Sachidanand Singh vs Indian Oil Corporation

Subrata Talukdar, J.—In this writ petition challenge is thrown to the impugned show cause notice dated 23rd April, 2013 issued by the Indian Oil Corporation Ltd. (for short IOCL) against the sole proprietorship firm of the writ petitioner. By the show cause notice the writ petitioner was called upon to reply regarding the genuineness of a handwritten Credit Worthiness Certificate dated 15th December, 2006 issued by the Bank of India (for short BOI), Motihari Branch, Bihar submitted by the writ petitioner along with his application for selection as a retail outlet dealer of the dealership in issue, being located on Vivekananda Road, District-North 24 Parganas off the Dunlop Bridge/BT Road/Dakshineswar Traffic Point (hereinafter referred to for short as the said dealership).

The short facts presented by Sri Bikash Ranjan Bhattacharya, Ld. Senior Counsel for the petitioner are that the petitioner applied for the said dealership, as per the terms advertised and, was selected at the close of a rigorous selection procedure. The Letter of Intent (for short LOI) was issued in favour of the petitioner on 9th August, 2007 and the petitioner, upon completion of the formalities, received the letter of appointment on 13th August, 2007. Pursuant to the said LOI and the letter of appointment the petitioner has been functioning as a dealer of the said petroleum retail outlet to the satisfaction of IOCL. In this connection Sri Bhattacharya submits that an agreement was also executed between IOCL and the petitioner on 17th August, 2007.

During the functioning of the said dealership the appointment of the petitioner was challenged in a writ petition by one Ashoke Kumar Kundu, being the second empanelled candidate to the selection. Such challenge was mounted on the platform of several alleged discrepancies in the documentary affidavits submitted by the petitioner while claiming the said dealership.

Sri Bhattacharya submits that the writ petition being WP 17883(W) of 2007 filed by the said Ashoke Kumar Kundu against IOCL and others, was dismissed by judgment and order dated 9th July, 2010 passed by an Hon�ble Single Bench. It is pointed out by Ld. Senior Counsel that the Hon�ble Single Bench had the occasion to deal with each of the individual complaints and found them to be not sustainable. Sri Bhattacharya submits that these complaints, inter alia, related to the nature of the affidavits submitted by the petitioner in support of his claim to the location of the said dealership as well as to other affidavits of third parties in support of the ability of the petitioner to execute the necessary quantum of business. At paragraphs 6, 7 & 8 of the judgment and order dated 9th July, 2010, the Hon�ble Single Bench was pleased to hold as follows:-

"6. The main submission of Ms. Mukherjee is that the investigation was not properly done on the basis of these allegations. I have examined the affidavits, copies of which form part of pleadings. As regards errors in these affidavits, I find the same is not of a high degree. The description of the location broadly corresponds to the actual location. The case of the petitioner is that the location of the outlet is not on the crossing of Dunlop and B.T. Road but between Dunlop Bridge B. T. Road crossing and Dakshineswar. This is a minor error in description. So far as the name of the deponent in the affidavit of Fuldip Singh, the examining authorities did not find any gross error. A copy of this affidavit has been made Annexure "R3" in the affidavit-in-opposition of the oil company. I find 5 from this affidavit that the affidavit has been affirmed in the name of Fuldip Singh, and there is signature also, which is not legible. Below this signature, the name Kuldip Singh appears in capital letters. This does not appear to me the signature of the deponent. Since the signatory has been identified by a learned Advocate, and no specific case has been made out that there is no Fuldip Singh but only Kuldip Singh, I do not think this Court can review the decision of the oil company based on their own investigation. As regards the affidavit of Tiwari, in the absence of any statement made on oath that he never filed any affidavit, I do not think this Court can take cognizance of such allegation. The other allegation that one Thakur Tiwari did not own any vehicle was also examined and dealt with by the investigating body of the oil company. Ms. Vinita Meheria appeared on behalf of the Indian Oil Corporation, and she submitted that the investigation was done as per the existing norms. Dr. Chakraborty appeared for the private respondent and submitted that it was Fuldip Singh himself who had signed the affidavit.

