to that effect due certificate was issued.

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Since 24.02.2013, the sale from respective DU was suspended as advised by Weights and Measures Inspector.

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Further, it has been referred therein that sale of Hi-Speed Diesel is almost nil in most of the RO due to huge gap in pricing with HSD.

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As far as MS is concerned, the potential is about 3 KL to 4 KL a month with an assurance that the sale as per the required quantity will be

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done in future.

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Further, query has been made by the respondent with respect to irregularities in point no.4(i), which has again been replied by the writ petitioner vide letter dated 25.04.2013 annexing therein the letter dated 23.02.2013 addressed to the Weights and Measures Inspector for reverification and further clarified the said point no.4(i) by referring therein that “if in Du No. BY L&T 9299, sealing wire was found broken, it might be purely due to heavy rust and force used by the Inspection Officer”. The DU was regularly been checked up but not its seal and wires.

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On 23.02.2013, during routine delivery check, it has been found erratic delivery from above said machine and thereafter, it has immediately been informed to the concerned Officer of the respondent-BPCL and Weights and Measures Inspector for re-verification of the said machine.

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The respondent Company after receipt of the aforesaid letter from the writ petitioner has again made correspondence to the writ petitioner on 07.05.2013 asking the writ petitioner to explain as to why the letter addressed to the Weights and Measures Department, Ghatsila was not produced before the Inspection Officials on 26.02.2013.

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Apart from that, another letter was issued by the respondent Company on 07.05.2013 addressed to the Inspector, Weights & Measures Department, Ghatsila to intimate him about the genuineness of the letter dated 23.02.2013 as also about the observations during the visit of the inspected site.

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The aforesaid communication has been answered by the writ petitioner clarifying therein that the authorized DSW Mrs. Lakshmi Rana who was present at the petitioner‟s premises was not aware of the said letter dated 23.02.2013 addressed to the Inspector, Weights & Measures Department, Ghatsila and therefore, the said letter could not be produced

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during the course of such inspection.

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The respondent Company has again made correspondence to the Weights and Measures Department, Ghatsila, Jharkhand on 05.08.2013 seeking confirmation as to whether the facts narrated by the writ petitioner in letter dated 25.04.2013 was good and found the same in order.

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The Inspector, Weights and Measures Department, Ghatsila, on receipt of the aforesaid letter, has explained vide letter dated 16.08.2013 the fact about re-verification and also mentioned that the metering unit is very old and outdated and needs to be replaced.

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It is the case of the writ petitioner that even in spite of the letter of the Inspector, Weights and Measures, Department, Ghatsila having been received, the order of suspension of supply from the concerned DU has not been lifted.

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The concerned Company having not been satisfied with the reply, has issued the order dated 31.07.2017 terminating the contract and restraining the supply of MS & HSD to the petitioner‟s unit. 3. The writ petitioner initially has approached to this Court seeking relief to the effect for a direction upon the respondent to start the supply of the Motor Spirit and High Speed Diesel Oil (MS & HSD)) in terms of the agreement executed on 24.05.2005 but during the pendency of the writ petition since the decision has been taken to terminate the contract vide order dated 31.07.2017, as such, the order of termination of the contract has been assailed by filing the interlocutory application being I.A.No.7104 of 2017 seeking leave of this Court to amend the prayer made in the writ petition by inserting the prayer for quashing of the order dated 31.07.2017 which has been allowed by the learned Single Judge of this Court while disposing of the aforesaid interlocutory application being I.A.No.7104 of 2017 vide order dated 26.02.2018.

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4. The learned Single Judge has allowed the writ petition by quashing the order dated 31.07.2017 which is impugned in this intra-court appeal preferred by the Bharat Petroleum Corporation Limited (BPCL) inter-alia on the ground that the allegation of commission of irregularities as per the contract which contains a condition as under Clause-9 and 13(a)thereof, for which, the opportunity of hearing was provided and after the reply having found to be not satisfactory, the conscious decision has been taken by the competent authority.

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5. It has been submitted that although the contract does not contain any condition to provide an opportunity of hearing but ample opportunity has been provided which has been put-forth but the said reply has not been found to be satisfactory rather the writ petitioner has tried to mislead the authority by fabricating the documents with the connivance of the Weights and Measures Department about re-verification vide request dated 23.02.2013 but the requisite fee has been deposited only on 27.02.2013 while the inspection by the appellant‟s Company has been conducted on 26.02.2013, wherein the aforesaid irregularities have been found.

