Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(Tel) 64321

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 for the respondent-Indian Oil Corporation

A writ petition under Article 226 is not maintainable when an efficacious alternative appellate remedy or a binding arbitration clause exists, unless the petitioner demonstrates patent illegality, violation of natural justice, or lack of jurisdiction. Mere apprehension of bias is insufficient to bypass agreed-upon dispute resolution mechanisms.

Headnote:(A) Constitution of India - Article 226 - Writ jurisdiction - Maintainability - Alternative remedy - Where a structured appellate process exists under regulatory guidelines or a contractual dispute resolution mechanism like arbitration is provided, the High Court must ordinarily refrain from exercising its extraordinary writ jurisdiction unless exceptional circumstances, such as patent illegality, violation of natural justice, or total lack of jurisdiction, are clearly demonstrated. (Paras 6, 7, 12, 13)

(B) Administrative Law - Bias - Principles of natural justice - Allegations of bias or mala fides in administrative proceedings must be supported by cogent evidence rather than mere speculation or unfounded apprehension. Participation by lower-level officials in the decision-making process does not vitiate the proceedings if the final order is passed by a competent, duly authorized senior official. (Paras 8, 10.1, 15)

(C) Contract Law - Dealership Agreement - Arbitration clause - Where a contract contains a valid arbitration agreement for the settlement of disputes, parties are bound by the terms thereof, and an apprehension that the appointed arbitrator being an employee of the counterparty would be biased is not a sufficient ground to bypass the agreed-upon grievance redressal mechanism. (Paras 14, 15.1)

Facts of the case:
A retail petroleum outlet sought to quash an order of termination of its dealership agreement issued by a public sector enterprise. The dealer alleged harassment, personal bias by officials, and procedural irregularities. The termination was based on a technical audit report confirming unauthorized modifications to the dispensing equipment, classified as a critical irregularity under the regulatory guidelines.

Findings of Court:
The court found that the procedural requirements, including the issuance of a show-cause notice and the opportunity for a personal hearing, were duly satisfied. The laboratory report confirming the physical tampering of electronic components provided substantive evidence. The allegations of bias were found to be speculative and unsubstantiated.

Issues: Whether the writ petition is maintainable despite the availability of an alternative appellate remedy and an arbitration clause in the agreement, and whether the termination order was vitiated by bias or procedural unfairness.

Ratio Decidendi: The court held that contractual disputes governed by arbitration clauses and regulatory guidelines providing for an appellate hierarchy ought to be resolved through those mechanisms. In the absence of proven manifest injustice or procedural violation, the High Court will not substitute its jurisdiction for the designated institutional or arbitral remedy.

Result: Writ petition dismissed with liberty to move the appropriate forum as per the contract.

Table of Content
1. petitioner challenges dealership termination, alleging malicious bias and procedural irregularities. (Para 1)
2. respondent maintains termination was based on conclusive technical evidence of tampering. (Para 2)
3. arguments on maintainability of writ petition versus alternative appellate remedy. (Para 3 , 4 , 5)
4. court upholds termination based on technical evidence and mandates contractual arbitration mechanism. (Para 6 , 7 , 8 , 9 , 10 , 11 , 12 , 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

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2025 Supreme(Online)(Tel) 64321

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