The disputes raised in this writ petition are essentially factual in nature. The petitioner himself had not complained against the grant of the dealership to the private respondent at the initial stage but he has mainly relied on the complain of two other individuals. I do not think an unsuccessful applicant can come forward with a complain against a successful applicant by two unconnected individuals has not been investigated properly. None of the complainants have come forward before this Court. I have gone through the errors or discrepancies 6 pointed out on behalf of the petitioner and find them to be minor discrepancies. In the light of these facts, in my opinion this Court has to accept the finding of the investigating agency of the oil company. As regards the decision cited on behalf of the petitioner, I do not think there has been any gross suppression of material fact which would attract the ratio of the decision of the Hon�ble Supreme Court in the case of B.R. Chowdhury (supra) in the facts of the present case. In the present case, the site disclosed in the affidavits broadly corresponds to the site for which the application was invited. In the case of Hindusthan Pertroleum Corporation (supra) the actual site was altogether different from the one which was disclosed. I have already observed that the error in description of the site was minor, and cannot be treated to be fatal in nature. Certain other authorities were cited on behalf of the parties on the scope of judicial review in the matters of this nature. These authorities lay down well-established principles of administrative law, and I do not consider it necessary to individually refer to these authorities for the purpose of adjudication of this writ petition.

Under these circumstances, the writ petition fails."

On the strength of the above noted judgment and order of the Hon�ble Single Bench dated 9th July, 2010 Sri Bhattacharya submits that for all purposes the appointment of the petitioner to the said dealership stood affirmed. Sri Bhattacharya points out that in its affidavit-in-opposition to the writ petition of Ashoke Kumar Kundu (supra), the respondent-IOCL had stated as follows:-

"(b) Selection of a dealer is made by a selection committee, which is an expert body, after taking into account and after appreciating various factors and materials. The Hon�ble High Court in its constitutional writ jurisdiction usually does not sit as a court of appeal over such assessment and re appreciate the various factors and materials, which were taken into account by the selection committee.

(c) The writ petitioner has made false and misleading allegations in the writ petition knowing the same to the false.

(d) The writ petition proceeds on the sole basis that letter of intent was awarded to respondent no. 6 by respondent authorities without investigating into complaints made by third parties regarding selection of respondent no.6. This allegation is wholly false and misleading for the reasons stated herein later."

Therefore, Sri Bhattacharya asserts that the complaints against the petitioner were found to be baseless upon investigation by IOCL and such issue questioning the said dealership cannot be reopened at this stage by issuance of the impugned show cause notice dated 23rd April, 2013.

Next, Sri Bhattacharya takes this Court to the judgment and order of the Hon�ble Division Bench dated 11th March, 2011 passed in MAT 183 of 2010 which was an appeal preferred by the said Ashoke Kumar Kundu to the order of the Hon�ble Single Bench dated 9th July, 2010. Sri Bhattarcharya points out that the Hon�ble Division Bench did not find any infirmity in the judgment of the Hon�ble Single Bench and consequently also did not notice any arbitrariness or illegality in appointing the petitioner to the said dealership.

The judgment of the Hon�ble Division Bench dated 11th May, 2011 was carried by way of a Special Leave Petition (SLP) by the said Ashoke Kumar Kundu before the Hon�ble Apex Court which was dismissed on the 9th of September, 2011. Sri Bhattacharya therefore reiterates that the selection of the petitioner has attained finality and the impugned show cause notice dated 23rd April, 2013 cannot be allowed to proceed. Therefore, Ld. Senior Counsel for the petitioner prays for quashing of the impugned show cause notice.

Appearing for the IOCL, Ms. Vineeta Meharia, Ld. Counsel submits that the nature and purport of the impugned show cause notice dated 23rd April, 2011 is different from the subject matter of the first round of litigation. According to Ms. Meharia, the first round of investigation carried out by IOCL centred around the validity of the documents submitted by the petitioner along with his application. Such documents did not include the said Credit Worthiness Certificate issued by the then Manager, BOI, Motihari Brach.

Ms. Meharia points out that subsequently the corporate office of IOCL received a complaint to be investigated by the Central Vigilance Commission under the Public Interest Disclosure Protection of Informer Resolution (for short PIDPIR). The said complaint was forwarded by the Vigilance Department to the IOCL at Motihari for investigation. During enquiry the Vigilance Department issued a communication on the 24th of May, 2010 to the BOI requesting confirmation of the genuineness of the Credit Worthiness Certificate issued in favour of the petitioner.