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The writ petitioner has taken the plea of re-verification of one DU No.BY L&T 9299 but he has not produced any document pertaining to the very first verification and when there is no report pertaining to the first verification, there is no question of any re-verification.

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The document dated 23.02.2013 has been made which is by way of afterthought and more surprisingly, requisite fee has not been deposited rather the same was deposited only after the inspection which was conducted on 26.02.2013, therefore, the writ petitioner has not only committed irregularities contrary to the condition of contract and the Marketing Discipline Guidelines but also tried to mislead the authority.

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6. The appellant Company after taking into consideration these aspects of the matter has cancelled the contract but the learned Single Judge, without appreciating these aspects of the matter, has quashed and set aside the decision by which, the contract has been cancelled by considering the letter dated 23.02.2013 made to the Inspector, Weights and Measures Department regarding excess delivery but without considering that if that letter was of re-verification then where was the original verification report as because the content of the letter dated 23.02.2013 begins with the caption subject for re-verification of the unit and once the letter has been written for re-verification, then certainly there must be the original verification report.

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The learned Single Judge ought to have been taken into consideration these aspects of the matter in order to see the genuineness of the fact and the reason assigned by the writ petitioner.

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Further, the learned Single Judge has not appreciated the fact that when the letter dated 23.02.2013 has been issued for re-verification of the unit, what prevented the writ petitioner to deposit the requisite fee and why it has been deposited only on 27.02.2013 i.e., one day after the date of inspection i.e., on 26.02.2013.

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7. According to the learned counsel for the appellant that the learned Single Judge has further failed to appreciate that even accepting the show cause contains two irregularities that is:-“(i) In DU No.9299 the sealing wire on metering unit is found broken and (ii) MS (Motor Spirit) and HiSpeed Diesel were dry at the time of inspection”. But the order of termination is also on the ground of using the said DU whose sealing wire was found broken.

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8. According to the learned counsel, even accepting that the ground about sealing wire having found to be broken has not been mentioned in

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the show cause, can the decision of the authority for cancellation of the contract will vitiate if the two other grounds are already available being sufficient reason to terminate the contract.

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He, therefore, submits that the learned Single Judge, in exercise of power of issuance of Writ of Certiorari, has exceeded its jurisdiction in replacing the fact finding arrived at by the concerned competent authority by substituting the said view with its own view, which cannot be said to be proper taking into consideration the scope of Writ of Certiorari.

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Therefore, according to him, the order passed by the learned Single Judge is not sustainable in the eye of law and the same is fit to be quashed and set aside.

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9. Per contra , Mr. Deepak Sinha, learned counsel appearing for the writ petitioner, has submitted that there is no error in the impugned order, according to him, the learned Single Judge has appreciated the fact by taking into consideration the letter written by the writ petitioner to the Weights and Measures Inspector of the Weights and Measures Department, Ghatsila dated 23.02.2013 asking the concerned authority to re-verify the unit which clearly goes to suggest that the dispensing unit was not in workable condition and once the writ petitioner has already taken the endeavour by making due information to the concerned authority of the Weights and Measures Department, the same cannot be said to be falsified merely on account of the fact that the requisite fee has not been deposited immediately on the date of making such request.

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The learned Single Judge has further considered the fact that the inspection was conducted on 26.02.2013 in which two irregularities have been found which has been referred by the writ petitioner to the Weights and Measures Department on 23.02.2013 and considering the aforesaid aspect of the matter, the learned Single Judge is correct in making

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interference with the decision of the authority, by which, the contract has been terminated.

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He further submits that the learned Single Judge has also taken into consideration the fact that the ground for termination of contract is not based only upon the reason which has been sought to be explained by the writ petitioner but also on the ground to which the writ petitioner has never been provided an opportunity.

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He, on the basis of these facts submits that the learned Single Judge after taking into consideration all these aspects of the matter is correct in interfering with the impugned decision, hence, the same may not be interfered with.

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10. This Court after having heard the learned counsel for the parties and perused the documents available on record as also the finding recorded in the impugned order, deem it fit and proper to refer certain undisputed facts before entering into the legality and propriety of the impugned order.

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11. The admitted fact herein is that the writ petitioner has entered into an agreement on 24.05.2005 with the appellant Corporation to sale Motor Spirit and Hi-Speed Diesel. The agreement contains the various conditions including the condition as under condition no.13(a) for termination of the agreement for the reason assigned therein.

