The second point raised by Mr. Dutta which I will now deal with relates to the effect of the Corporation not making available the test report of Mumbai. According to learned counsel, the test report was in favour of the writ petitioner and if that was made available to him by the Corporation, he would have produced it during the adjudication. If that report was gone into by the adjudicating authority, there was every likelihood of the petitioner being exonerated from the charges of fiddling or tampering with the apparatus. I was shown two English Decisions, R v Layland Magistrates, ex parte Hawthon (1979) 1 All. E.R. 209 and R v Blundeston Prison Board of Visitors, exparte Fox-Taylor (1982) 1 All. E.R. 646 . In first of those cases the Court recognised a duty on the prosecution to inform the defence of any witness who was acting against the prosecution, so that the accused may produce that witness at the trial. The accused had not been so informed. The court held that the trial had been vitiated and there was a breach of the principles of natural justice.
First of all, these decisions relate to a criminal trial or a statutory enquiry, which is not the case here.
Secondly, I do not think that there is any obligation on the part of the prosecution, in this country to disclose to the accused the potential witnesses they were interrogating and supply the names of anti-prosecution witnesses to the defence. Far less is the duty of the prosecution in this country to hand over or give information about witnesses to the accused, particularly when the witness was likely to give evidence against the prosecution and for the defence. It is for each party to produce his evidence. It is no part of the duty of the other side to help the adversary to procure a witness or evidence. Thirdly, the Court was adjudicating the consideration of a show cause notice issued by the Corporation as to why the dealership licence in favour of the petitioner should not be revoked. In this type of cases such strict rules of evidence or the requirement of rigid compliance with the principles of natural justice do not apply. It is only necessary for the Court to ascertain whether the recipient of the show cause notice was given an opportunity to meet the case. It is also necessary to determine whether he was allowed to adduce evidence and whether he was given fair hearing before the decision was made. Of course, there is no denial that the Court is empowered to scrutinize the correctness of the decision actually made.
The second case, in my opinion, has no application. Enquiry by the Board of visitors was inquisitorial. The question was whether the prison authorities were in breach of their duty by not informing the board about a potential witness. Here as discussed hereinafter, the Mumbai report was not relied upon in adjudication.
Mr. Mookerji, learned Senior Advocate for the Corporation, submitted and I think very rightly that the ground on which the writ petitioner was adjudged guilty was that he failed to take adequate care of the premises and installations at the premises. After the Corporation finally sealed the installations in the petrol pump on 24th September 2011, the writ petitioner was found guilty of gross negligence in safeguarding the premises. It is for this reason that his license was terminated. The Mumbai report was not relied upon. In those circumstances Mr. Mookerji was absolutely right when he submitted that if a particular piece of evidence was not relied upon for the purpose of adjudication, it really did not matter whether that piece of evidence was disclosed to the adversary or not. In my opinion neither could it be said that there was breach of the principles of natural justice, because if a particular document was not relied upon in adjudication, the prosecutor was under no obligation to furnish details of or a copy of the said document to the alleged delinquent.
Neither do I think that the petitioner was not given notice of any charge against him that was considered in the adjudication.
Even if the adjudication order is considered through the lens of an administrative law lawyer it cannot be said that it was perverse. Neither is the order of termination disproportionate.
Kolkata High Court (Appellete Side)
M/S. Hazra Filling Station vs Indian Oil Corporation Limited ... on 17 August, 2015
Citation;AIR 2016(NOC)304 Cal
Sutanu Hazra is the proprietor of Hazra Filling Station. It operates from a place at Amta Road, Baltikuri (Kalitala), Dasnagar, Howrah in West Bengal. This filling station used to deal in the products of Indian Oil Corporation(hereinafter referred to as "the Corporation"). The writ petitioner and the Corporation had a special legal relationship. The land where the filling station is situated is owned by the writ petitioner. The Corporation was the lessee. On 27th December, 2005 the parties entered into a dealership agreement whereunder the writ petitioner was appointed as a dealer for the retail sale of the products of the Corporation. In this writ the writ petitioner challenges the termination of this dealership made by the Corporation by its letter dated 16th December, 2011. Now, I will describe the facts in some detail.