By reply dated 12th July, 2010 BOI confirmed that the Manager of Motihari Branch who issued the certificate on 12th July, 2006 has stated in writing that although the certificate was written by him, the last three words "to Rs. 15 lac" were however not in his handwriting. The said certificate appears at both pages 170 and 162 of the writ application.

Pursuant to the reply of BOI dated 12th July, 2010 the Corporate Office of IOCL by letter dated 20th February, 2013 directed the West Bengal State Office of IOCL to take suitable action against the petitioner in terms of Clause 45 of the Dealership Agreement. Accordingly, by the show cause notice dated 23rd April, 2015 the petitioner was asked to clarify on the forged nature of the Credit Worthiness Certificate since, such forgery, attracts "termination of dealership in terms of Clause 45(b)(i) of the Dealership Agreement".

Clause 45(b)(i) reads as follows:-

"(b) Upon���.

(i) If any information given by the Dealer in his application for appointment as a dealer or in any document supplied therewith or filed in support thereof shall be found to be untrue or incorrect;"

Ms. Meharia submits that the petitioner bought time on the Credit Worthiness Certificate by seeking documents from IOCL by his letter dated 6th May, 2013 which were promptly supplied by the communication from IOCL dated 10th May, 2013. Ms. Meharia points out that since the petitioner was further buying time qua his reply to the show cause notice, IOCL issued a reminder dated 27th May, 2013 instructing the petitioner to submit his explanation within seven days from the date of receipt of such reminder.

Ms. Meharia further points out that the petitioner then carried the impugned show cause notice for adjudication by way of the present writ petition and, by order dated 13th June, 2013 an Hon�ble Single Bench was pleased to stay, on prima facie satisfaction, further proceedings arising out of the show cause notice. Such interim order was extended until further orders.

Ms. Meharia relies on the authority of the Hon�ble Apex Court reported in 2004 (2) SCC 177 (at paras 9 & 11) and 2007 (4) SCC 410 to make the point that the present writ petition is pre-mature and, the petitioner is required to answer the show cause notice. Ms. Meharia further submits that the prima facie satisfaction of IOCL to proceed with the show cause notice is justified since the author of the said certificate, one B.K. Das has himself denied on affidavit to have written the last three words, viz. "to Rs. 15 lac".

Representing the respondent no.6, being the then Manager of Motihari Branch of BOI, Ms. Debjani Mitra relies on his affidavit to clarify in extenso as follows:-

"2. I say that on or about October 2005, I was posted at Bank of India, Motihari Branch, under Muzaffarpur Zonal Office, Post Office-Motihari, District-East Champaran, Bihar, PIN- 845401 and was posted there till May, 2007.

The petitioner at the relevant period of time was maintaining a Savings Account with the Bank of India, Motihari Branch and had been introduced by one of the high valued customers of the said Branch.

As such, at the request of the petitioner vide his letter dated 15.12.2006, I as the then Branch Manager of the Bank of India issued a letter dated 15.12.2006 to the petitioner extending financial assistance as per landing norms of the Bank of India.

However, I strongly deny and dispute that I have ever written the last three words of the second paragraph of the aforementioned office letter dated 15.12.2012 i.e. "to Rs. 15 Lacs".

I further say that no commitment of extending financial assistance for may specific amount was expressed either in the said letter or during verbal discussions with the petitioner.

I further submit that the petitioner at the relevant period of time used to maintain his accounts at the Motihari Branch, Bank of India and used to pay official and courtesy visits to the said Branch. On or about December, 2006, the petitioner informed me that he will participate in a tender bidding for a retail outlet dealership of the respondent No.1.

The petitioner further requested me to allow the petitioner to utilise my residential address at Kolkata for receiving any communication from the respondent No.1 regarding the aforementioned tender which will be communicated and/or rerouted to the petitioner as Motihari is a rural area in the State of Bihar and at times letter/postal communication reaches there late.

