Non-compliance with statutory provisions regarding communication of test results can render termination unjustified.

1. The claimant before the learned Arbitrator is the petitioner in the present O.P. He has challenged the award rejecting his prayer to set aside the cancellation of the dealership licence and for consequential compensation. The petitioner contends that the learned Arbitrator failed to consider the terms of the contract, particularly when the test report which was the basis of the termination had not been disclosed as per Clause 8(6) of the order issued under Section 3 of the Essential Commodities Act. The petitioner submits that the test results were informed to the petitioner only along with the order of termination. Consequently, the termination being violative of the distribution agreement, the award rejecting the prayer of the petitioner is liable to be set aside.

2. It is further submitted that respondents-1 and 2 have not explained as to the non-furnishing of the laboratory report when the cancellation itself rested on the test report. There was no opportunity granted to the petitioner to know the contents of the test report and the test conducted. Consequently, the learned Arbitrator committed an error in rejecting the plea. In this connection, learned counsel placed reliance on the decision of the Andhra Pradesh High Court reported in 2008 (6) ALT 550 (Premodaya rep. by its Managing Director Vs. Bharat Petroleum Corporation Limited). He also placed reliance on the Article on "Octane Number and Aniline Point of Petroleum Fuels" by T.A.Albahri, M.R.Riazi and A.A.Alqattan of the Chemical Engineering Department, Kuwait University, on the importance of Research Octane Number (RON) of petroleum products. Learned counsel submits that in the absence of any material to substantiate the allegation of adulteration, the award has to be set aside under Motor Spirit and High Speed Diesel (Regulation of Supply, Distribution and Prevention of Malpractices) Order, 2005 issued by the Ministry under the Essential Commodities Act. He pointed out to the definition of "adulteration" as well as to "malpractice" only to submit that in the absence of any material to show that the petitioner had committed adulteration deliberately, the question of invoking the terms of termination clause under the agreement does not arise.

3. Per contra, learned counsel appearing for the respondents-1 and 2 pointed out that the petitioner was informed orally about the test results immediately on receipt of the same and hence, it is not open to the petitioner to submit that the petitioner had not been informed about the test results in accordance with the Rules. In the above circumstances, there is no violation of the terms of the contract. He also placed reliance on the following decisions:

.(i) 2008 (3) R.A.J. 168 (Mad) (Bharat Petroleum Corporation Limited Vs. Rajrajeswari Agency);

.(ii) Unreported decision of this Court dated 23. 2007 in W.A.No.2868 of 2003

(Indian Oil Corporation Ltd. and another Vs. M/s.Kamala Filling Station and 2 others);

(iii) (2002) 1 M.L.J. 740 (M/s.Swamy Service Station Vs. Bharat Petroleum

Corporation Limited);

(iv) 2000-1-L.W. 502 (Jenarthanan,B Vs. The Senior Regional Manager, Hindustan Petroleum Corpn.); and

.(v) (1991) 1 SCC 533 (Indian Oil Corporation Ltd. Vs. Amritsar Gas Service).

Emphasizing on Clause 8(6) of the notification, contemplating "communication", with the oral information given as to the variation in RON and the notice also informing that the petitioners products had not satisfied the RON, based on the termination clause under the dealership agreement, the termination was fully justified. In this connection, he placed reliance on the decision of this Court reported in 2008 (3) R.A.J. 168 (Mad) (Bharat Petroleum Corporation Limited Vs. Rajrajeswari Agency) that the termination had been done in accordance with the rules and regulations and hence, learned Arbitrator rightly came to the conclusion that the termination was justified; consequently, no interference is called for.

4. It is seen from the