Certain clauses in the dealership agreement are in my opinion very important. First of all, the recital clause, as was the agreement, was in standard form. It stipulated that the Corporation would have some interest in the land and in the "super structure thereon" as described in the first schedule. Now, this first schedule denoted the entire land of 8 cottahs 15 chittaks and 22 sq.ft. owned by the petitioner in the aforesaid place together with "all the buildings, structure other movable and immovable property assets thereon". The recital affirmed that the Corporation would install in the property "apparatus and equipments mentioned in schedule II of the agreement." Now the items mentioned in schedule II of the agreement were the usual items that were to be found in a filling station. Apart from the usual things like dispensing pumps, air compressors, car wash equipments, belts, handles, keys, meters, lubricant machines, the premises had a 20/15 KL tank.
Clause 15 gave power to the Corporation to stop or suspend supplies to the dealer. This power was to be exercised by the General Manager of the Corporation at Kolkata.
Clause 45 stipulated that it had the power to terminate the agreement on the happening of the events mentioned therein. Sub-clause ( k ) provided that such right would be exercised if the dealer "tampered with the quality of the products."
Under clause 42 the dealer was to adhere to all laws and regulations and the directions of the officers of the Corporation.
The agreement also contains an arbitration clause, which is clause 61. It is inserted hereunder.
"********************61 (a) Any dispute or difference of any nature whatsoever, any claim, cross-claim, counter- claim or set-off or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation who may either himself act as the Arbitrator or nominate some other officer of the Corporation to act as the Arbitrator, the Dealer will not be entitled to raise any objection to any such Arbitrator on the ground that the Arbitrator is an officer of the Corporation.
*******************(f) The award of the Arbitrator so appointed shall be final conclusive and binding on all parties to the agreement subject to the provisions of the Arbitration Act, 1940 or any statutory modification or re- enactment thereof and the rules made thereunder for the time being in force shall apply to the arbitration proceedings under this clause.
(g) The award shall be made in writing and published by the Arbitrator within two years after entering upon the reference or within such extended time not exceeding one further year as the parties shall by writing agree. The parties hereto shall be deemed to have irrevocably given their consent to the Arbitrator to make and publish the award within the period referred to hereinabove and shall not be entitled to raise any objection protect thereto under any circumstances whatsoever."
The facts are like this.
On 24th September, 2010 the anti-adulteration cell of the Corporation made an inspection of the said premises. They proceeded to test the dispensing units with a 5 litre measure. One nozzle was initially tested. When 5 litres was required to be completely discharged, it was found that the quantity actually delivered was short by 90 ml. This test was conducted with the help of normal electricity supply. All of a sudden there was a power cut. According to the Corporation the supervisor entered the sales building and switched off the power supply. Power supply was resumed through a generator. At this time it was found that all the dispensing units were recording the discharge correctly.
The inspection team wanted to seize the control card and the totaliser pulsar unit of the first dispensing unit checked. Since the machine had been sealed by the Weights and Measures Inspector, the exercise could only be done after opening of the seals by the Weights and Measures Department. The inspector insisted over telephone that the seal should be broken in his presence. According to the minutes the inspection team waited from 12.30 pm to 8.30 pm waiting for the inspector but he did not arrive. It left after affixing the plastic seals and holograms on the control card, totaliser unit and nozzle etc. This was in anticipation of the visit by the Weights and Measures Department early the following week. These parts could be checked after opening the seals by the Weights and Measures Department. In the minutes itself a direction was given to the writ petitioner to safeguard the plastic seals and holograms. He was warned that tampering with the seals would be sternly dealt with. The minutes were signed by the writ petitioner as well as by the representatives of the Corporation.
25th and 26th September, 2010 were Saturday and Sunday. The officials of the Weights and the Measurers department would only be available on Monday, 27th September, 2010.