As a bona fide customer of the Bank of India who desired to open business in West Bengal and had no address of communication at Kolkata, I on good faith allowed the petitioner to use my residential address for purposes of receiving communications from the Respondent No.1 for the aforementioned tender purposes only. One or two letters addressed to the petitioner by the respondent No.1 through my residence at Kolkata mentioned in the Writ Petition was redirected by my family members to Motihari which the petitioner collected from me at the Motihari Branch of Bank of India.

I further say that the petitioner was never my tenant at my residence at Kolkata. My younger brother and my family are the only residence at the said address in Kolkata. There is no vacant portion in the said property after the occupation of the same by my brother and my family to let out. The statement made by the petitioner in the Writ Petition is totally baseless false and are after thought."

Ms. Mitra therefore submits that the satisfaction arrived at by the Hon�ble Single Bench vide its judgment and order dated 9th of July, 2010 relates to the verification of materials connected to the application of the petitioner other than the Credit Worthiness Certificate which is the issue in this writ petition. Ms. Mitra points out that in view of the admission on affidavit made by the respondent no.6, being the said B.K. Das, that the three words in issue namely, "to Rs. 15 lac" were not written by him, prima facie demonstrate that fraud has been committed which requires to be further investigated by IOCL.

Having heard the parties and considering the materials on record this Court arrives at the following conclusions:-

(A) That the scope, purport and intent of the solemn judgment of the Hon�ble Single Bench dated 9th July, 2010 and of the Hon�ble Division Bench dated 11th March, 2011 did not cover the issue of forgery connected to the Credit Worthiness Certificate in issue in the present writ petition. This Court is persuaded to accept the submissions of Ms. Meharia that the two stages of investigation are different. This Court further finds merit in the stand taken by Ld. Counsel for IOCL that the affidavits in issue which were the subject matter of the first investigation and, have been discussed both in the judgment of the Hon�ble Single Bench dated 9th July, 2010 and the Hon�ble Division Bench dated 11th March, 2011 (supra) are distinct from the issue of forgery raised by way of the show cause notice impugned in the present writ petition.

(B) This Court is further satisfied that the complaint of forgery in the Credit Worthiness Certificate was separately brought to the notice of the Vigilance Department of IOCL under the PIDPIR. Such complaint was investigated by IOCL and the Motihari Branch of BOI separately approached to confirm the genuineness of the said Credit Worthiness Certificate. Upon the confirmation received from BOI, the petitioner was asked to show cause vide the impugned notice dated 23rd April, 2013.

(C) This Court is also required to notice the failure on the part of the petitioner to take a clear stand qua the show cause notice since, the petitioner failed to rebut the charge by taking refuge in the earlier round of litigation culminating in the order of dismissal of the SLP filed by the said Ashoke Kumar Kundu. This Court notices that by reply to the show cause notice dated 23rd April, 2013 the petitioner on 6th May, 2013 called for documents from IOCL and by a communication dated 10th May, 2013 the documents were supplied by IOCL to the petitioner. It is relevant to mention that the petitioner in his reply dated 6th May, 2013 sought three documents namely, a) Credit Worthiness Certificate; b) IOCL�s letter seeking written confirmation from the bank regarding genuineness of the certificate; and c) the facsimile reply by the Zonal Manager, Motihari to IOCL dated 12th July, 2010.

By a letter dated 10th May, 2013 the bank supplied the following documents:-

(1) Copy of Credit Worthiness Certificate;

(2) Copy of confirmation from BOI dated 12th July, 2010.

In the considered view of this Court the supply of document no. 2 by IOCL vide its communication dated 10th May, 2013 to the petitioner covers the requirement of the document nos. (b) and (c) desired by the petitioner in his reply to the show cause notice. This Court is of the further considered view that the confirmation by the BOI to IOCL regarding the authenticity of the certificate and its reference to the demand made by IOCL vide its communication dated 24th May, 2010, demonstrates that the genuineness of the certificate was sought for by IOCL and, replied to by the bank. Therefore, having regard to the above noted facts this Court does not find that the petitioner suffered from any breach of the principles of natural justice.

