Bharat Filling Station And Anr. vs Indian Oil Corporation Ltd.
2003 Latest Caselaw 301 Del

JUDGMENT

A.K. Sikri, J.

1. Petitioner No. 2 is an Ex-serviceman. He was Sqn. Leader who participated in 1971 Indo-Pak war and was boarded out because of permanent disability he suffered in the said war. Respondent No. 2, namely, Indian Oil Corporation Ltd. (IOCL) has ascheme for allotment of petrol pumps i.e. retail outlets on preferential basis to Ex-servicemen and particularly those suffering disabilities while in action. Petitioner No. 2 applied for and was allotted retail outlet at Delhi Palam Road, New Delhi for sale of petrol and petroleum products in the year 1977. He started petrol pump under the name and style of Bharat Filling Station (petitioner No. 1). Initially he was the sole proprietor of the concern which was subsequently converted into a partnership firm.

2. An agreement dated 8.2.1978 was executed between the petitioner No. 2 and the respondent No. 2 for running the aforesaid outlet. The petitioners had been running this petrol pump on the aforesaid outlet since then. However, vide letter dated 13.6.2001 the respondent No. 2 Corporation has terminated the dealership of the petitioners in respect of the aforesaid retail outlet. Challenging this decision, present petition has been filed by the petitioners.

3. It is stated in the petition that the petitioners have been running the petrol pump strictly in accordance with the terms and conditions of the Agreement and have not committed any irregularities in this behalf. It is averred that on 19.5.2001, an Officer of the respondent No. 2 had carried out inspection under various heads and a satisfactory report to this effect was submitted. On 3.6.2001 petrol pump of the petitioners was again inspected by the officials of the respondent No. 2 and this time also, no complaint of any short supply of the petrol pump was made as would be clear from letter dated 4.6.2001 written by Chief Divisional Manager of Indian Oil Corporation to the petitioner. The only irregularity found was that sales and other rooms were found to be locked and without lights resulting in the entire building being dark and other similar minor irregularities. Insofar as quality and quantity of petroleum products are concerned, no deficiency was pointed out. It appears that on 10.6.2001 the Economic Offences Wing, Crime Branch, Delhi Police along with officials of respondent No. 2 came for inspection at 8 p.m. at the petitioners petrol pump on the basis of some complaint filed before them and inspection was carried out. According to the respondents during this inspection it was found that 3 Z-line dispensing units (2 HSD and 1 MS of 2-3 wheelers) were having extra fittings which were not part of original equipments. On checking it was found that an extra switch was installed in the sloping column inside nozzle boot resulting in delivering short supply of 200 ML in every 5 litres. During this inspection, Crime Branch officials also called L&T representatives to check the equipments and they also confirmed that the extra switch installed by the petitioners in the aforesaid 3 Z-line machine was not a part of the original equipment supplied by them. On the basis of this inspection, the petitioner No. 2 was arrested on the same day i.e. 10.6.2001 and an FIR was lodged by the Crime Authorities under Section 120 and Section 420, IPC against him.

4. On the basis of aforesaid alleged irregularities as found in the investigation, the respondent No. 2 terminated the dealership of the petitioners wide communication dated 13.6.2001. In this notice of termination the respondent No. 2 has mentioned in detail about the aforesaid inspection carried out on 10.6.2001 and the deficiencies found therein. After stating the factum of inspection, deficiencies found and lodging of FIR, the said termination order reads as under:

"The aforesaid irregularities/acts are not only in violation of terms and

conditions of the agreement of dealership, but are also in violation of MS/ HSD Control Order, 1998 and Weights and Measures Act. The above acts of your were widely reported in the Press, which has brought bad name to the Corporation.

In view of the serious breaches of the Dealership Agreement and provisions of MS/HSD Control Order, 1998, I am of the opinion that your acts are prejudicial to the interest and good name of the Corporation and its products. Therefore, I have come to the conclusion that the Corporation should not have any further association with you as our dealer. Accordingly, it has been decided to terminate your Agreement of Dealership forthwith under the terms of the Agreement of Dealership dated 2.6.1999. Please note that the dealership granted to you vide Agreement of Dealership dated 2.6.1999 shall hereby stand terminated forthwith."

5. Thus treating the aforesaid irregularities to the interest of the good name of the Corporation, it was decided to terminate Agreement of Dealership forthwith under the terms of the Agreement dated 2.6.1999.