Now, in the intervening night between the 26 and 27th September, 2010 the writ petitioner reported an incident. It was said that a vehicle had collided with the dispensing unit, breaking the seal and completely damaging the unit. The Corporation did not take this lightly. They believed that under the agreement the writ petitioner had every duty to properly safeguard the installation, particularly when one of the dispensing units had been sealed by the Corporation officials and was to be tested by the Weights and Measures department the following Monday on 27th September, 2010. Although a FIR has been lodged by the petitioner informing the police of the so called accident, according to the Corporation this damage was done "with an oblique aim and intention".
On 28th March, 2011 the Corporation issued a show cause notice to the writ petitioner asking him to show cause within fifteen days as to why the dealership agreement should not be terminated. By a letter dated 14th April, 2011 the writ petitioner replied to it. It was a very detailed reply full of technical information, reciting the terms of the contract rules and regulations etc.
Inter alia, the following points were raised in the reply to the show cause notice.
The writ petitioner had installed a close circuit television in the premises. But since a few days prior to the visit of the inspection team the device was not working. The Gram Rakshi Bahini was employed as night to guards. Fuel was supplied to the Das Nagar Inspector in-charge for proper patrolling. A "police link siren" had been installed and was operative. Two persons who had been deputed to guard the installation were asleep at the time of the incident. Mr. Mookerji, learned senior advocate appearing for the respondent Corporation clarified during hearing of this application that the adjudication of the show cause notice was confined to the issue of alleged failure of the writ petitioner in securing and guarding the premises and the installations therein, after the inspection made on 24th September, 2010.
By a supplementary affidavit affirmed by the said Corporation on 1st June, 2015 the Corporation has brought on record a letter dated 3rd August, 2013 by the writ petitioner to them. It was purported to be a notice under section 106 of the Transfer of Property Act. It stated that with the end of September, 2013 the tenancy would stand determined. In or about September, 2013 before expiry of the notice period, the writ petitioner instituted a title suit (Title Suit No. 194 of 2013) in the learned 6th Court of the learned Civil Judge (Jr. Division) Howrah (Sadar) against the Corporation, claiming a declaration that the they were the owner of the property, an injunction restraining the defendant from letting out the suit property to any third party. In paragraph-5 of the plaint it was pleaded that the corporation / plaintiff was not filing an eviction suit as the notice period had not elapsed.
Even after September, 2013 the plaintiff has not filed any suit for eviction of the defendant. Neither is any reply of the Corporation to the said notice on record.
Now I will deal with the points raised by the writ petitioner, one by one. First of all, Mr. Kishore Dutta learned senior advocate for the petitioner submitted that his client could not be dispossessed without the authority of law, by the grant of licence by the Corporation to a third party. To my mind, there is no dispute with the proposition of law which he tried to advance in the four cases cited by him, Midnapur Zamindary Co. Ltd. Vs. Naresh Narayan Roy reported in AIR 1924 PC 144, Lallu Yeshwant Singh Vs. Rao Jagdish Singh and Others reported in AIR 1968 SC 620, State of West Bengal and Others Vs. Vishunarayan & Associates (P) Ltd. and Another reported in (2002) 4 SCC 134 and Krishna Ram Mahale Vs. Mrs. Shobha Venkat Rao reported in (1989) 4 SCC 131. A person in possession of land which includes even a licensee cannot be evicted without the due process of law. Mr. Dutta assumed that after grant of lease of his client's property to the Corporation, his client was operating a filling station as a licensee under the lessee. This relationship of licensor and licensee remained even after determination of the lease by the Section 106 notice dated 3rd August, 2013.
Mr. Dutta attacked the decision of the Corporation dated 16th December, 2011 on several grounds. They are as follows:
The decision is perverse in as much as the reply of the writ petitioner was not considered.
The decision was without jurisdiction. It was made by the Senior Divisional Retail Sales Manager, Haldia Divisional Office on behalf of the Corporation. It ought to have been made by the General Manager of the Corporation at Calcutta under clause 15 of the agreement.
