Rupal Indian Oil vs Indian Oil Corporation

M.N. Bhandari, J.—With consent of the parties, writ petition is heard finally.

By this writ petition, challenge is made to the show cause notice dated 26.6.2013 so as the letter dated 19.9.2012 and another show cause notice dated 19.2.2013. A further prayer is made to direct the respondents to resume supply to the retail outlet of the petitioner.

Learned counsel for petitioner submits that on 19.9.2012, an inspection was conducted by the respondents where they found variation in the stock. The petitioner was not available on the date of inspection as his father was suffering from ailment thus he was in Ahmedabad for their treatment. Immediately after knowing about the inspection and stoppage of supply of petroleum products vide letter dated 19.9.2012, petitioner tried to approach the respondents, rather, sent a notice to cause inspection again. It was only after a period of two days from the date of inspection. The respondents did not respond to the request made by the petitioner. In the meanwhile, sample collected by the respondents was sent for analysis. The petitioner asked the respondents to inform about the result of analysis of the sample taken at the time of inspection but the aforesaid was also not replied. The petitioner was trying hard to find out the outcome of the analysis report as the supply of the petroleum products was stopped by the respondents since 19.9.2012 itself.

The respondents thereafter issued a show cause notice on 19.2.2013 in reference to Marketing Discipline Guidelines (for short ''MDG''). The petitioner gave a detailed reply to the aforesaid. It was necessary for the respondents to notice that there was change in the Guidelines as the Government of India, Ministry of Petroleum has issued fresh Guidelines making it effective since 8.1.2013. The action against the petitioner was initiated subsequent to issuance of new Guidelines thus petitioner''s case should be governed by the new Guidelines and not by the Guidelines already repealed. The respondents did not take care of the aforesaid, rather issued a show cause notice for termination of the dealership on 26.6.2013. The notice for termination of dealership was served upon the petitioner along with reply to the writ petition. The petitioner accordingly amended the writ petition.

Learned counsel further submits that allegation against the petitioner is regarding variation in stock. The aforesaid allegation is absolutely incorrect and is fortified from the fact that whatever samples were collected by the respondents, did not fail rather on analysis, it was confirming to the standards of the petroleum products. In the background aforesaid, it becomes clear that a case of adulteration of the petroleum products does not exist against the petitioner. Ignoring the aforesaid and with bias, notice for termination of the dealership was given. The petitioner immediately amended the writ petition to challenge the said order. As per the new Guidelines made effective since 8.1.2013, the Government of India has provided for the action. In case of first default, punishment of 15 days'' suspension of dealership can be imposed. If the case of the petitioner is considered as per the new Guidelines, petitioner has already suffered punishment as without suspension order, supply was stopped since 19.9.2012 i.e. for last more than 1 year and 9 months by now. Accordingly, impugned show cause notice should be quashed or if it is not interfered at this stage, respondents may be commanded with the direction that case of the petitioner should be dealt with as per the new Guidelines made effective since 8.1.2013. The petitioner''s retail outlet remained closed for a period of more then 1 year 9 months thus petitioner should be allowed to start business with supply of petroleum products by the respondents.

Learned counsel for respondents vehemently opposed the writ petition. He submits that the petitioner''s lapse is serious inasmuch as variation in stock was found while his retail outlet was inspected on 19.9.2012. When a request for re-inspection was made, respondents tried to contact the petitioner but he was not available. In view of above, respondents cannot be blamed for the alleged inaction or delay in the proceedings. Even for service of notice to show cause, petitioner was not available hence delay was caused even to serve the notice. It is also submitted that the Guidelines issued by the Government of India, Ministry of Petroleum has been applied as was applicable at the time of inspection and it cannot under new Guidelines made effective since 8.1.2013. Any event taken place prior to issuance of new Guidelines would be dealt with as per the earlier policy and the Guidelines then existing and cannot be as per the Guidelines now applicable. A reference of the judgment of the Hon''ble Apex Court in regard to prospective application of legislation and sub-ordinate legislation has been given. It is in the case of K.S. Paripoornan Vs. State of Kerala and Others,

Learned counsel for respondents has further raised a preliminary objection regarding maintainability of the writ petition. It has been filed against show cause notice as, till now, final order has not been passed against the petitioner thus writ petition should be dismissed on the aforesaid count alone. Reference of the judgment in the case of Executive Engineer, Bihar State Housing Board Vs. Ramesh Kumar Singh and others, has been given. The prayer is accordingly made to dismiss the writ petition.

I have considered rival submissions of the parties and perused the record of the case.

The facts, as stated, show that inspection was made on 19.9.2012 wherein variation in stock was found. The respondents collected samples for its analysis. It was in absence of the petitioner, who was in Ahmedabad for treatment of his ailing father. His father died later on due to kidney failure. The petitioner made an application for re-inspection of his retail outlet immediately on his arrival, that too, within a period of two days itself but for whatever reasons, request was not acceded by the respondents. The petitioner then sent representations to find out result of the analysis report but, as stated, it was not made known to him. The petitioner was finally served with the show cause notice dated 19.2.2013 at annexure-8 though prior to it, a letter was issued on 19.9.2012 to stop supply of petroleum products, which cannot be considered to be an order of suspension. In view of the facts aforesaid, initiation of the action for the incidence was in the month of February, 2013 though prior to it, new Guidelines were introduced by the Ministry of Petroleum, Government of India making it effective since 8.1.2013.

