' SADIQ HUSSAIN BHATTI, J.--Since a common point is involved in all these three identical petitions, therefore, we propose to dispose of them by this common judgment.
2. As facts of each petition are slightly different, therefore, it would be expedient if facts of each petition are given separately.
3. In Constitutional Petition No,D-2968 of 2011, the facts are that the petitioner was granted license by respondent No,2, Oil and Gas Regulatory Authority (OGRA), on 25-2-2005 for establishment of an Oil Marketing Company (OMC) on the terms and conditions mentioned in the license. As per tclause 2 of the license, the petitioner was required to construct and maintain 20 days storage capacity and stock in accordance with its consumption. The petitioner, after grant of the License, acquired plat of land measuring 360,000 sq. Ft situated in Deh/Tappo Ali Murad Kalhoro, Taluka Khanpur, District Shikarpur in October, 2006 for constructing storage capacity of 65000 Metric Ton petroleum, which is much beyond the requirement of clause (ii) of the License. The petitioner has spent a sum of Rs,90 million on construction of infrastructure for the storage facility but the completion of the same was delayed due to inordinate delays in the grant of necessary permissions/NOCs from different Government Departments. The petitioner has also acquired a piece of land at Machike, Sheikhupura to construct storage facility for 7000 Metric Ton petroleum and has applied to relevant Government authorities for requisite permissions/NOCs. Till date, the petitioner has invested a sum of Rs,28 million on this project. The petitioner has No far developed 183 retail outlets in different parts of the country and has invested approximately a sum of Rs,1.97 billion thereon. The respondent No,2 sent a Show-Cause Notice, bearing No,OGRA(Oil)19-3(51)/09 dated 11 July, 2011, whereby the petitioner was called upon to show cause in writing as to why the petitioner should not be proceeded for imposition of penalty/suspension of License in accordance with the Rules for noncompliance of Clause (ii) of the License. The petitioner replied to the show- cause notice vide its letter dated 1st August, 2011 terming the said show-cause notice as not maintainable under the law as the petitioner has not committed any violation of the terms of the License. The respondent No,2, vide its order dated 24-8-2011, imposed a fine of Rs,6.00 million on the petitioner. The petitioner informed the respondent No,2, vide letter dated 5-9-2011, 2 about its intention to file an appeal against order dated 24-8-2011. However, respondent No,2, after receipt of letter dated 5-9-2011, served upon the petitioner Notice dated 6-9-2011 whereby the marketing activities of the petitioner were suspended. This Notice has been challenged by the petitioner in C.P.
No, D-2968 of 2011. Learned counsel for the petitioner stated that the imposition of penalty has been challenged through an appeal under section 12 of the Ordinance, 2002 and is pending.
4. In Constitutional Petition No,3003 of 2001, the facts are that on 4th March, 2002 the petitioner was granted permission to establish an Oil Marketing Company pursuant to Rule 28 of the 1971 Rules.
This permission was subject to the following conditions:--
(1) The petitioner shall incorporate itself with the Securities and Exchange Commission and furnish the incorporation certificate to the Authority;
(2) The petitioner will construct and maintain 30 days storage capacity in accordance with their consumption;
(3) All infrastructure including development of retail outlets should strictly meet the safety and environmental standards prevalent in the country;
(4) Petroleum products will be stored and distributed in accordance with the prevalent policy of the respondent No,1 and applicable laws/rules;
(5) Quarterly progress report on development of infrastructure and activities of the petitioner will be submitted to the Authority; and
(6) The petitioner's operations will be governed under the provisions of all applicable law/rules.
5. As of June, 2011 the petitioner was operating 213 filling stations throughout the country. The total number of the aforementioned filing stations being operated by the petitioner in each Province and in Azad Jammu and Kahsmir are as under:-- Punjab 95 Sindh 77 Balochistan 08 Khyber Pakhtunkhwa ("KPK")22 Gilgit Baltistan 05 Azad Jammu and Kashmir06 Total 213
6. The petitioner claims to have incurred huge costs in constructing the aforementioned filling stations and in the requisite human resources required to operate and maintain them. The total quantity of motor gasoline and diesel capable of being stored at the above referred filling stations is sufficient to meet country-wide requirement of motor gasoline and diesel for about 9 days.
7. As of June 2011 the petitioner owned or otherwise had access to the following bulk storage facilities for motor gasoline and diesel:-- Location Region Storage capacity Keamari Sindh 231 MT MouzakundBalochistan 7,457 MT Machike Centre 1,204 MT Total 8,892 MT Diesel: Location Region Storage capacity Keamari Sindh 9,188 MT MouzakundBalochistan 13 ,687MT Machike Centre 6,108 MT Total 28,993MT
8. The bulk storage facilities at Mouzakund are owned by the petitioner while those at Keamari are available to the petitioner pursuant to the hospitality agreements dated 1st October, 2010 and 20th June, 2011 entered into with Messrs Al-Rahim Trading Company (Private) Limited, and those at and Machike are available to the petitioner pursuant to the hospitality agreement dated 4th January, 2010 entered into with Messrs Admore Gas (Private) Limited and the hospitality agreement dated 13th August, 2009 entered into with Messrs Attock Petroleum Limited. In addition, the petitioner also has access to bulk storage facilities in Punjab at Mehmood Kot and at Gatti (Faisalabad) where Pak Arab Refinery maintains a storage facility and from where it also supplies petroleum products to the petitioner. The total quantities of motor gasoline and diesel in bulk storage during each of the eight months preceding June, 2011 was 8,892 MT (Motor gasoline) and 28,993 MT (Diesel) and the average daily sales of the petitioner's Motor Gasoline and Diesel throughout the country during this period was 114 MT (Motor Gasoline) and 592 MT (Diesel). On the basis of the foregoing, at all times during the eight months up to June 2011 the petitioner had storage capacity for motor gasoline for 78 days and diesel for 49 days. The Chairman of respondent No, 2 received a letter from respondent No,1 dated 27 June 2011 advising him to suspend the marketing permissions/licenses of the petitioner and five other oil marketing companies. Following this letter, the respondent No, 2 issued Show-Cause Notice No,OGRA(Oil) 19-3(51)/(09) dated 1 1 th July, 2011 to the petitioner calling upon it to show-cause as to why action should not be taken for alleged failure of the petitioner to maintain back up stock on a region/product wise basis. The petitioner replied to the said show cause notice by its letter dated 13th July, 2011. Subsequently, in the meeting held on 23rd July, 2011, which was, inter alia, attended by the Chairman of the petitioner as well, a fine of Rs,1,00,000 (Rupees one million) was imposed on the petitioner. No appeal was filed against imposition of this fine. Thereafter, vide Notice dated 6th September, 2011, the respondent No,2 provisionally suspended the petitioner's marketing activities in the Provinces of Punjab and Khyber Pakhtunkhwa and also imposed a fine of Rupees Three Million on the petitioner. This Notice has been impugned by the petitioner through the present petition.
