w w w . L a w y e r S e r v i c e s . i n



M/s. Nishi Gas Agency v/s The State of Assam & Others


Company & Directors' Information:- ASSAM GAS COMPANY LTD [Active] CIN = U11101AS1962SGC001184

Company & Directors' Information:- GAS CORPORATION INDIA LIMITED [Strike Off] CIN = U40200BR1993PLC005536

Company & Directors' Information:- U T AGENCY PVT. LTD. [Active] CIN = U45203WB1991PTC052617

Company & Directors' Information:- S K H AGENCY PRIVATE LIMITED [Active] CIN = U52390TG2013PTC085384

Company & Directors' Information:- O M AGENCY PRIVATE LIMITED [Active] CIN = U52321TN1961PTC004668

Company & Directors' Information:- S M AGENCY PVT LTD [Active] CIN = U51109WB1964PTC026129

Company & Directors' Information:- G R AGENCY LTD [Strike Off] CIN = U51109WB1951PLC019409

Company & Directors' Information:- S N Q S AGENCY PRIVATE LIMITED [Active] CIN = U52110TZ1999PTC008761

Company & Directors' Information:- A & N AGENCY PRIVATE LIMITED [Under Process of Striking Off] CIN = U51909TN2003PTC052088

Company & Directors' Information:- A E AGENCY PRIVATE LIMITED [Active] CIN = U65993TN2000PTC044931

Company & Directors' Information:- S R W AGENCY PRIVATE LIMITED [Active] CIN = U52190WB2011PTC160006

Company & Directors' Information:- K L AGENCY PRIVATE LIMITED [Strike Off] CIN = U74899DL1992PTC050493

Company & Directors' Information:- S B T AGENCY PVT LTD [Strike Off] CIN = U51103WB1965PTC026347

Company & Directors' Information:- S B M AGENCY PRIVATE LIMITED [Active] CIN = U51504TN2004PTC052953

Company & Directors' Information:- M P S AGENCY PVT LTD [Active] CIN = U51109WB1998PTC088149

Company & Directors' Information:- A. G. AGENCY PRIVATE LIMITED [Strike Off] CIN = U51109DL2008PTC186212

Company & Directors' Information:- S N AGENCY PVT LTD [Strike Off] CIN = U66010WB1989PTC047981

Company & Directors' Information:- V AND S AGENCY PRIVATE LTD. [Strike Off] CIN = U74999DL1986PTC025148

    Case No. WP(C) 2727 & 4473 of 2018

    Decided On, 17 September 2018

    At, High Court of Gauhati

    By, THE HONOURABLE MR. JUSTICE PRASANTA KUMAR DEKA

    For the Petitioner: B. Chakraborty, S. Chakraborty, Advocates. For the Respondent: U.K. Nair, Senior Advocate, M.K. Choudhury, Senior Advocate, S.R. Baruah, Government Advocate, R. Sinha, M. Sarma, Advocates.



Judgment Text

1

Judgment & Order (CAV)

1. Heard Mr. B. Chakraborty, the learned counsel for the petitioner. Also heard Mr. U. K. Nair, the learned senior counsel assisted by Mr. R. Sinha, the learned counsel for the respondent No.4, Mr. M. K. Choudhury, the learned senior counsel assisted by Mr. M. Sarma, the learned counsel for the respondent No.5 and Mr. S. R. Baruah, the learned Government Advocate for the respondent Nos.1, 2 and 3.

2. The writ petition No.2727/2018 is filed by the petitioner challenging the order issued under Memo No.BSM65/2018/32-33 dated 19.04.2018 by the Sub-Divisional Officer (SDO) (Civil), Bilasipara, Dhubri, the respondent No.4 thereby suspending the retail trade license of the petitioner. The other writ petition No.4473/2018 is also filed by the petitioner assailing the legality and correctness of the show cause notice issued vide No.BSM85/2018/227 dated 05.07.2018 by the Sub-Divisional Officer (Civil), Bilasipara, Dhubri, the respondent No.4 as to why distributorship should not be cancelled for the reasons mentioned in the said show cause notice.

