The presence of unauthorized fittings in a dispensing unit constitutes a breach of the dealership agreement, justifying termination of the dealership.

JUDGMENT :

1. Heard learned counsel appearing for the petitioner and learned counsel appearing for the respondents.

2. Petitioner through this writ petition has challenged the order dated 29.7.2017 passed by the Chief Divisional Retail Sales Manager, Indian Oil Corporation Ltd., Kanpur Divisional Office, Kanpur whereby petitioner’s retail outlet dealership and dealership agreement have been terminated with forfeiture of the security amount.

3. Facts of the case, in brief, are that petitioner was appointed as a dealer by the Indian Oil Corporation Ltd. and in the year 2007 a retail outlet was established in the name and style of M/s Maharashi Filling Station, Kulpahar, Mahoba Road, District Mahoba. A dealership agreement was executed in between the petitioner and the Indian Oil Corporation Ltd. on December 6, 2007 and thereafter petitioner started running the retail outlet. On May 6, 2017, inspection was carried out on the petitioner’s retail outlet by a team comprising of the officers of the District Administration, officers of the Indian Oil Corporation, police officers, officers of the Department of Weights and Measures, officers of the Department of Civil Supplies, OEM Midco Engineer and OEM Service Engineer, Gilbarco. In the inspection report following findings were recorded:-

“1. There are three MPDs at the location (2x Midco and 1x Gilbarco).

2. In one MPD of Make Midco, Series: Surefill, Serial No.: 10DC0197V, Model: SFI2224ASHP 1, an addition fitting seem to be attached, hanging from the pulsar, cap number 10C3515E, when opened after the breaking of seal of pulsar, of Nozzle 2, of HSD, in presence of all team members. Dealer is present at the site.

3. Measures of all the operational nozzles were found within limits. Nozzle No. 1 of other Midco MPD is not operational, hence delivery could not be checked.

4. Pulsars for all nozzles at Retail Outlet have been checked. All pulsars, except the one mentioned in pt. 2, were found without any fitting or evidence of fittings.

5. All the nozzles, found within limits, have been stamped again, after receiving the government fee.

6. Supply inspector also found the stock variations within limits.

7. OEM Service engineers have also prepared reports for Midco and Gilbarco MPDs.”

4. In the inspection, OEM Service Engineer Midco had also prepared a report in which it was categorically mentioned that in the inspection, extra cable in the Pulsar, Assembly and I.C. has been found.

5. On the basis of the inspection report dated 6.5.2017, a letter was issued on 15.5.2017 by the Indian Oil Corporation in respect of the fact finding inquiry and the petitioner was required to furnish its comments within seven days. In the letter dated 15.5.2017, it was mentioned that the additional fitting found in the inspection of the petitioner’s retail outlet violates Clause 5.1.4 of the Marketing Discipline Guidelines, 2012. Petitioner submitted comments on 30.5.2017 wherein he submitted that the Dispensing Unit Midco Make Surefill Serial No.10DC0197V, Model SFH2224ASHPI is the property of the Indian Oil Corporation and whenever any repairing etc. of the said unit is needed, that is done by the person authorized by the Indian Oil Corporation. The last repair was carried out on 23.9.2016 by the authorized person and thereafter unit was sealed. In the inspection held on 6.5.2017 seal of the aforesaid dispensing unit was found intact and therefore, petitioner cannot be held responsible for any additional attachment found inside the dispensing unit.

6. The Chief Divisional Retail Sales Manager, Indian Oil Corporation Ltd., Kanpur Divisional Office, Kanpur issued a show cause notice on 12.6.2017 whereby petitioner was called upon to show cause within 15 days of the receipt of the notice, as to why action may not be taken for the breach of the terms and conditions of the dealership agreement and for causing prejudice to the interest and good name of the Corporation.

7. Petitioner submitted reply to the aforesaid show cause