9. In C.P. No, 301.1 of 2011 the petitioner was granted a provisional marketing license by respondent No,1 on 16-12-2003 under Rule 28(1) of the Rules, 1971. The first condition of the provisional license was that the petitioner will construct and maintain 20 days' storage capacity and stocks in accordance with its requirement and condition (viii) of the license was that the provisional license is for three years till the marketing plan was executed/ implemented by the petitioner and in case of failure of the petitioner to comply with the same, the respondent No,1 may not renew the license or may impose a penalty depending on the nature of the noncompliance. The respondent No,2, vide its notice dated 15-12-2007, renewed the license of the petitioner. However, the respondent No,2, vide its notice dated 6th September, 2011 suspended the marketing activities of the petitioner in Sindh, Khyber Pakhtunkhwa and Balochistan on the basis that the petitioner had failed to construct/ maintain 20 days' storage/stock of sales to meet any emergent need of the country as obligated under Rule 30-A of the 1971, Rules. Apart from suspension of the license, the respondent No,2 also imposed a fine of Rs, 3,000,000 (Rupees three million) on the basis that the petitioner had grossly violated the terms and conditions of its license. The petitioner, feeling aggrieved by this notice, has impugned the same through the present petition.
10. Mr. Muhammad Saleem Thepdawala, learned counsel for the petitioner in C.P. No, D-2968 of 2011, submitted that the respondent No,2, vide letter dated September 6, 2011, (hereinafter referred to as "the impugned notice") provisionally suspended the marketing activities of the petitioner throughout the country till completion of product-wise/ province-wise storage as per policy/ directions issued from time to time by the Government of Pakistan. The learned counsel states that prior to the suspension notice, the respondent No. 2 issued a Show Cause Notice dated July 11, 2011 calling upon the petitioner to show cause as to why it should not be proceeded against for imposition of penalty/suspension of its permission/license in accordance with the Rules for the reason that it failed to construct storage capacity for 20 days in accordance with its consumption and Infrastructure Development Plan. This show cause notice was replied by the petitioner vide its letter dated August 1, 2011. However, vide notice dated August 24, 2011, the respondent No. 2, while rejecting the pleas taken in the reply to the show cause notice dated July 11, 2011, in exercise of powers conferred under rule 44 of the Pakistan Petroleum (Refining, Blending and Marketing) Rules, 1971 (herein referred to as " the Rules, 1971") imposed a penalty of Rupees Six Million on the petitioner.
The petitioner, vide letter dated August 5, 2011, informed the respondent No.2 that it is filing an appeal against such imposition of penalty and called upon the respondent No.2 to suspend the operation of this notice till final decision of the appeal. According to the learned counsel, the respondent No.2 was not justified in suspending the marketing after it imposed a penalty of Rs. Six Million and appeal filed under section 12 of the Ordinance, 2002, challenging such imposition of fine, is pending. The learned counsel for the petitioner invited our attention to various documents on the record and submitted that immediately after grant of the Provisional Marketing License the petitioner acquired a plot of land, measuring 360,000 sq. Ft. Situated at Deh/Tappo Ali Murad Kalhoro, Taluka Khanpur, District Shikarpur, opposite PARCO Pumping Station No.3, to construct storage facility to cater to the need of the retail outlets in the southern region including Sindh, Balochistan and some nearby parts of the Punjab. In this regard the petitioner has already spent a sum of Rs.90.00 million upon construction of the infrastructure for the storage capacity. The learned counsel submitted that petitioner would have completed the storage facility much earlier but due to inordinate delays in obtaining necessary permissions/NOCs from different Government departments, the work was delayed. The learned counsel further stated that the petitioner has also acquired a plot of land at Machike, Sheikhupura for the purpose of construction of storage facility of 7,000 Metric Ton and has applied to the District Coordinator Officer (DCO) and other relevant government authorities for requisite NOCs. He submitted that till date the petitioner has obtained NOCs from 10 different authorities but NOCs from Explosive Department Lahore and Environmental Protection Agency are still awaited. The petitioner, according to the learned counsel, has spent a sum of Rs.28 million on this site. The learned counsel submitted that till date the petitioner has spent a huge amount of Rs. 1.10 billion on setting up of 233 retail outlets as well as the storage facilities. Learned counsel submits that there was no violation of the term of license as the bona fide intention of the petitioner to set up such facility is clear from its conduct. It is for reasons beyond the control of the petitioner that the storage facilities could not be completed within time.
