Judgment :

T.S. Sivagnanam, CJ.

1. This intra court appeal by the Indian Oil Corporation Limited hereinafter referred to as the IOCL is directed against the order dated 07.08.2023 in WPA No. 7674 of 2023. The said writ petition was filed by the respondent herein for issuance of a writ of mandamus to rescind/cancel the order of termination dated 24.02.2023 issued by the fourth appellant as well as the show cause notice which was issued earlier dated 25.11.2022 issued by the sixth appellant and to prohibit the appellant from giving effect to the order of termination.

2. The learned Single Bench allowed the writ petition and set aside the show cause notice dated 25.11.2022 and the order of termination dated 24.02.2023 and directed the appellant to resume supply of Motor Spirit (MS) and High Speed Diesel (HSD) and other petroleum products if any to the writ petitioner’s retail outlet namely M/s. Krit Filling Station within a time frame. Aggrieved and being dissatisfied with the said order IOCL have preferred the present appeal.

3. We have elaborately heard the learned advocates for the parties and carefully perused the materials placed on record.

4. The following facts would be germane to decide as to the correctness of the order and direction passed by the learned Single Judge.

5. On March 02, 2023, an inspection was done by the officials of the appellant in the retail outlet of the respondent and no irregularity in the nature of positive stock variation of the products was found. Yet another inspection was conducted in the retail outlet on 24.09.2022 and during such inspection positive stock variation beyond permissible limits had been observed in both the products since last inspection dated March 02, 2022 and the variation beyond permissible limit in MS and HSD was 17919 ltr and 17302 ltr respectively. Copy of the inspection report was drawn and furnished to the respondent and photograph taken during the inspection was also attached to the report. A fact finding letter was issued to the dealer dated 24.09.2022 by referring to the findings recorded during the inspection together with the summary of irregularity, calling upon the dealer to explain within a period of ten days on the proposal as to why supplies to the dealer should not be suspended. The dealer was informed that if they fail to submit a reply within stipulated time and/or the explanation given is not found satisfactory the appellant will be constrained to take action as deem fit in accordance with the relevant clause of the dealership agreement, Marketing Discipline Guidelines 2012, MDG and/or any other laws. The dealer submitted his reply dated October 01, 2022 reporting about the nozzle lock defects on several occasion and that they did not have canopy as this might cause variation of stock and no adverse inference can be drawn on the sales which are done in an online condition of automation.

6. Further it was stated that they strictly follow the instructions given by the appellant and that the observation made in the fact finding letter shows that the seals are intact and it is not tampered and that no mistake has been committed by them. Tests report dated 08.10.2022 was issued on the samples which were drawn during inspection that the product taken for the testing meets the specification with regard to the test done. In terms of the relevant guidelines, a Committee was formed for further analysis of the matter and the Committee submitted their report dated October 26, 2022 pursuant to which show cause notice dated 25.11.2022 was issued dealing with the reply given by the dealer to the fact finding letter and also referring to the relevant clauses and the dealer was called upon the show cause why action should not be taken as per clause 8.2(vi) of the amended MDG 2012 and clauses 3,29,30,34,39(a) and 42 of the Dealership Agreement executed by the dealer for violation mentioned in the show cause notice. Prior to issuance of the show cause notice the same was approved by