TMI Blog2010 (2) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No.1 for the retail sale or supply of petrol, diesel, motor oils, grease and such other products as might be specified by the Corporation from time to time, at the premises in question. The Agreement was to remain in force for 15 years with effect from 30th August, 2003. However, both the parties would be at liberty to determine the Agreement without assigning any reason by giving three months' notice in writing to the other of its intention to terminate the Agreement and upon expiration of such notice, the Agreement would stand cancelled and revoked, without prejudice to the rights of either party against the other in respect of any matter or thing antecedent to such termination. It was also indicated that such liberty would not prejudice the rights of the Corporation to terminate the Agreement earlier on the happening of any of the events mentioned in Clause 58 of the Agreement. Clause 4 of the Agreement provided that the licence and permission granted for the use of the outfit would terminate immediately on the termination of the Agreement or on any breach of any of the terms thereof. The relevant portion of Clause 58 of the Agreement is reproduced hereinbelow :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horized representative, SGS India Pvt. Ltd. submitted its report on the Marker Test indicating such contamination. Accordingly, in terms of the Marketing Disciplinary Guidelines, referred to hereinabove, on 27th May, 2008, sales and supplies of all the products from its outlet were suspended by the petitioner Corporation to the Respondent No.1 because of the sample failure. According to the petitioner Corporation, on the very next day on 28th May, 2008, the Respondent No.1 was given notice that a Nozzle Test of HSD was to be conducted at the Barauni Terminal on 29th May, 2008. According to the petitioner Corporation, the Respondent No.1's representative refused to acknowledge the notice. However, the Area Sales Manager of the petitioner Corporation is alleged to have informed the Respondent No.1 telephonically of the Nozzle Test to be conducted on 29th May, 2008, at its Barauni Terminal. Despite having been given notice, no one appeared on behalf of the said respondent when the comparison test was conducted in Barauni and the same was held at the Barauni Terminal on 29th May, 2008, in the presence of the representative of SGS India Pvt. Ltd. (the agent of the petitioner), the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of the Respondent No.1. The learned Single Judge was of the view that since the retesting had been done without proper notice to the Respondent No.1, as per the Marketing Discipline Guidelines, the same had caused severe prejudice to the Respondent No.1 and the order of termination of the Dealership Agreement dated 9th September, 2008, could not, therefore, be sustained. 6. Appearing for the petitioner Corporation, Mr. U.U. Lalit, learned Senior Advocate, submitted that the Nozzle Test had been conducted at site in the presence of the representative of the Respondent No.1 and also the transporter and samples had been drawn for testing at site and also for future testing, in the presence of the parties. Since the Respondent No.1 failed the Marker Test during the Nozzle Test, the samples taken earlier were sent to the Forensic Laboratory at Barauni for cross- checking. Mr. Lalit submitted that notice had been duly given to both the Respondent No.1 and the transporter, but that while the representative of the transporter was present, the Respondent No.1 chose to be absent during the Marker Test in the laboratory. Mr. Lalit submitted that the Show Cause Notice issued to the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e termination of a petrol pump dealership. In the said case, one of the objections taken to the writ petition was that the said jurisdiction had been wrongly invoked since an alternative remedy was available and questions relating to the termination gave rise to serious questions of fact arising out of the contract between the parties, which, ordinarily the writ Court would not be entitled to go into. The Supreme Court went on further to hold that in such circumstances the writ petition was not the proper remedy and the refusal of the High Court to entertain the writ petition on the ground of existence of an alternative remedy should not be interfered with. Several decisions on the same lines, including that of Amritsar Gas Service's case, were taken into consideration while arriving at the said decision on being fully conscious of the fact that only if a question of public law character was involved, could a writ petition be entertained in the existing circumstances. 10. Mr. Lalit, however, pointed out that a differing view had been taken by this Court in State of Himachal Pradesh Ors. vs. Gujarat Ambuja Cement Ltd. Anr. [(2005) 6 SCC 499] in which the question as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008, at the retail outlet itself. The learned counsel pointed out that by letter dated 30th May, 2008, the Respondent No.1 informed the Senior Regional Manager of the petitioner that although the representative of S.G.S. India Pvt. Ltd. had come to the retail outlet on 26th May, 2008 in order to conduct a marker test of the nozzle sample of MS and HSD from the dispensing unit, such a test could not be conducted since the retail outlet was dry in respect of both MS and HSD, which made it impossible for samples to be drawn from the nozzles of the dispensing units of the said products. Similarly, the underground tanks were also dry and there was hardly any MS or HSD available in tank Nos.1 and 2 from which samples could be extracted through the nozzle. Mr. Bhatt also pointed out several other letters of protest written on behalf of the Respondent No.1 against the termination of supply of petroleum products to the said Respondent and requesting that the same may be restored immediately. 13. Mr. Bhatt then referred to the reply given on behalf of the Respondent No.1 on 25th June, 2008, to the show cause notice wherein again the above facts were reiterated and it was also asserted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent No.1 by Shri D.K. Dash was in hand written script. In addition, the same did not have any reference number and though dated 28th May, 2008, was alleged to have been tendered on 29th May, 2008, the very date on which the Marker Test was to be held in the Barauni Terminal at 3.00 p.m. Mr. Bhatt urged that the said notice was obviously manufactured for the purpose of termination of the dealership of the Respondent No.1. 16. Having carefully considered the submissions made on behalf of the respective parties and also having considered the various decisions referred to by learned counsel, we are of the view that the case made out on behalf of the Respondent No.1 is more probable. Although, the transporter's representative was present at the terminal at the stipulated time on 29th May, 2008, that by itself cannot give rise to a presumption that service had been effected also on the Respondent No.1, in the absence of any proof in that regard. Except for the endorsement on the hand-written notice said to have been given by Mr. Dash, there is nothing else on record to even suggest that notice had been sent to the Respondent No.1 and that the same had been refused. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etention sample in the laboratory at Barauni Terminal. The Guidelines being followed by the Corporation require that the dealer should be given prior notice regarding the test so that he or his representative also can be present when the test is conducted. The said requirement is in accordance with the principles of natural justice and the need for fairness in the matter of terminating the dealership agreement and it cannot be made an empty formality. Notice should be served on the dealer sufficiently early so as to give him adequate time and opportunity to arrange for his presence during the test and there should be admissible evidence for such service of notice on the dealer. Strict adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer. In the present case, there is no admissible evidence to prove service of notice on the respondent or refusal of notice by the respondent. Further, the notice dated 28.05.2008 which was allegedly refused by respondent, did not give him adequate time to arrange for the presence of himself or his representative during the test to be cond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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