11. Salman Talibuddin, learned counsel for the petitioner in C.P. No.D-3003 of 2011, submitted that the license, by not restricting the petitioner's marketing activities to any particular Province or Provinces, authorized the petitioner to conduct its marketing activities through out the country; the permission only requires the petitioner to maintain 30 days storage capacity in accordance with its own consumption. In other words, the only obligation imposed on the petitioner pursuant to the permission is to keep in store a quantity of refined oil products (namely, motor gasoline and diesel) sufficient to meet its requirements for motor gasoline and diesel for a thirty-day period; and the permission neither specifies nor does it require that the storage facilities must be located in each Province where the petitioner operates filling stations nor does it make it a condition of the permission that the said storage facilities must be owned by the petitioner. The learned counsel submitted that the petitioner has incurred Huge costs in constructing the aforementioned filling stations and in the requisite human resources required to operate and maintain them. The learned counsel also submitted that the bulk storage facilities at Mouzakund are owned by the petitioner while those at Keamari are available to the petitioner pursuant to the hospitality agreements dated 1st October, 2010 and 20th June, 2011 entered into with Messrs Al-Rahim Trading Company (Private)
Limited, and those at Machike are available to the petitioner pursuant to the hospitality agreement dated 4th January, 2010 entered into with Messrs Admore Gas (Private) Limited and the hospitality agreement dated 13th August, 2009 entered into with Messrs Attock Petroleum Limited. In addition, the petitioner also has access to bulk storage facilities in Punjab at Mehmood Kot and at Gatti (Faisalabad) where Pak Arab Refinery maintains a storage facility and from where it also supplies petroleum products to the petitioner. It was further submitted that the total quantities of motor gasoline and diesel in bulk storage during each of the 8 months preceding June 2011 was 8,892 MT (Motor gasoline) and 28,993 MT (Diesel) and the average daily sales of the petitioner's Motor Gasoline and Diesel throughout the country during this period was 114 MT (Motor Gasoline) and 592 MT (Diesel). On the basis of the foregoing, at all times during the 8 months up to June 2011 the petitioner had storage capacity for motor gasoline for 78 days and diesel for 49 days. On the basis of the above storage capacity during 2010/ 2011, there was no justification in respondent No.1 's addressing letter dated 27 June 2011 to the respondent No.2's Chairman advising him to suspend the marketing permissions/licenses of the petitioner. The basis of the decision was that the petitioner does not have the required storage facility. The respondent No.1 recommended that the petitioner and other companies listed in the letter should remain suspended till creation of necessary infrastructure storages in the different regions of operation according to the conditions of the license to ensure product-wise back up supplies of 20 days storage, in respective regions.
The cumulative country-wise oil marketing share of the petitioner and the other companies listed in the letter of 27 June 2011 is only 5%, of this the petitioner's market share for Motor gasoline is 1.68% and 3.09% for diesel. The learned counsel submitted that suspending the petitioner's marketing activities would have only aggravated the fuel shortages and not alleviated the situation in any manner; and that imposing the requirement to maintain 20 days stock in the "respective regions" amounted to a unilateral and totally unsustainable alteration of the permission granted to the petitioner on 4th March, 2002 which only requires the petitioner to maintain 30 day stock for the entire country; and that since "region" is not a term defined in either the 2002 Ordinance or the 1971 Rules and if that term (as used in the letter of 27th June, 2011) is taken to be a reference to each Province, the effect would be to require the petitioner to maintain a 100 day stock for each of motor gasoline and of diesel.
12. On behalf of the petitioner in C.P. No.D-3011 of 2011, the grounds to attack the impugned Notice are that no violation of Rule 30-A of the Rules, 1971 was made, therefore, the impugned Notice is unconstitutional, illegal and of no legal effect. That the petitioner has constructed its storage facility at Machhike in 2005 which is much beyond the 20 days requirement of the petitioner. Apart from this, the petitioner has storage agreements with third parties for storage facilities in Sindh, Khyber Pakhtunkhwa, Balochistan and Punjab to feed all its retail outlets. That the impugned Notice has been issued without any notice or affording any opportunity to the petitioner. It was submitted that vide letter dated 15-12-2007, the respondent No.2 itself acknowledged that the condition pertaining to storage has been met and, therefore, there was no justification in issuing the impugned Notice. It was further argued that as per the conditions of the provisional license the petitioner was required to construct storage facility for 20 days capacity only and nowhere it was stipulated that such facilities are to be constructed in each Province of the country. Thus, the petitioner has not acted in violation of Rule 30-A of the Rules, 1971. It was therefore argued that the impugned Notice was liable to be set aside.