3. The petitioner is operating the Liquefied Petroleum Gas (LPG) distributorship under M/S Indian Oil Corporation Ltd. (IOCL), respondent No.5 for the last 32 years in the name and style M/S Nishi Gas Agency at Bilasipara in Dhubri District without any complaint from any quarter. The LPG distributorship was cancelled on 01.10.2016 by the SDO (Civil), Bilasipara. The matter was challenged before the appellate authority, accordingly the Deputy Commissioner, Dhubri on 30.06.2017 ordered for restoration of the trade license to the petitioner. However, the same was not complied on the ground that a second appeal was preferred by the SDO (Civil), Bilasipara. WP(C) No.5079/2017 was preferred and vide an interim order dated 27.10.2017 direction was issued for restoration of the license of the petitioner in terms of the order of the appellate authority dated 30.06.2017. That was not followed consequent to which Contempt Case (Civil) 546/2017 was preferred by the petitioner and notice was issued to the SDO (Civil), Bilasipara vide order dated 15.11.2017 of this Court. In compliance of the said order the license was restored vide order dated 22.11.2017 by the then SDO (Civil), Bilasipara.

4. The respondent No.4 vide order No.BSM85/2018/32-33 dated 19.04.2018 on certain allegations on the basis of sudden inspection in the office and godown of the petitioner’s gas agency suspended the retail sale license bearing No.375 on the basis of the conclusion drawn which is reproduced herein below: 'Thereby the Distributor has violated Clause 9 (e) and Schedule I, Prohibited Activities No.10 of the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order 2000 and Clause 16 and 25 of the Assam Trade Articles (L & C) Order 1982 R/W Terms and Conditions No.5(ii) of the license issued to M/S Nishi Gas Agency, Bilasipara under the ATA (L & C) Order1982 R/W Chapter 2.2.10 of the LPG Marketing Discipline Guideline 2015.'

5. The said order of suspension is challenged in WP(C) No.2727/2018. After the said suspension order, vide show cause notice No.BSM85/2018/277 dated 05.07.2018, the respondent No.4 issued the same as to why the retail sale license bearing No.375 shall not be cancelled for violation of the provision of Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order 2000 (hereinafter referred to as LPG Order 2000) read with clauses of the Assam Trade Articles (Licensing and Control) Order 1982 {hereinafter referred to as ATA (L & C) Order 1982} and LPG Marketing Discipline Guideline 2015. WP(C)4473/2018 was filed challenging the said show cause notice dated 05.07.2018. Vide order dated 13.07.2018 this Court stayed the impugned notice dated 05.07.2018 until further order.

6. Mr. B. Chakraborty, the learned counsel for the petitioner in both the writ petitions submits that after enactment of the LPG Order 2000 read with Revised Marketing Discipline Guidelines 2015 of the Oil companies pertaining to LPG distributorship, the power to take any penal action vests with the Oil companies and not with the State authority. The provisions of LPG Order 2000 is impregnated with its overriding effect over the ATA (L & C) Order 1982 and as such the issuance of the show cause notice dated 05.07.2018 by the respondent No.4 is without any jurisdiction and liable to be set aside. Mr. Chakraborty in support of his submission referred to the LPG Order 2000, more specifically Clause 13 wherein it stipulates the power of entry, search and seizure. Sub-clause 1 of Clause 13 authorises any officer of the Central or State Government not below the rank of Inspector duly authorized by a general or specific order by the Central Government or the State Government or any officer of a Government Oil Company, not below the rank of Sales Officer may with a view to securing due compliance of the said Clause 13 (1) has the power for entry, search and seizure with respect to gas cylinders which is the subject matter of these writ petitions. However, it is only the Sales Officer of a Government Oil Company who is authorized to secure compliance of the said order by the distributor appointed under the Public Distribution System. He further referring Clause 14 of the LPG Order 2000 submits that the provisions of the said LPG Order 2000 shall have overriding effect notwithstanding anything contained in any Order made by the State Government. In compliance of the said LPG Order 2000, more specifically Clause 13 (1), the Government of Assam vide notification No.FSA 3572001/153 dated 19.02.2001 specifically authorized the Food and Civil Supplies Officers of the State Government not below the rank of Inspector, Food and Civil Supplies Department to exercise the power under Clause 13 (1) of the LPG Order 2000. That does not mean that the said authorized officers are competent to take penal action under the said LPG Order 2000 or under the LPG Marketing Guideline 2015 inasmuch as the Government Oil companies have their own and common guideline for imposing penalties on the LPG distributors. Thus, Mr. Chakraborty submits that the action initiated by the respondent No.4 is totally beyond the jurisdiction and a clear case of arbitrary action and as such the show cause notices are liable to be set aside.

