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2016 Supreme(MP) 714

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BENCH
Vivek Rusia, J.
M/s. Govind Saraf Kisan Seva Kendra - Petitioner
Versus
Indian Oil Corporation Ltd. - Respondent
WP No. 9473 of 2014
Decided on : 09-12-2016

Advocates:
Advocate Appeared:
For the Petitioner:Shri A.S. Kutumble, Learned Senior Counsel with Shri M.M. Bohra, Advocate
For the Respondent:Shri B.L. Pawecha, Learned Senior Counsel with Shri Yogesh Mittal, Advocate

The court emphasized the need for evidence to establish intentional manipulation of delivery in cases of irregularities and held that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion.

Headnote:

Double Gear - Termination of Dealership - MDG-8th January 2013 - Clause 5.1.4

Fact of the Case:

The petitioner, a retail outlet dealer for petrol and diesel, had his dealership terminated due to irregularities found in the dispensing unit. The petitioner appealed the termination, which was also dismissed.

Finding of the Court:

The court found that the termination of the dealership was arbitrary and without proper application of mind. The court set aside the impugned orders and restored the petitioner's dealership.

Issues: Violation of dealership agreement clauses, rejection of appeal, maintainability of writ petition, and availability of alternative remedy of arbitration.

Ratio Decidendi: The court held that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not compulsion. The court also emphasized the need for evidence to establish intentional manipulation of delivery in cases of irregularities.

Final Decision: The court allowed the petition, set aside the impugned orders, and restored the petitioner's dealership.

ORDER :

Vivek Rusia, J.

The petitioner has filed the present petition being aggrieved by the order dated 13.03.2014, by which the dealership of the petitioner was terminated and order dated 17.12.2014, by which the appellate authority has dismissed the appeal.

Facts of the case are as under:

1. That the petitioner was appointed as retail outlet dealer for sale of petrol and high speed diesel by the respondent/Indian Oil Corporation (herein after in short "IOCL"), vide agreement dated 21.11.2008. The petitioner was awarded by a certificate in the year 2011 for earning maximum number of fuel revenue.

2. That in the year 2012, a machine named as "MIDCO S.No.1136 Midko 980 C" was installed in the petitioner's pump by way of transfer from M/s. Digendra Fuel & Service Station petrol pump. The said machine was installed on "as it is" basis. The verification report was prepared on 11.10.2012. At the time of installation, the reading of meter of machine was 2808681.

3. The officers of the respondent company conducted random investigation on 08.02.2013 and 11.07.2013 and found no violation of Marketing Discipline Guideline 2013. Thereafter, another investigation was conducted within a month on 21.08.2013 and Panchnama was prepared and four irregularities were found during investigation. Following irregularities were recorded in Panchnama:

"1. MS L&T DU having Sl. No.130-1P 0585 was being operated without W&M seal there was no calibration and stamping by W& M department. Only factory seal of GVR affixed at the time of manufacture was there in this DU.

2. Double gear machine (an unauthorized fitting) found in the MS Midco DU having Sl. No. 1136.

3. Positive stock variation of 1241 litre beyond permissible limit in MS.

4. Negative stock variation of 2205 ltrs beyond permissible limit in HSD."

4. The copy of the inspection report dated 21.08.2013 is filed as Annexure P/14. The petitioner was served with the show cause notice dated 21.08.2013 which he replied vide letter dated 16.09.2013. The explanation as given by the petitioner was found satisfactory in respect of point no.1, 3 and 4, but however, in respect of irregularity mentioned at point No.2 regarding double gear mechanism found in MS Midco DU having Sl. No. 1136, explanation was not found satisfactory by "IOCL". The respondent issued second show cause notice dated 05.12.2013 as the action amounts to tampering with dispensing unit under the provisions of MDG-2012, under clause 5.1.4 and as to why the dealership should not be terminated. The petitioner submitted the detailed reply dated 26.12.2013. Vide order dated 13.03.2014, the dealership of the petitioner in the name and style of M/s. Govind Saraf Kisan Seva Kendra, Zirapur Road, Machalpur, District Raigarh stand terminated forthwith. The reasons assigned for the termination of the dealership is reproduced below:

"We have considered your reply dated 26.12.2013 to the above show cause notice and also applied our mind to arguments tendered by you during the personal hearing held on 16.01.2014. In rebuttal, you have mentioned repeated your averments mentioned in reply to fact finding letter that the subject DU was installed after shifting it from M/s. Digendra Fuel & Service Station, Biora, Distt. Rajgarh and that it was in sealed condition and as such, latent defects could not be noticed.

Your above contention is not acceptable for the reason that during all the earlier inspections by our officials, calibration by W&M Department and preventive maintenance by OEM/Midco representative, the fact of additional/unauthorized fitting in the DU was not reflecting.

From the above, we have come to the conclusion that you do not have any satisfactory reasons on our show cause notice. Your above actions/in-actions amounts to violation of clauses 15, 16 and 46 of dealership agreement read with clause 5.1.4 of MDG-8th January 2013. It has also earned bad name to our Corporation and its product."

5. Being aggrieved by the aforesaid termination, the petitioner p































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