13. Mr. Asim Iqbal, learned counsel for respondent No.2, first attacked the very maintainability of these constitution petitions on the ground that alternate adequate remedy by way of appeal under section 12 of the Ordinance, 2002 is available to the petitioner. He also stated that since disputed questions of fact are involved, therefore, the same cannot be decided in a constitutional petition and the petitions are not maintainable on this score also. He further stated that since the licenses were issued to the petitioners at Islamabad; the renewals were also granted at Islamabad and the respondents are also situated at Islamabad, therefore, this Court has no territorial jurisdiction to entertain these petitions and the same should have been filed before the Islamabad High Court. In this regard he relied on the following cases:
(1) Pakcom Limited and others v. Federation of Pakistan and others (PLD 2011 44); Supreme Court
(2) Anjuman Fruit other s Arhtian and v. Deputy Commissioner, Faisalabad and others (2011 SCMR 279)
(3) WI-Tribe Pakistan Limited v. Federation of Pakistan through Federal Secretary, Information Technology and telecom, Islamabad and another (PLD 2009 Islamabad 41)
(4) Rana Aftab Ahmad Khan v. Muhammad Ajmal and another (PLD 2010 Supreme Court 1066)
14. The learned counsel giving back ground of the controversy stated that due to heavy floods in the upcountry there was acute shortage of petroleum products at retail outlets causing great inconvenience to the general public. In order to avoid any repetition of such situation, the Ministry of Petroleum and Natural Resources ("MP&NR"), in exercise of powers under Rule 30-A of the Rules, 1971 and the conditions of the licenses, advised all the Oil Marketing Companies, including the petitioners, vide its letter dated 29-9-2010, to build up and maintain stocks of 20 days for meeting any emergent need of the Country. The learned counsel, then, referred to various letters/correspondence available on record to show that the petitioners have failed to comply with the above directives as was exposed by the shut down of Attock Refinery Limited and National Refinery Limited due to which acute shortage of petroleum products was observed at retail outlets throughout the Country and thus rendering themselves liable to action under the relevant laws/rules. So far as agreement for storage facilities entered into between the petitioners and third parties are concerned, the learned counsel submitted that it was only a stopgap arrangement and the petitioners were under contractual obligation to 'construct their own storage facilities for the required capacity. The petitioners, he added, cannot resile from their contractual obligation by renting storage facilities of other companies. The learned counsel referred to letter dated January 28, 2009 to show that though the License was granted to the petitioner in C. P. No. 2968 of 2011 on 25-1-2005 but, as late as 2009. The petitioner was unable to construct the required storage facility.
He also referred to letter of the petitioner in C.P. D-2968 of 2011 to show that as per its own undertaking, the petitioner was required to construct storage facilities at various places to cater to the need of their retail outlets across the country.
15. Mr. Muhammad Astral Khan Mughal, learned D.A.G. Adopted the arguments advanced by Mr. Asim Iqbal, learned counsel for respondent No.2.
16. It may be mentioned here that in C.P. No. D-2968 of 2011, filed by Messrs HASCOL Petroleum Limited, first a penalty of Rs.6,000,000 (Rupees Six Million) was imposed on the petitioner against which the petitioner filed an appeal before the Chairman, OGRA under section 12 of the OGRA Ordinance, 2002. The learned counsel for this petitioner vehemently argued that there was no justification in suspending the marketing activities of the petitioner during the pendency of the appeal before the Chairman, OGRA.
17. On the other hand, by a single Notice dated 6-9-2011, a fine of Rs.3,000.000 (Rupees three Million) was imposed on the petitioners in the remaining two petitions and further their marketing activities were also suspended by the same Notice. Although, fine imposed on petitioner in C.Ps. No.2968 of 2011 has not been impugned and only suspension of the marketing activities has been assailed before us through the present petition but the petitioners in C.P. Nos. D-3003 of 2011 and 3011 of 2011, have assailed both the fine as well as suspension of their marketing activities.
18. First, we would like to decide the question of maintainability of these petitions. Mr. Asim Iqbal, learned counsel for the respondent No.2 at the very outset submitted that these petitions are not maintainable as adequate alternate remedy is available to the petitioners in the form of an appeal under section 12 and review under section 13 of the Ordinance, 2002. However, Mr. Selman Talibuddin, learned counsel for petitioner. Submitted that if the order complained of was patently illegal, void or wanting in jurisdiction then recourse to the alternate remedy would be counter productive and in such type of cases existence of alternate remedy would not bar a petition under Article 199 of the Constitution. He also submitted that the respondent No.2 has clearly shown its mind by imposing penalty and by suspending the marketing activities of the petitioners, therefore, the petitioners cannot be forced to throw itself at the mercy of the same Authority. He also submitted that it is not a rule of law that if an alternate remedy is available then the High Courts will not entertain a writ petition but is a rule by which the High court regulates its jurisdiction. The learned counsel, in support of his submissions, relied on the reported decisions in the case of (i)
Col. (Retd.) Maqbul Ilahi through Attorney v. Pakistan Defence Officers Housing Authority (2009 YLR 282) (ii), Dr. Akhtar Hussain Khan v Federation of Pakistan and others (2012 SCM R 455), and (iii)
Muslimabad Cooperative Housing Society Ltd., v. Mst. Siddiqa Faiz and others (PLD 2008 SC 135).
19 In the case of Col. (Retd) Maqbul Ilahi (supra), a Division Bench of this Court held as under:- "17. On behalf of respondent the maintainability of this Constitutional petition was vehemently assailed on the ground that the petitioner could not have invoked the constitutional jurisdiction of the Court as the impugned notice was merely a show-cause notice which did not violate any fundamental or vested right of the petitioner resulting in legal loss which were essential condition for having recourse to Article 199 of the Constitution of Islamic Republic of Pakistan. It was submitted by Mr. Khalid Jawed that proper course for the petitioner was to have waited for a decision/order in pursuance of the show-cause notice and to, have assailed the same in accordance with the law. This contention advanced by Mr. Khalid Jawed on behalf of the respondent is ,without any substance in view of the pronouncement made by the honourable Supreme Court in large matter of cases to the effect that if the order or action complained of was so patently illegal, void or wanting in jurisdiction that any further recourse to alternate remedy may only be counter productive and by invoking of Article 199 the mischief could forthwith be nipped in the bud then in such matters existence of alternate remedy would not bar the exercise of Constitutional Jurisdiction by this Court. Reliance may be placed on (i) 1999 SCMR 1881 (ii) 1999 SCMR 1072, (iii) 1993 SCMR 1778 and (iv) PLD 1990 SC 399."Khan (supra), a Full Bench of the Hon'ble Supreme Court held as under:-- "49. In Al-Jehad Trust v. Federation of Pakistan (PLD 1996 SC 324), the Court took a similar view and in Wukala Mahaz Barai Tahafaz Dastoor v. Federation of Pakistan (PLD 1998 SC 1263), the Court came to a similar conclusion. In such cases, even the existence of an alternate remedy has not prevented the Court from exercising its power of judicial review if the said alternate remedy is neither efficacious nor expeditious. In Watan Party through President v, Federation of Pakistan (PLD 2006 SC 697), the Court repelled this argument by holding that:- "But at the same time, we have also to keep in mind another very important principle of law enunciated by this Court in the case of Syed Ali Abbas v. Vishan Singh (PLD 1967 SC 294) petitioner cannot be refused relief and penalized for not throwing himself again (by way of revision or review) on mercy of authorities who are responsible for such excesses. This principle has to be read along with the principle laid down in the case of Anjuman-eAhmadiya, Sargodha ibid wherein it has been held that if an adequate remedy provided by , law is less convenient, beneficial and effective in case of a legal right to performance of a legal duty, the jurisdiction of the High Court can be invoked. Similarly this principle has been reiterated in the Murree ' Brewery's case ibid wherein it has been held that if a statutory functionary acts mala fide or in a partial, unjust and oppressive manner the High Court in exercise of its writ jurisdiction has power to grant relief to the aggrieved party.