7. Mr. Chakraborty further refers to the Revised Marketing Guideline Discipline 2015 for LPG distributors. Referring Chapter-5 of the General Guidelines, Mr. Chakraborty submits the contents of the General Guidelines No.V of the Chapter 5 wherein it has been specifically mentioned that under existing laws, Control Orders of various Central Government/State Government which refers to the competent officers, in addition, oil company officers are empowered to carry out checks of distributorship for determining and securing compliance with such law/control order. If any malpractices or irregularities are established by such authorities after checking, the same would also be taken as the malpractice or irregularities under the said guideline and prescribed various punitive actions to be imposed by Oil Companies on receipt of advice from such authority. Referring to the said provision Mr. Chakraborty submits that if there is any violation detected by Food and Civil Supplies officials the same ought to be referred to the concerned Oil Company officers and any penal action must be initiated by the said Oil Company through its authorized officers but not by the said officials so authorized by the Government of Assam to carry out entry, search and seizure in compliance of Clause 13 (1) of LPG Order 2000.

8. The respondent No.4 filed an affidavit-in-opposition thereby raising the maintainability issue of the writ petitions inasmuch as Section 28 of the ATA (L & C) Order 1982 provides for appeal against any order passed by the officer below the rank of Deputy Commissioner, but the petitioner without taking recourse to the said alternative remedy preferred the writ petitions and the same are liable to be dismissed on that count. The said affidavit-in-opposition of the respondent No.4 is with respect to the factual aspect of the various orders passed by him. But in my opinion considering the factual matrix, I am satisfied that this Court can entertain these writ petitions.

9. Mr. Nair, the learned senior counsel for the respondent No.4 submits that Section 5 of the Essential Commodities Act 1955 authorise delegation of power by the Central Government by notified order in relation to such matters and subject to and on such conditions exercisable, also by such State Government or such officers or authority subordinate to a State Government subject to the specific direction. On the basis of the said authority the Central Government vide S.O.681 (E) as published in Gazette Notification dated 30.11.1974 delegated various Orders under Section 3 of the Essential Commodities Act 1955 to the State Government. The S.O.682 (E) further delegated to the State Government the powers conferred on the Central Government by sub-section (1) of Section 3 of the Essential Commodities Act, 1955 to make Orders to provide for the matters specified in Clause (c) of sub-section (2) of Section 3 of the Essential Commodities Act, 1955 to all essential commodities other than foodstuff and fertilizers. Section 2 (c) of the Essential Commodities Act, 1955 stipulates for controlling the price at which essential commodities may be bought or sold, subject to certain conditions that where the price at which any essential commodity may be bought or sold is controlled by Order under any other law for the time being in force the same Order authorizes the State Government also to enforce the said law covering all essential commodities other than foodstuff and fertilizers. The Liquefied Petroleum Gas was brought under Schedule-I of the ATA (L & C) Order 1982 and under such circumstances the State Government or its officials authorized to that effect are competent to take necessary action invoking the powers under ATA (L & C) Order 1982.

