The main legal point established is that distributorship agreements, being commercial transactions, do not involve public law functions and are subject to arbitration for dispute resolution.

Hemant Gupta, J. - This order shall dispose of Civil Writ Petition Nos. 14572 of 2007; 17067 of 2007 and 8826 of 2008, as all the three writ petitions raise identical questions of law arising out of the similar facts.

2. In Civil Writ Petition No. 14572 of 2007, the petitioner was granted distributorship of Liquified Petroleum Gas (for short referred to as the LPG) at Phagwara, in the year 1995 on the basis of the recommendations of the Oil Selection Board. However, the said distributorship was cancelled on 21.7.2004 pursuant to a show cause notice dated 15.6.2004. The Petitioner filed representation to Government of India, Ministry of Petroleum and Natural Gas. The Ministry issued directions on 10. 11.2005 (Annexure P.7), wherein it was observed that Marketing Discipline Guidelines issued by the Ministry of Petroleum and Natural Gas on 12.4.2001, have been issued so that the penal action against the distributors may be taken without any discrimination and to avoid arbitrary action at the field level. It was, thus, observed that that the Marketing Discipline Guidelines are to be respected by the Oil Marketing Company, in letter and spirit, therefore, the Director, Marketing of the Oil Company was directed to examine the case record personally and review the decision of the Company appropriately. After the said communication, the Board of the respondent-Company in its 529th meeting held on 21.6.2007, found that the distributor had indulged in large scale mal-practices including variation in weight in large number of cylinders sold and use of devices for pilferage of product from cylinders and, thus, the termination of the distributorship was found to be in order. It is, thereafter, the petitioner has approached this Court to challenge the decision of the respondent-Oil Company terminating the distributorship agreement.

3. In CWP No. 17067 of 2007, the challenge is to the cancellation of the LPG Distributorship vide order dated 19.10.2007. In the aforesaid case, the petitioner was granted distributorship for the sale of LPG in the category of physically handicapped person on the basis of the recommendations of the Oil Selection Board. Distributorship agreement dated 26.12.2001 was executed between the parties. On 28.10.2006, an inspection of the godown of the petitioner was conducted. Thereafter, the distributorship was suspended on account of allegations of overcharging of cylinders; underweight of cylinders and tampering with the cylinders etc. A show cause notice was issued to seek termination of the distributorship agreement on 6.11.2006 and after considering the reply dated 11.11.2006, an order of imposing fine was passed. Another show cause notice was issued on 20.1.2007. The petitioner denied the allegations in his reply, but on 12.2.2007, a fine of Rs. 2,62,497/- was imposed.

4. The petitioner represented the respondents on 6.3.2007 to explain the entire matter and position and on 8.6.2007, requested the Corporation for arbitration. An Arbitrator was appointed on 16.7.2007. It was on 6.6.2007, again the godown of the petitioner was inspected. On 13.8.2007, a show cause notice was issued to the petitioner as to why his distributorship be not terminated. The first reason for issuing the show cause notice was that three major irregularities within a period of two years were committed and the second reason was unauthorized assignment of interest in distributorship to outsider. Subsequently, in pursuance of the directions of this Court, after considering the reply to the show cause notice, the order terminating the distributorship was passed on 19.10.2007.

5. In Civil Writ Petition No. 8826 of 2008, the petitioner was allotted a retail outlet of petrol and diesel pump in village Musahibpur in District Hoshiarpur on 9.5.2001. It is the case of the petitioner that respondent No. 3 came to the retail outlet of the petitioner and started fiddling with the seals and wires of the dispenser units in a reckless way, in the a