6. Learned Counsel for the petitioners submitted that impugned notice of termination is clearly illegal inasmuch as prior to this termination no show-cause notice was served upon the petitioners nor were they given any opportunity of being heard against this drastic action taken by the respondent No. 2. He further submitted that the respondent No. 1 has issued Marketing Discipline Guidelines which, inter alia, stipulate the procedure for dealing with such kinds of offences. His submission was that not only norms contained therein were not violated in any case commission of first offence of this kind there could not be extreme penalty of termination of dealership. Further these guidelines categorically provide that before taking any such action show-cause notice has to be served upon the delinquent dealer. He, therefore, submitted that on either counts termination of dealership would be illegal. In support of his submissions, learned Counsel for the petitioners relied upon a recent judgment of the Supreme Court in the case of Harbanslal Sahnia and Anr. v. Indian Oil Corporation Ltd. and Ors., Civil Appeal Nos. 8620-8621 of 2002 decided on 20.12.2002 which was a case of termination of dealership by the Indian Oil Corporation Ltd. itself. In addition he referred to the following judgments:

 (1)    Sahadat Hossain v. Sub-Divisional Controller of F & S., Katwa Burdwan and Ors., . 
 

 (2)    Durga Oil Mill and Anr. v. The State of Bihar and Ors., . 
 

 (3)   Rajendralal Shadilal and Co. Pvt. Ltd. and Anr. v. The State of Maharashtra and Anr., . 
 

 (4)   Anand Jaiswal v. State of Madhya Pradesh and Ors., AIR 1987 Madhya Pradesh 96.  
 

7. Mr. Kalra, learned Counsel appearing for the respondents on the other hand referred to various clauses of Dealership Agreement to pointout that such Dealership Agreement was terminable by three months notice, in writing to the other, of its intention to terminate this Agreement and, therefore, when the respondent No. 2 had right to terminate the Agreement, giving of show-cause notice was not mandatory. His submission was that it was a contractual matter between the petitioner No. 2 and the respondent No. 2 and terms and conditions of the contract were stipulated in Agreement dated 8.2.1978. Parties were bound by these terms and conditions of the contract and being a contractual matter this writ petition challenging the termination was not maintainable. According to him even if it is presumed that termination was illegal, remedy of the petitioner was to seek damages for wrongful termination of the contract. In this behalf, he referred to Clauses 3, 13, 16 and 56(j) of the Terms and Conditions of the Agreement. He further submitted that even if there was a dispute, Clause 67of the Agreement provided for settlement of such dispute by means of arbitration and on this ground also this writ petition was not maintainable. He further submitted that reliance given on the guidelines by the petitioner was misconceived as these guidelines were not mandatory in nature. His submission was that in exceptional cases it was still within the rights of the respondent No 2 to terminate the Agreement and the instant case was of this nature wherein serious allegations were levelled against the petitioner which form part of FIR as well. He argued that general public interest warranted taking of immediate and urgent action in this matter, by terminating the dealership without observing principles of natural justice which was not a necessary requirement in any case. In support of this submission, he relied upon the judgment in the case of Union of India and Anr. v. Tulsiram Patel, reported in AIR 1985 SC 1418 and Smt. Meneka Gandhi v. Union of India and Anr., . He further submitted that in contractual matters where the Agreement did not have statutory flavour, writ petition could not be filed and for this proposition he made reference to the judgment of Supreme Court in the case of Kerala State Electricity Board and Anr. v. Kurien E. Kalathil and Ors., and Indian Oil Corporation Ltd. v. Amritsar Gas Service and Ors., (1990) Suppl. 3 SCR 196. His further submission was that the issue involved disputed questions of fact which could not be gone into writ petition and the proper remedy for the petitioners was to invoke arbitration.

8. First and foremost question which needs to be determined is as to whether before taking such action of termination of agency, respondent No. 2 was required to observe principles of natural justice. The outcome of the writ petition as well as answer to other submissions would depend on determination of this question. It cannot be denied that the respondent No. 2 is "another authority" and is an instrumentality and/or agency of the State within the meaning of Article 12 of the Constitution of India and provisions of Chapter-111 of the Constitution are attracted. It is trite of law that principles of natural justice are treated as part of Article 14 of the Constitution. Therefore, if principles of natural justice were to be observed by the respondent No. 2, violation thereof would mean infarction of Article 14 of the Constitution and thus writ petition would be maintainable. It is because of this reason that one has to decide the question of applicability of principles of natural justice in the instant case.