10. Mr. Choudhury, the learned senior counsel on behalf of the respondent No.5 submits that the LPG distributorship is governed by the Central legislation, i.e., the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order 2000 which is enacted in exercise of the power conferred by Section 3 of the Essential Commodities Act, 1955. Section 6 of the Essential Commodities Act, 1955 stipulates that any order made under Section 3 of the said Essential Commodities Act, 1955 shall have overriding effect over any State legislation. Further it is stated that as per the Revised Marketing Discipline Guideline 2015 with effect from September, 2017, the irregularities done by the petitioner falls under Clause 2.2.10 under the heading Major Irregularities, i.e., not giving rebate on non-home delivery and the penalty is also specified which is fine equivalent to 20% of the average monthly distributor’s commission. As such the action of suspension of the license of the petitioner to carry on LPG distributorship by the respondent No.4 is uncalled for. To that effect, Mr. Choudhury refers to the affidavit-in-opposition filed by the respondent No.5.

11. Considered the submission of the learned counsel. Common issue involved in both the writ petitions is as to whether the authorized officers under ATA (L & C) Order 1982 have the jurisdiction to impose penalty on the petitioner on the face of LPG Order 2000 and the Marketing Guideline 2015 for LPG distributorship.

12. Section 5 of the Essential Commodities Act, 1955 empowers the Central Government vide notified Order to delegate power of various Orders of the Central Government within the said Act of 1955. Under provision of ATA (L & C) Order 1982, no dealer shall after the commencement of the Order carry on business of purchase, sale or storage for sale of any of the trade articles mentioned in Schedule-I to the said Order except under and in accordance with the terms and conditions of a license issued on that behalf by the licensing authority under the provision of the said Order. The licensing authority means the Deputy Commissioner and Additional Deputy Commissioner in respect of Sadar Sub-Division and Sub-Divisional Officer (Civil) in respect of the Sub-Division. The Liquefied Petroleum Gas (LPG) was not included in the original Schedule-I of ATA (L & C) Order 1982 which was included later on vide notification No.SDA96/80/1/Pt./17 dated 30.01.1985.

13. In the present case in hand, the petitioner was issued license No.375 by the licensing authority in order to run the distributorship under the name and style Nishi Gas Agency by the Sub-Divisional Officer (Civil), Bilasipara as the licensing authority the LPG being an item covered by Schedule-I of the ATA (L & C) Order 1982. The said license is subject to the conditions stipulated in the license itself and as the same is issued under ATA (L & C) Order 1982 any violation of the terms of the said Order 1982 would automatically lead to calling for the penal process and actions stipulated under the said ATA (L & C) Order 1982.

14. The S.O. 681 (E) delegated Orders to the State Government as empowered under section 5 of the Essential Commodities Act, 1955 by the Central Government for the matters specified in Clauses d, e, f, g, h, I, (ii) and j of sub-section 2 of Section 3 of the Essential Commodities Act, 1955. The said S.O. 681 (E) was notified by the Central Government vide notification dated 30.11.1974. Again vide S.O. 682 (E) notification dated 30.11.1974 delegated the Order under Section 3 (2) (c) of the Essential Commodities Act, 1955 to the State Government. Section 3 (2) (c) of the said Act of 1955 Orders is for controlling the prices at which essential commodities may be bought or sold. In both the notifications it has been stipulated that no order shall be issued in pursuance of the powers thereby delegated if it is 'inconsistent' with any order issued by the Central Government under the Essential Commodities Act, 1955.

15. The LPG Order 2000 dated 26.04.2000 was originally issued by the Ministry of Petroleum and Natural Gas and subsequently republished in G.O.Ms No.155, Cooperation, Food and Consumer Protection dated 20.07.2000. The said Order was issued by the Central Government in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 and the same extends to the whole of India. The said Order includes the Public Distribution System (PDS) and is defined in Clause 2(l) as the system of distribution, marketing or selling of Liquefied Petroleum Gas by a Government Oil Company at the Government controlled or declared price through a distribution system approved by the Central Government or a State Government. The said LPG Order 2000 stipulates the restrictions of storage, transport, unauthorized possession, supply. In addition to that there are specific stipulations to display stock and price of LPG, maintenance of register account book by the distributor and Clause 13 of the said Order LPG 2000 stipulates the power of entry, search and seizure. Clause 14 prescribes the overriding effect of the Order. For the sake of convenience, Clause 13 and Clause 14 are reproduced herein below:

