The court upheld the termination of the dealership agreement based on the critical irregularities as per the Marketing Discipline Guidelines.

JAGMOHAN BANSAL, J.

1. Through this common order, both the captioned petitions are disposed of as the same are interconnected. For the sake of brevity and convenience, facts are borrowed from CWP-26964-2017.

2. The petitioner through instant petition under Articles 226/227 of the Constitution of India is seeking setting aside of order dated 31.03.2017 (Annexure P-24) whereby respondent No.2 has terminated dealership agreement executed between petitioner and respondent No.1-Bharat Petroleum Corporation Limited (for short the ‘corporation’).

3. The brief facts of the case which are necessary for the adjudication of the present petition are that the petitioner, a partnership firm, on 28.10.1989 was allotted petrol pump. On 28.04.2014, an inspection was conducted by the officials of the corporation and no irregularity in the Dispensing Units (for short ‘DU’) was found. On 17.06.2014, a team from Quality Control Cell of the corporation inspected premises of the petitioner. An inspection report dated 17.06.2014 was prepared. In the said report, it was noticed that there is additional fitting in one of the DUs. In respect of DU Make MIDCO, it was found that there is short delivery in the dispensation of every 5 litre oil. The team observed that there is an electronic tampering, accordingly sale qua MIDCO Make DU was stopped. It was also observed that in case of another DU, there is excess delivery. Sale of the said DU was also stopped with intent to re-calibrate. In case of MIDCO Make DU, at the time of starting of inspection, the inspecting team found that there is sale of 0.71 litre. The inspecting team, three consecutive times, took delivery of 5 litre oil and it was found that there was shortage of 230, 180, 210 ml in the first, second and third dispensation, respectively. The respondent-corporation issued show cause dated 22.08.2014 (Annexure P-7) calling upon the petitioner to show cause as to why the contract should not be terminated. The petitioner filed its reply dated 10.09.2014. As per respondent-corporation, there was no requirement to get report of original equipment manufacturer in case of tampering of equipment, however, Government of India vide Instruction dated 25.03.2015 clarified that in case of software tampering, the tampering needs to be proved. In view of aforesaid letter of Government of India, all the oil companies decided to get test report from original equipment manufacturer in case of tampering of equipment. In compliance of fresh instructions, joint inspection was conducted on 21.09.2015 and instruments were taken in the custody and thereafter, sent for testing to OEM. The samples came to be tested in the presence of representative of the petitioner as well as corporation. The OEM in its report dated 01.03.2016 formed an opinion that pulsar assembly was in tampered condition and pulsar was not as per MIDCO Standards. Hence, further tests were not carried out on the received assembly. On the basis of test report, fresh notice came to be issued and petitioner filed its reply to the said notice. Prior to passing of order, the petitioner approached this Court by way of filing CWP No. 7708 of 2017. This Court vide interim order dated 18.04.2017 granted interim protection to the petitioner. The respondent-corporation passed order of termination dated 31.03.2017, however, it came to be communicated after passing of interim order by this Court. It is apt to notice here respondent-corporation on 10.04.2017 re-advertised the dealership and interviews came to be conducted.

4. Mr. Kanwaljit Singh, Senior Advocate submits that action of respondent-corporation was totally arbitrary and unreasonable. The petitioner was allotted petrol pump in the year 1989 and during 25 years of career, no discrepancy was found. The respondent-corporation inspected premises of the petitioner on 25.04.2014 i.e. just two months prior to the dat