9. As noted above, IOC, whenever enters into dealership agreement, executes memorandum of agreement which lays down standard terms and conditions These conditions, inter alia, include provision for termination of the dealership, as well. It is provided that the agreement can be terminated by giving required notice. It may however, be mentioned that at the same time in order to ensure that such agreements with the dealers are worked out in a systematic manner and the respondent-IOC does not invoke the termination clause arbitrarily, Government of India has issued Marketing Discipline Guidelines. These Guidelines are laid down in order to ensure that retail outlets are carried on the principles of highest business ethics and excellent customer service and customers receive product of the right quality and quantity. The purpose is also to ensure that dealers follow the correct and safe practices in handling and dispensing petroleum products, show courteous behavior to customers and provision of uniform code of conduct and discipline is enforced throughout the country dealership network of the industry. For ensuring uniform code of conduct and discipline, the Guidelines also enumerate the nature of irregularities which may be committed by such dealers and the action which is required for such irregularities. Chapter 6 of these Guidelines filed "Prevention of Irregularities at Retail Outlets" stipulates major as well as minor irregularities and provides for the penalties for such major and minor irregularities. At the end of Chapter 6, ninenotes are given. Short-delivery of products is treated as major as well as minor irregularity. When weights and measure seals are tampered with, short delivery of products is treated as major irregularity and when weights and measure seals are intact but deliveries are below tolerance limit, short delivery of product is treated as minor irregularity. The penalty for short delivery of products as major irregularity is provided in the following manner :

"Short Delivery of Products

When weights and measure seals are tampered with:

 (i)     Suspension of sales and supplies of all products for 30 days along with a fine of Rs. 50,000/- in the first instance. 
 

 (ii)   Fine of Rs. 1 lakh and suspension of sales and supplies of all products for 45 days in the second instance. 
 

 (iii)  Termination in the third instance."  
 

 Penalty for short delivery products as major irregularity is provided in the following manner: 
 

 Short Delivery of Products   
 

 When Weights and Measure seals are intact but deliveries are below tolerance limit: 
   

 (a)      Sales and supplies should be stopped from the Dispensing unit till recalibration is carried out by Weights and Measures department. 
 

 (b) (i)    Suspension of sales and supplies of all products for 15 days along with a fine of Rs. 20,000/- in the first instance. 

 

 (ii)  Suspension of sales and supplies for 30 days along with a fine of Rs. 50,000/- in the second instance. 
 

 (iii) Suspension of sales and supplies of all products for 45 days along with a fine of Rs. 1 lakh in the third instance. 
 

 (iv) In extreme cases, where it is proved that the dealer has tampered with the delivery system, termination will be considered in the fourth instance."   
 

 10. For our purposes notes appended thereto being relevant are quoted below: 
   

    (i)     The above are general guidelines and notwithstanding what has been stated above, the Competent Authority of the concerned Oil Company can take appropriate higher punitive action against the erring dealer including termination in the first or any instance. 
 

 (ii)   Every punitive action would be taken after show-cause notice of minimum seven days. 
 

 (iii) The cycle of calculating second and third instances shall be five years starting from the date of first irregularity. 
 

 (iv)  In case, two or more irregularities are detected at the same time RO, action will be taken in line with what is listed in the MDG under the relevant category for each irregularity. 
 

 (v)   All irregularities established under "Major" and "Minor" categories will be treated separately for the purpose of imposing penalties. 
 

 (vi)  Field staff should ensure that samples for testing are sent to the Laboratory within 10 days of drawal of the same. Lab test reports should thereafter be made available within ten days. 
 

 (vii) In case of irregularities not specifically mentioned /covered above, the competent/appropriate authority of the concerned Oil Company shall impose proper penalty and /or issue warning letter after inquiry and in accordance with the principles of natural justice. 
 

(viii) Under existing laws, Control Orders, etc., various authorities of Central Government/StateGovernment--In addition to Oil Company Officers --are empowered to carry out checks of the dealership for determining and securing compliance with such laws/Control Order. If any "malpractice or irregularity" is established by such authorities after checking the same would also be taken as a "malpractice or irregularity" under these guidelines and prescribed punitive action would be taken by the Oil Company, on receipt of advice from such authority.

(ix) Wherever fine with suspension has been provided, fine must be paid within suspension period, failing which suspension would be extended by the equivalent period. If fine is not paid even within the extended period, the dealership would be terminated.