'13. Power of entry, search and seizure:

(1) Any Officer of the Central or the State Government not below the rank of Inspector duly authorised by a general or a special order, by the Central Government or the State Government , as the case may be or any officer of a Government Oil Company not below the rank of Sales Officer , authorised by the Central Government , may , with a view to securing due compliance of this order or any other order made there under:

(a) Stop and search any vessel or vehicle used or capable of being used for the transport or storage of any petroleum product,

(b) enter and search any place,

(c) seize stocks of liquefied petroleum gas along with container and /or equipments , such as cylinders, gas cylinder valves, pressure regulators and seals in respect of which he has reason to believe that a contravention of this Order has been , or is being, or is about to be made.

(2) The sales officer of a Government Oil Company shall be authorised to secure compliance of this order by the distributors appointed under the public distribution system and or by the consumer registered by them.

14. Overriding effect of the Order: The provisions of this Order shall have overriding effect notwithstanding anything contained in any Order made by a State Government or a Union Territory Administration.'

16. In pursuance of the said Clause 13 (1), the Central Government vide its notification G.O.Ms.No.295, C, F & CP Dept. dated 15.12.2000 authorized all Officers of Civil Supplies and Consumer Protection Department not below the rank of Assistant Commissioner of Civil Supplies including the Assistant Commissioner (Inspection) of Civil Supplies and Central Government Officers of other Departments including Officer of Revenue Department not below the rank of Tahsildar etc. The Government of Assam vide notification No.FSA 3572001/153 dated 19.02.2001 authorized any Food and Civil Supplies Officer of the State Government not below the rank of Inspector, Food and Civil Supplies Department in pursuance of Clause 13 (1) of the LPG Order 2000 to exercise the power (entry, search and seizure) in their respective jurisdiction under Clause 13 of the said Order.

17. Revised Marketing Discipline Guideline, 2015 for LPG distributorship under Chapter-5, Clause-V stipulates as follows:

'v) Under existing laws, Control Orders of various authorities of Central Government/State Government – in addition to Oil Company Officers – are empowered to carry out checks of the Distributorship for determining and securing compliance with such laws/Control Order. If any 'malpractice or irregularity' is established by such authorities after checking, the same would also be taken as a 'malpractice or irregularity' under these guidelines and prescribed punitive action would be taken by the Oil Company, on receipt of advice from such authority. In the meantime, if the oil company on its own detects a malpractice / irregularity of the same nature; action is to be taken under MDG independent of the case pending with the Government Authority for the purpose of counting of the number of irregularities under the particular category.'

18. The said Guideline 2015 under Chapter 3 prescribes the action on the LPG distributors for any irregularities which are classified as critical irregularities, major irregularities, minor irregularities and the punishment and the quantum of compensation to the customers. From the affidavit-in-opposition of respondent No.5 it is seen that the Guideline 2015 is effective since the year 2017. In other words, the said Guideline 2015 is a complete Code to enforce discipline amongst LPG distributorship keeping in view the public convenience. The LPG Order 2000 is the Order in exercise of the power conferred by the Section 3 of the Essential Commodities Act, 1955 and the same is an Order of the Central Government. On the basis of the delegation under section 5 of the Essential Commodities Act, 1955 the State Government is also authorized with the powers under the Order under Section 3 of the Essential Commodities Act, 1955 vide S.O. 682 (E) mentioned hereinabove. To enforce the various Orders to control price and supply/distribution of Essential Commodities, the ATA (L & C) Order 1982 came into force vide notification No.SDA96/80/Pt. dated 22.06.1982. Clause 14 of the said LPG Order 2000 is specific that the provisions of the Order shall have overriding effect notwithstanding anything contained in any order made by a State Government or by a Union Territory Administration.

