Sanjib Banerjee, J.
1. The petitioners question the propriety of a show cause notice issued by the Indian Oil Corporation Limited threatening to terminate an agreement by which the petitioner firm operates a petrol pump on NH-6 at Mechogram in district Purba Medinipur. The principal prayer in the petition is to set aside the show cause notice. In course of time the petitioners have attempted to enlarge the scope of the proceedings, now that a final order has been made and the corporation has sought leave to implement the final order. In view of the fact that the impugned show cause notice had culminated in a decision being rendered by the corporation, the writ petitioners were given the liberty to withdraw the limited challenge to the show cause notice with leave to carry all points in the comprehensive challenge to the final decision of the corporation. The petitioners have insisted on pursuing this writ petition.
2. An interim order was made on May 17, 2007 that has been continued. The court permitted the corporation to proceed with the show cause notice in accordance with law. The corporation was also given liberty to pass a final order but it was directed that no effect would be given to such final order without leave of court. By an order of July 4, 2007 the corporation was given leave to issue a supplementary show cause notice. Affidavits, supplementary affidavits and even an application have been filed. Pursuant to an earlier direction the records relating to the matter have remained in court.
3. The petitioners found their challenge to the show cause notice of May 4, 2007 on mala fides on the part of the corporation and its officials. The petitioner firm sells the Xtra Premium brand of petroleum and diesel from the retail outlet. The firm had put in a requisition for supply of Xtra Premium gasoline in the beginning of November, 2006. On November 4, 2006 the corporation sent a tanker with 4,000 kl of ordinary petrol (known as motor spirit or MS). The petitioners' outlet does not dispense ordinary motor spirit. It is the petitioners' case that the second petitioner, who is the principal person in control of the petitioner firm and the operation at the retail outlet (the other partners being his daughters), was not present at the time that the delivery of motor spirit was effected. The motor spirit was decanted into the underground tanks meant for XP brand and was, over the next few days, sold to customers as XP brand. There are varying explanations at different stages proffered by the petitioners as to the circumstances in which fuel containing an overwhelming percentage of ordinary motor spirit was sold as XP branded fuel.
4. It is the petitioners' case that for the next three months nothing came of the matter though it had been detected both by the corporation and the petitioners that ordinary motor spirit had been supplied to the petrol pump and had been sold as XP branded fuel thereat. The petitioners state that it was only in March, 2007 that an inspector of the corporation issued an ante-dated notice of November 23, 2006 calling for an explanation in the matter. It is the petitioners' further case that such inspector advised the second petitioner to sign a letter bearing the date of November 30, 2006 on the lines that such inspector suggested on the assurance that the matter would be treated as closed thereupon. The petitioners allege that the notice to show cause of May 4, 2007, in such circumstances, came as a bolt from the blue as the petitioners were content that the aberration had been overlooked and had been given a quiet burial.
5. The petition was filed shortly after the petitioner firm responded to the show cause notice of May 4, 2007. The show cause notice, in its material part, reads as follows:
On receipt of the complaint from Ministry of Petroleum and Natural Gas an investigation was held by our Officers when following were found in the RO.
1. The outlet is selling only XtraPremium as the only MS tank available at the RO has been converted to XtraPremium. There is no storage tank for normal MS at the outlet.
2. It has been established from SAP record that on 04.11.2006 you uplifted a mixed load consisting of 4 KL normal MS and 8 KL of normal HSD. The concerned Field Officer on 23.11.06 issued a show cause to you asking to explain as to how 4 KL of normal MS was uplifted when there was no storage tank of normal MS at the outlet when you have explained that you were forced to take normal Petrol to retain the customer to avoid dry of stock. (Such type of explanation is not at all acceptable to the Corporation.)
3. You have sold the normal MS at XtraPremium rate from your RO which is a gross violation in terms of the provision of the aforesaid dealership agreement as well as in terms of the various provisions of the MDG.
As per clause 32 of the Dealership Agreement dated 22.03.2002 executed between yourself and our Corporation to the effect that the Dealer cannot sell the Corporation's Products at higher rate of prices than those which the Corporation shall from time to time prescribe. In default, the Corporation may, without prejudice to any other right to remedy, terminate this Agreement with immediate effect.