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One of the conditions as contained in condition no.13(d) is that if licensees commit breach of any covenant and/or stipulation in this licence, the Company shall not be bound to observe and perform its obligation hereunder, for ready reference, condition as contained in condition nos.9, 13(a)(v), 13(a)(vii) and 13(a)(viii) are being referred hereinbelow:-

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“(9) Neither the Licensees nor the Licensees servants or agents shall interfere in any way with the working parts of the pumps or other equipment provided by the Company.”

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“13(a)(v) If the Licensees for any reason other than due to the Company’s default fail to maintain supply to the public through the said facilities for any period exceeding 24 hours.

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13(a)(vii) If the Licensees shall be guilty of a breach of any of the covenants and stipulation on their part contained in this agreement.

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13(a)(viii) If the Licensees shall commit or suffer to be committed any act which in the opinion of the Marketing Director of the Company for the time being in Mumbai or any other person nominated for this purpose by the Company is prejudicial to the interest or good name of the Company or its products. The decision of such officer or person shall be final and binding on the Licensees.”

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It further appears from condition no.12 which stipulates that the Lincence may be terminated without assigning any reason whatsoever by either party giving to the other not less than ninety days notice in writing to expire at any time of its intention to terminate it and upon the expiration of any such notice this Licence shall stand cancelled and revoked. The requisite period of notice may be reduced or waived by mutual consent.

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It further appears from the Marketing Discipline Guidelines contained under Chapter-8 that irregularities have been classified into three categories i.e., Critical, Major and Minor.

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Under the head Critical Irregularities, the nature of allegation levelled against the writ petitioner is under the said heading since the Critical Irregularities also includes if the seals of the metering unit found tampered in the dispensing pumps and the action in case of any Critical Irregularities would be termination at the first instance, for ready reference all regularities i.e., Critical, Major and Minor are being referred hereinbelow which reads hereunder as:-

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“ 8.2 Critical Irregularities: The following irregularities are

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classified as critical irregularities:

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(i) Adulteration of MS/HSD (5.1.1)

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(ii) Seals of the metering unit found tampered in the dispensing pumps. {5.1.2(b)}

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(iii) Totalizer seal of dispensing unit tampered or deliberately making the totalizer non functional or not reporting to the company if totalizer is not working. (5.1.3 read with 5.1.2)

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(iv) Additional/Unauthorized fittings and gears inside the

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dispensing units/tampering with dispensing units.(5.1.4)

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(v) Unauthorized storage facilities (5.1.5) (vi) Unauthorized purchase/sales of products. (5.1.6)

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(vii) Tank lorry carrying unauthorized product found under decantation at the RO (5.1.7)

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Action:

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Termination at the FIRST instance will be imposed for

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the above irregularities.

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8.3 Major Irregularities: The following irregularities are classified as major irregularities:

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(i) Refusal by the dealer to allow drawl of samples/carry out inspections.(5.1.8)

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(ii) Non availability of reference density at the time of inspection. (5.1.90

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(iii) Selling of normal MS/HSD as branded fuels. (5.1.10)

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(iv) Stock variation beyond permissible limits but sample passing quality tests. (5.1.11)

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(v) Non maintenance of records since last inspection. (5.1.12) (vi) Overcharging of MS/HSD/CNG/Auto LPG (5.1.13)

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(vii) Non provision of clean facility. (5.1.14.b).

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(viii) Dealer operating the automated RO in manual mode without authorization. (5.1.16)

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Action: Except in case of (iii) & (vii) Suspension of sales and supplies for 15 days for the first irregularity, 30 days for the second irregularity, and a third offence would lead to termination of the dealership.

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Action in case of (iii) above would be as under:-

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In the first instance OMC would impose a penalty of recovery of differential price since last inspection. Termination will be the action in case of 2^nd instance.

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Action in case of (vii) above would be as under:-

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Penal action will be taken in case during the inspection (a) Toilet is found to be not clean or (b) Water is not available or (c) Latch on the toilet door is not available/not working.

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In the first instance Rs.10000/-, Second instance Rs.20000/-, Third instance Rs.25000/- and Fourth instance onwards (i) Rs.30000/- or 45 % of the monthly dealer commission (based on average of last 6 months), whichever is higher and (ii) suspension of Sales and supplies for 7 days or rectification of the defect in toilet, whichever is later.

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8.4 Minor Irregularities: The following irregularities are classified as minor irregularities:

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(i) Short delivery with Weights & Measures Departments’ seals intact where the dealer has not informed the OMC of this defect. {5.1.2(a)}

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(ii) Non maintenance of specified records where records from last inspection are maintained but prior records are not available. (5.1.12)

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(iii) Non provision of facilities like air, Telephone and first aid box. (5.1.14.a)

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(iv) Miscellaneous.