11. As per Note No. (ii) before taking punitive action show-cause notice of minimum seven days would be served. When the respondents have themselves provided for detailed procedure to take action in case a dealer is found to have committed some irregularity as per which the show-cause notice has to be served, the respondents cannot be permitted to say that such procedure is not to be followed. Mr. Kalra, learned Counsel for the petitioner relied upon Note No. (i) to say that these Guidelines were not of general nature and the respondent No. 2 was authorised to take appropriate higher punitive action against the erring dealer including termination in the first or any instance. That may be so. It cannot be denied that the kinds of penalties which are provided are to be generally followed and in exceptional cases, if the respondent No. 2 is of the opinion that higher penalty than the normal penalty prescribed in the Guidelines is to be given, the respondent No. 2 is not powerless to inflict such penalty. However, at this stage we are dealing with the question as to whether before imposing the penalty principles of natural justice are required to be observed. As pointed out above, respondents' own Guidelines prescribed this procedure. It is trite of law that any action, even administrative, which visits person with penal or civil consequences, before taking such action principles of natural justice are generally to be followed unless the Legislature has by incorporating a statutory provision specifically excluded the observance thereof. In the instance case, there is no such exclusion. On the contrary the respondents have themselves provided for the mechanism for taking such action and have rather incorporated the provision for issuing of show-cause notice. In fact, even as per the argument of Mr. Kalra, the respondents would be required to serve such a show-cause notice. The penalties which are to be given in case of such irregularities are already mentioned above. Mr. Kalra submits that the respondent-IOC has right to take appropriate highest punitive action even in the first or any instance. That means in a given case the respondent No. 2 can depart from the normal penalties. If respondents want to take such action, they will have to justify the same on the facts and circumstances of a particular case and this itself necessitated observance of principles of natural justice by putting the dealer to notice that going by the serious irregularity in a given case, the respondent propose to terminate the dealership and therefore such a dealer will have to be given an opportunity to show cause against such a proposed action. When normally from the Guidelines a dealer is put to notice for any irregularity, like in the instant case, the first instance which would visit is the penalty of suspension for a few days and some fine in monetary terms.

12. A Full Bench of this Court in the case of J.T. (India) Exports v. Union of India and Anr., reported in 2001 (78) ECC 677 (Del.), recapitulated the legal position on this aspect after scanning important case law, Indian as well as English. Arijit Pasayat, CJ (as he then was) speaking for the Court formulated the legal position in the following manner:

"Para 4 : The expression 'natural justice and legal justice' does not present a water-tight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law.

Para 5 : The adherence to principle of natural justice as recognised by all civilised States is of supreme importance when a quasi-juridical body embarks on determining disputes between the parties. These principles are well-settled. The first and foremost principle is what is commonly known as audi alteram partcm rule. It says that none should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should appraise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed against the person in absentia becomes wholly vitiated. Thus it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play.

Para 6: Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice."

13. The Court, thereafter, concluded from some leading judgments of Court in England including Board of Education v. Rice, 1911 AC 179 and Earl of Salbourne, LO in Spackman v. Plumstead District Board of Works, 1985 (10) AC 229, and expressed in the following manner as to how concept of principles of natural justice had shaped over a period of time:

"Para 11: Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed there under. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the fact and circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. Expression 'civil consequences' encompasses in fraction of not merely property or personal rights but of civil liberties, material deprivations, and non-pecuniary damages. It its wide umbrella comes everything that affects a citizen in his civil life.

Para 12: Natural justice has been variously defined by different Judges. A few instances will suffice. In Drew v. Drew and Lebura, 1855 (2) Macg. 1.8, Lord Cranworth defined it as 'universial justice'. In James Durber Smith v. Her Majesty the Queen, (1877-78 (3) App. Case 614, 623 JC) Sir Robort P. Collier, speaking for the judicial committee of Privy Council, used the phrase "the requirements of substantial justice while in Arthur John Specman v. Plumstead District Board of Works, 91884-85 (10) App. Case 229, 240, Earl of Salbourne, S.C. Preferred the phrase "The substantial requirement of justice". In Vionet v.