6. The petitioner firm's reply of May 10, 2007 claimed that an explanation had earlier been furnished which should have satisfied the corporation. The petitioners asserted that the firm had placed an indent for 12 kl XP on November 4, 2006 along with a demand draft therefor in the sum of Rs. 6,10,000/-. The petitioners blamed the corporation for creating the confusion by supplying a mixed load of 4 kl of motor spirit and 8 kl of high speed diesel from the relevant installation without any prior intimation to the firm. The reply spoke of the second petitioner not being present as he 'had left station on 29.10.2006 and was away at Calcutta till 09.11.2006 for (his) medical check up.' It was stated that the second petitioner visited the retail outlet only on November 10, 2006 and 'came to know that there had been a supply of 4 kl normal MS along with 8 kl HSD.' The uneducated staff at the retail outlet, the reply continued, had decanted the motor spirit 'bonafide believing it to be Xtra premium since it was never expected that there would a supply of MS as against an indent of Xtra premium.' The reply alleged that the firm had refunded the excess amount to the customers who had been delivered ordinary motor spirit instead of the XP branded fuel. The petitioners wondered if the complaint, on the basis of which the show cause notice had been issued, had been lodged after the refund was made. The reply referred to a practice of 'stop sale' that is followed by the corporation in such a case and held the corporation responsible for not informing the retail outlet of the 'mistake.' Over a page of the reply, the petitioners narrated the impeccable conduct of the retail outlet before repeating that there was no ill intention on the petitioners' part that should warrant the termination of the dealership agreement.
7. There is no assertion in the response to the show cause notice that the earlier notice of November 23, 2006 or the reply thereto of November 30, 2006 had been ante-dated or that such earlier reply had been prepared at the dictates of an officer of the corporation or even of the fact that the petitioners had been assured that the matter would be treated as closed upon the earlier reply being tendered on the lines as suggested by the corporation's officer.
8. In the supplementary show cause notice of July 26, 2007 the corporation made a more specific charge and alleged that the firm had committed a major irregularity within the meaning of clause 8 of the first appendix to the Marketing Discipline Guidelines, 2005 that applies to dealerships of public sector oil marketing companies. The supplementary show cause notice also charged the petitioner firm of having acted in a manner which was 'prejudicial to interest and good name of the Corporation and its product and for which the dealership agreement (was) liable to be terminated under Clause 56(K)' of the agreement.
9. The dealer sought time to react to the supplementary show cause notice on the ground of the ill health of the second petitioner. The substance of the supplementary show cause notice was dealt with in the petitioners' letter of September 28, 2007. To complete the chronology, though such matters may not be central to the grounds on which the challenge to the show cause notice is founded, the petitioner firm was afforded an opportunity of hearing by the corporation. A hearing was conducted before the chief retail sales manager of corporation on October 29, 2007. The corporation thereafter informed the petitioner firm and its partners by a letter of December 24, 2007 that the hearing officer had been replaced as it had come to light that the person initially appointed for such purpose had 'some previous knowledge of the circumstances leading to the ... Show Cause Notices.' A de novo hearing was convened before the senior manager (retail sales), WBSO. The petitioner firm addressed a letter on January 11, 2008 to the new hearing officer, summarising the defence and signing off with a request that 'all the parameter and consequences may be considered before taking any final decision.'
10. In course of the hearing, the petitioners have sought to challenge the replacement of the original hearing officer. The petitioners imply that the original officer was favourably disposed towards the petitioner firm and had indicated as much, which prompted the vindictive corporation to replace him. The petitioners contend that the mala fides on the part of the corporation that culminated in the arbitrary issuance of the show cause notices would also be evidenced by the change of the hearing officer midstream.
11. The petitioners submit that despite the officer who was responsible for the ante-dated notice and reply of November 23, 2006 and November 30, 2006, respectively, being impleaded, such officer has not pledged his oath or refuted the charges levelled in the petition.
12. The petitioners refer to a judgment reported at AIR 1964 SC 72 : : (1966)ILLJ458SC (S. Pratap Singh v. The State of Punjab) to demonstrate the span of judicial review upon a show cause notice being challenged on the ground of mala fides. In that celebrated case mala fides had been alleged against the Chief Minister of Punjab by a suspended civil surgeon in the employment of the State Government. The surgeon had been granted leave preparatory to his retirement but orders were subsequently passed revoking the leave and recalling him to duty, placing him under suspension and ordering a departmental enquiry against him. The legality of such orders was challenged in the High Court which failed. The surgeon carried an appeal to the Supreme Court and argued the case in person. Two grounds were urged: that the orders were contrary to the service rules applicable to the appellant and that they had been passed mala fide, by or at the instance of the Chief Minister who was personally hostile to the appellant.
13. The Supreme Court considered the second ground urged in great detail 'to state the principle underlying this branch of the law.' It was argued on behalf of the respondents in that case that mala fides had not been made out by the evidence on record. The parameters for an inquiry to be embarked upon following a charge of mala fides being raised in proceedings under Article 226 of the Constitution of India in such circumstances, have been drawn at paragraph 10 of the report:
10. Before entering on a discussion of the question whether the appellant has established that the action of Government was vitiated by mala fides, we consider it pertinent to make a few preliminary observation. In considering the evidence we have kept in view the high position which the Chief Minister holds in the State and are conscious of the fact that charges of personal nature made against such a dignitary are not to be lightly accepted. We have also borne in mind that charges of personal hostility are easily and very often made by persons who are subjected to penal or quasi penal proceedings against those who initiate them, and have therefore made full allowance for these factors, and we have examined and weighed the evidence with anxious care. We would only add that the fact that two of our brethren feel differently on this matter has heightened our responsibility and in the care to be bestowed in appreciating the evidence. The Constitution enshrines and guarantees the rule of law and Article 226 is designed to ensure that each and every authority in the State, including the Government acts bona fide and within the limits of its power and we consider that when a Court is satisfied that there is an abuse or misuse of power and its jurisdiction is invoked, it is incumbent on the Court to afford justice to the individual. It is with these considerations in mind that we approach the facts of this case.