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(a) Non display of authorized Retail Selling prices of MS/HSD/CNG/AUTO LPG. (5.1.15)

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(b) Non display of density, opening stock of the day, sticker ensuring Zero before delivery on dispensing unit, name of

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product on each nozzle of MPD, contact details of authorized persons to be contacted in case of Complaint/Grievance/Emergency. (5.1.17)

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(c) Non maintenance of complaint book or not providing the same when demanded by the customer. (5.1.17)

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(d) Poor housekeeping. (5.1.17)

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(e) Driveway Salesman at the ROs not in uniform/wearing badges. (5.1.17) (One or more irregularity under the above category a, b, c, d or e will be considered as one irregularity only for the purpose of taking action). Action: (except in case of (i) above):- Warning-cumguidance letter in the first instance, Rs.10000/- per irregularity on second instance and Rs.25000/per irregularity on third instance onwards. Action in case of (i) above would be as under: - First instance: warning letter to be issued. Second instance within one year of 1^st instance: Rs.10000/per nozzle found delivering short. Third and subsequent instances within one year of 1^st instance: Rs.25000/- per nozzle found delivering short.”

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12. The writ petitioner has started carrying out its business. One inspection was conducted on 26.02.2013 by the appellant Corporation and found as per the inspection report that the sealing wire on metering unit of DU No.BY L&T 9299 is found broken. The nozzle of this DU is sealed with plastic seal no.5593724. The samples from both HSD tanks have been collected for testing in Lab.

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The appellant Corporation has issued notice to the writ petitioner for the alleged breaches i.e.,(i) In DU No.BY L&T 9299, the sealing wire on metering unit is found broken and (ii) MS & Hi-Speed Diesel were dry at the time of inspection with a further direction to submit reply within 15 days from the date of receipt of the show cause.

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The writ petitioner has made due reply denying the allegations and also referring therein the letter dated 23.02.2013 addressed to the Weights and Measures Inspector said to have been issued for reverification of the dispensing unit.

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The explanation has been furnished that the aforesaid unit was not in workable condition for which requisite fee was made for re-verification

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of the aforesaid unit by making correspondence on 23.02.2013 addressed to the Weights and Measures, Inspector, Weights and Measures Department, Ghatsila, Jharkhand and as such, no fault lies on the part of the writ petitioner.

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The aforesaid show cause has found to be unsatisfactory by the appellant Corporation on the following grounds:-

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(i) That if any correspondence said to have been issued by the writ petitioner on 23.02.2013 addressed to the Weights and Measures Inspector, why it has not been brought to the notice of Inspecting Team who has conducted Inspection on 26.02.2013 and;

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(ii) The writ petitioner has failed to explain as to why the requisite fee for re-verification has not been deposited along with requisite dated 23.02.2013 and why it has been deposited on 27.02.2013, only after the date of inspection i.e., 26.02.2013.

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The appellant Company has considered the letter dated 23.02.2013 and taking into consideration the conduct of the writ petitioner about deposit of the requisite fee only after the date of inspection i.e., on 26.02.2013 as afterthought and as such, cancelled the contract.

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13. The question which is required to be considered by this Court on the basis of the argument advanced on behalf of the parties as referred hereinabove i.e.:-

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(i) The issue of maintainability of the writ petition;

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(ii) Whether the reply of the writ petitioner held to be unsatisfactory by the appellant suffers from error;

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(iii) Whether non-deposit of requisite fee along with letter dated 23.02.2013, can be said to be justifiable explanation by the writ petitioner;

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(iv) Whether was it not required by the writ petitioner to apprise the Corporation about the letter dated 23.02.2013 to the Inspecting Team on 26.02.2013 i.e., the date of inspection;

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(v) Whether if on one ground no show cause has been issued, can the entire order will vitiate, if the other irregularities, the principle of natural justice has been observed and;

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(vi) Whether the High Court in exercise of power of Writ of Certiorari, can substitute the view of the authority with its own view.

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14. So far as the issue no.(i) about maintainability of the writ petition on the ground of availability of alternative remedy of appeal which was one of the issues agitated before the Writ Court but the said plea has not been addressed to this Court and therefore, this Court is not going into the aforesaid issue.

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15. The issue nos.(ii), (iii) and (iv) are interlinked with each other, therefore, these issues are being considered together hereinbelow.

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The sole explanation furnished by the writ petitioner that there is no laches on his part mainly because the correspondence has been made to the Weights and Measures Inspector, Weights and Measures Department, Ghatsila, Jharkhand as on 23.02.2013 for re-verification of the unit.

