HINDUSTAN DETERGENT CORPORATION Vs. WEST BENGAL SMALL INDUSTRIES DEVELOPMENT CO LTD
LAWS(CAL)-2004-8-38
HIGH COURT OF CALCUTTA
Decided on August 30,2004

HINDUSTAN DETERGENT CORPORATION Appellant
VERSUS
WEST BENGAL SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD. Respondents

JUDGEMENT

- (1.) I am considering an application under Article 226 of the Constitution of India ('the writ petition' in short) along with an application for further relief filed by the writ petitioners.
(2.) I propose to State the relevant facts for the purpose of deciding the said application: (a) The writ petitioner No.1 is a registered partnership firm and it runs a small-scale industrial unit. The writ petitioner No.1 is manufacturing detergent powder. (b) The Department of Cottage and Small Scale Industries, Goverrnment of West Bengal, adopted decision to market the products manufactured by diverse detergent manufacturers by the West Bengal Small Industries Development Corporation Limited ('the said corporation' in short) through the public distribution system of the Department of Food and Supply, Government of West Bengal. It was decided that the detergent would be sold under a common brand name 'WEBSI'. (c) The petitioner No.1 applied for its enlistment under the said scheme and the said corporation accepted the offer of the petitioner No.1 and enlisted the name of the petitioner No.1 as Websi manufacturer. (d) The capacity of the petitioner No. 1 is 250 M ,T. and the petitioner was always ready and willing to manufacture 50 M.T. Websi per month. However, the respondent No. 1 did not lift 50 M.T. of Websi detergent powders per month from the petitioner No. 1. (e) The petitioners noticed, in course of time, that the respondent No. 1 began to lift less and less quantity of Websi detergent powder from the petitioner No. 1 although the capacity of the petitioner was all through 50 M.T. per month. It is alleged that there is no reasonable justification by the respondent No. 1 for not lifting the registered Websi capacity of 50 M.T. from the petitioner. (f) The petitioner was appointed as the agent of the respondent No.1 initially for the District of Midnapore, but subsequently, the petitioner No. 1 was, also, appointed as the agent for the Districts of Bankura, Birbhum, Purulia and entire North Bengal excepting the District of Malda. (g) In a meeting held in the chamber of managing director of the respondent No.1 it was decided, on July 3, 2001, that each Websi manufacturing unit would have the target of 7 M.T. per month to bring equality amongst the manufacturers instead of fixing the targets according to the capacity of units pro rata linking with the sale of detergent powders. Since the petitioner had the capacity to manufacture 250 M.T. per month and as the initial registered target for the petitioner No. 1 was 50 M.T., the petitioners approached this Court with this writ petition. (h) This matter was listed before Pinaki Chandra Ghosh. J. on April 10, 2002 when the respondents submitted before His Lordship that the policy, as challenged by the writ petitioners before this Court, had not been given effect to. In view of such concessions, His Lordship. inter alia, observed that it was not necessary for His Lordship to deal with the matter at that stage. It is alleged by the petitioners that although it was submitted before this Court that the respondent No.1 did not give effect to the policy as challenged by the petitioners, but in fact such policy had been given effect to even before passing of the said order dated April 10, 2002: (i) It is, further, alleged that between the period April 2002 and March 2003 total 85.5 M.T. Websi powders have been lifted from the petitioner No. 1. The petitioner No. 1, in the meantime, manufactured 40.075 M.T. detergent powders as per the alleged production programme given by the respondent No. 1. However, from January 2003 the respondent No. 1 completely stopped lifting material from the petitioner No. 1 although empty polly packets were supplied to the petitioner No. 1 for packaging detergent powders. (j) The marketing manager of respondent No. 1 on April 3, 2003 issued a show cause notice asking your petitioner to show cause as to why actions would not be initiated against the petitioner No. 1 as it has been alleged by the ration dealers of Ghatal and other areas of Midnapore District that the petitioner No. 1 supplied bad quality of Websi detergent powders. It was, further, alleged that samples were collected from the said areas and after testing, the samples were found below the standard. (k) The petitioner No. 1 replied to the show cause notice denying the allegations made against the petitioners. It was denied, inter alia, that the samples collected by the respondent No. 1 were manufacture by the petitioner No. 1. The petitioner No. 1 requested for supply of referee samples to enable the petitioner No. 1 to get the referee samples tested by recognised testing house.
(3.) The main writ application at that stage was listed before me o;n December 2, 2003. When the matter was taken up for hearing the learned Advocate appearing for the writ petitioners submitted that the authorities concerned failed to consider the causes shown by the petitioners as yet. The learned Advocate appearing for the respondent No. 1 submitted that the authorities concermed would give its a decision in this matter within ten days. The matterwas adjourned to enable the respondent No. 1 to produce the decision of the managing director of respondent No. 1 on the next date of heaaring. However, the managing director was directed to give an opportunity of hearing to the representatives of the writ petitioners and he was directed to pass a reasoned and speaking order. The managing director of the respondent No. 1 passed his order on December 9,2003 by which the petitioner No. 1 has been debarred as the manufacturer of Websi detergent powder and, also, as the supplying agency of the respondent No. 1. It has been noted in the said order dated December 9,2003 that the respondent No. 1 received complaints by some consumers of Websi detergent powders regarding poor quality of such powders supplied through public distributor system in the District of Purba Midnapore and Paschim Midnapore. The petitioner No. 1 was the manufacturer and supplier in respect of the said two districts. On the basis of such complaints, a team comprising of four officials of the respondent No.1 went to different places in the District of Paschim Midnapore to ascertain the facts. During the course of their enquiry, they interacted with number detergent consumers and dealers and came to learn that the Websi detergent powders, supplied through public distribution system, were of poor quality. They, also, approached ration shop dealers and purchased Websi detergent powders posing themselves as consumers from different places of the said district. The powders collected by them was sent for testing by the Electronic Test and Development Centre, a unit of the Cottage and Small Scale Industries Department of Government of West Bengal and the said test centre conducted tests and reported, inter alia, that the active ingredient was substantially less than the stipulated requirement of minimum 15 per cent of active ingredient in the product. It was held that the complaint and grievances of the consumers were genuine. It was, further, held that the petitioner No. 1 manufactured and supplied detergent powders of very low grade, which affected the brand image of the respondent No. 1 adversely.;


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