The question for my consideration is as to whether the case in hand is to be governed by the Guidelines made effective since 8.1.2013 or the old Guidelines, then existing at the time of inspection?

A reference of the judgment in the case of KS Paripoornan (supra) has been given. To substantiate the argument, para 67 of the said judgment has been referred for this purpose. The said para is quoted hereunder for ready reference-

In the instant case we are concerned with the application of the provisions of Subsection (1-A) of Section 23 as introduced by the amending Act to acquisition proceedings which were pending on the date of commencement of the amending Act. In relation to pending proceedings, the approach of the courts in England is that the same are unaffected by the changes in the law so far as they relate to the determination of the substantive rights and in the absence of a clear indication of a contrary intention in an amending enactment, the substantive rights of the parties to an action fall to be determined by the law as it existed when the action was commenced and this is so whether the law is changed before the hearing of the case at the first instance or while an appeal is pending. (See: Halsbury''s Laws of England, 4th Edn., Vol. 44, para 922). Similar is the approach of the courts in India. In AIR 1941 16 (Federal Court) Sulaiman, J. has observed.:

Undoubtedly, an Act may in its operation be retrospective, and yet the extent of its retrospective character need not extend so far as to affect pending suits, Court have undoubtedly leaned very strongly against applying a new Act to a pending action, when the language of the statute does not compel them to do so.

To the same effect are the observations of Varadachariar, J., who has stated:

There can be little doubt that there is a well-recognised presumption against construing an enactment as governing the rights of the parties to a pending action.... There are two recognised principles, that vested rights should not be presumed to be affected and that the rights of the parties to an action should ordinarily be determined in accordance with the law as it stood at the date of the commencement of the action. The language used in an enactment may be sufficient to rebut the first presumption, but not the second. Where it is intended to make a new law applicable even to pending actions, it is common to find the legislature using language expressly referring to pending actions.

The perusal of the para reveals as to when an amendment in the Act may operate retrospectively or it would be prospective. If a right exists in favour of any one, any amendment in the legislation has to operate prospectively and would not take away the said right. In the same manner, if an action has already been initiated then it is to be as per the law then existing and not under the new provisions.

As against the aforesaid, learned counsel for petitioner has referred the judgment of the Hon''ble Supreme Court in the case of T. Barai Vs. Henry Ah Hoe and Another, Therein, in regard to an offence, the punishment would not be as per the law which was applicable at the time of incidence but as per amended provisions.

The case in hand is shown to have similarity as the respondents intend to punish the petitioner as an outcome of the inspection held on 19.9.2012. In my opinion, it is not a case to make Guidelines applicable retrospectively if the facts of this case are looked into. It is true that the inspection was caused on 19.9.2012 but initiation of the action by issuance of the show cause notice is on 19.2.2013. Prior to the aforesaid, letter dated 19.9.2012 was sent to stop supply of petroleum products, which is not considered to be suspension by the counsel for respondents. In the background aforesaid, respondents are under an obligation to regulate their action as per the Guidelines made effective since 8.1.2013.

The action should be under the Guidelines as were existing on the date of initiation of the action. If that analogy is to be applied, initiation of the action by the respondents against the petitioner is when the show cause notice was issued on 19.2.2013. In view of above, respondents should regulate their action as per the Guidelines made effective since 8.1.2013 and not under the Guidelines then existing at the time of inspection and were not existing at the time of initiation of proceedings. The view aforesaid is supported by the judgment referred by the respondents. A careful reading of para 67 of the judgment in the case of KS Paripoornan (supra) shows that existing right of the parties cannot be taken away with the amendment. Same way, if the proceedings have already been initiated, it has to be governed by the rule then existing and not by the amended rules. In the instant case, initiation of the proceedings against the petitioner is in the month of February, 2013 and not prior to it. In the background aforesaid, I am of the opinion that petitioner''s case should be regulated by the Guidelines issued by the Ministry of Petroleum, Government of India, made effective since 8.1.2013.

At this stage, it would also be relevant to decide preliminary objection raised by learned counsel for respondents. It is submitted that show cause notice has been challenged without final order therein. Reference of the judgment in the case of T Barai (supra) has been given. If the discussion made in the earlier paras is looked into, it has been clarified that action initiated against the petitioner should be regulated by the Guidelines then existing or by the Guidelines made effective since 8.1.2013. The issue aforesaid has been concluded holding that it should be as per the Guidelines made effective since 8.1.2013. This court is not interfering in the initiation of the action but holding that it should be as per the Guidelines now existing and made effective since 8.1.2013.

In view of the observations made above in the earlier paras with the directions to the respondents to regulate their action under the Guidelines made effective since 8.1.2013 and no interference in the show cause notice has been made. In view of the above, writ petition is required to be disposed of with the direction to the respondents to conclude their action in pursuance to the show cause notice within shortest possible time, which should not be later than a period of one month from the date of receipt of copy of this order. The petitioner is not getting supply of petroleum products and virtually suffered discontinuance for work for last more than 1 year and 9 months by now. Thus, taking the aforesaid as well as the fact that sample taken by the respondents has not failed and thereby a case of adulteration does not exist, respondents will take proper and reasonable view in the matter. In view of the aforesaid, I am unable to accept the argument regarding maintainability of the writ petition because this court is not causing interference in the show cause notice but a direction is issued to regulate the action as per the Guidelines made effective since 8.1.2013. The writ petition is disposed of with the aforesaid. This disposes of the stay application also.