The judgment established that administrative decisions based on misreading of documents, ignorance of evidence, and without recording reasons are arbitrary and violative of principles of natural justice.

JUDGMENT :

Pankaj Bhatia, J.

1. The present petition has been filed challenging the order dated 15.10.2019 passed by Dispute Resolution Panel (in short “DRP”) whereby the appellate forum had remanded the matter for adjudication before respondent no.4 as well as the order dated 19.10.2020 passed by respondent no.3 whereby the contract of the petitioner has been cancelled and his dealership also stands cancelled consequently.

2. This Court during the course of hearing had summoned the records of Writ – C No.21992 of 2020 for the purpose of perusal.

3. Heard Shri Prashant Chandra, learned Senior Advocate assisted by Ms. Radhika Singh, learned counsel appearing for the petitioner and Shri Dipak Seth, Shri Manish Jauhari and Ms. Shruti Sahu, learned counsel(s) appearing on behalf of respondent nos.1 to 4.

4. The facts, in brief, are that the petitioner was appointed as a retail outlet dealer by Indian Oil Corporation (for short ‘corporation’) by means of an appointment letter dated 02.12.2015 for running a retail outlet at Bariha Taranpur, District Lakhimpur Kheri, which was being run by the petitioner in the name and style of M/S R.S. Filling Station. An agreement was executed in between the parties on 01.04.2006. It is also common ground that the dealership granted to the petitioner is governed by the agreement executed in between the parties and the Marketing Discipline Guidelines (hereinafter referred as “MDG”) issued from time to time. In the month of April, 2017 in pursuance to the directions given by the State Government, inspections were carried out by the authorities as specified in the Government Order across various petrol and diesel outlets and an inspection was also carried out on the petitioner’s outlet on 31.05.2017 by a team of three persons. An inspection report was prepared, which is annexed as Annexure - 4 to the writ petition. It is also relevant to note that detailed instructions were issued by the Chief Secretary, State of U.P. vide communication dated 15.06.2017 constituting a team of 5 persons for carrying out the inspections. In the inspection report as prepared and contained in Annexure – 4, it was recorded that an inspection was carried out and the machines were checked. At the time of inspection, four dispensing units (8 nozzles) were found, out of which 6 nozzles were found in working conditions. From each nozzle, 15 ltrs. each of petrol and diesel were taken out and after inspection, the same were found to be giving proper delivery. 2 nozzles were found to be not in the working conditions. On inspection of pulsar cards of the nozzles, 2 pulsar cards appeared to be suspicious, which were seized and taken into custody and a plastic seal was fixed thereupon.

5. Based upon the inspection report dated 31.05.2017, the respondent – corporation issued a letter dated 31.05.2017 calling for the response from the petitioner. The said letter, which is contained in Annexure – 8, was termed as “fact finding letter”. It was mentioned that during the inspection following observations were made and the petitioner was called upon to submit his explanation within a period of 15 days as to why action should not be taken as per the MDG/dealership agreement to protect the marketing interest of the corporation:

“2 Pulsar card were found with impression of tempering, due to which 3 Nozzles (2 MS AND 1 HSD) were affected by these 2 Pulsar card.”

6. The petitioner submitted a reply on 15.06.2017 denying the allegations and submitted that no extra chips were found in the machines, the seals of machines were found intact, measurements checked were found in order and the calibration of the machines was done by the Weights and Measurement Officer and a certificate was issued by them, thus, no fault could be attributed to the petitioner. Subsequently, a show – cause notice was issued to the petitioner on 30.08.2018 (Annexure – 10). In