THIS WRIT APPEAL IS FILED U/S 4 OF THE KARNATAKA HIGH COURT ACT PRAYING TO SET ASIDE THE ORDER DATED 01.07.2024 PASSED IN WP No. 9770/2015 (GM-RES) BY THE LEARNED SINGLE JUDGE OF THIS HONBLE COURT AND THE SAID WRIT PETITION BE DISMISSED BY ALLOWING THIS WRIT APPEAL, IN THE INTEREST OF JUSTICE AND EQUITY.

THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:

CORAM: HON'BLE MR. VIBHU BAKHRU ,CHIEF JUSTICE and HON'BLE MR. JUSTICE C.M. POONACHA

CAV JUDGMENT

(PER: HON'BLE MR. JUSTICE C.M. POONACHA)

1. The present intra Court appeal is filed by M/s Indian Oil Corporation Limited [IOCL] and its officials calling in question the order dated 01.07.2024 passed in W.P. No.9770/2015 (GM-RES) [impugned order] whereunder, the learned Single Judge allowed the writ petition and quashed the orders/communications dated 09.02.2015 and 10.02.2015 [impugned communications] issued by the IOCL. Vide the said impugned communications, IOCL had terminated the dealership of respondent/writ petitioner.

2. The relevant facts in a nutshell leading to the present appeal are that the petitioner was granted a retail outlet by the IOCL to deal with the petroleum products as operator - dealer under the General Women's quota, as per letter dated 22.12.2009. Accordingly, the petitioner established a petrol bunk at Kolar Town between Clock Tower to Doom Tower Circle and was carrying on the business of petroleum products as a dealer of IOCL. An investigation was conducted by the Anti Adulteration Cell of the IOCL on 22.08.2012, which uncovered a suspicious additional fitting in cable form connected between pulsar cable and the motherboard of the MMS dispensing unit. Based on the inspection report, a show cause notice dated 23.08.2012 was issued by IOCL to the writ petitioner. The writ petitioner replied to the same vide reply dated 30.08.2012 denying the allegations made. It is stated in the said reply that the writ petitioner was unaware of the additional cable fitting. At the instance of IOCL, the writ petitioner submitted an affidavit on 21.09.2012 undertaking to continue to operate the retail outlet in compliance with the guidelines of IOCL. Thereafter, a second show cause notice dated 27.03.2013 was issued requiring the writ petitioner to explain as to why the dealership should not be cancelled due to the irregularities found in the inspection, which was held on 22.08.2012. The petitioner replied to the same vide reply dated 04.04.2013. Upon considering the writ petitioner's reply, IOCL terminated the dealership agreement under clause 6.1.5 of the Marketing Discipline Guidelines, 2005 [guidelines]. Being aggrieved, the writ petitioner filed the writ petition being W.P.No.9770/2015. The learned Single Judge of this Court vide the impugned order allowed the writ petition and passed the following order:

ORDER

i) The petition stands allowed.

ii) The impugned order/communication dated 9.2.2015 issued by the respondent No.2 at Annexure-G and consequential communication dated 10.2.2015 at Annexure-H stand quashed.

iii) It is needless to state that it is for the respondents to take appropriate action against the petitioner in the event the petitioner is operating the outlet business in violation of Rules and Regulation of the Corporation.

3. It was noticed by the learned Single Judge that IOCL had not afforded an opportunity of hearing to the petitioner before the dealership was cancelled. Considering clause 6.1.5, it was held that although the said clause does not explicitly provide for a hearing, termination with civil and economic consequences implies the need for a hearing. Hence, it was held that the termination of dealership agreement was illegal, arbitrary and in violation of the principles of natural justice.

4. The learned Senior Counsel for the appellant/IOCL would vehemently contend that the said clause 6.1.5 does not stipulate that an opportunity of pe