Termination of a dealership agreement is justified if the dealer misrepresents employment status, violating agreement terms that prohibit concurrent employment.

ORDER :

1. The petitioner assails the order of termination passed by the second respondent dated 07.04.2025 and also seeks for a direction to the respondents to continue the supply of petroleum products to the petitioner based on the dealership agreement dated 31.3.2018.

2. Heard the learned Senior Counsel appearing on behalf of the petitioner and the learned Standing Counsel appearing for the respondents.

3. The case of the petitioner is as follows :

(i) The petitioner is the sole proprietrix of M/s.K.T. Bakthavatchalam Naidu Agency. She was granted a dealership by the first respondent for the retail sale of all the petroleum products. The dealership agreement was entered into in this regard on 31.3.2018. The land, in which, the retail outlet operates, belongs to the family of the petitioner. Considering the educational qualification of the petitioner, the property owned by the petitioner and her expertise in business administration, the dealership was granted in favour of the petitioner.

(ii) The petitioner received a notice dated 16.7.2024 from the first respondent in response to a complaint given by the petitioner's estranged husband on the ground that the petitioner has taken up another employment in a private company. The petitioner gave a reply on 31.7.2024 clarifying that she was never a full time employee with any private company. She further clarified that she was previously associated with one M/s.Fisher Chennai Engineering Center (for short, the private company) as a freelancer providing online support consultancy on commission basis. This engagement was also effectively discontinued in the year 2018 itself and the petitioner was relieved formally in the year 2021 due to intermittent pandemic condition.

(iii) The first respondent once again issued a notice dated 20.11.2024 with the very same set of allegations and called upon the petitioner to show cause as to why the dealership agreement should not be terminated for violations of the terms and conditions of the dealership agreement. On receipt of this notice, the petitioner submitted a reply dated 03.12.2024. A personal hearing was conducted and the petitioner gave her explanation and also submitted her further explanation in writing on 06.2.2025.

(iv) The grievance of the petitioner is that the second respondent, without considering any of those explanations, proceeded to issue the termination order dated 07.4.2025. Aggrieved by that, the above writ petition has been filed before this Court.

4. The respondents filed a counter affidavit, in which, they took the following stand :

(i) The petitioner had submitted her application under the open category on 20.11.2014 and after selection, she was issued a letter of intent dated 29.2.2016. Thereafter, the letter of appointment dated 29.3.2018 was issued to the petitioner. Pursuant to that, the petitioner and the Indian Oil Corporation Limited (IOCL) entered into a retail outlet dealership agreement dated 31.3.2018.

(ii) Later, a complaint was received on 06.7.2024 from the petitioner's husband stating that the petitioner is employed gainfully in the private company. To substantiate the same, he also sent Form-16 for the fina