- (1.) This writ petition has been filed by petitioner M/s. Shri Karni Filling Station aggrieved by notice dated 9.12.2011 (Annexure 12) by which petitioner was called upon to show cause as to why the dealership agreement dated 4.8.1983 and its RO dealership should not be terminated. In that notice, however, it was also directed that sales and supplies of the retail out are suspended with immediate effect. Petitioner originally filed a civil suit with various prayers including the prayer for injunction against stoppage of supply in which an objection was raised by the respondent IOC that it has the remedy of raising arbitration dispute. Whereupon, the civil suit was dismissed with liberty to the petitioner to avail that remedy. Petitioner served a notice upon the respondents for appointment of arbitrator. Respondents have accordingly appointed Shri Sanjoy Bhattacharya, Senior Manager, Engineering, IOC, Rajasthan State Office, as arbitrator as per clause 69 of the Agreement. The petitioner has approached this Court challenging the show cause notice dated 9.12.2011 but in the course of argument, learned counsel for the petitioner has argued that since the arbitration proceedings may take time, supply of oil through other dispensing units, which were found to be in perfect condition, may be ordered to be restored.
(2.) Shri K.K. Shah, learned counsel for petitioner has argued that it is only that particular dispensing unit in which according to the allegation of the respondent an additional chip was found, the supply could be discontinued and not of the entire retail outlet. Even that could not be done by respondents because they have failed to establish any tempering of the dispensing unit by the petitioner. Learned counsel invited attention of the court towards, manual, which he has downloaded from Internet, Part No. WF whereof mentions the product description as PTFE Tube having UL/CUL as E 203950 at page 22, which according to the counsel is the tube and not chip. It is not shown as a chip even in the report of inspection carried out by the Anti Adulteration Team of the IOC, which is responsible for maintenance and upkeep of the dispensing units. Reference is made to the Inspection Report of Dispensing Unit dated 8.11.2011 (Annexure 10).
(3.) Shri K.K. Shah, learned counsel for the petitioner has also cited judgment of the Division Bench of the Andhra Pradesh High Court dated 21th July, 2011, in Writ Appeal No. 318 of 2011 - The Union of India and Others vs. M/s. P. Laxmikanth Rao and Sons, whereby the Division Bench dismissed the writ appeal filed against the order dated 14.3.2011 of the Single Bench in Writ Petition No. 20302 of 2010 - M/s. P. Laxmikanth Rao and Sons vs. The Union of India and Others. In fact, petitioner therein was a dealer in products of the Hindustan Petroleum Corporation Limited and a show cause notice was issued alleging that the HSD dispensing unit was delivering 140 ml. Liter short, for every five liters and that the lever of the metering unit was found to have been tampered, by replacing a gear with 39 teeth, in the place of the one with 38 teeth. Not satisfied with the explanation of the petitioner therein, the Corporation terminated the dealership. The Single Bench observed that the equipment for measuring and supply of petroleum products is chosen and fitted by the respondents themselves. A dealer has absolutely no say in the matter. Further, the terms of agreement prohibit a dealer from meddling in any manner, with the dispensing unit. If any defect is noticed, the only step which the dealer is required to take is that he should report it to the company. The court further observed that the petitioner made an elaborate reference to the previous inspections, the condition of seals etc. In the impugned order, it was stated that a duplicate gear was implanted by the petitioner. Not a word was said about the seal being in tact. It was further observed that the opinion tendered by the manufacturer of the unit i.e. Larson and Tubro, was not made available to the petitioner. The court held that it is a case of non-application of mind. Things would have been different had the respondent said that the petitioner, or for that matter any individual, can have access to the gear even while the seal was intact. Failure to supply the same, resulted in violation of principles of natural justice. The petitioner cannot be expected to answer certain issues regarding which he has no information. The Single Bench set aside the impugned order. In appeal, the Division Bench of the AP High Court maintained the view taken by the Single Bench and dismissed the appeal.;