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2007 Supreme(Del) 1795

High Court Of Delhi
S. Ravindra Bhat
SUSHILA KUMAR - Appellant
Versus
INDIAN OIL CORPORATION LTD - Respondents
W. P. (C) 469 Of 2005
Decided On : 08/31/2007

Advocates Appeared:
G.D.GOEL, M.M.KALRA, MADHU TEVATIA, Sanjiv God

Headnote:Constitution of India, 1950 Article 226 - Termination of dealership of Indian Oil Corporation challenged - Ground that said termination was arbitrary, unfair and violation of principles of natural justice Termination was based on violation of terms and condition of agreement - Impugned termination letter was arbitrary and unreasonable and prima facie showed a biased attitude and utter non-application of mind - Hence, Court directed to respondent to restore LPG distributorship to the petitioner within 10 weeks - Petition allowed. [Paras 11, 12]

S. RAVINDRA BHAT, J.

( 1 ) THE writ Petitioner is aggrieved by the termination of a LPG (Liquified Petroleum Gas) dealership by the respondent, Indian Oil corporation (hereafter called "ioc" ).

( 2 ) THE facts necessary to decide this case are that the petitioner's husband was a Major-General in the Army. On 7. 11. 1988, the said Maj. Gen. B. N. Kumar died during engagement with extremists in Punjab. As a gesture of rehabilitation for his family, the IOC decided to grant an LPG outlet to his widow, the present Petitioner. After a wait of over 5 years, the distributorship Agreement was executed by the parties on 7. 7. 1994. The petitioner commenced business.

( 3 ) IT is averred that the Petitioner operated the distributorship with outlet or hinderance for the eight year period between 1994 and 2001. On 21. 4. 2001, the IOC issued a show cause notice to her, levelling allegations, including, inter alia, that she had stopped carrying on business. The petitioner replied on 2. 5. 2001, denying that there was any breach of the agreement or that she was unavailable at the outlet; she stated that the business was managed under her close supervision. On 5-6-2001, the IOC closed the matter with a "warning" that the Petitioner should personally tend to the business. It is alleged that on 8. 6. 2001, the Petitioner wrote to ioc stating that since her daughter was in the family way, and in New zealand, she had to go abroad for a few months. She later left the country.

( 4 ) IT is an undisputed fact that the petitioner's premises were inspected on 13. 7. 2001 by the respondent. Among the various observations noted were that the proprietor i. e. the petitioner had informed IOC and authorized one tarun Kumar to look after the functioning of the unit, in her absence; the report also acknowledged that she was out of India. In these circumstances, on 30. 7. 2001, the impugned letter terminating the distributorship was issued. After re-counting the previous inspection and the show cause notice and caution letter issued earlier, the impugned letter proceeded to state as follows:

"in your reply to the Show Cause you had stated that the distributorship is being operated by you and that the overall function of the distributorship is being personally looked after by you. However, in spite of your above statement, it has been reported that you are never available at your distributorship and the same

is being run and operated by some other person. Your continuous absence from the distributorship clearly shows that the operations of the distributorship are being controlled and carried out by some other persons in violation of the terms and conditions of the distributorship agreement. That in view of the breaches and violation of the terms and conditions of the distributorship agreement committed by you and your failure to remedy the same in spite of opportunities given to you, it has been decided to terminate your distributorship forthwith. Please note that the distributorship agreement dated 7. 7. 1994 stands terminated forthwith. You are advised to return all the equipment and stationery to our representative immediately and also to reconcile the accounts and clear the outstandings immediately. You are further advised to hand over the godown premises to our authorised representative immediately. "

( 5 ) THE petitioner felt aggrieved by the termination of her distributorship; she represented against it on 1. 8. 2001. Later she wrote to the Union Minister of Petroleum and Natural Gas on 29. 8. 2001, 11. 12. 2001, 1. 6. 2002, 24. 1. 2003, 17. 7. 2003 and yet again on 16. 9. 2004. All these representations and entities proved to be of no avail; the termination letter was not withdrawn. She has therefore preferred the present proceeding, alleging that termination was arbitrary, unfair and made in utter violation of principles of natural justice. It is also alleged that there was no proper application of mind to the facts of this case before the terminati











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