The court emphasized that termination of a dealership must follow due process and that Writ jurisdiction can be invoked when fundamental rights are at stake, despite the existence of alternative remedies.

JUDGMENT :

01. Since, both the Writ Petitions have been moved by the same Petitioner and regarding the same subject matter, both are proposed to be taken up jointly for disposal.

OWP No. 585/2010:

02. The Petitioner-firm initially filed OWP No. 585/2010, seeking Writ, direction or order, including a writ in the nature of certiorari/ mandamus for quashing the Order No. JDO/R/GM dated 7th of June, 2010 issued by the Divisional Retail Sales Manager, Jammu, terminating the retail outlet dealership of the Petitioner-firm and Order No. 8 SAI/GMFS dated 1st of May, 2010 issued by the Indian Oil Corporation Limited, Jammu Divisional Office, whereby the sales and supply ordered to be sought by the Petitioner-firm have been directed to be stopped.

03. The Petitioner-firm claims to have been appointed as a dealer for the retail sale/ supply of petroleum products at Bumhama, Kupwara vide a Memorandum of Agreement dated 26th of February, 2004 drawn up by the Respondent-Corporation with the Petitioner-firm; that the retail outlet came to be set up/ established by the Petitioner-firm at Bumhama, Kupwara providing the facilities of Motor Sprit/ High Speed Diesel/ Lube/ Greases;

04. It is alleged that on 30th of April, 2010, the Central Bureau of Investigation (CBI) registered a case against the Petitioner-firm through its Manager, Bashir Ahmad Sofi, vide FIR No. 012320100002 under Section 3/7 of the Essential Commodities Act read with Petroleum Act and the Rules made thereunder, showing the suspected offence as “adulteration in essential commodity (HSD)” based on a source of information, resulting in a joint surprise check of the Filling Station by a team of Central Bureau of Investigation (CBI) and Bharat Petroleum Corporation, who obtained samples from the Filling Station, which were tested in the Mobile Testing Lab on spot and it was alleged that the samples failed in the test of “Density” and “Kinematic Viscosity” as the same were found adulterated as per the test report.

05. It was further alleged that after the case was registered, the Petitioner-firm was served with an order by Area Manager (RS) SS of the Respondent-Corporation on 1st of May, 2010, thereby directing the Petitioner-firm to stop the sales from the outlet and that it was also served with a show cause notice dated 5th of May, 2010 asking it to explain in respect of High Speed Diesel (HSD) samples failing in clinical test and the Tank Lorry Retention samples available at the Retail Outlet being neither labelled nor properly sealed and reference density (morning density) being also not available at the time of inspection; that based on these allegations, the Petitioner-firm was further informed that the failure of High Speed Diesel (HSD) samples in the clinical test is a source of irregularity and merits termination as per Clause 7 of the Marketing Discipline Guidelines (MDG), 2005; that the Petitioner-firm was further informed that unlabeled and improperly sealed Tank Lorry Retention Samples at the Retail Outlet was an irregularity, which attracts a fine of Rs.50,000/- as per Clause 11 of the Marketing Discipline Guidelines (MDG), 2005; that the non-availability of the reference density (morning density) at the time the inspection was carried out, is a serious irregularity under the Marketing Discipline Guidelines (MDG), 2005 and that, as per Clause 7, penal action is termination in case of sample failure.

06. It has been further asserted by the Petitioner that the Petitioner- firm replied to the show cause notice, admitting that on 30th of April, 2010, nozzle samples of High Speed Diesel (HSD) were drawn from the outlet, however, it was denied that any sample of High Speed Diesel (HSD) was drawn from the outlet of the Petitioner; that on 30th of April, 2010 at around 03:00 PM, a group of persons with automatic weapons in their hands entered the office at the Retail Outlet, restricting the movement of the staff, whereafter, the Manager was made to sign some papers without his know