(D) This Court also finds that by communication dated 27th May, 2013 the petitioner was reminded by IOCL to clarify the discrepancies alleged in the show cause notice with the further reminder that the petitioner is employing dilatory tactics by seeking additional documents from IOCL although the issue for consideration is straight forward pertaining to the use of the three words "to Rs. 15 lac". This Court is also persuaded to hold that the petitioner approached this Court at a pre-mature stage by challenging the show cause notice.

(E) This Court is also in agreement with the argument advanced by Ms. Mitra, Ld. Counsel for the respondent no.6 to the effect that since the author of the certificate has himself denied using the three words "to Rs. 15 lac" in the said certificate, there arises a prima facie presumption of adverse inference against the petitioner which is required to be carried forward to its logical conclusion by IOCL through the issuance of the show cause notice.

In the opinion of this Court such show cause notice requires to be answered by the writ petitioner directly without adopting time consuming tactics and finally, seeking relief on a misconceived argument that the authenticity of the Credit Worthiness Certificate stood settled through the judicial pronouncements of the Hon�ble Single Bench, Hon�ble Division Bench and confirmation of such pronouncements by the Hon�ble Apex Court.

(F) This Court also notices that the platform of the order obtained by the petitioner on the 13th of June, 2013 rested on the ground that the petitioner alleged that his landlord is the person who initiated the enquiry in respect of the Credit Worthiness Certificate, stands answered by the affidavit of the respondent no.6 which has been quoted above in this judgment. The respondent no.6 has clearly stated that the petitioner was temporarily allowed to use his residential address for receiving correspondence from IOCL at Motihari and, such address was provided by the respondent no.6 to the petitioner considering his long standing association with the bank.

This Court notices that the writ petitioner has denied the statements of the respondent no.6 with regard to the nature of use of the residential address of the respondent no.6 at Motihari. However, with regard to the Credit Worthiness Certificate this Court finds that the petitioner has merely stated that the said certificate was issued after adhering to the bank�s lending norms of Rs. 15 lac and the said certificate has been confirmed to be genuine by BOI vide its communication from the Branch Manager, Motihari on 30th May, 2013.

In any view of the matter there is no denial by the writ petitioner of the specific stand taken by the respondent no.6 that the three words in issue were not written by him. Therefore, this Court is of the considered view that IOCL correctly proceeded to take the first step for examination of the issue by issuing the show cause notice dated 23rd April, 2013 and, having failed to receive a complete reply from the petitioner took steps under Section 45 (b)(i) of the Dealership Agreement.

(G) This Court cannot help but notice that even to the naked eye a copy of the Credit Worthiness Certificate appearing at page 170 of the writ petition, being Annexure P-21, carries a full stop after word �norms� following which the next three words appear "to Rs. 15 lac", again followed by a second full stop. Strangely, the first full stop appears to have been written over in the copy of the certificate at page 162 of the writ petition whereas the handwriting, again to naked eye, of the words "to Rs. 15 lac" in either of the pages is distinctly different.

This Court is required to notice the terms of the agreement signed between the parties dated 9th of August, 2007 which permit IOCL to raise the issue of forgery under Clause 45(b)(i) as above. Since this is a dispute touching the agreement between the parties this Court is of the view that in the facts of this case the relief of the petitioner lies in the remedy provided under the agreement, i.e. arbitration.

(H) Before parting with this case, this Court cannot help but notice the certificate dated 30th of May, 2013 purportedly issued by the Chief Manager of the Motihari Branch, BOI in favour of the writ petitioner. Such letter merely speaks of the fact that a certificate was issued on the 15th of December, 2006 by the Motihari Branch in favour of the petitioner without commenting on the authorship of the three words "to Rs. 15 lac". Interestingly, this Court cannot also help but notice that the word �chief� before the word �manager� has been spelt incorrectly as �cheif� which, at the level of the manager of a Nationalised Bank, this Court finds such departure from elementary dictionary sense to state the least, surprising with reference to its exact origins.

In the backdrop of the above discussion WP 16119(W) of 2013 stands dismissed.

CAN 10622 of 2014 stands accordingly disposed of.

Interim order stands discharged.

There will be, however, no order as to costs.

Urgent certified photocopy of this Judgment and order, if applied for, be supplied to the parties upon compliance with all requisite formalities.