IMPORTANT POINT
Consideration of the petitioner's defense and the expert opinion of the OEM is crucial in dealership termination cases to ensure compliance with principles of natural justice.

JUDGMENT :

1. The petitioner/respondent in the instant Appeal was a retail outlet by the name of M/s Modern Service Station. It was appointed a dealer in terms of petrol/HSD Pump Dealer Agreement executed between the petitioner and the Indian Oil Corporation on 11.4.2011. The petitioner’s retail outlet had two dispensing units which were manufactured by M/s. Gilbarco Veeder Root (hereinafter referred to as “M/s GVR”). As per the Rules, the Dispensing Units had to be periodically stamped by the manufacturer and by the Weights and Measures Department and on 23.3.2019 the Weights and Measures Department had given its report as “Dispensing Unit is OK”. Similarly on 19.4.2019 also with regard to the Dispensing Units a report was given that “dispensing unit is ok so no need for calibration”.

2. On 20.4.2019, after taking into account all the reports, the Weights and Measures Department issued a verification certificate. Similarly on 14.1.2020, the Sales Officers inspected and reported “No variation in stocks”.

3. In April 2020 again the stamping of the two dispensing units was required and, therefore, on 13.3.2020, the petitioner deposited the required fees for the stamping of the two dispensing units. In March 2020, the pandemic of Covid – 19 broke and a lock down was imposed nationwide and, therefore, on 12.6.2020 a Government Order was issued extending the validity of the last existing “Stamping” till 30th September 2020. The petitioner requested the Weights and Measures Department on 13.9.2020 to grant permission to the M/s. GVR engineer to break open the seal for stamping/software upgradation which was last done around a year back. On 15.9.2020, A.M Retail Sales, Mathura-I, through Abhishek Sharma visited the petitioner’s retail outlet and issued verbal directions for immediate stoppage of sales from the dispensing units until the software of the dispensing unit was upgraded and re-stamping was done. Subsequently, the petitioner (respondent herein) stopped the dispensation of the diesel from the dispensing units.

4. On 16.9.2020 one Mr. Girendra, the Authorized Service Engineer of M/s GVR informed the petitioner that he had obtained permission from the Weights and Measures Department for breaking open the seal of the two dispensing units for software upgradation and for checking the dispensing unit for annual re-stamping.

5. Mr. Girendra broke open the seal and prepared an inspection report wherein he had stated that both CPU Cards had defect and that two new CPU Cards were required for software upgradation. On 17.9.2020, the petitioner had expected the M/s GVR personnel to return and to correct the defect and also replace the two CPU Cards and thereafter upgrade the software. However, instead, on 17.9.2020 the Joint Inspection Team visited the retail outlet for allegedly conducting inspection of the dispensing unit and as per the report of the team the seals on the motherboard of both the dispensing units were not available and extra soldering with small wire was found in both the motherboards. The report thereafter stated that both the motherboards had been taken out from the dispensing unit in the presence of Sri Raja Babu Bansal (dealer's representative) and, thereafter, they were sealed and taken away.

6. On 21.9.2020, the petitioner received written instructions from Sri Abhishek Sharma, A.M. Retail Sales Mathura – I, of the Indian Oil Corporation Limited to stop the sales from both the dispensing units.

7. On 8.10.2020, the petitioner received a fact finding letter wherein it was observed that as per the provisions of the Marketing Discipline Guidelines, 2012 (amended on 3.8.2018), the irregularities which were found in the dispensing units of the petitioner's retail outlet were termed as “critical irregularities” and it was further observed that penal action in the form of termination of dealership was required. To the fact finding report, the petitioner put in a reply on 12.10.2020 and had stated that after Mr. Girendra of M/