14. The petitioners say that the judgment would show that transcripts of telephone conversation were looked into by the Supreme Court for the purpose of assessing the charge of mala fides directed against the Chief Minister of a State by a civil surgeon in government service. The petitioners argue that since the sixth respondent has not stepped forward to meet the specific case of his involvement in the entire matter and the circumstances in which the notice and the reply which bear the respective dates November 23, 2006 and November 30, 2006 came to be issued, the entire exercise of the corporation must be viewed as an overzealous reaction to a complaint forwarded by the ministry; or a subterfuge with a more sinister motive. The petitioners insinuate that a dead issue was raked up at the prodding of an invisible hand to wreak havoc on a business and a family that had rendered dedicated service to the corporation. The petitioners allege that the events subsequent to the petition being filed would buttress the charge of mala fides found in the petition.
15. Another well-known judgment reported at AIR 2001 SC 343 (State of Punjab v. V.K. Khanna and Ors.) is placed for the principle that if there is an element of malice involved in the matter of issuance of a charge sheet or the concerned authority is shown to be so biased that the inquiry would be a farcical show, the jurisdiction under Article 226 of the Constitution may be exercised to avoid harassment and humiliation. Paragraph 33 of the report is relied on:
33. While it is true that justifiability of the charges at the stage of initiating a disciplinary proceeding cannot possibly be delved into by any court pending inquiry but it is equally well settled that in the event there is an element of malice or mala fide, motive involved in the matter of issue of a charge-sheet or the authority concerned is so biased that the inquiry would be a mere farcical show and the conclusions are well known then and in that event law courts are otherwise justified in interfering at the earliest stage so as to avoid the harassment and humiliation of a public official. It is not a question of shielding any misdeed that the Court would be anxious to do, it is the due process of law which should permeate in the society and in the event of there being any affectation of such process of law that law courts ought to rise up to the occasion and the High Court, in the contextual facts, has delved into the issue on that score. On the basis of the findings no exception can be taken and that has been the precise reason as to why this Court dealt with the issue in so great a detail so as to examine the judicial propriety at this stage of the proceedings.
16. The petitioners have also referred to a judgment reported at (2006) 12 SCC 28 (Union of India and Anr. v. Kunisetty Satyanarayana) as to the circumstances when a charge sheet or show cause notice can be quashed in this jurisdiction. Paragraphs 15 and 16 of the report summarise the position:
15. Writ jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge-sheet.
16. No doubt, in some very rare and exceptional cases the High Court can quash a charge-sheet or show-cause notice if it is found to be wholly without jurisdiction or for some other reason if it is wholly illegal. However, ordinarily the High Court should not interfere in such a matter.
17. The judgments reported at AIR 1964 SC 962 : : [1964]6SCR330 (C.S. Rowjee v. State of A.P.) and (1986) 1 SCC 133 : : AIR1986SC872 (Express Newspapers (P) Ltd. v. Union of India) are cited for the proposition that when a charge of mala fides had been brought and particulars in support had been furnished, such charge had to be specifically dealt with or be deemed to have been admitted. A passage from the report on what has come to be known as the Express Demolition case has been placed:
116. It is somewhat strange that although definite allegations of mala fides on the part of the respondents particularly the Government for the day at the Centre were made with sufficient particulars and though the respondents had ample time to file their affidavits in reply, none of the respondents except Respondent 2, the Lt. Governor of Delhi and Respondent 5, Land & Development Officer has chosen to deny the allegations. The counter-affidavit of Respondent 2 purporting to be on behalf of all the respondents is that the allegations made by the petitioners in paras 11, 12 and 13 are not 'relevant' to the matter in issue. In C.S. Rowjee v. A.P. State Road Transport Corporation the Court in a matter arising out of the Motor Vehicles Act, 1939 where certain allegations against the Minister went uncontroverted, had occasion to administer a word of caution. Where mala fides are alleged, it is necessary that the person against whom such allegations are made should come forward with an answer refuting or denying such allegations. For otherwise such allegations remain unrebutted and the Court would in such a case be constrained to accept the allegations so remaining unrebutted and unanswered on the test of probability. That precisely is the position in the present case, in the absence of any counter-affidavit by any of the respondents....
