Rajasthan High Court - JodhpurM/S Shree Rajendra Agro Service Centre vs Indian Oil Corporation Ltd on 9 May, 2023Author:Pushpendra Singh BhatiBench:Pushpendra Singh Bhati[2023/RJJD/013634]\n\n      HIGH COURT OF JUDICATURE FOR RAJASTHAN AT\n                       JODHPUR\n                 S.B. Civil Writ Petition No. 4160/2023\n\nM/s Shree Rajendra Agro Service Centre, Through Its Proprietor\nMahendra Kumar Mewara S/o Sukha Ram Mewara, Aged About\n39 Years, Resident Of Ramdevra Gali, At Post Sindru, Sumerpur,\nPali (Raj.).\n                                                                    ----Petitioner\n                                    Versus\n1.       Indian Oil Corporation Ltd., Through Its Chief Manager,\n         Jodhpur Divisional Officer, Sector 12, Chopasani Housing\n         Board, Jodhpur-342008.\n2.       Divisional Retail Sales Head, Divisional Office Indian Oil\n         Bhawan, Plot No.1162-63, Sector No.11, Hiran Magri,\n         Udaipur - 313002.\n3.       M/s Gilbarco Veedeer Root India Pvt Ltd., Through Its\n         Head /director Art Guild House, B Wing, 1St Floor Pheonix\n         Market City, L.b.s. Road, Kurla West, Mumbai - 400 070.\n                                                                 ----Respondents\n\n\nFor Petitioner(s)         :     Mr. Lakshya Singh Udawat\nFor Respondent(s)         :     Mr. Nishant Bora\n\n\n\n      HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATIJudgment\n\nReserved on 03/05/2023\nPronounced on 09/05/20231.    This writ petition underArticle 226of the Constitution of\n\nIndia has been preferred claiming the following reliefs:"It is, therefore, humbly and respectfully prayed that\n      this writ petition of the petitioner may kindly be allowed\n      and record of the case may kindly be called for:-1. By an appropriate writ, order or direction, the order of\n      termination of dealership retain outlet dated 10.02.2023\n      (Annex.14) passed by the respondents may kindly be\n      quashed and set aside.(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                    (2 of 9)                         [CW-4160/2023]2. Any other appropriate writ, order or direction which this\n      Hon'ble Court may deem just and proper in the facts and\n      circumstances of the case may kindly be passed in favour\n      of the petitioner.3. Costs of the writ petition may kindly be awarded to the\n      petitioner."2.    Brief facts of the case, as placed before this Court by learned\n\ncounsel for the petitioner, are that the petitioner-Firm has been\n\noperating a Retail Outlet/Petrol Pump Dealership (RO) at Village -\n\nSanderao, District-Pali, Rajasthan in pursuance of the agreement\n\nentered between the petitioner and respondent-Corporation on\n\n16.04.2019. The petitioner has two Dispensing Units (DU) i.e.\n\nMIDCO and GILBARCO VEEDER ROOT (GVR).2.1. Upon     the    petitioner's      RO     faced      certain     difficulties   on\n\n15.12.2020,      the petitioner contacted the concerned persons,\n\nnamely, Shri Atul Kumar and Shri Chetan Pandya, whereupon the\n\npetitioner was instructed to restart the DU in order to rectify the\n\nhindrance in operation. However thereafter, the MDT Committee\n\nvisited the RO of the petitioner-Firm on 30.12.2020 for inspection\n\nof the said RO regarding certain errors (Error E09 and E28). Upon\n\nthe said inspection by the Committee, the authorities shut down\n\nthe DU in question.2.2   Thereafter, the IOCL Retails Outlet MDT Inspection Report\n\ndated    30.12.2020        was    prepared,         stating       therein   that    no\n\nmanipulation or error has been found in the RO.\n\n2.3. Subsequently, the Original Equipment Manufacturer (OEM)\n\nsubmitted a Lab Analysis Report - Rev.1.0 on 25.02.2021 wherein\n\nit was stated that E09/E28 errors were observed from 30.09.2020(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                   (3 of 9)                     [CW-4160/2023]\n\n\nto 30.12.2020; it was also stated therein that the manipulation\n\nwas found in Dispensing Units (DU) of the RO in question.\n\nThereafter, the concerned Officials, on 12.04.2021, arrived at the\n\nRO in question for the purpose of investigation, and collected all\n\nthe relevant documents from the RO in question for Lab test.\n\nThereafter, another Lab Analysis Report dated 23.08.2021 was\n\nsubmitted by the Original Equipment Manufacturer (OEM), wherein\n\nit was stated that no external component/device was found.\n\n2.4. Thereafter, the respondents issued a letter/notice dated\n\n08.09.2021 to the petitioner, while concluding that based on the\n\nDU error log analysis and investigation, it was established that the\n\nDU has been manipulated for delivery of fuel, and asked the\n\npetitioner-Firm to file reply thereto within 10 days regarding to the\n\naforementioned allegation; failing which the proceedings, as per\n\nMarketing Disciplinary Guidelines-2012,                  were stipulated to be\n\ninitiated.2.4.1. The petitioner-Filed replied the said letter/notice along with\n\nthe relevant service report on 16.09.2021, and stated that no\n\ndevice was ever found in the RO to derive the conclusion of\n\nmanipulation by way of spurious external device. The respondents\n\nhowever, again issued a notice on 15.12.2021 with regard to the\n\nsame DU error, while proposing termination of petitioner-Firm's\n\ndealership as per clause 5.1.4 of the Marketing Disciplinary\n\nGuidelines-2012; the same was received by the petitioner through\n\nE-mail on 24.12.2021. The petitioner filed a detailed reply to the\n\nsaid notice, along with the relevant documents on 29.12.2021\n\nthrough Email and R.P.A.D.