The Supreme Court confirms the cancellation of the HP concession

Reading time: 09 minutes

Synopsis

The Supreme Court said that anyone violating the control order is liable to be punished by the court. Thus, for a person to be prosecuted for violation of the provisions relating to searches and seizures contained in section (7) thereof, such person must be brought to court, particularly for violating the said control order.

A bench comprising Justices JK Maheshwari and Sanjay Karol allowed the appeal filed by Hindustan Petroleum Corporation Limited against the order of the Patna High Court quashing and setting aside the order of termination of concession license of Dharamnath Singh after collection samples, after noting that the defendant herein had not been prosecuted for violation of the control order.

The High Court ruled that an external agency, SGS India, had “absolutely no authority to take samples or make any seizure of any product”, in violation of Section 7 of the Order. control as well as article 100 of the Code of Criminal Procedure. Therefore, it was held that even if the appellant(s) had the power to appoint officers for reasons of administrative convenience, such officers cannot be permitted to flout the provisions of law available to them in the present case, did he declare.

Additional Solicitor General N Venkataraman submitted that clause 4 of the agreement provides that a license may be terminated immediately: (a) upon termination of the agreement; (b) violation of any of the conditions described in Article 58.

The provisions of the control order do not apply to the present case since the respondent is not prosecuted for its violation and the agreement is terminated for violation of the terms and conditions, it said.

The respondents, on the other hand, stated that the termination of the contract could not take place without compliance with the inspection guidelines laid down in the control order.

They said the agreement does not prescribe any procedures for sample collection, testing or any other procedures for suspected product adulteration. The Control Order (2005) was preceded by a similar order of 1998 and both would be binding on an oil company. As such, the procedure mentioned in article 7 of the control order must be followed.

The agency’s sample collection process was improper. The sample was taken in the absence of an authorized officer of the appellant, they said.

Due to non-compliance with the provisions of the control order, the collection of samples is baseless, the respondents argued.

“No power has been given to the oil company to circumvent the sample collection procedure. Section 100 CrPC has been made applicable to ensure the sanctity of the investigation as its outcome could attract penal consequences Granting such powers to a third party (agency) would be illegal,” they said.

The court referred to the Inter Se Agreement 1997, the Motor Petrol and High Speed ​​Diesel (Regulation of Supply, Distributor and Prevention of Malpractices) Ordinance 2005 and the 2005 Marketing Discipline Guidelines.

The court also noted the appellant’s contention that the defendant should be prosecuted only for the violation of the terms of the agreement between the parties and not for any other alleged violation, if any.

“The gist of the decision is that when a dealership contract is to be cancelled, it must be done in strict accordance with the rules/guidelines framed in this regard. When a sample test is carried out, the dealer must be informed in advance in order to guarantee the presence of his representative”, declared the judiciary.

In the present facts, the court said, the respondents challenged the process of collection of samples, being aggrieved by the fact that a third party, namely SGS India, had been appointed to collect samples and not by the absence notification. or any other failure to respect the principles of natural justice.

Having taken note and considered all the arguments raised within the Bar, the court declared that the appeals are allowed keeping in mind that the termination of the contract between the parties was solely based on the violation of the terms of the concession contract .