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By taking such plea, the writ petitioner has tried to impress upon the appellant Corporation that once the due information has been furnished to the Weights and Measures Inspector about deficiency in the said unit, if no action has been taken by the Weights and Measures Inspector, why the writ petitioner will be penalized.

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The question is that the reason is furnished by a party, the same must have nexus with its conduct to show the bonafide.

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Herein, it is the specific case of the writ petitioner that in absence of deposit of requisite fee, the verification or re-verification of the concerned

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unit cannot be conducted by the Weights and Measures Inspector but very surprisingly, he has only made an application on 23.02.2013 without any requisite fee for so called re-verification of the unit.

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Further, the writ petitioner has kept himself silent in depositing the requisite fee rather he has only deposited the requisite fee on 27.02.2013 i.e., the next following day of the date of inspection conducted by the appellant Corporation which was on 26.02.2013.

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The question is why and under what circumstances, the writ petitioner kept silent from 23.02.2013 to 26.02.2013 and only deposited the requisite fee on 27.02.2013. The writ petitioner has furnished no explanation to that effect and as such, in absence of any sufficient explanation in this regard, the reasoning furnished by the writ petitioner to the effect that the application has been made on 23.02.2013 for reverification of the unit without depositing the requisite fee cannot be said to be acceptable, as such, it has rightly not been accepted by the appellant Corporation.

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The matter would have been different if the writ petitioner would have made application on 23.02.2013 along with requisite fee on the same date or at least on the following date considering the fact that as per the terms of contract, the dispensing unit may not be stopped or there may not be excess supply or less supply of the fuel but he has chosen not to do so rather he has deposited the requisite fee of Rs.750/- on 27.02.2013 i.e., after the inspection having been conducted on 26.02.2013.

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Further, it requires to refer herein that when on 26.02.2013, the Inspection Team of the appellant Corporation has visited the writ petitioner‟s Company for conducting the inspection, no such information or no such document has been produced before the Inspecting Team for its

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satisfaction, however, reason has been assigned that the person who at the time of making such letter or depositing the requisite fee was not aware with the aforesaid fact but that reason cannot be said to be proper, it is for the reason that if a party is found to have committed any irregularity, it is upon the party to come out with convincing reason for its acceptance. Herein after inspection on 26.02.2013 when show cause notice has been issued then in its reply it is being explained about ignorance of such letter by the employee who was on duty in the outlet on the date of inspection. But the same is having no substance as because even as per agreement it was incumbent upon the dealer to apprise the Corporation about any alteration in the Dispensing Unit which is prohibited as per condition no.7(a) of the Agreement which reads hereunder as:

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“7(a) The Licensees shall be responsible to see that full and proper measure is delivered from the pumps installed by the Company on the said premises and shall have no recourse against the Company for any loss, damages, cost, charge or expenses which the Licensees may at any time suffer by reason of the pumps delivering wrong measure or by reason of the Motor Spirit or HSD becoming contaminated in any way. If at any time the pumps, shall be delivering wrong measure or shall develop any other defect the Licensees shall forthwith report such defect in writing to the Company and subject to sub-clause (b) hereunder shall not operate the defective pump or pumps further until the defect shall have been remedied.”

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But no such report was made by the writ petitioner to the Corporation in terms of the aforesaid Clause.

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Therefore, according to our considered view the explanation, furnished by the writ petitioner, has rightly not been considered fit to be acceptable by the appellant Corporation.

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16. So far as the issue no.(v) is concerned which pertains to in case of multiple irregularities committed by the party apart from the aforesaid multiple irregularities if the final decision has been taken in addition to that multiple irregularities and no such occasion has been provided to explain

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for the irregularities in addition to the multiple irregularities referred in the show cause, can the entire decision of the authorities be vitiated.

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The answer of this Court would be in negative as because if the show cause contains sole allegation of irregularities then the principle of natural justice has to be satisfied but if there are multiple allegations about commission of irregularities and if one of the irregularities have not found mentioned in the show cause, the entire decision would not vitiate, if the reason explained by the parties with respect to irregularities which has been referred in the show cause has been found to be not satisfactory.

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Herein the show cause includes two allegations i.e.,:-“(i) In DU No.9299 the sealing wire on metering unit is found broken and (ii) MS (Motor Spirit) and Hi-Speed Diesel were dry at the time of inspection”.