(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                     (4 of 9)                            [CW-4160/2023]\n\n\n2.5   However,       against       the      aforementioned             notice     dated\n\n15.12.2021, the petitioner-Firm preferred S.B.C.W.P No.543/2022\n\nbefore this Hon'ble Court, which was disposed of on 10.02.2022\n\nby a Coordinate Bench of this Hon'ble Court, with a direction to\n\nthe respondent-Corporation to give opportunity of hearing to the\n\npetitioner-Firm, along with some technical expert, so as to enable\n\nthe petitioner to put forth its case in its proper perspective.\n\n2.6. Thereupon, the petitioner, vide letter dated 14.05.2022,\n\ninformed the respondent-Corporation with regard to passing of the\n\naforementioned         order     dated        10.02.2022;            whereupon,       in\n\ncompliance     of    the    aforesaid       order      dated        10.02.2022,      the\n\nrespondent-Corporation conducted the personal hearing of the\n\npetitioner on 07.10.2022. However subsequently, the respondent-\n\nCorporation     vide       the   impugned           order          dated    10.02.2023\n\nterminated the dealership retail outlet of the petitioner-Firm;\n\naggrieved thereby, the present petition has been preferred\n\nclaiming the afore-quoted reliefs.3.    Learned counsel for the petitioner submitted that the\n\nimpugned order is violative of the clause 5.1.4 read with clause\n\n8.2 of the Guidelines-2012, wherein it was provided that in order\n\nto attract the impugned action, it is necessary that any type of\n\nmechanism or fitting or gear has been found in a condition that is\n\nfitted to the DU for manipulation of delivery of fuel.\n\n3.1   He further submitted that no substantial proof or the service\n\nhistory records were available to establish that the ECAL connector\n\nhas been manipulated with any external spurious device.(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                     (5 of 9)                        [CW-4160/2023]\n\n\n3.2. Learned counsel also submitted that the inspection was\n\nconducted on 15.12.2020 and notice to show cause was given\n\nafter expiry of a period of one year, and therefore, the entire\n\naction of the respondents is clearly contrary to the Guidelines-\n\n2012; hence, as per learned counsel, the impugned termination\n\norder is liable to be quashed and set aside.3.3. Learned counsel also submitted that the report on GILBARO\n\nVEEDER ROOT (GVR) is completely incorrect, so far as it concludes\n\nthe manipulation of the dispensing unit, and thus, the respondents\n\nhave wrongly passed the impugned order on the basis of the said\n\nreport. He further submitted that the entire problem has arisen\n\ndue to some manufacturing defects in the Dispensing Units (DU)\n\nof the RO in question.3.4. Learned counsel further submitted that the IOCL Retail\n\nOutlet MDT Inspection Report dated 30.12.2020 stated that no\n\nirregularity was found in RO in question, but despite the same, the\n\nrespondents passed the impugned termination order, which is\n\nunsustainable in the eye of law.3.5. In support of his submissions, learned counsel relied upon\n\nthe following judgments:(a) E. Venkatakrishna Vs Indian Oil Corporation & Anr.(2000) 7 SCC 764 and;(b) Harbanslal Sahnia & Anr. Vs Indian Oil Corporation &\n\nOrs., (2003) 2 SCC 107.4.    On the other hand, learned counsel appearing on behalf of\n\nthe respondents, while opposing the aforesaid submissions made\n\non   behalf   of     the   petitioner,      submitted         that   the   impugned(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                     (6 of 9)                        [CW-4160/2023]\n\n\ntermination order was passed on the basis of the report of Original\n\nEquipment Manufacturer, wherein the petitioner's RO was opined\n\nto have suffered with manipulation of the DU, and therefore, once\n\nthe allegation in question is proved, then the respondents were\n\nleft with no other option, but to pass the impugned termination\n\norder, which is justified in law.4.1. Learned counsel further submitted that in case of any\n\nproblem in the Dispensing Unit, the complaint has to be booked\n\nthrough E-ledger; once the complaint is registered, the service\n\nengineer visits the retail outlet to attend such complaint.\n\n4.2. Learned counsel also submitted that the Original Equipment\n\nManufacturer (GILBARCO VEEDER ROOT) has filed its reports on\n\n25.02.2021     and     23.08.2021,         which       clearly     reveal   that   the\n\nDispensing Unit has been manipulated for delivery of fuel.\n\n4.3.    Learned counsel further submitted that the petitioner has\n\nviolated clause 42 of the Guidelines-2012, because if the dealer\n\ndoes    not   follow    the     instructions/guidelines            issued    by    the\n\nrespondents, pertaining to the marketing discipline and safe\n\npractices for supply and storage of the products, then as per the\n\nagreement, the concerned dealership is liable to be terminated.\n\nThus, as per learned counsel, the present petition deserves to be\n\ndismissed.5.     