18. In response to a preliminary objection taken by the corporation, that any order following the show cause notices could be challenged in arbitration proceedings in accordance with the arbitration clause that the dealership agreement incorporates, the petitioners refer to a judgment reported at AIR 1971 SC 33 : : [1970]78ITR26(SC) (L. Hirday Narain v. ITO) to suggest that a writ petition may not be thrown out at the stage of final hearing on the ground of there being any alternative remedy available. The judgment reported at (2003) 2 SCC 107 : : AIR2003SC2120 (Harbanslal Sahnia v. Indian Oil Corporation Ltd.) is cited to show that arbitration is not an efficacious remedy in the context of the charges that have been brought. Paragraph 7 of the report is placed:
7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corporation v. Registrar of Trade Marks.) The present case attracts applicability of the first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings....
19. The petitioners have also relied on the judgments reported at AIR 1955 SC 233 : : [1955]1SCR1104 (Hari Vishnu Kamath v. Ahmad Ishaque) and AIR 1959 SC 65 : : [1959]1SCR1424 (Ghaio Mal & Sons v. State of Delhi) to suggest that it is obligatory on the part of the respondent authority to produce the records when a writ of certiorari is prayed for. However, such argument is irrelevant as the records have been brought to court and the petitioners have been permitted to take inspection thereof and make notes therefrom.
20. In the petitioners' endeavour to enlarge the scope of the proceedings and incorporate a challenge to the replacement of the hearing officer - as evidence of the charge of mala fides originally brought - the petitioners claim that the notings of the original hearing officer and his opinion in favour of the petitioners should be disclosed by the corporation. The petitioners rely on the judgments reported at (1988) 1 SCC 626 : : [1988]2SCR910 (National Insurance Co. Ltd., New Delhi v. Jugal Kishore and Ors.), (1979) 1 All ER 209 (R v. Leyland Magistrates, ex parte Hawthorn) and (1982) 1 All ER 646 (R v. Blundeston Prison Board of Visitors, ex parte Fox- Taylor) for the principle that material in exclusive possession of the prosecution must be made available to the delinquent if such material is favourable to the delinquent. The principle is captured at paragraph 10 of the Jugal Kishore report:
10. Before parting with the case, we consider it necessary to refer to the attitude often adopted by the Insurance Companies, as was adopted even in this case, of not filing a copy of the policy before the Tribunal and even before the High Court in appeal. In this connection what is of significance is that the claimants for compensation under the Act are invariably not possessed of either the policy or a copy thereof. This Court has consistently emphasised that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the cause to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the State such as the appellant who are under an obligation to act fairly. In many cases even the owner of the vehicle for reasons known to him does not choose to produce the policy or a copy thereof. We accordingly wish to emphasise that in all such cases where the Insurance Company concerned wishes to take a defence in a claim petition that its liability is not in excess of the statutory liability it should file a copy of the insurance policy along with its defence. Even in the instant case had it been done so at the appropriate stage necessity of approaching this Court in civil appeal would in all probability have been avoided. Filing a copy of the policy, therefore, not only cuts short avoidable litigation but also helps the court in doing justice between the parties. The obligation on the part of the State or its instrumentalities to act fairly can never be overemphasised....
21. In continuation of the argument that the mala fides on the part of the corporation would appear from the original hearing officer being replaced, the petitioners say that the corporation has caused a second inquiry to be conducted upon it appearing that the first would not be to the satisfaction of the corporation in the corporation's desire to have the petitioners' agreement terminated. The petitioners say that such conduct of the corporation amounted to successive inquiries being ordered which is impermissible. The petitioners refer to a judgment reported at (1971) 2 SCC 102 : : (1971)ILLJ427SC (K.R. Deb v. The Collector of Central Excise, Shillong) in such context.
22. Following an interjection on behalf of the corporation that the petitioners have sought to enlarge the ambit of the present proceedings despite the challenge in the petition being limited to the show cause notice, the petitioners say that matters referred to in the affidavit-in-reply and even the supplementary affidavit should be looked into since a charge of mala fides had been brought. The petitioners rely on a judgment reported at (1965) 3 SCR 17 : : [1965]3SCR17 (Sri-La-Sri Subramania Desika Gnanasambanda Pandarasannadhi v. State of Madras and Anr.) for the principle that a plea taken even in the affidavit-in-rejoinder can be urged at the hearing by the petitioner.
23. The original show cause notice of May 4, 2007 only cited clause 32 of the dealership agreement while requiring the petitioner firm to answer why its dealership should not be terminated. The supplementary notice of July 26, 2007 was issued pursuant to leave obtained from court and referred to clause 56(k) of the dealership agreement and clause 8 of the first appendix to the Marketing Discipline Guidelines, 2005. Clause 32 of the agreement prohibits the dealer from selling the corporation's products at higher rates or prices than those prescribed by the corporation; in default, the corporation is entitled to terminate the agreement with immediate effect. Clause 56(k) provides for the corporation being at liberty to terminate the agreement if the dealer by himself or by servants or agents commits any act which, in the opinion of the general manager of the corporation, is prejudicial to the interest or good name of the corporation or its products. The first appendix to the Guidelines details the penal actions that can be taken by a public sector oil company for malpractices at their retail outlets selling motor spirit or high speed diesel. Clause 8 thereof makes a dealer liable to have his agreement terminated for selling normal motor spirit or high speed diesel as branded fuel.
