IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
Pushpendra Singh Bhati, J.
M/s Shree Rajendra Agro Service Centre - Petitioner
Versus
Indian Oil Corporation Ltd. and ors.- Respondents
S.B. Civil Writ Petition No. 4160 of 2023
Decided On : 09-05-2023
Constitution of India, 1950 - Article 226 - To set aside order of termination of dealership retain outlet - Held, as per clause 42 of Guidelines-2012, Dealer shall, at all times, faithfully, promptly and diligently observe and perform and carry out, at all times, all directions, instructions, guidelines and orders given or as may be given from time to time by Corporation or its representatives on safe practices and Marketing discipline and/or for proper carrying on of Dealership of Corporation failing which, as per clause 45, Corporation shall be at liberty at its entire discretion to terminate agreement forthwith upon or at any time, after stipulated failures on part of Dealer - Court does not find it a fit case so as to grant any relief to petitioner in present petition - Petition dismissed.
JUDGMENT :
1. This writ petition under Article 226 of the Constitution of India has been preferred claiming the following reliefs:
1. By an appropriate writ, order or direction, the order of termination of dealership retain outlet dated 10.02.2023 (Annex.14) passed by the respondents may kindly be quashed and set aside.
2. Any other appropriate writ, order or direction which this Hon’ble Court may deem just and proper in the facts and circumstances of the case may kindly be passed in favour of the petitioner.
3. Costs of the writ petition may kindly be awarded to the petitioner.”
2. Brief facts of the case, as placed before this Court by learned counsel for the petitioner, are that the petitioner-Firm has been operating a Retail Outlet/Petrol Pump Dealership (RO) at Village -Sanderao, District-Pali, Rajasthan in pursuance of the agreement entered between the petitioner and respondent-Corporation on 16.04.2019. The petitioner has two Dispensing Units (DU) i.e. MIDCO and GILBARCO VEEDER ROOT (GVR).
2.1. Upon the petitioner’s RO faced certain difficulties on 15.12.2020, the petitioner contacted the concerned persons, namely, Shri Atul Kumar and Shri Chetan Pandya, whereupon the petitioner was instructed to restart the DU in order to rectify the hindrance in operation. However thereafter, the MDT Committee visited the RO of the petitioner-Firm on 30.12.2020 for inspection of the said RO regarding certain errors (Error E09 and E28). Upon the said inspection by the Committee, the authorities shut down the DU in question.
2.2 Thereafter, the IOCL Retails Outlet MDT Inspection Report dated 30.12.2020 was prepared, stating therein that no manipulation or error has been found in the RO.
2.3. Subsequently, the Original Equipment Manufacturer (OEM) submitted a Lab Analysis Report – Rev.1.0 on 25.02.2021 wherein it was stated that E09/E28 errors were observed from 30.09.2020 to 30.12.2020; it was also stated therein that the manipulation was found in Dispensing Units (DU) of the RO in question. Thereafter, the concerned Officials, on 12.04.2021, arrived at the RO in question for the purpose of investigation, and collected all the relevant documents from the RO in question for Lab test. Thereafter, another Lab Analysis Report dated 23.08.2021 was submitted by the Original Equipment Manufacturer (OEM), wherein it was stated that no external component/device was found.
2.4. Thereafter, the respondents issued a letter/notice dated 08.09.2021 to the petitioner, while concluding that based on the DU error log analysis and investigation, it was established that the DU has been manipulated for delivery of fuel, and asked the petitioner-Firm to file reply thereto within 10 days regarding to the aforementioned allegation; failing which the proceedings, as per Marketing Disciplinary Guidelines-2012, were stipulated to be initiated.
2.4.1. The petitioner-Filed replied the said letter/notice along with the relevant service report on 16.09.2021, and stated that no device was ever found in the RO to derive the conclusion of manipulation by way of spurious external device. The respondents however, again issued a notice on 15.12.2021 with regard to the same DU error, while proposing termination of petitioner-Firm’s dealership as per clause 5.1.4 of the Marketing Disciplinary Guidelines-2012; the same was received by the petitioner through E-mail on 24.12.2021. The petitioner filed a detailed reply to the said notice, along with the relevant documents on 29.12.2021 through Email and R.P.A.D.
2.5 However, against the aforementioned notice dated 15.12.2021, the petitioner-Firm preferred S.B.C.W.P No.543/2022 before this Hon’ble Court, which was disposed of on 10.02.2022 by a Coordinate Bench of this Hon’ble Court, with a direction to the respondent-Corporation to give opportunity of hearing to the petitioner-
E. Venkatakrishna Vs Indian Oil Corporation & Anr. (2000) 7 SCC 764
Termination of dealership without adhering to procedural guidelines and principles of natural justice is unlawful.
The court emphasized the necessity of adhering to principles of natural justice in administrative actions, ruling that reliance on undisclosed evidence rendered the termination of the dealership arbi....
Termination of dealership - Action of termination against critical irregularities has to be approved by Regional Head/State Head/Zonal Head of the Oil Company (General Manager and above) and in respe....
The court upheld the legality of dealership termination based on confirmed tampering evidence, affirming procedural fairness and adherence to natural justice principles, invalidating the petitioner's....
The court upheld the termination of the dealership agreement based on the critical irregularities as per the Marketing Discipline Guidelines.
The presence of unauthorized fittings in a dispensing unit constitutes a breach of the dealership agreement, justifying termination of the dealership.
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