Heard learned counsel for the parties as well as perused the\n\nrecord of the case, along with judgments cited at the Bar.6.     This Court observes that the dealership agreement was\n\nexecuted between petitioner and respondent on 16.04.2019. The\n\npetitioner had faced certain difficulties, whereupon the MDT(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                       (7 of 9)                           [CW-4160/2023]\n\n\nCommittee visited the RO regarding the errors in question.\n\nThereafter,      first        report         was      prepared,        wherein         no\n\nmanipulation/error in the form of external spurious has been\n\nfound. Subsequently, the Original Equipment Manufacturer (OME)\n\nhas submitted its reports, indicating therein that the manipulation\n\nhas been done in RO; on the basis whereof, the impugned\n\ntermination order was passed, after affording the petitioner\n\nadequate opportunity of hearing, as per law.7.    This Court further observes that in the present case, when\n\nthe errors were found for the first time, the complaint was booked\n\nthrough E-ledger, whereupon the MDT Committee visited the RO\n\nfor inspection only, and thereafter, prepared a report dated\n\n30.12.2020.8.    This Court also observes that the service report and MDT\n\nCommittee Inspection Report were prepared only on the basis of\n\ninspection, without any technical assistance; thereafter, the errors\n\nin   questions       were      sent    for    testing      at    Original    Equipment\n\nManufacturer (OEM) Lab, whereupon, it was clearly found that the\n\nManipulation     of      the     Dispensing         Unit     (DU)    was      done    for\n\ndisconnecting the original E-car connector of the Dispensing Unit\n\n(DU) with external spurious device; the Dispensing Unit (DU) was\n\nmanipulated for delivery of fuel\n\nRelevant    portion      of     the    said      report      dated    23.08.2021        is\n\nreproduced as hereunder:"DU ERROR LOG ANALYSIS AND INVESTIGATION\n         Findings:(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                      (8 of 9)                            [CW-4160/2023]\n\n\n         ➢      The Automation error logs were analyzed for the\n         period of "30th Sep 2020 to 30th Dec 2020".(Analysis Time Period).➢      E28/E09 errors were observed on following days\n         •      "14th Oct 2020, 23rd - 24th October 2020, 29th\n         - 30th October 2020,\n         •      27th Nov 2020 - 15th Dec 2020 and 15th -\n         29th Dec 2020"\n         ➢      The repetitive series of data pattern shown bythe E-28/E-09 errors establish a modus operandi of\n         Ecal cable disconnection from the CPU Ecal port.➢      Based on the analysis of the DU Error Logs\n         during the Analysis Time Period and a review of our\n         service records during the same Analysis Time Period,\n         we note that no technical issues were observed on the\n         dispensing unit which could result in the occurrence of\n         the E-28/E-09 errors. It is clarified for the avoidance of\n         doubt that based on the DU service records analyzed\n         from    complaints       captured         in   GVR         IFS   service\n         management system which is integrated with the oil\n         company complaint management system, no service\n         requests were raised by the dealer during the Analysis\n         Time Period.INVESTIGATION AND ANALYSIS RESULTS\n         ➢      Manipulation of the dispensing unit was\n         done by disconnecting the original Ecal connector\n         of the DU with an external spurious device."9.    This Court further observes that as per the clause 42 of the\n\nGuidelines-2012, the Dealer shall, at all times, faithfully, promptly\n\nand diligently observe and perform and carry out, at all times, all\n\ndirections, instructions, guidelines and orders given or as may be\n\ngiven from time to time by the Corporation or its representatives\n\non safe practices and Marketing discipline and/or for the proper\n\ncarrying on of the Dealership of the Corporation; failing which, as(Downloaded on 10/05/2023 at 10:51:35 PM)[2023/RJJD/013634]                   (9 of 9)                    [CW-4160/2023]\n\n\n                                   per clause 45, the Corporation shall be at liberty at its entire\n\n                                   discretion to terminate the agreement forthwith upon or at any\n\n                                   time, after the stipulated failures on the part of the Dealer.10.   The judgment cited at the Bar by the learned counsel for the\n\n                                   petitioner do not render any assistance to the case of the present\n\n                                   petitioner.11.   Thus, in light of the aforesaid observations and looking into\n\n                                   the factual matrix of the present case, this Court does not find it a\n\n                                   fit case so as to grant any relief to the petitioner in the present\n\n                                   petition.12.   Consequently, the present petition is dismissed. All pending\n\n                                   applications stand disposed of.(DR.PUSHPENDRA SINGH BHATI), J.SKant/-(Downloaded on 10/05/2023 at 10:51:35 PM)Powered by TCPDF (www.tcpdf.org)