24. The petitioners insist that the substance of the relevant provisions cited for termination of a dealership agreement is that there should be proven misconduct on the part of the dealer for his dealership agreement to be terminated. The petitioners suggest that a mistake committed by a dealer or an act of negligence would not amount to misconduct entailing the heavy punishment of termination of the dealership agreement. A judgment reported at (1992) 4 SCC 54 : : [1992]3SCR634 (State of Punjab v. Ex-Constable Ram Singh) is cited and paragraphs 5 and 6 placed from the report:
5. Misconduct has been defined in Black's Law Dictionary, Sixth Edition at page 999 thus:
A transgression of some established and definite rule of action, a forbidden act, a dereliction from duty, unlawful behavior, wilful in character, improper or wrong behavior, its synonyms are misdemeanor, misdeed, misbehavior, delinquency, impropriety, mismanagement, offense, but not negligence or carelessness.Misconduct in office has been defined as:
Any unlawful behavior by a public officer in relation to the duties of his office, wilful in character. Term embraces acts which the office holder had no right to perform, acts performed improperly, and failure to act in the face of an affirmative duty to act.P. Ramanatha Aiyar's Law Lexicon, Reprint Edition 1987 at page 821 defines 'misconduct' thus:
The term misconduct implies a wrongful intention, and not a mere error of judgment. Misconduct is not necessarily the same thing as conduct involving moral turpitude. The word misconduct is a relative term, and has to be construed with reference to the subject matter and the context wherein the term occurs, having regard to the scope of the Act or statute which is being construed. Misconduct literally means wrong conduct or improper conduct. In usual parlance, misconduct means a transgression of some established and definite rule of action, where no discretion is left, except what necessity may demand and carelessness, negligence and unskilfulness are transgressions of some established, but indefinite, rule of action, where some discretion is necessarily left to the actor. Misconduct is a violation of definite law; carelessness or abuse of discretion under an indefinite law. Misconduct is a forbidden act; carelessness, a forbidden quality of an act, and is necessarily indefinite. Misconduct in office may be defined as unlawful behaviour or neglect by a public officer, by which the rights of a party have been affected.6. Thus it could be seen that the word 'misconduct' though not capable of precise definition, on reflection receives its connotation from the context, the delinquency in its performance and its effect on the discipline and the nature of the duty. It may involve moral turpitude, it must be improper or wrong behaviour; unlawful behaviour, wilful in character; forbidden act, a transgression of established and definite rule of action or code of conduct but not mere error of judgment, carelessness or negligence in performance of the duty; the act complained of bears forbidden quality or character. Its ambit has to be construed with reference to the subject matter and the context wherein the term occurs, regard being had to the scope of the statute and the public purpose it seeks to serve. The police service is a disciplined service and it requires to maintain strict discipline. Laxity in this behalf erodes discipline in the service causing serious effect in the maintenance of law and order....
25. The petitioners submit that since the matters complained of by the corporation had been triggered by the corporation itself in its erroneous supply of a combination of motor spirit and high speed diesel against an indent for supply exclusively of XP branded fuel, the corporation contributed to what happened at the retail outlet immediately thereafter. The petitioners urge that it is for such reason that the corporation did not take any action despite the matter being immediately noticed by it. The petitioners contend that the subsequent conduct of the corporation in acting with alacrity and bending over backwards to inflict the severest punishment on the petitioner firm was result of a complaint forwarded by the ministry and the local officials' zealousness to impress their higher-ups in Delhi as to their qualities as strict disciplinarians.
26. After being permitted to consult the records, the petitioners say that a pseudonymous complaint resulted in decades of good work of the petitioners being brought to naught. The petitioners refer to the recommendations made at the first two levels that the file travelled, and emphasise on the concurrent opinion of the two subordinate officers being overridden by a superior officer. The petitioners say that it undeniable that a pseudonymous complaint cannot be proceeded with and though there is no doubt that the complainant could not be traced, the matter was proceeded with. The petitioners question the foundation of the initial show cause notice since it referred to the complaint which had already been discovered to be pseudonymous. The petitioners insist that upon the complainant not being traced, the matter was immediately required to be dropped and that the corporation decided to proceed with it nonetheless would, ipso facto, amount to mala fide conduct. The petitioners suggest that, in the circumstances, it was reasonable to presume that the initial show cause notice was the first formal step of a premeditated decision for terminating the dealership agreement. The petitioners say that since the more lenient view taken by the two subordinate officers had been overruled by a superior officer, the steps to be taken after the show cause notice and at the hearing were a foregone conclusion.
