The termination of a distributorship on arbitrary grounds without sufficient notice or opportunity for defense is unjustified, especially when compassion was a basis for its allotment.

1. Leave granted. The appellant is the widow of Major General B.N. Kumar, who was killed in war with Pakistan. She applied for allotment of LPG distributorship on compassionate ground. Respondent 1, Indian Oil Corporation Ltd. accepted her application and vide letter dated 27-11-1989/20-3-1990 she was offered the dealership at Noida. However, the distributorship agreement was executed only on 7-7-1994.

2. The appellant successfully operated the dealership from 1994 to 2001 without any cause of complaint from any consumer. After seven years, she was served with a show - cause notice dated 27-4-2001 proposing to take action on the ground of violation of the terms of agreement. It was alleged that during the inspections carried out by the field staff, the appellant was rarely available at the showroom.

3. The appellant filed a detailed reply dated 2-5-2001 and denied the allegation. The Chief Area Manager (Marketing Division) took cognizance of the appellant's assertion that she was signing the documents on a day - to - day basis and supervising the dealership and issued letter dated 5-6-2001, Para 2 of which reads as under:
"Keeping in view the above, the Corporation has decided to defer any further action pursuant to the show - cause notice. You are hereby WARNED that in case at any later date it is found that there is any breach of any term of the agreement including that of Clause 23(b) we shall be constrained to take further action as may be deemed appropriate including termination of distributorship."

4. In June 2001, the appellant sent a communication to the Chief Area Manager of Respondent 1 seeking the latter's approval to travel to New Zealand to attend to her daughter, who was expecting a child.

5. During the appellant's absence, the Chief Area Manager ordered an inspection of the showroom and then issued letter dated 30-7-2001 terminating the distributorship agreement on the ground that she was operating the distributorship through Shri. Tarun Kumar. The reasons recorded by the Chief Area Manager for taking punitive action against the appellant are reproduced below:
"In your reply to the show cause you had stated that the distributorship is being operated by you and that the overall function of the distributorship is being personally looked after by you. However, in spite of your above statement, it has been reported that you are never available at your distributorship and the same is being run and operated by some other person. Your continuous absence from the distributorship clearly shows that the operations of the distributorship are being controlled and carried out by some other persons in violation of the terms and conditions of the distributorship agreement.
That in view of the breaches and violation of the terms and conditions of the distributorship agreement committed by you and your failure to remedy the same in spite of opportunities given to you, it has been decided to terminate your distributorship forthwith. Please note that the distributorship agreement dated 7-7-1994 stands terminated forthwith, You are advised to return all the equipment and stationery to our representative immediately and also to reconcile the accounts and clear the outstandings immediately. You are further advised to hand over the godown premises to our authorised representative immediately."

6. The appellant challenged the aforesaid communication in CWP No. 469 of 2005 filed before the Delhi High Court. In the affidavit filed by her, the appellant averred that she had gone abroad after taking permission from the co