Termination of dealership without adhering to procedural guidelines and principles of natural justice is unlawful.

JUDGMENT :

MAHESH CHANDRA TRIPATHI, J.

1. Heard Shri Krishna Dev Vyas, learned counsel for the petitioner; Ms. Archana Singh, learned counsel for Indian Oil Corporation Ltd. and Shri O.P. Singh, learned Senior Advocate assisted by Shri Indrajeet Singh, learned counsel for respondent no. 6.

2. In leading Writ (C) No. 31629 of 2021, the petitioner has sought the following reliefs:

“(I) Issue a writ, order or direction in the nature of certiorari, or appropriate writ for setting aside the impugned Show Cause Notice dated 04.01.2021 issued by the Respondent no. 4 (Annexure No. 9 to the writ petition) and quashing the proceedings initiated vide the impugned notice dated 04.01.2021.

(II) Issue a writ, order or direction in the nature of certiorari, or appropriate writ for setting aside the impugned Order dated 15.11.2021 issued by the respondent no. 2 (Annexure No. 15 to the writ petition).

(III) Issue a writ order or direction in the nature of mandamus commanding and directing the respondents not to take any coercive steps against the petitioner pursuant to the impugned order dated 15.11.2021.

(IV) Issue a writ order or direction in the nature of mandamus commanding and directing the respondents and their agents to restore the dealership agreement dated 10.03.2004 and to forthwith restore the supply of the diesel and petrol to the petrol pump of the Petitioner.”

3. In the connected Writ (C) No. 11173 of 2012 the petitioner has prayed for quashing the appointment letter dated 15.01.2022 issued by the respondent no. 3 and the notice/letter dated 26.03.2022 issued by the respondent no. 3 for taking over the petrol pump from the petitioner. Further prayer is made to issue direction in the nature of mandamus commanding the respondents to handover the possession of the petrol pump to the petitioner.

4. Both writ petitions arise out of similar set of facts and seek to raise challenge to termination order dated 15.11.2021. Accordingly, with the consent of the parties, the petitions have been heard together and are being disposed of by means of a common order.

5. Brief background of the case, as reflected from the record, is that M/s M.K. Fuel Centre (petitioner) is a partnership firm and a retail outlet of Indian Oil Corporation Limited [IOCL]. A dealership agreement was executed between the petitioner and IOCL on 10.03.2004 and the petitioner continued to operate the petrol pump for last 17 years without any complaint. The Marketing Discipline Guidelines, 2012 [MDG] have been issued by the Government of India w.e.f. 08.01.2013 and are applicable to all Public Sector Oil Marketing Companies and are required to be strictly followed, before any action of suspension or termination of dealership is resorted to. The marketing guidelines also provide a detailed procedure for checking irregularities at retail outlets.

6. On 11.06.2020 a routine annual inspection was done by the team of Weight and Measurement (W&M) department for annual calibration and stamping of all the dispensing units and no irregularity, discrepancy or any tampering was reported in any of the Dispensing Units (DUs). Another inspection was held on 10.07.2020 by the Sales Inspection Team, which also found no discrepancies. The retail outlet was working as per the normal standards. Again on 14.07.2020, an inspection was carried out by the Sales Officer, Kanpur-II RSA and an inspection and analysis report was prepared, wherein no discrepancy was found in the stock. All seals were found intact and there was no variation in the dispensing units. Since certain errors had occurred in one of the Dispensing Unit, as such again on 16.07.2020, a joint inspection was carried out by a team constituted by the Chief Divisional Retail Sales Manager in the presence of the dealers and the Inspectors from the Weight and Measurement Department, wherein no discrepancy was found in any of the Dispensing U