Adjudication was made of charges not included in the show cause notice. The findings of the Corporation regarding "fiddling" with the dispensing unit were sent for reconfirmation to Mumbai. The Mumbai test report, which is said to be favourable to the petitioner in as much as it tends to hold that there was no tampering with the dispensing machine and hence no short fall in oil discharge, was not made available to him. The petitioner had no obligation to maintain the dispensing unit. Tampering of the dispensing unit had not been proved.
Most of these points were taken at the bar. I do not find them either in the body or in the grounds of the writ petition.
The substantial grounds which were taken in the writ as well as Mr. Dutta in his submissions were that the machines were not malfunctioning. The Mumbai tests report was not made available to the writ petitioner. The penalty of termination of the dealership was disproportionate. The Corporation had accepted the accident theory.
I will deal with all points, including those raised at the bar. First of all, I will deal with the point that the officer issuing the letter of termination had no authority to do so. Clause 15 was placed before me by Mr. Dutta to suggest that only the General Manager, Kolkata had this power. As rightly brought to my notice by Mr. Mookerji, learned advocate for the Corporation, clause-15 has to be juxtaposed with clause-45. Clause 15 and 45 are inserted below "*************************************************
15. Notwithstanding anything to the contrary herein contained the Corporation shall be at liberty upon breach by the Dealer of any covenant in the Agreement to stop and/or suspend forthwith all supplies to the Dealer and/or sales from the premises by the Dealer for such period or periods as the Corporation may this fit, and such right of stoppage and/or suspension of supplies shall be in addition to and/or without prejudice to any other right or remedy of the Corporation under the Agreement or Law. For the purpose of this clause, the General Manager of the Corporation for the time being at Kolkata shall be the sole judge as to whether a breach of covenant of this agreement has been committed by the Dealer. The Dealer shall not be entitled to claim any compensation or damage from the Corporation or account of any such stoppage and/or suspension of supplies.
***********************************************
45. Notwithstanding anything to the contrary herein contained, the Corporation shall at liberty at its entire discretion to terminate this Agreement forthwith upon or at any time after the happening of any of the following events namely.
a) If the Dealer shall commit a breach or default of any of the terms, conditions, covenants and stipulations contained in this Agreement. ****************************************" Mr. Mookerji was absolutely right when he submitted that clause-15 was exercised in case of an emergent situation. It starts with the words "notwithstanding anything to the contrary". It goes on to say that in case of a breach of contract by the dealer, the General Manager at Kolkata may forthwith suspended all supplies to the dealer. Clause-45 deals with the action in case of a usual breach of contract by the dealer, where the Corporation has the power to terminate the agreement. In the exercise of this ordinary power of termination under clause-45, no officer is designated. This power can be used as has been done in this case by any authorised officer of the Corporation. Therefore, the first point raised by Mr. Dutta fails.
The second point raised by Mr. Dutta which I will now deal with relates to the effect of the Corporation not making available the test report of Mumbai. According to learned counsel, the test report was in favour of the writ petitioner and if that was made available to him by the Corporation, he would have produced it during the adjudication. If that report was gone into by the adjudicating authority, there was every likelihood of the petitioner being exonerated from the charges of fiddling or tampering with the apparatus. I was shown two English Decisions, R v Layland Magistrates, ex parte Hawthon (1979) 1 All. E.R. 209 and R v Blundeston Prison Board of Visitors, exparte Fox-Taylor (1982) 1 All. E.R. 646 . In first of those cases the Court recognised a duty on the prosecution to inform the defence of any witness who was acting against the prosecution, so that the accused may produce that witness at the trial. The accused had not been so informed. The court held that the trial had been vitiated and there was a breach of the principles of natural justice.
First of all, these decisions relate to a criminal trial or a statutory enquiry, which is not the case here.