19. In State (NCT of Delhi) vs. Sanjoy reported in (2014) 9 SCC 772 the effect of a non obstante clause in a legislative device was held as follows:

'63. It is well known that a non obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment, that is to say, to avoid the operation and effect of all contrary provisions.'

20. If the said overriding effect of LPG Order 2000 is taken into consideration, the penal provision of any Order under section 3 of the Essential Commodities Act, 1955 made by a State Government, becomes redundant so far distribution of Liquefied Petroleum Gas is concerned even if it is covered under Public Distribution System.

21. The cancellation of license as stipulated under Clause 11 of ATA (L & C) Order 1982 amounts to cancellation of the license issued by the Central Government Oil Company to the LPG distributors under it. The Revised Marketing Discipline Guideline categorizes various irregularities as hereinabove stated and for such irregularities separate punitive actions are stipulated in the said Guideline considering the gravity of the offence. From the affidavit-in-opposition filed by the respondent No.5 it is found that as per the Revised Marketing Discipline Guideline, 2015 for LPG distributorship with effect from September, 2017, the irregularities done by the petitioner agency falls under Clause 2.2.10 under the heading Major Irregularities and the penalty is specified under Clause 3.2.(i) of the said Guideline which is fine equivalent to 20% average monthly distributor’s commission. Under such circumstances the action of the respondent No.4 for cancellation of the license of the petitioner agency is totally contradictory which in my considered opinion cannot be accepted on the enlarged principles of equity and under Article 14 of the Constitution of India. Had there been no such non obstante clause in Clause 14 referred hereinabove then it would have been a separate issue but introduction of such non obstante clause is with the purpose for removing such contrary provision viz the Clause 11 (Suspension and Cancellation of Licence) of the ATA (L & C) Order 1982 so far LPG distributorsh

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ip distributing LPG under Public Distribution System is concerned. 22. In the light of the said discussion I am of the considered opinion that the power of the officials as authorized under the ATA (L & C) Order 1982 must be confined to the extent of the one authorized by the notification No.FSA 3572001/153 dated 19.02.2001, i.e., to the extent of entry, search and seizure under Clause 13 (1) of the LPG Order 2000. It would not be out of place to mention here that in the LPG Order 2000, Clause 13 (2) specifically authorizes the Sales Officers of a Government Oil Company to secure compliance of the said LPG Order 2000 by the distributor appointed under the Public Distribution System. The LPG, under the ATA (L & C) Order 1982 is an item which falls under Public Distribution System and as such petitioner is insulated from the action of imposing penalty by the State Government officers so authorized under the said notification dated 19.02.2001 and also under the ATA (L & C) Order 1982. However, the said officers are authorized as hereinabove stated with the power of entry, search and seizure and if there is any prima-facie proof of any irregularity then such officers are authorized to inform the Sales Officers of the Government Oil Company as stipulated under Chapter 5, clause-v of the Revised Marketing Discipline Guideline, 2015 which has its statutory force for imposing penalty. 23. In view of the discussion both the writ petitions are allowed. The impugned show cause notice under Memo No.BSM 65/2018/32-33 dated 19.04.2018 suspending the Trade Licence bearing No.375 standing against the petitioner’s LPG distributorship under name and style M/S Nishi Gas Agency, Bilasipara and the subsequent show cause notice for cancellation of said Trade Licence under Memo No.BSM 85/2018/227 dated 05.07.2018 which is consequential to the show cause notice dated 19.04.2018 both issued by the Sub-Divisional Officer (Civil), Bilasipara in the district of Dhubri are set aside and quashed along with the Suspension Order. As a result, the said Trade Licence No.375 is directed to be restored back by the respondent No.4. However, the respondent No.4 shall inform the concerned Sales Officer of IOCL, respondent No.5 about the irregularities so detected by the authorized officials under the ATA(L & C) Order 1982 following which necessary action may be initiated by the respondent No.5 as per law. 24. Interim order passed earlier stands vacated.
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