' Thus we are of the opinion that under the circumstances of the case, it would not be in the interest of justice to push the petitioners back to the authority who had already exercised the jurisdiction and is insisting that the action so taken by it is not only in accordance with law as it suffers from no legal discrepancy or infirmity but is also transparent. Therefore under the circumstances, referring the case of the petitioner to the Federal Government or this Court directing investigation under section 27 of the Ordinance would be inappropriate and an exercise in futility and it would also not serve the interests of justice."
21. In the last cited case of Muslimabad Cooperative Housing Society (Supra) a Division Bench of the Hon'ble Supreme Court held as under:- "On the aspect whether writ lies before the High Court when alternate and efficacious remedy is available, it would be appropriate to refer to the case of The Murree Brewery Co. Ltd., v. Pakistan through the Secretary to Government of Pakistan and others (PLD 1972 SC 279). It has been held therein that the High Court will not entertain a writ petition when other appropriate remedy is yet available is not a rule of law barring jurisdiction but a rule by which the Court regulates its jurisdiction. When a statutory functionary acts mala fide or in a partial, unjust and oppressive manner, the High Court in the exercise of its writ jurisdiction has power to grant relief to the aggrieved party."
22. There is a plethora of judgments on the point that if an order or action complained of is patently illegal, void or wanting in jurisdiction that any recourse to the alternate remedy may only be counter productive and the mischief could be nipped in the bud by approaching the High Court under Article 199 of the Constitution then even in the presence of the alternate remedy a constitutional petition would be maintainable. However, for this purpose, the petitioners have to show that the orders/actions impugned are clearly made in violation of any rule or law. If it is shown by the petitioners that the impugned orders/actions have been made in violation of any rule/procedure/law, then the petitions would be maintainable, however, if it is shown by the respondents that the actions/orders assailed in the petitions were taken strictly in accordance with the rule/law/procedure, then the petitions could be dismissed as not maintainable. This question, therefore, would be answered at the end of the discussion after deciding, whether the impugned orders are void, illegal and in violation of any rule/law/prescribed procedure.
23. The petitioners were granted licenses for carrying out business as OMCs and one of the conditions of such license was that "The Company will construct and maintain 20 days storage capacity and stocks in accordance with their consumption." Thus, it has been categorically stated that the company will "construct and maintain" such storage capacity. It has not been mentioned that the company will arrange such storage capacity which would have entitled the company to take storage space on rent/lease from third parties. Then, there was another condition of the license which stipulates that "The company will comply with the terms and conditions defined in the Pakistan Petroleum (Refining, Blending and Marketing) Rules, 1971, Pakistan Petroleum Rules, 1985 and other Government Policies notified/issued from time to time." On 18-10-2010, respondent No.2 addressed a letter inter alia to the petitioners, the relevant part whereof reads as under:- "Subject: SHORTAGE OF PETROLEUM PRODUCTS DURING FLOODS ' Dear Sir, ' Reference Directorate General Oil, Ministry of Petroleum and Natural Resources, letter No.DOM- 6(23)/ 2010 dated 29th September, 2010, addressed to all the OMCs and copy endorsed to OGRA, on the above subject.
' The Government and the Regulator have taken a serious notice of the shortage of MOGAS in the country. You are, therefore, warned that in future, in case the licensing conditions of maintaining 20 days stock as spelled out in para 6 of the above mentioned letter are not met (for catering any emergent situation like the recent floods), the defaulting company shall face severe implications including cancellation of license (s).
24. In the above quoted letter reference was made to para 6 of the letter of Directorate General Oil, Ministry of Petroleum and Natural Resources, letter No.DOM-6(23)/2010 dated 29th September, 2010, which reads as under: "6. As decided/committed in the meeting held on 27th September, 2010 under the Chairmanship of Minister for Petroleum and NR, OMCs are directed to ensure building-up of stocks of minimum 20 days by 31st October, 2010 and to maintain the same in future, failing which action will be initiated against the defaulters as per Rules/Procedure."
25. It was vehemently argued by learned counsel for the petitioners that there is na requirement of maintaining 20 days stock province wise or location wise as there is no such mention in the license.
However, annexure III to the para wise comments submitted by the learned D.A.G. On behalf of respondent No.1, makes it crystal clear that the 20 days stock building is for area-wise consumption of the respective petitioners. Annexure III to the comments of respondent No.1 is the "Invitation for Expression of Interest to establish new. Oil Marketing Companies" which, as is evident from its contents, was addressed to all those persons who were interested in establishing new OMCs.
