Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Tel) 37774

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Nagesh Bheemapaka, J
Vimal Filling Station – Appellant
Versus
Indian Oil Corporation – Respondent
WRIT PETITION No.17884 of 2025

Advocates:
For the Appellants/Petitioners: Manu
For the Respondents: Standing Counsel

Writ jurisdiction under Article 226 is not an appropriate remedy for contractual disputes involving complex technical facts when the agreement provides for internal appellate or arbitration mechanisms and the administrative process has complied with the principles of natural justice without evidence of patent perversity or bias.

Headnote:(A) Constitution of India - Article 226 - Writ Jurisdiction - Maintainability - Alternative remedy - Where a hierarchy for appeal against administrative action exists, writ jurisdiction should not be invoked unless exceptional circumstances like lack of jurisdiction, patent illegality, or gross violation of natural justice are established. (Paras 6, 7, 12.1)

(B) Dealership Agreement - Contractual dispute - Arbitration clause - Where a contract contains a specific dispute resolution mechanism through arbitration, parties are bound by the terms, and courts are generally disinclined to interfere in matters of fact or technical disputes arising from the agreement. (Paras 13, 14, 15)

(C) Administrative Law - Principles of natural justice - Allegations of bias - Mere apprehension or speculative allegations of bias without empirical or documentary substantiation do not vitiate quasi-judicial or administrative proceedings, especially when the decision-making process adheres to procedural fairness including notice and personal hearing. (Paras 8, 9, 10.1, 15.1)

Facts of the case:
A retail outlet operator challenged the termination of a fuel dealership agreement, alleging that the termination was the result of personal bias by administrative officials and procedural impropriety. The corporation justified the termination based on findings by an authorized technical laboratory that revealed unauthorized hardware modifications and tampering within dispensing units, which were classified as critical irregularities under the marketing discipline guidelines.

Findings of Court:
The court observed that the corporation, as an entity functioning under a statute and executing public functions, is amenable to writ jurisdiction. However, it found no evidence of bias or procedural violation. The court held that the technical findings from a specialized, independent laboratory constituted substantial evidence, and the petitioner was afforded adequate opportunity to respond to the allegations before the final order was passed.

Issues: Whether the writ petition was maintainable given the existence of alternative appellate and arbitration remedies, and whether the terminal action was vitiated by bias, procedural irregularity, or lack of evidence.

Ratio Decidendi: The court held that while writ jurisdiction is maintainable against public sector entities, interference is not warranted when a contractual dispute involves complex questions of fact and technical evidence. Furthermore, where a clear appellate and arbitration mechanism is provided in the agreement, the petitioner cannot circumvent these procedures based on unsubstantiated allegations of bias.

Result: Writ petition dismissed; liberty granted to the petitioner to avail the remedial mechanism provided under the agreement.

Table of Content
1. petitioner challenges termination alleging malice and lack of evidence. (Para 1)
2. respondent maintains termination was based on proven equipment tampering. (Para 2)
3. parties contest the maintainability and procedural fairness of the action. (Para 3 , 4 , 5)
4. court finds no procedural impropriety in the termination process. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12)
5. dispute resolution must be sought through contractual arbitration clause. (Para 13 , 14 , 15 , 16)

ORDER:

The case of the petitioners, precisely, as per the writ affidavit, is that they hold a Dealership Agreement with the 1st respondent-Indian Oil Corporation, and are running a petroleum retail outlet under the name and style of M/s. Vimal Filling Station, on land measuring 1111.11 square yards in Survey Nos. 5A and 6/A of Dharur Village and Mandal, Vikarabad District. The Dealership was initially granted to the Smt. Parvathamma, who is the grandmother of the 2nd petitioner, and later reconstituted on 27.01.2009, in favor ofSmt. Vimala Bai, who is the daughter of Smt. Parvathamma. Following the demise of Smt. Vimala Bai on 05.08.2020, the dealership was transferred to her son, the present petitioner, under a fresh Dealership Agreement executed on 22.12.2020, valid for fifteen years, i.e., until 21.12.2035. The retail outlethad functioned smoothly since its inception on 30.06.2012, with no complaints ever recorded by customers, the Weights and Measures Department, or IOCL regarding adulteration or short.

1.1 The petitioner alleges that from 2022 onwards, IOCL officials, particularly Mr. Abhishek Choudhary, then Chief Manager (now Deputy General Manager, RS, Secunderabad Division), and Mr. B. Erranna, Manager, began harassing him and attempted to force a reconstitution of the dealership with a third party. His father, Mr. Abid Hussain Agarwal, lodged a complaint against these officials with IOCL’s Vigilance Department (Southern Region), and a letter from the DGM (Vigilance) acknowledging the complaint was received. The petitioner asserts that Mr. Choudhary, motivated by vengeance over this complaint, later became part of the personal hearing committee and was instrumental in terminating the dealership out of bias.

1.2 The sequence of disputed events began on 16.11.2023, when the GVR service technicians—authorized agents of IOCL—visited the retail outlet to break the seals on Dispensing Unit (DU) Serial No. 01807001363 (Make:GVR) for calibration and annual stamping in the presence of the Assistant Legal Metrology Officer (ALMO), Vikarabad, and the retail outlet staff. A Panchanama was subsequently drawn up on 24.01.2024, recording that the Motor Spirit (MS) and High Speed Diesel (HSD) stock variation was within permissible limits and that the 5-liter measure test showed no deviation. The Panchanama further noted that samples of MS (two samples) and HSD (one sample) were collected and retained by the dealer for verification. The petitioner emphasizes that the Weights and Measures Department seals on the Metering and Totalizer Units were intact on 16.11.2023, and that the GVR technician himself broke the seals during calibration, thereby disproving any allegation of tampering by the dealer.

1.3 Despite these observations, IOCL issued a Show Cause Notice dated 28.08.2024, which, according to the petitioner, was invalid because it referred to the Dealership Agreement of 2012, long since replaced by the current agreement of 22.12.2020. The petitioner responded, denying any tampering or irregularity and asserting that he was not given a fair hearing. Nevertheless, IOCL proceeded to rely on an allegedly fabricated GVR TACC Laboratory Report dated 19.07.2024, which claimed that the CPU cards from the DU showed soldering rework on resistors R201 and R202, as well as on the JTAG connector pins 17 and 19, and on the FRAM IC and EEPROM 17th pin on the rear side of the card. The petitioner strongly contests these findings, asserting that he had no technical capabil

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2025 Supreme(Online)(Tel) 37774

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABADNagesh Bheemapaka, JVimal Filling Station – AppellantVersusIndian Oil Corporation – RespondentWRIT PETITION No.17884 of 2025

Cases Referred (6)

IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
Nagesh Bheemapaka, J
Vimal Filling Station – Appellant
Versus
Indian Oil Corporation – Respondent
WRIT PETITION No.17884 of 2025