D NAGARAJAN Vs. CHIEF REGIONAL MANAGER

JUDGEMENT

(1.) THE writ petition is filed challenging the show -cause notice issued by the respondent dated 1.9.2007 by which the petitioner is directed to show -cause as to why action including the termination of dealership agreement cannot be taken against the petitioner in accordance with clauses 55(I) and (K) for violation of clauses 26 and 42 of the dealership agreement by giving 7 days' time to the petitioner.

(2.) THE petitioner company was appointed as a dealer for sale of petroleum products of the respondent Corporation from 1962 and an agreement was entered into subsequently on 1.6.1981. On 14.8.2007, an inspection was conducted in the retail outlet of the petitioner by M/s. SGS India Private Limited and on test of sample it was observed that nozzle sample of both MS and HSD have failed in the Marker Test as they were found to have turned into pink. Thereafter, the nozzle samples of MS/HSD in Marker Test and the Tank Truck Retention samples and nozzle samples were collected from the outlet jointly by SGS and the respondent on the same day and sent for Joint Test. In the Joint Marker Test conducted on 17.8.2007, it was observed that MS and HSD drawn from the outlet failed in the Marker Test while the Tank Truck Retention Samples stood passed the said test. Copies of the Joint Test Reports were also handed over to the petitioner. According to the petitioner, since the nozzle samples and Tank Truck Retention Samples resulted in variations, the samples should got tested as per the Marketing Discipline Guidelines as per Three Tier Sampling system. The said method is provided in clause 2.4.4 of the Guidelines. The complaint of the petitioner is that without following the said guidelines and procedure, the impugned show -cause notice was issued by the respondent having coming to the premeditated conclusion that the petitioner has altered MS and HSD and therefore, the show -cause notice is only an empty formality.

(3.) IT is the case of the respondent in the counter affidavit that the writ petition is not maintainable since it is only a show -cause notice which is impugned in the writ petition. However, it is stated by the respondent that the petitioner cannot challenge the issue of show -cause notice after causing proved adulteration of Motor Spirit (MS) and High Speed Diesel (HSD). According to the respondent, the writ petition is not maintainable because there is an arbitration clause in the dealership agreement by which any dispute can be referred to the arbitration proceedings. It is also stated by the respondent that the petitioner has quoted wrong guidelines while the respondent has acted as per the amended MDG (Marketing Discipline Guidelines) dated 15.1.2007. It is the further case of the respondent that the petitioner's case is a proven adulteration of petrol and diesel and there is no premeditation in issuing show -cause notice.