Clause 2 of the said public advertisement inter alia provides that "The interested companies shall also provide a 3 years Investment Plan to create a location wise minimum storage of 20 days of their proposed sales." This in fact is the document through which the respondents started the process of selecting eligible companies to be granted licenses for establishing OMCs. The condition quoted above does not leave any doubt that the storage capacity for 20 days sales was to be maintained on location-wise basis. The purpose of the storage is that in eases of emergency, like the floods or-unforeseen closure of a refinery, retail outlets in the affected area are regularly provided supply from the storage. Therefore, the argument that the petitioners have storage capacity of 78 days or more at Karachi would be of no help to them as the same cannot be provided in case of emergency to retail outlets in upcountry. It was argued that sufficient storage capacity is available at the relevant retail outlets. This storage is for the day to day use and not for meeting emergency situations like the one mentioned above. In clause (ii) of the license reference is also made to Infrastructure Development Plan. Annexure I to the Comments filed by respondent No.1 enumerates the criteria for issuance of Petroleum Products Marketing License, clause (2) whereof states "A new company should develop storages at locations and capacities corresponding to their business strategy, estimated business volumes and associated economic."
In the letter dated July 4, 2011, the petitioner Hascol Petroleum Limited has given status of progress on storage facilities wherein it has been stated that the work on Shikarpur Installation and Machike Installation is in progress. Similarly, BYCO Petroleum Limited, petitioner in C.P. No. D-3003 of 2011, vide its letter dated June 27, 2011, (available at page 161 of the file), has given its future infrastructure development plan. As per Annexure "A" to the said letter, BYCO has provided "Country Wide Storage Infrastructure Details", which is provided on region-wise basis i.e. South, Centre and North. It is also worth mentioning here that in reply to Show Cause Notice dated July 11, 2011, the petitioner (BYCO) vide its reply dated July 13, 2011, informed respondent No.2 that "we are fully cognizant with the terms and conditions of our marketing license and are in compliance with all its requirements, specific details of our PMG/HSD storages are appended below:" Thereafter, again the storage facilities have been enumerated location-wise and region-wise. This clearly shows that the petitioner is well aware that the storage capacity has to be built region-wise to cater for the needs of the respective areas. The condition that the OMCs should construct and maintain 20 days storage/ stock of their sales is very clear and specific. Therefore, if an OMC owns and maintains storage facilities in all the regions but the same are for less than 20 days capacity of its sale even then the OMC would expose itself- to action against the relevant rules/laws if, however, the OMC maintains storage facility for 20 days in one region but it also operates retail outlets in other regions for which stipulated storage facility is not provided even then the OMC would be in violation of terms of its license. Thus, the OMC has not only to construct and maintain storage facility for 20 days but the same is to be maintained on region-wise basis. The contention that this will amount to maintaining 100 or 80 days storage capacity is not proper as each location will have storage capacity for 20 days for that region alone and not for the entire country.
26. In view of the above discussion, we hold that the storage capacity equal to 20 days consumption has to be built by each petitioner on location-wise basis so that in case of emergency the supply chain is not broken and the people of the country do not suffer due to shortage of petrol and diesel.
27. Now, we would advert to the question whether the respondent No.2 was justified in issuing the impugned Notices or not. A perusal of the impugned Notices shows that these have been issued under rule 33(2) and rule 44 of the Rules, 1971. Rule 33 reads as under: "33, Revocation or amendment of permission. (1) The Authority may, if in its opinion the public interest so requires, revoke permission:--
(a) Where any person, in the opinion of the Authority, makes wilful and unreasonably prolonged default in doing anything required of him by these rules and has been informed in writing to that effect by the Authority;
(b) Where any person violates any of the terms or conditions of his permission and is to informed in writing and does not rectify the violation within the time specified; ' Or
(c) Where any person is in the opinion of the Authority, unable by reason of his insolvency fully and efficiently to discharge the duties and obligations imposed on him by the permission.
(2) Where, in the opinion of the Authority the public interest so requires, the Authority may, instead of revoking a permission under ,sub-rule (1), permit it to remain in force in relation to the whole or any part of Pakistan with such alterations or amendments in the terms and conditions of permission as it thinks fit to make or upon such new terms and conditions as it may impose.
28. Rule 44 of the said Rules reads as under:-- "44. Penalty for breach of Rules. Any person who contravenes the provisions of these rules shall, without prejudice to any other action that may be taken under these rules in relation to the contravention, be punishable for every breach with imprisonment for a term which may extend to three years, or with fine or with both."
29. A perusal of the above two rules shows that under rule 33 of the Rules, 1971 in case of violation of the terms and conditions of the license, as envisaged under clause (b) of sub-rule (1) of Rule 33 of the Rules, 1971, the Authority is competent to revoke the license and under sub-rule (2) of Rule 33 of the Rules, 1971, the Authority, if the public interest so requires, instead of revoking a permission under sub-rule (1), permit it to remain in force in relation to the whole or any part of Pakistan with such alternations or amendments in the terms and conditions of the permission as it may think fit to make. In the present case, the Authority provisionally suspended the marketing activities of the petitioners only till the period that the petitioners make compliance of the terms and conditions of their license. The language of rule 44 of the Rules, 1971 is very clear that if a person contravenes the provisions of these rules then, without prejudice to any other action that may be taken under these rules in relation to the contravention, the Authority is competent to punish him for every breach with imprisonment for a term which may extend to three years, or with fine or with both. Thus, the Authority is not only competent , to revoke the license but is also competent to impose fine and sentence him to B imprisonment.
