Allahabad High Court: Making Person Aware Of Material During Appellate Proceedings Without There’s Anything To Indicate, Violates Natural Justice Principles
The Allahabad High Court held that making a person aware of the material during the course of the appellate proceedings without there being anything to indicate that the said material is proposed to be relied upon, violates principles of natural justice.
The Lucknow Bench held thus in a Petition challenging the Order by which the license for retail outlet dealer of Indian Oil Corporation was terminated as well as the Order by which the Appeal was preferred against the said Order was rejected.
A Single Bench of Justice Pankaj Bhatia observed, “When the material proposed to be relied upon, is indicated in the show cause notice, the dealer is confronted and is aware of the materials proposed to be relied upon and thus, would be entitled to challenge the said material including by way of right of cross examination. Making a person aware of the material during the course of the appellate proceedings without there being anything to indicate that the said material is proposed to be relied upon, is clearly in violation of principles of natural justice as, the person against whom the document is relied upon is never given an opportunity to defend the said evidence or to controvert it in any manner.”
The Bench added that the reliance on the clarificatory e-mail which was available to the corporation even before issuance of the first show cause notice and the same not being made a part of the document relied upon in the show cause notice, has resulted in violation of the principle of natural justice.
Advocate Geetika Yadav appeared for the Petitioners while Advocates L.P. Mishra and Manish Jauhri appeared for the Respondents.
Factual Background
The Petitioner was appointed as a retail outlet dealer by the Indian Oil Corporation (IOC) via an appointment letter for running a retail outlet which was being run by the Petitioner in the name and style of M/s. R.S. Filling Station. An agreement was executed in between the parties and the dealership was granted to the Petitioner was governed by the agreement executed between the parties and Marketing Discipline Guidelines (MDG), issued from time to time. In 2017, as per the directions of the State Government, inspections were carried out by the authorities as specified in the Government Order (GO) across various petrol and diesel outlets, and an inspection was also carried out on the Petitioner’s outlet. During the inspection, many things were seized and taken into custody and a plastic seal was affixed.
The Petitioner submitted a reply, denying the allegations and submitted that no extra chips were found in the machines, the seals of machines were found intact, measurements checked were found in order and the calibration of the machines was done by the Weights and Measurement Officer and a certificate was issued by them, thus, no fault could be attributed to the Petitioner. Subsequently, a show-cause notice was issued to the Petitioner and some irregularities were found at the retail outlet. The license of the Petitioner which was cancelled by the State, was restored. However, after the inspection, an FIR was lodged against the Petitioner under Sections 3 and 7 of the Essential Commodities Act. The Respondent (IOC) passed an Order, terminating the retail outlet dealership of the Petitioner. Being aggrieved by the termination order, the Petitioner filed a Writ Petition before the High Court.
Reasoning
The High Court after hearing the contentions of the counsel, noted, “… the petitioner cannot claim negative equality, is a view which is clearly well settled, however, the Corporation being a 'State' cannot take two stands in respect of two different dealers in cases of similar allegations. The two reports indicate almost similar errors and both the reports also indicate that these were not the errors which were standard in the equipment supplied by the OEMs.”
The Court said that the Corporation which is 'State' within the meaning of Article 12, even in the contractual matters, is bound to act in fair and reasonable manner, the reasoning given by the Appellate Authority, in both the Appeals is diametrically opposite.
“Once the corporation has accepted the reasoning given by the same appellate authority in its judgment dated 30.08.2022 and has not challenged the said order any further, the contrary finding recorded by the same appellate authority in the case of the petitioner, is clearly an arbitrary exercise of Appellate Powers”, it added.
The Court further reiterated that an interim order has no precedential value and even otherwise said interim order, has no bearing on facts of the case.
Accordingly, the High Court allowed the Writ Petition and quashed the impugned Orders.
Cause Title- R.S. Filling Station Indian Oil Corporation Ltd. Kheri Thru. Proprietor Amit Singh and Anr. v. Indian Oil Corporation Ltd. Mumbai Thru. Executive Director and Others (Neutral Citation: 2025:AHC-LKO:19838)
Appearance:
Petitioners: Advocates Abhinav Trivedi, Anshuman Singh, Ashok Kumar Singh, and Radhika Singh
Respondents: Advocate Manish Jauhari