27. The corporation reminds of the salutary principles in assessing a show cause notice. It says that if the show cause notice is not without jurisdiction or palpably absurd or actuated by demonstrable malice, a challenge thereto would be repelled as premature and the noticee would be left to face the proceedings before the authority. The corporation refers to the Kunisetty Satyanarayana decision of the Supreme Court that the petitioners have relied on and cite a recent judgment of a Division Bench of this Court reported at (2009) 1 CLT 191 (CESC Limited v. West Bengal Pollution Control Board and Ors.). The following passage from the Division Bench judgment is placed:
Ordinarily no writ lies against a charge-sheet or show-cause notice. Law journals abound with judgments on such score. The reason why a writ petition is not easily entertained against a show-cause notice or charge sheet is that at that stage the challenge may be premature. A mere charge- sheet or show-cause notice does not give rise to any cause of action as it does not amount to an adverse order affecting the rights of a party unless the same has been issued by a person having no jurisdiction to do so. It is eminently possible that after considering the reply to a show-cause notice or after holding an enquiry the authority concerned may drop the proceedings or hold that the charges are not established. A writ petition is generally entertained when some right of any party is infringed. A mere show-cause notice or charge-sheet may not infringe the right of any person. It is only when an order imposing some punishment or otherwise adversely affecting a party is passed, that such party can be said to have a grievance. ...
28. The corporation says that the petition, read in proper perspective, makes out no case of mala fides. The corporation asserts that no credence should be given to the petitioners' claim that the notice of November 23, 2006 and the reply thereto of November 30, 2006 were prepared only in March, 2007. The corporation emphasises the varying stands adopted by the petitioners at different stages. The corporation states that the scope of the inquiry at present should be restricted to the propriety of the show cause notice and assessed on the grounds originally brought to court as the dealer may either invoke the arbitration agreement to assail the final order or, if permissible, bring fresh proceedings in this Court against the same.
29. The corporation has also referred to a judgment reported at (2005) 7 SCC 764 : : AIR2005SC4217 (Ajit Kumar Nag v. G.M. (PJ), Indian Oil Corporation Ltd.) to suggest that a heavy burden rests on one who brings a charge of malice as it is often made without any seriousness. The corporation says that since it is admitted that the retail outlet sold motor spirit as XP branded fuel, the diversions resorted to by the petitioners by referring to the pseudonymous complaint and by bringing a charge of mala fides, should be brushed aside. A passage from paragraph of the Ajit Kumar Nag judgment has been relied on:
56. ... It is well settled that the burden of proving mala fide is on the person making the allegations and the burden is 'very heavy'. (vide E.P. Royappa v. State of T.N.) There is every presumption in favour of the administration that the power has been exercised bona fide and in good faith. It is to be remembered that the allegations of mala fide are often more easily made than made out and the very seriousness of such allegations demands proof of a high degree of credibility. As Krishna Iyer, J. stated in Gulam Mustafa v. State of Maharashtra (SCC p. 802, para 2):It (mala fide) is the last refuge of a losing litigant.
30. The petitioners' version of what happened and how, appears at five places. First there is the alleged ante-dated letter of November 30, 2006. Then there is the petitioners' response of May 10, 2007 to the first show cause notice. Third in point of time comes the petition that was filed on May 15, 2007. The next document is the petitioners' reply of September 28, 2007 to the supplementary show cause notice. Finally, there is a summary of the petitioners' defence issued to the second hearing officer on January 11, 2008. It is necessary that the principal contents of the petitioners' versions be placed one after another and assessed as to whether a charge of mala fides brought by the petitioners needs to be taken seriously.
The letter dated November 30, 2006:
b) There was no Xtra Premium during 3rd, 4th (Saturday).
c) On 4th there was only 800 ltr approx of Xtra Premium stock available in the Tank. As a result, to avoid dry-out we were compelled to draw normal MS so that customers are not disturbed..
e) Although, the price of normal MS is cheaper than Xtra Premium, we could not sell the product as per normal MS rate, as there was every possibility to discontinuation of trust in our RO due to frequent change of selling price..
We pray before you that this type of mistake will be happened in future and consider our mistake for the 1st time.
The reply dated May 10, 2007 to the original show cause notice:
c) On the date 04.11.2006 I was personally not present at the retail outlet as I had left station on 29.10.2006 and was away at Calcutta till 09.11.2006 for my medical check up. In fact, on the material date 04.11.2006 I was under medical supervision of a medical practitioner.After my return to Panskura on 10.11.2006 when I visited the retail outlet on looking through the records, particularly the challans, I came to know that there had been a supply of 4 KL normal MS along with 8 KL HSD..
(The staff at the retail outlet) did not have any idea that what they had sold as Xtra premium was really normal MS and it was only when I pointed out the said mistake that they relented.
Immediately thereafter I caused notices to be pasted in the retail outlet relating to such refund and I had refunded the excess amount to pay such customers on good faith who had come and disclosed that they had purchased particular quantity of petrol during the said period. Perhaps after getting the refund a complaint might have been lodged... you will appreciate that we have all along acted bonafide and never had we uplifted intentionally normal MS instead of Xtra premium and there was never any intention to sell normal MS instead of Xtra premium ...