30. In the present cases, the petitioners were granted licenses to conduct Oil Marketing business subject to certain terms and conditions. One of such conditions was that the petitioners shall construct and maintain 20 days storage capacity and stocks in accordance with their consumption. In addition to that, Policy Guidelines issued under Rule 30-A of the Rules, 1971, also required the OMCs to maintain 20 days stocks. According to the Authority, the petitioner not only contravened one of the terms and conditions regarding constructing and maintaining 20 days storage capacity as they were obligated to "construct and maintain 20 days storage capacity and stocks in accordance with their consumption and Infrastructure Development Plan" but also contravened me Policy Guidelines issued under Rule 30-A of the Rules, 1971. Rule 30-A reads as under:-- "30-A Every marketing company shall maintain such minimum stocks of petroleum products as the Authority may, having due regard to storage capacity and the finances of such individual marketing company, by order in writing require from time to time."
31. Petitioner in C.P. No. D-2968 of 2011 was granted license on 25-2-2005, petitioner in C.P. No.D- 3003 of 2011 was granted license on 4-3-2002 while petitioner in C.P. No. D-3011 of 2011 was granted license on 16-12-2003. However, till date they have not completed the storage facilities as required under terms and conditions of their respective license. Mr. Muhammad Saleem Thepdawala, learned counsel appearing for the petitioner in C.P. No. D-2968 of 2011, vehemently argued that the petitioner has acquired necessary piece of land for construction of the storage facility but the work on such facility was delayed due to non-issuance of the necessary NOCs from various Government Agencies/Departments. This assertion is belied by the fact that while it is claimed that the construction of the storage facility is delayed due to non-issuance of NOCs but at the same time the petitioner has completed a number of retail outlets which also require NOCs from the same Government Agencies/Departments. This applies to the other petitioners as well, as they have also increased their retail outlets but have not constructed storage facilities as required under the terms of their licenses and under the Policy Guidelines issued by the Government. If they were able to obtain NOCs for their retail outlets across the country then what prevented them from obtaining the same for the storage facilities. In this regard reference may be made to petitioner's (in C.P. No. D-2968 of 2011) letter dated January 12, 2009, (Annexure R/6 to the para wise comments of respondent No.2), wherein the petitioner itself had admitted (in para 2) that there is delay in construction of the storage facility. Reference may also be made to respondent No.2's letter dated February 20, 2008 (Annexure R-7 to the comments of respondent No.2) wherein it has been made clear that the extension in the marketing license has been made subject to the condition that "any further extension in the marketing license by the authority will be based on progress made by the company in developing the requisite infrastructure (i.e. Construction of storage capacity for 20 days cover in accordance with your consumption and infrastructure development plan)."
' Again the marketing license was extended by a period of one year vide letter dated July 2, 2009 on the condition that "The Company shall ensure the completion of the requisite storage infrastructure (i.e. Construction/maintenance of storage capacity for 20 days sales requirement) strictly in accordance within the time line action plan submitted by the Company to the Authority, vide its letter No. Nil dated 4th May, 2009." According to letter dated May 4, 2009, the storage tanks were to be completed by December, 2009. However, vide letter dated 12 September, 2009, the petitioner informed the respondent No.2 that the construction of storage facility is "now estimated to be completed by March, 2010." Thus, there is no denying the tact that the construction of the storage facility was never completed within the time line even within the extended time frame provided by the petitioner itself.
32. Perusal of letter dated May 4, 2009 also reveals that though land measuring eight acres was acquired for construction of storage facility in August, 2006 but application for NOC was made 'immediately' which was issued by DCO, Shikarpur on 16-10-2008. However, it is not clarified as to when the application was made. The same letter also talks about a Joint Venture with the petitioner's share being 5,600 metric tons but again it is not specified as to for how many days this quantity would cater.
33. So far as C.P. No.D-3003 of 2011 is concerned, as per respondent No.2's comments, as per calculation on the basis of province-wise sale and storage requirement, the company has over all backup storage of 12.7 days motor gasoline and 11:6 days of HSD.
34. As per comments of the respondent No.2, petitioner in C.P. No. 3011 of 2011, as per conditions of its license and the commitment made in Infrastructure Development Plan, was obligated to construct overall petroleum products storage capacity of 55,000 metric tons which included 2000 metric ton petrol, 20,000 metric ton diesel, 3,000 metric ton kerosene oil and 30,000 metric ton furnace oil along with setting up of 120 retail outlets in the country. Since the petitioner commissioned further 224 petrol pumps after renewal of the license in 2007, therefore, it was obligated to construct further storage capacity to meet the requirement of condition (ii) of its license.
35. So far as petitioner in C. P. No.D-3011 of 2011 is concerned, in the meeting held on July 21, 2011 a Director of the petitioner while putting up petitioner's case stated that "Now company entered into a 5 year agreement with PSO for supplies where OMC margin is shared equally 50%-50%. This arrangement merely helps company to sustain business leaving nothing for development of infrastructure." Thus, clearly stating that the petitioner has no intention of spending any amount on the infrastructure. However, this does not absolve the petitioner of its contractual obligation. The license was granted to the petitioner on certain terms and conditions and if the petitioner is unable to meet such terms and conditions then the petitioner has no right to claim any benefit under the license. The license was granted to the petitioners on certain terms and conditions and those terms and conditions are binding on the petitioners which cannot be attacked on any ground after execution of the license. There is no allegation that such terms were incorporated in the license due to any coercion, fraud or undue influence which would vitiate the same. In the case of WI-Tribe Pakistan Limited v. Federation of Pakistan through Federal Secretary, Information Technology and Telecom, Islamabad and another (PLD 2009 Islamabad 41), it was held as under:- "The arguments raised by Mr. Afnan Karim Kundi, Advocate that APC for USF is not in nature of fee but akin to a tax has not impressed me. I am in agreement with learned counsel for the respondents that while getting the licenses, the petitioners and the appellants agreed with the terms and conditions of the licenses. If they while getting the licenses had not agreed with the terms and conditions, the Pakistan Telecommunication Authority, which has the power under section 21 of the Pakistan Telecommunication (Re-organization) Act, 1996 would not have awarded licenses to them. Section 21 of the Pakistan Telecommunication (Reorganization) Act, 1996 gives exclusive power to the authority to grant licenses and while granting licenses, could lay down the terms and conditions of the licenses."