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However, the order of termination of contract dated 31.07.2017 has also been passed on the basis of the irregularities i.e., the particular DU was being used by the writ petitioner in spite of sealing wire on metering unit having been broken but on this ground alone, the entire order of cancellation of contract will not vitiate since the other allegation i.e., DU No.9299, the sealing were on metering unit is found broken and MS and Hi-Speed Diesel were dry at the time of inspection have been found to be proved after providing due opportunities of hearing to the writ petitioner which has found to be not satisfactory and therefore, even if one irregularity has not been mentioned in the show cause, the charges or irregularities proved on the basis of the other charges or irregularities contained in the show cause, the entire decision of the termination of contract will not be vitiated.

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17. So far as the issue no.(vi) which pertains to whether the High Court in exercise of power of Writ of Certiorari, can substitute its view contrary to the view taken by the administrative authority.

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To answer this issue, this Court deems it fit and proper to discuss about the principle of Writ of Certiorari by the High Court sitting under Article 226 of the Constitution of India.

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In this regard, reference may be made to the judgment rendered by the Hon‟ble Apex Court in the case of Syed Yakoob vs. K.S. Radhakrishnan and Ors., A.I.R. 1964 Supreme Court 477 . Paragraph

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no.7 of the said judgment is being reproduced hereinbelow:

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“The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Art. 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal Acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Art. 226 to issue a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v. Ahmad Ishaque, 1955-1 SCR 1104 : ((S) AIR 1955 SC 233); Nagendra Nath v. Commr. Of Hills Division, 1958 SCR 1240 : (AIR 1958 SC 398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168.

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In Hari Vishnu Kamath vs. Ahmad Ishaque and Ors., AIR 1955

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Supreme Court 233, the Hon'ble Supreme Court has held as hereunder in paragraph no.21:

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“………….to the character and scope of the writ of certiorari and the conditions under which it can be issued, the following propositions may be taken as established: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it. (2) Writ of certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal even if they be erroneous. This is on the principle that a Court which has jurisdiction over a subject-matter has jurisdiction to decide wrong as well as right, and when the Legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior Court were to rehear the case on the evidence and substitute its own findings in certiorari.”

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In Sawarn Singh and Anr. vs. State of Punjab and Ors., (1976) 2

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SCC 868 their Lordships, while discussing the power of writ under Article

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226 of the Constitution of India for issuance of writ of certiorari, has been

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pleased to hold at paragraph nos.12 and 13 as hereunder:

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“ 12. Before dealing with the contentions canvassed, it will be useful to notice the general principles indicating the limits of the jurisdiction of the certiorari jurisdiction can be exercised only for correcting errors of jurisdiction committed by inferior courts or tribunals. A writ of certiorari can be issued only in the exercise of supervisory jurisdiction which is different from appellate jurisdiction. The Court exercising special jurisdiction under Article 226 is not entitled to act as an appellate Court. As was pointed out by this Court in Syed Yakoob's case (supra)

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13. In regard to a finding of fact recorded by an inferior tribunal, a writ of certiorari can be issued only if in recording such a finding, the tribunal has acted on evidence which is legally inadmissible, or has refused to admit admissible evidence, or if the finding is not supported by any evidence at all, because in such cases the error amounts to an error of law. The writ jurisdiction extends only to cases where orders are passed by inferior courts or tribunals in excess of their jurisdiction or as a result of their refusal to exercise jurisdiction vested in them or they act illegally or improperly in the exercise of their jurisdiction causing grave miscarriage of justice.”

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In Heinz India (P) Ltd. and Anr. vs. State of U.P. and Ors., (2012)

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5 SCC 443 their Lordships have been pleased to hold at paragraph nos.66

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and 67 as hereunder:

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“ 66. That the court dealing with the exercise of power of judicial review does not substitute its judgment for that of the legislature or executive or their agents as to matters within the province of either, and that the court does not supplant “the feel of the expert” by its own review, is also fairly well settled by the decisions of this Court. In all such cases judicial examination is confined to finding out whether the findings of fact have a reasonable basis on evidence and whether such findings are consistent with the laws of the land.

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67. In Dharangadhara Chemical Works Ltd. v. State of Saurashtra this Court held that decision of a tribunal on a question of fact which it has jurisdiction to determine is not liable to be questioned in proceedings under Article 226 of the Constitution unless it is shown to be totally unsupported by any evidence. To the same effect is the view taken by this Court in Thansingh Nathmal case where this Court held that the High Court does not generally determine questions which require an elaborate examination of evidence to establish the right to enforce for which the writ is claimed.”