Secondly, I do not think that there is any obligation on the part of the prosecution, in this country to disclose to the accused the potential witnesses they were interrogating and supply the names of anti-prosecution witnesses to the defence. Far less is the duty of the prosecution in this country to hand over or give information about witnesses to the accused, particularly when the witness was likely to give evidence against the prosecution and for the defence. It is for each party to produce his evidence. It is no part of the duty of the other side to help the adversary to procure a witness or evidence. Thirdly, the Court was adjudicating the consideration of a show cause notice issued by the Corporation as to why the dealership licence in favour of the petitioner should not be revoked. In this type of cases such strict rules of evidence or the requirement of rigid compliance with the principles of natural justice do not apply. It is only necessary for the Court to ascertain whether the recipient of the show cause notice was given an opportunity to meet the case. It is also necessary to determine whether he was allowed to adduce evidence and whether he was given fair hearing before the decision was made. Of course, there is no denial that the Court is empowered to scrutinize the correctness of the decision actually made.
The second case, in my opinion, has no application. Enquiry by the Board of visitors was inquisitorial. The question was whether the prison authorities were in breach of their duty by not informing the board about a potential witness. Here as discussed hereinafter, the Mumbai report was not relied upon in adjudication.
Mr. Mookerji, learned Senior Advocate for the Corporation, submitted and I think very rightly that the ground on which the writ petitioner was adjudged guilty was that he failed to take adequate care of the premises and installations at the premises. After the Corporation finally sealed the installations in the petrol pump on 24th September 2011, the writ petitioner was found guilty of gross negligence in safeguarding the premises. It is for this reason that his license was terminated. The Mumbai report was not relied upon. In those circumstances Mr. Mookerji was absolutely right when he submitted that if a particular piece of evidence was not relied upon for the purpose of adjudication, it really did not matter whether that piece of evidence was disclosed to the adversary or not. In my opinion neither could it be said that there was breach of the principles of natural justice, because if a particular document was not relied upon in adjudication, the prosecutor was under no obligation to furnish details of or a copy of the said document to the alleged delinquent.
Neither do I think that the petitioner was not given notice of any charge against him that was considered in the adjudication.
Even if the adjudication order is considered through the lens of an administrative law lawyer it cannot be said that it was perverse. Neither is the order of termination disproportionate.
Now, I come to the one of the most important points in this matter. It is with regard to the arbitration clause. Nobody disputes that there is an arbitration clause in the agreement.
In fact, in paragraph 6 in his reply to the show cause notice, dated 14th April, 2011 the petitioner wondered why he had been asked to reply to the show cause notice instead of being asked to participate in arbitration. In Empire Jute Company Limited and Others Vs. Jute Corporation of India Limited And Another reported in (2007) 14 SCC 680 , the Supreme Court said that where there was a disputed question of fact a writ application was not ordinarily maintainable. If there was an arbitration agreement for resolution of the dispute the parties must be referred to arbitration. In contractual matters where disputed questions of facts are involved, the highest court has said that the writ court should not interfere, as held in Pimpri Chinchwad Municipal Corporation and Others vs. Gayatri Construction Company and Another reported in (2008) 8 SCC 172. Similar was the view of the Court in Rajasthan State Industrial Development and Investment Corporation and another Vs. Diamond & Gem Development Corporation Limited and another reported in (2013) 5 SCC 470. Hindustan Petroleum Corpn. Ltd v. Pinkcity Midway Petroleums reported in (2003) 6 SCC 503 concerned a dispute between a dealer and Hindustan Petroleum Corporation Limited. In this case also there was an allegation of tampering with the seal of the dispensing units. The question arose whether the dispute fell under the Weights andMeasures (Enforcement) Act, 1985. In that case, as opposed to our case, there was no allegation of destruction of the sealed units by an alleged accident, after inspection. It appears that Hindustan Petroleum Corporation Limited stopped the supply of petroleum products to the dealer. The Supreme Court held that arbitration was an adequate remedy. All these cases were cited by Mr. Mookerji. In Indian Oil Corporation Limited Vs. Amritsar Gas Service and Others reported in (1991) 1 SCC 533, also cited by Mr Mookerji Indian Oil Corporation had terminated the dealership of Amritsar Gas Service on the ground that they had wrongfully altered the waiting list of customers and had granted "connections" unauthorisedly and indiscriminately. The highest Court observed that this dispute fell in the domain of private law and had to be determined in that perspective.