Barrett, 1885 (55) LJRD 39,41, Lord Fasher, M.R. defined natural justice as 'the natural sense of whatis right and wrong'. While, however, deciding Hookings v. Smethwick Local Board of Health, 1890 (24) QBD 712, Lord Fasher, M.R. instead of using the definition given earlier by him in Vionet v. Barrett (supra), chose to define 'natural justice as fundamental justice'. In Ridge v. Baldwin, 1963(1) WB 569, 578, Harnian LJ. in the Court of appeal described natural justice as 'fairplay in action'. This was noted in Maneka Gandhi v. Union of India, . In re R.N. (An Infaot) 1967 (2) B 617, 530, Lord Parker, CJ, preferred to describe natural justice as 'a duty to act fairly'. In Fairmount Investments Ltd. v. Secretary to State for Environment, 1976 WLR 1255, Lord Russell of Willowan somewhat picturesquely described natural justice as 'a fair crack of the whip' while Geoffrey Lane, LJ in Regina v. Secretary of State of Home Affairs Exparte Hosenball, 1977 (1) WLR 766, preferred the homely phrase 'common fairness'.

Para 14: Even, if grant of an opportunity is not specifically provided for it has to be read into the unoccupied interestices and unless specifically excluded principles of natural justice have to be applied. Even if a statute is silent and there are no positive words in the Act or Rules spelling out the need to hear the party whose rights and interests are likely to be affected, the requirement to follow the fair procedure before taking a decision must be read into the statute, unless the statute provides otherwise. Reference is accordingly disposed of.

14. Once it is held that the principles of natural justice are to be normally followed before taking such an action next question which falls for determination is as to whether observance of principles of natural justice can be dispensed with in general public interest, when the offence alleged is of very serious nature. Learned Counsel for the respondents, however, argued that there may be cases of grave nature where immediate action is warranted and observance of principles of natural justice may defeat the very purpose of taking action. In support of this proposition, as pointed above, Mr. Kalrahad referred to the judgment of Supreme Court in the case of Maneka Gandhi (supra), and Tulsi Ram Patel (supra).

15. What would be the position when very emergent and immediate action is to be taken keeping in view the serious and/or sensitive nature of allegations against a particular contractor/supplier and observance of principles of natural justice and time consumed thereinmay defeat the very purpose for which emergent action is required?

16. There could be two answers to this question which are as follows:

(a) In a given case the Government can justify that principles of natural justice are not required to be observed at all. In the judgment dated 7th January, 2003 in CWP No. 5375/2002, the Court held that based on dictum laid down in the cases of R.S. Dass v. Union of India and Ors., reported in 1986 (Supp.) SCC 617; Shiv Sagar Tewari v. Union of India, , the position wr ich emerges is that the Court would not compel observance of rules with natural justice in cases:

(i)     where giving of notice would obstruct taking of prompt action and the matter is urgent and requires prompt action. Inaction or delay would paralyse the administrative process/machinery. 
 

 (ii)   Where on indisputable or admitted facts, only one conclusion possible and it would be futile to issue a writ or compel observance or principles of natural justice. 
 

 (iii)  Where observance of principles of natural justice is excluded by express provisions of statute or by implication,  
 

Thus if the Government is able to bring its case within the sweep of any of the aforesaid situation, it can justify giving go-bye to the observance of rules of natural justice. Further in a given case the Court can still deny relief in exercise of writ jurisdiction even though the impugned order was not sustainable if the Government is able to justify that giving relief would do greater harm to the society and would be prejudicial to public interest.

(b) If the action to be taken is of such an emergent nature that pre-decisional hearing would not be possible, purpose can be achieved by giving post-decisional hearing as held in the case of Liberty Oil Mills and Others v. Union of India and Ors., , wherein the Court observed:

"... Does it mean that the principle of natural justice of procedural fairness is to be altogether excluded when action is taken under Clause 8-B? We do not think so. We do not think that it is permissible to interpret any statutory instrument so as to exclude natural justice, unless the language of the instrument leaves no option to the Court. Procedural fairness embodying natural justice is to be implied whenever action is taken affecting the rights of parties. It may be that the opportunity to be averted or the act to be prevented is imminent or where the action to be taken can brook no delay. If an area is devastated by the flood, one cannot wait to issue show- cause notices for requisitioning vehicles to evacuate population. If there is an out-break of epidemic, we presume one does not have to issue show-cause notices to requisition beds in hospitals, public or private. In such situations, it may be enough to issue post-decisional notices providing for an opportunity."