36. As per the comments filed by respondent No.2, the petitioner has only one storage facility at Machike in Punjab while its retail outlets are spread all over the country. Therefore, while the petitioner has increased its retail outlets manifold but at the same time it has not increased its storage capacity which is in clear violation of the terms and conditions of the license and clause (IV)(a) of the Government of Pakistan Policy/Criteria.
37. So far as issuance of the impugned notice during pendency of appeal is concerned, as was argued by Mr. Muhammad Saleem Thepdawaia, learned counsel for the petitioner in C.P. No.D- 2968 of 2011, it may be stated that as per above quoted rules 33 and 44 of the Rules, 1971, the Authority is empowered not only to impose fine but is also empowered to revoke/suspend the license of the petitioner. The argument of the learned counsel that once a legal step has been taken by the Authority by imposing fine for violation of any of `the terms and conditions of the license, no coercive measure could be taken before the expiry of the appeal period in case appeal is provided against such penalty, has no force as the two powers are coextensive and exercise of One power will not oust the exercise of the other power. Therefore, unless there is restraining order, it cannot be said that filing of an appeal against the imposition of fine of Rs. 6.0 million ipso facto means that the respondent No.2 has been restrained from taking any other action as per law.
38. It was also urged that the impugned Notices were passed without affording any opportunity of hearing to the petitioners. A perusal of the correspondence exchanged between the parties clearly shows that at each and every step the petitioners were given notices before taking any step. Even representatives of the petitioners attended meetings convened by the respondents in which the petitioners' point of view was fully explained. Thus, it cannot be said the rule of natural justice was not followed.
39. Now, adverting to the question of maintainability of these petitions in view of availability of alternate remedy by way of appeal under section 12 of the Ordinance, 2002, it may be noted that section 12(1) of the Ordinance, 2002 provides as under:-- "12. Appeal, etc.---(1) Any person aggrieved by any order or decision of the delegatees of a power 'delegated by the Authority under section 10 may, within thirty days of the receipt of such decision or order, prefer appeal to the Authority and Authority shall hear and decide the appeal within ninety days from the date of its presentation."
40. It may be pertinent to note here that the Authority has been bound. By a statutory command to decide such appeal E within ninety days from the date of presentation thereof. Thus, in our opinion, an alternate adequate remedy is available to the petitioners for redressal of their grievance.
Reference in this regard may also be made to subsection (2) of section 12, ibid, which provides as under:-- " (2) In relation to any decision concerning a regulated activity, the High Court may, if it is satisfied that no other adequate remedy is provided on application of an aggrieved party, make an order--
(a) directing the Authority to refrain from doing anything it is not permitted by law to do, or to do anything the Authority is required by law to do; or
(b) declaring that any act done or proceeding taken by the Authority has been done or taken without lawful authority and is of no legal effect.
41. However, the learned counsel for the petitioners have not been able to show that the actions taken by respondent No.2 were without lawful authority or were of no legal effect. We have held that the respondent No.2 was competent to impose the penalty as well as suspend the licenses of the petitioners. Therefore, if the petitioners were aggrieved by any act of the respondent No.2, the same should have been assailed by filing an appeal under section 12 of Ordinance, 2002 and if still the petitioner felt aggrieved by any order passed by the competent Authority under section 12 ibid, the remedy by way of a review under section 13 of the Ordinance, 2002 could have been availed.
42. In these petitions the petitioners failed to show, nor asserted, that the impugned action cannot be challenged before the Authority. Even the petitioner in C.P. No. 2968 of 2011- has challenged the imposition of penalty before the concerned Authority but for challenging the suspension of the license, it had preferred to approach this Court. Although, as stated above, under section 12 of the Ordinance, 2002, the same could have been challenged before the competent Authority.
43. The outcome of the above discussion can be summarized in the following terms:--
(a) Under rules 33 and 44 of the Rules, 1971, the Authority is empowered to impose fine as well as to revoke/suspend the license of the petitioners and there is no embargo on the Authority that if it uses one power it cannot use the other power as both the powers are co-extensive. Thus, the Authority acted in accordance with law when it issued the impugned Notice, suspending the license of the petitioner in C. P. No. D-2968 of 2011. Appeal under section 12 of the Ordinance, 2002 in respect of the fine imposed by respondent No.2 on petitioner in C.P. No. 2968 of 2011, is pending before the competent forum which will decide the same according to law.
(b) In the same manner, the notices issued to petitioners in C.Ps. Nos. 3003 of 2011 and 3011 of 2011 were also validly issued and do not suffer from any illegality or impropriety.
(c) Likewise, Impugned Notice dated 6-9-2011, issued to the petitioners by the respondent No.2, does not suffer from any legal infirmity or impropriety.
(d) Since the impugned Notices have been found to be strictly in accordance with law and do not suffer from any illegality or irregularity, therefore, these petitions are not maintainable and are liable to be dismissed. The same are accordingly dismissed.
(e) Since, it has been held that impugned suspension is well within the competence of the concerned authority, which could be assailed before the competent authority as may be invested with powers under section 12, ibid, the petitions are liable to be dismissed.
44. The upshot of the above discussion is that we find not merit in these petitions being non- maintainable and the same are accordingly dismissed.