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In Thansingh Nathmal vs. The Superintendent of Taxes, Dhubri & Ors., A.I.R. 1964 1419 Supreme Court , Hon'ble Supreme Court has been pleased to hold that the High Court does not jointly determine question which requires elaborate examination of evidence to establish the right to enforce for which the writ is claimed.

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In Pepsico India Holding (P) Ltd. vs. Krishna Kant Pandey, (2015) 4 SCC 270 their Lordships, while discussing the scope of Articles 226 and 227 of the Constitution of India in the matter of interference into the finding of the Tribunal, has been pleased to hold by placing reliance upon the judgment rendered in Chandavarkar Sita Ratna Rao vs. Ashalata S. Guram, (1986) 4 SCC 447 at para-17 as hereinbelow:

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“ 17. In case of finding of facts, the court should not interfere in exercise of its jurisdiction under Article 227 of the Constitution. Reference may be made to the observations of this Court in Bathutmal Raichand Oswal V. Laxmibai R. Tarta where this Court observed that the High Court could not in the guise of exercising its jurisdiction under Article 227 convert itself into a court of appeal when the legislature has not conferred a right of appeal. The High Court was not competent to correct errors of facts by examining the evidence and reappreciating. Speaking for the Court, Bhagwati, J, as the learned Chief Justice then was, observed at page 1301 of the report as follows:

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The special civil application preferred by the appellant was admittedly an application under Article 227 and it is, therefore, material only to consider the scope and ambit of the jurisdiction of the High Court under that article. Did the High Court have jurisdiction in an application under Article 227 to disturb the findings of fact reached by the District Court? It is well settled by

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the decision of this Court in Waryam Singh v. Amarnath that the

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…...... power of superintendence conferred by Article 227 is, as pointed out by Harries, C.J., in Dalmia Jain Airways v. Sukumar Mukherjee to be exercised most sparingly and only in appropriate cases in order to keep the subordinate courts within the bounds of their authority and not for correcting mere errors.

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This statement of law was quoted with approval in the subsequent decision of this Court in Nagendra Nath Bose V. Commr. Of Hills Division and it was pointed out by Sinha, J., as he then was, speaking on behalf of the court in that case:

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It is thus, clear that the powers of judicial interference under Article 227 of the Constitution with orders of judicial or quasi-judicial nature, are not greater than the power under Article 226 of the Constitution. Under Article 226 the power of interference may extent to quashing an impugned order on the ground of mistake apparent on the face of the record. But under Article 227 of the Constitution, the power of interference is limited to seeking that the tribunal functions within the limits of its authority.”

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Recently, the Hon‟ble Apex Court in General Manager, Electrical Rengali Hydro Electric Project, Orissa and Others vs. Giridhari Sahu and Ors., (2019) 10 SCC 695 has delved upon the issue about scope of issuance of writ of certiorari by the High Court and has laid down that, if the finding recorded by the court is erroneous and based upon perversity, the order is fit to be quashed/set aside.

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18. It is settled position of law as has been pronounced by the Hon‟ble Apex Court in the judgments referred hereinabove that the High Court can only exercise the power of Writ of Certiorari having its limited scope in a case where on the face of the order, there is apparent error or there is violation of principle of natural justice or any decision contrary to the statutory provision but herein, this Court has not found violation of principle of natural justice, so far as the two allegations as have been referred in the show cause, rather this Court has found from the record that the appellant Corporation has provided ample opportunities firstly by issuing show cause and secondly by providing an opportunity to clarify the fact about not apprising about the letter dated 23.02.2013 to the Inspecting Authority who had conducted raid on 26.02.2013 as also to apprise as to why the requisite fee had not been deposited on 23.02.2013

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and why it had been deposited on 27.02.2013, this goes to show that the principle of natural justice has rightly been followed by the appellant Corporation. Further, there is no ground taken of violation of the statutory provision.

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19. The learned Single Judge ought to have been taken into consideration the very scope of issuance of Writ of Certiorari as has been laid down by the Hon‟ble Apex Court hereinabove before interfering with the decision of the Administrative Authority by substituting the view with its own view, therefore, the learned Single Judge while quashing the impugned decision dated 31.07.2017 cannot be said to be justified.

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Further, the nature of allegation levelled against the writ petitioner since being referred in the agreement with a condition that if any of the conditions of the agreement will be violated or breach thereof, the decision would be taken for termination of the contract but herein, the authorities after taking into consideration the nature of allegation and after following the principle of natural justice with respect to the allegations referred in the show cause have taken decision to terminate the contract, therefore, this Court in exercise of power conferred under Article 226 of the Constitution while issuing the Writ of Certiorari by showing interference in the impugned decision would not be proper taking into consideration the fact that the explanation furnished by the writ petitioner has not found to be satisfactory.