It however, gave example of such emergent cases where pre-decisional hearing may not be necessary and post-decisional hearing would serve the purpose by making these remarks:

".... It may be that the opportunity to be heard may not be pre-decisional; it may necessarily have to be post-decisional where the danger to be averted or the act to be prevented is imminent or where the action to be taken can brook no delay. If an area is devastated by flood, one cannot wait to issue show-cause notices for requisitioning vehicles to evacuate population. If there is no outbreak of epidemic, we presume one does not have to issue show-cause notices to requisition beds in hospitals, public or private. In such situation, it may be enough to issue post-decisional notices providing for an opportunity. It may not even be necessary in some situations to issue such notices, but it would be sufficient but obligatory to consider any representation that may be made by the aggrieved person and that would satisfy the requirements of procedural fairness and natural justice....."

17. The Court further added that pre-decisional natural justice is not usually contemplated when the decisions taken are of the interim nature pending investigation or inquiry. Such an order may be made ex parts which may provide an opportunity to the aggrieved party to be heard at a later stage.

18. Thus the Supreme Court held in the aforesaid cases that there may be circumstances where immediate action is required and in such cases pre-decisional natural justice may not be contemplated and purpose can be served by giving post-decisional hearing. However going by the facts and circumstances it cannot be said that the alleged offence was so grave that it was necessary for the respondent No. 2 to dispense with the provisions of requirement of observance of show-cause notice before taking drastic action of terminating the dealership agency. Even if the respondent No. 2, in such circumstances, it was of the opinion that the kind of irregularity committed by the petitioner is serious, was not remediless and could have resorted to suspension of the dealership pending inquiry by serving show-cause notice. However, the respondent No. 2, going by the allegations contained in First Information Report, took the impugned action thereby presuming that whatever is stated in the First Information Report or whatever is the Report of inspection is gospel truth and has to be believed without giving any chance to the petitioner to rebut the same. It cannot be treated as fair play or in consonance with the sense of justice. After all, even as per the procedure prescribed by the respondent No. 2 show-cause notice only of seven days was required to be given. Thus even if the respondent No. 2 had followed the procedure prescribed it would not have taken much time before concluding the hearing and taking action. I may point out at this stage that I am not going into the issue as to whether allegations, contained in the inspection Report and First Information Report are correct inasmuch as learned Counsel for the petitioner has also tried to argue that the allegations made against the petitioner are not correct. It would be a matter for the respondent No. 2 to decide after giving proper opportunity to the petitioner. Any observation made by this Court at this stage may have an adverse effect on the petitioner and/or the respondent and that is why, I am refraining from making any such observations. I am only concerned with the manner in which action is taken by the respondent No. 2. Once it is found that principles of natural justice were required to be complied with for taking such action and admittedly that is not done the impugned notice/ decision dated 13th June, 2001 terminating the dealership of the petitioner cannot be sustained and is hereby set aside.

19. The view which I have taken as aforesaid, other judgments cited by the learned Counsel for the respondent No. 2 shall be of no avail. On the other hand judgment of Supreme Court in the case of Harbans Lal (supra), which was a case of termination of dealership by IOC itself, would squarely apply to the facts and circumstances of this case. In fact this judgment answers both the contentions raised by learned Counsel for the respondent No. 2 to the maintainability of the writ petition. In this case, the Supreme Court negatived the contention of IOC to the effect that writ petition was not maintainable as relationship between the parties was contractual and further the Dealership Agreement contained an arbitration clause. In that case for certain alleged irregularities committed by the dealer show-cause notice was given which was however not persuaded. But thereafter dealership was terminated. The Supreme Court set aside the termination order. One may also make mention of the judgments of the Supreme Court in the cases of Kumari Shrilekha Vidyarthiv. State of J&K, reported in AIR 1991 AC 537 and Mahavir Auto Stores and Ors. v. Indian Oil Corporation and Ors., .

20. The result of the aforesaid discussion is that this writ petition is allowed. Rule is made absolute. Termination order dated 13th June, 2001 is hereby quashed.

21. It may be mentioned at this stage that before this writ petition could be filed the respondents had taken over the possession of the petrol pump. It is being run by the respondent No. 2 at present. Since the Termination Order dated 13th June, 2001 is quashed, the respondent No. 2 shall restore the possession of this petrol pump to the petitioner. The respondent No. 2 shall be at liberty to take appropriate action after complying with principles of natural justice and in accordance with Marketing Discipline Guidelines.

In the facts and circumstances of this case there shall be no order as to costs.