The relevant averments in the petition:
7. That your petitioners state that on or about 22.11.2006 your petitioner No. 2 left for Delhi and came back to Kolkata on or about 04.12.2006.
In the meantime on 23.11.2006 one Sri M.N. Saha, the Area Manager/Deputy Manager, the respondent No. 6 herein visited the said retail outlet for inspection and there was no report of any discrepancy in sales or any decantation of MS and Xtra premium although he duly put his signature to the Daily Sales Register, (DSR).
8. That after four months, on or about 12.03.2007 the said Sri M.N. Saha called up your petitioner No. 2 on urgent basis at his residential quarters and when your petitioner No. 2 reached there, he handed over a piece of paper and told the said your petitioner No. 2 to put his signature on the said paper which was nothing but a show cause notice purportedly dated 23.11.2006. Your petitioner No. 2 at once refused to put his signature thereon and told Sri Saha to talk to the Chief Divisional Manager and accordingly the respondent No. 6 telephoned the C.D.M. over his mobile phone and after some discussion between the said Sri Saha and the said CDM, the said Sri Saha recalled the original show cause and typed out another show-cause notice also purportedly dated 23.11.2006. Thereafter, Sri Saha repeatedly told your petitioner No. 2 to put his signature to the said show cause failing which dire consequences would follow. Thereupon your petitioner No. 2 had no other alternative, but to put his signature thereon. Thereafter Sri Saha himself prepared the reply to the said show cause and put a date 30.11.2006 whereafter he took out a print from his personal computer; but on finding that the printout was in red ink, similar to the show-cause letter purportedly dated 23.11.2006, the said Sri Saha took your petitioner No. 2 to Haldia at Veteran Petrol Pump, Gate No. 2, I.O.C. and took out a new print in black ink and told the petitioner No. 2 to put his signature to the same. Your petitioner No. 2 initially had not wanted to put his signature to such a document but on being told that the matter would be regularized without any difficulty by the said Sri Saha and his superior being the CDM, since they felt that it was a mistake on their part and then your petitioner No. 2 put his signature to the same and was directed to submit the reply purportedly dated 31.11.2006 to the Chief Divisional Manager, at the Gariahat Office and your petitioner No. 2 duly did so on the next day i.e. on 13.03.2007.
Your petitioners state and submit that it will be evident from the print out of the telephonic discussion made between Shri M N Saha and Shri Dipankar Roy, the then CDM on that particular day i.e. 12.03.2007 if called for from the concerned Mobile Company.
In fact on those material dates i.e. 23.11.2006 and 30.11.2006 your petitioner No. 2 was in North India.
Be it stated further that no Memo No. was given to the show cause purportedly dated 23.11.2006 which was prepared by the said M N Saha since it was prepared by the said Saha at his quarter at Haldia and not in the office of IOCL and the said document without any memo No. is thus an antedated, manufactured one. ...
The petitioners' reply of September 28, 2007 to the supplementary show cause notice:
3(a). The violation was on the part of IOC as it despatched MS when the order placed was for XP.
3(b) IOC detected the anomaly on November 4, 2006. Usually IOC would send a 'stop sale' instruction, which was not done in this case. 'Had such mistake been intimated to us, then we would not have faced such a situation ...'
7(a)(iii) ... The mixture of 500 l of XP and 4000 l of MS was sold out 'before it could be detected from the available fund balance as I had made full payment for 12 KL of Xtra Premium.'
As part of goodwill gesture P 'refunded money to 537 number of customers amounting to Rs. 7266.60 who had been informed through notices pasted on the wall of the RO on 10.11.2006.
7(a)(iv) 'Hence, from the above detailed explanation, you will kindly observe that this is not a deliberate, intentional attempt or designed to deceive the public. Had I not received 4000 ltrs of normal MS though (sic, through) delivered supply from IOC Haldia Terminal by way of wrong execution of my indent of 12 KL of Xtra Premium, this issue would not have arisen at all. ...
The petitioners' letter dated January 11, 2008 to the second hearing officer:
1. ... on 04.11.06 I was not present at RO due to my illness. I was under medical supervision in Kolkata.
2. ... The said load of MS was received and decanted bonafide believing it to be Xtra Premium ... In my absence the entire accident took place. My workers at RO were not educated enough and trained ...
3. Regarding my letter PA/06-07 dated 30.11.06, I once again state that the said letter was not written by me and I was not aware of the contents. For business conveniences, I use (sic, used) to keep my pre-signed letter head with Mr M N Saha (the then Dy Mgr CRS). Whatever written in that letter was the thought of Mr M N Saha.