However, in certain cases a writ application is maintainable to challenge termination of dealership.
Mr. Justice R.C Lahoti in Harbanslal Sahnia v. Indian Oil Corporation Ltd. reported in AIR 2003 SCC2120 cited by Mr. Dutta enumerated the instances when the writ court could exercise this jurisdiction. He said.
"7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petitioner filed by the appellants was liable to be dismissed, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the Fundaments Rights; (ii) where there is failure of principles of natural justice or, (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act and is challenged. [See Whirlpool Corporation v. Registrar of Trade Marks, Mumbai and others (1998) 8 SCC 11]. The present case attracts applicability of first two contingencies. Moreover, as noted, the petitioners' dealership which is their bread and butter came to be terminated irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings."
In my opinion, usually, after exchange of affidavits, the writ petitioner should not be relegated to an alternative forum. If the writ petitioner had to be relegated to an alternative forum like arbitration it had to be done at the threshold, before filing of affidavits. It is injustice to a party, referring to him of an alternative forum, after he has been asked to contest the case on merits on affidavits. Still, if upon filing of affidavits, it appears to the Court, that the facts are much more disputed than what was foreseen at the motion stage or that the facts are so special and not known to be so at the initial stage, the writ petitioner can be relegated to an alternative forum. That is not the case here. In my judgement, the case as made out in the writ petition is quite different from that in the suit pending in the Court below. The whole question here is whether the termination of the dealership by the letter of the Corporation dated 16th December, 2011 was wrongful or not. This dispute has not nothing to do directly with the suit pending in the court below. That is not an eviction suit. It was filed prior to expiry of the notice period of the section 106 of the Transfer of Property Act, 1882 notice issued by the petitioner to the Corporation. In the plaint reliefs have been sought to restrain the respondent corporation from parting with possession of the property to a third party. Even after expiry of the notice period a suit for eviction has not been filed by the petitioner. No reply to the s.106 notice is on record.
In the writ application the petitioner has sought for orders that the notice of termination dated 16th December, 2011 be stayed. In other words, he wants the revival of the relationship between himself and the Corporation. In the affidavit -in- opposition to the writ application the respondent corporation has not asked for any damages for breach of the agreement by the petitioner. Usually when there is termination of the contract by one party due to breach on the part of the other party there is a claim for damages. In the affidavit-in- opposition I do not find any such claim for damages made by Indian Oil Corporation. If Indian Oil Corporation had claimed damages then the issue would have become much more complicated, much more disputed. In my opinion the proper remedy in that case would have been to refer the parties to arbitration. Here the point is simple. The court is called upon to adjudicate whether the dealership agreement was rightfully determined by the corporation or not.
All the ancillary points raised by the writ petitioner have been dealt with by me earlier in this judgement. It appears that there was no illegality in the conduct of the respondents.
Now, let me come to the most important question: was the termination of 16th December 2011 lawful?
It is indeed very hard to accept the version of the incident given by the writ petitioner. On the face of them the above events which occurred between 24th September, 2010 and 27th September, 2010 would generate a strong suspicion of foul play by the petitioner, in the mind of any reasonable person. In fact, the Indian Oil Corporation had used very moderate expression in their decision dated 16th December, 2011 by saying that the writ petitioner did not take adequate safeguard to protect the installation. In fact the above facts are so glaring, that in my opinion the onus was on the writ petitioner to prove that he was not guilty. He has not discharged that onus. It is very difficult to accept that the equipments were damaged by accident. The incidents would raise a strong suspicion in the mind of any reasonable person that they were engineered by the petitioner to avoid testing of the dispensing units by the officials of the Indian Oil Corporation on 27th September, 2011. I have been able to come to such a finding on affidavit evidence. Acts of breach of contract, by the petitioner, are written in bold on the face of the records. There is no need, in my opinion, to refer the parties to arbitration. In my opinion Indian Oil Corporation has very rightly terminated the contract. Only this issue has been raised and answered in this writ. All other issues between the parties are open.
In those circumstances this writ application is dismissed. Certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities. (I.P. MUKERJI, J.)
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