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20. This Court has also considered the nature of one of the allegations as per show cause which pertains to, neither the licensee nor the licensees servants or agents shall interfere in any way with the working parts of the pumps or other equipment provided by the Company as would be evident from Clause-9 of the „BPCL Agreement‟ which will come in the category of Critical Irregularities, since the same pertains to tampering in

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the working parts of the outfit or other equipment, in that view of the matter, when the aforesaid irregularities have been established basis upon which the order of termination of contract has been passed, the said decision of the authority cannot be said to be improper taking into consideration the reply of the writ petitioner which has been found to be not satisfactory.

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21. Before parting with the order, this Court deem it fit and proper to consider the judgments upon which the reliance has been put by the learned counsel for the writ petitioner first in the case of SACI Allied Products Ltd., U.P. Vrs. Commissioner of Central Excise, Meerut, (2005) 7 SCC 159.

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Learned counsel has relied upon paragraph-15 and 16 of the aforesaid judgment in order to substantiate his argument that the notice issuing authority cannot go beyond the show cause but this Court after having made the elaborate discussion hereinabove on the basis of the fact and after going across the show cause notice has found that reference of two irregularities as has been referred herein which has been replied by the writ petitioner and after the reply having found to be not satisfactory, a decision has been taken for termination of the contract and therefore, it is not the case where it can be said that the authorities have deviated from the show cause as because two of the charges/irregularities have been found to be proved by taking into consideration the reply furnished by the writ petitioner, hence, this judgment is not acceptable in the facts of this case.

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So far as the judgment rendered in Godrej Industries Ltd. & Anr. Vrs. Commissioner of Central Excise, Mumbai & Anr., (2008) 17 SCC 471 of which para-3 has been relied upon, wherein, it has been laid down that any decision taken if found beyond the scope of show cause notice,

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the same cannot be sustained but as has been discussed hereinabove, since we have reached to the finding that two of the irregularities have been found to be mentioned in the show cause notice which has duly been replied having not found to be satisfactory and hence, merely for one irregularity, even if it has not been referred in the show cause, the entire decision of the authorities will not vitiate, however, the matter would have been different if it a case of only one irregularity but that is not the case herein, hence, this judgment is not applicable in the facts of the present case.

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So far as the judgment rendered in the case of Hindustan Petroleum Corp. Ltd. & Ors. Vrs. Super Highway Services & Anr., (2010) 3 SCC 321 , of which paragraph-31 has been relied upon, wherein it has been laid down that cancellation of a dealership agreement of a party is a serious business and cannot be taken lightly. In order to justify the action taken to terminate such 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 wellestablished principle that no person should be condemned unheard. It was the duty of the petitioner to ensure that Respondent No.1 was given a hearing or at least serious attempts were made to serve him with notice of proceedings before terminating his agreement.

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Herein, on the basis of the fact, this judgment is also not applicable because it is not a case wherein the principle of natural justice has not been followed.

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Further, it is also not the case herein that the contract has been terminated very lightly rather the contract has been terminated by taking into consideration the breaches of the condition of contract, to the effect:-

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“(i) In DU No.9299 the sealing wire on metering unit is found broken and (ii) MS (Motor Spirit) and Hi-Speed Diesel were dry at the time of inspection”, for which, due show cause notice has been issued but the writ petitioner has furnished his reply which having not found to be satisfactory and further after considering the fact that the nature of irregularities is under the heading “Critical Irregularities” as per the dealership guidelines, which provides for termination of contract if irregularity found to be proved, herein the irregularities have been found to be established after consideration of reply and as such, the decision has been taken to terminate the contract, hence on fact, this judgment is not applicable.

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22. This Court has gone across the impugned judgment and found that the learned Single Judge has not considered the facts in the right perspective as has been discussed in detail hereinabove and therefore, according to our considered view, the judgment impugned in this appeal cannot be held to be sustainable in the eyes of Law.

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23. Therefore, this Court after taking into consideration the facts in entirety as discussed hereinabove, is of the view that the order passed by the learned Single Judge suffers from error, accordingly, quashed and set aside.

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24. In the result, writ petition being W.P.(C) No.6378 of 2014 stands dismissed.

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25. Accordingly, the instant appeal stands allowed.

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26. In consequent to disposal of this appeal, Interlocutory Application

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being I.A.No.6847 of 2019 stands disposed of.

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I agree (Dr. Ravi Ranjan, C.J . )

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(Dr. Ravi Ranjan, C.J . )