31. Several questions arise. It is not in dispute that the letter of November 30, 2006 was, in point of time, the first statement made on behalf of the petitioners on the matter. Whether or not the notice of November 23, 2006 and this reply thereto were ante-dated or this reply was prepared at the command of the sixth respondent, it has irrefutably been issued by the dealer. The alleged ante-dating of the two documents do not find any mention in the petitioners' response to the first show cause notice. If the petitioners could assert in the petition filed on May 15, 2007 that the two documents had been ante-dated and had been prepared in the circumstances as alleged in the petition, it belies logic as to why such a tumultuous fact was overlooked in the letter issued five days before the petition was filed. After all, it is the petitioners' positive case that they were led to believe by the sixth respondent that the reply dated November 30, 2006 would close the matter. The circumstances lend to a possible view that the petitioners got wiser between the drafting of the reply to the show cause notice of May 4, 2007 and the making of the petition. When a charge of mala fides is made the sole plank for a challenge to a show cause notice, the contemporaneous conduct of the challenger is of utmost significance and needs to be scrutinised.
32. The next question that arises is as to whether the admixture of an overwhelming proportion of ordinary motor spirit with a small quantity of residual XP branded fuel in the tank was sold as the branded fuel consciously or by mistake. Even though the petitioners say that nothing in the letter of November 30, 2006 can be attributed to the petitioners or held against them, it is difficult to accept that any person, far less a businessman, would blindly agree to make the confession found in Clause (e) of the letter. Even if allowance is made for a momentary lapse, normal behaviour would have demanded an immediate retraction or, at the very least, a pointed retraction in response to the formal show cause notice of May 4, 2007.
33. Even if one proceeds on the basis of there having been a mistake on the corporation's part in effecting an erroneous supply on November 4, 2006, a dealer cannot be absolved of the obligation to ensure the adherence to quality and retail price at the time of actual sale. If the principal person in control of the firm could not find anyone responsible to take care of the affairs at the outlet during his absence, it is no excuse for the lapse of the nature that remains admitted. Finally, the reference to the complaint in the show cause notice is of little significance. A pseudonymous complaint is not entertained or proceeded with primarily as the substance thereof is incapable of being verified in the complainant's absence. In the present case, the substance of the complaint is corroborated by the records and stands admitted. The bogey of the reference to the complaint that the petitioners have sought to clutch at can bring them no joy in the circumstances.
34. Despite the impressive body of judicial authority brought by the petitioners, the question is one of facts. The principles that the petitioners refer to are unassailable. Even upon application of these principles, the show cause notice or the steps taken by the corporation do not warrant interference. Once the incident of ordinary motor spirit being sold as branded fuel is admitted, the action taken by the corporation up to the issuance of the show cause notice cannot be faulted on the grounds urged by the petitioners. It is an entirely different matter as to what consequence should follow or what penalty should visit the dealer as such matters are beyond the pale of the present proceedings.
35. There was undoubtedly a delay on the part of the corporation in reacting to the incident. If the petitioners' version now presented, that the notice of November 23, 2006 was issued only in mid-March, 2007, is accepted, there was a delay of about four months. If such version is rejected then there was a delay of more than five months between the date of the petitioners' reply of November 30, 2006 and the issuance of the show cause notice on May 4, 2007. If the corporation had been vindictive or its actions actuated by malice, as suggested by the petitioners, the corporation would have suspended the functioning of the retail outlet pending the outcome of the inquiry and the proceedings. In the corporation not having suspended the functioning of the outlet simultaneously with the issuance of the show cause notice of May 4, 2007, there appears to be an implicit acknowledgement of delay in reacting to the incident. There was a grave error committed at the retail outlet, whether or not of the petitioners' doing or due to an anomalous supply by the corporation. Albeit the delay, the matter was worthy of being investigated. And it is such investigation that commenced with the show cause notice of May 4, 2007. There was neither any apparent error of jurisdiction nor any colourable exercise of authority by the corporation in issuing such show cause notice. The circumstances cited by the petitioners do not make this a rare or exceptional case warranting interference at this stage. The petitioners have not been able to discharge the burden of establishing mala fides, far less establishing mala fides that would result in the show cause notice being set aside.
36. Though it is tempting, in the context of the petitioners' endeavour to enlarge the scope of the proceedings, to look into the conduct of the corporation subsequent to the issuance of the show cause notice and assess the final order, that would be unfair to the petitioners since the thrust of the challenge has been to the show cause notice and not to the final order that has now come into being. There is a window still available to the petitioners, but only to assail the action taken by the corporation upon the incident having taken place; upon it now being adjudged that the inquiry into the matter culminating in the issuance of the show cause was in order.
37. WP No. 9663 (W) of 2007 is dismissed. For the petitioners having attempted to unnecessarily stretch the matter, they shall pay costs assessed at 2500 GM. CAN No. 2189 of 2008 is disposed of without any order as to costs by permitting the corporation to give immediate effect to the order passed.
38. It is recorded that immediately prior to the delivery of this judgment, the records that had been produced by the corporation have been returned to counsel representing the corporation.
39. Urgent certified photostat copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities.