JUDGMENT : MAHESH CHANDRA TRIPATHI, J. 1. Heard Shri Krishna Dev Vyas, learned counsel for the petitioner; Ms. Archana Singh, learned counsel for Indian Oil Corporation Ltd. and Shri O.P. Singh, learned Senior Advocate assisted by Shri Indrajeet Singh, learned counsel for respondent no. 6. 2. In leading Writ (C) No. 31629 of 2021, the petitioner has sought the following reliefs: “(I) Issue a writ, order or direction in the nature of certiorari, or appropriate writ for setting aside the impugned Show Cause Notice dated 04.01.2021 issued by the Respondent no. 4 (Annexure No. 9 to the writ petition) and quashing the proceedings initiated vide the impugned notice dated 04.01.2021. (II) Issue a writ, order or direction in the nature of certiorari, or appropriate writ for setting aside the impugned Order dated 15.11.2021 issued by the respondent no. 2 (Annexure No. 15 to the writ petition). (III) Issue a writ order or direction in the nature of mandamus commanding and directing the respondents not to take any coercive steps against the petitioner pursuant to the impugned order dated 15.11.2021. (IV) Issue a writ order or direction in the nature of mandamus commanding and directing the respondents and their agents to restore the dealership agreement dated 10.03.2004 and to forthwith restore the supply of the diesel and petrol to the petrol pump of the Petitioner.” 3. In the connected Writ (C) No. 11173 of 2012 the petitioner has prayed for quashing the appointment letter dated 15.01.2022 issued by the respondent no. 3 and the notice/letter dated 26.03.2022 issued by the respondent no. 3 for taking over the petrol pump from the petitioner. Further prayer is made to issue direction in the nature of mandamus commanding the respondents to handover the possession of the petrol pump to the petitioner. 4. Both writ petitions arise out of similar set of facts and seek to raise challenge to termination order dated 15.11.2021. Accordingly, with the consent of the parties, the petitions have been heard together and are being disposed of by means of a common order. 5. Brief background of the case, as reflected from the record, is that M/s M.K. Fuel Centre (petitioner) is a partnership firm and a retail outlet of Indian Oil Corporation Limited [IOCL]. Accordingly, with the consent of the parties, the petitions have been heard together and are being disposed of by means of a common order. 5. Brief background of the case, as reflected from the record, is that M/s M.K. Fuel Centre (petitioner) is a partnership firm and a retail outlet of Indian Oil Corporation Limited [IOCL]. A dealership agreement was executed between the petitioner and IOCL on 10.03.2004 and the petitioner continued to operate the petrol pump for last 17 years without any complaint. The Marketing Discipline Guidelines, 2012 [MDG] have been issued by the Government of India w.e.f. 08.01.2013 and are applicable to all Public Sector Oil Marketing Companies and are required to be strictly followed, before any action of suspension or termination of dealership is resorted to. The marketing guidelines also provide a detailed procedure for checking irregularities at retail outlets. 6. On 11.06.2020 a routine annual inspection was done by the team of Weight and Measurement (W&M) department for annual calibration and stamping of all the dispensing units and no irregularity, discrepancy or any tampering was reported in any of the Dispensing Units (DUs). Another inspection was held on 10.07.2020 by the Sales Inspection Team, which also found no discrepancies. The retail outlet was working as per the normal standards. Again on 14.07.2020, an inspection was carried out by the Sales Officer, Kanpur-II RSA and an inspection and analysis report was prepared, wherein no discrepancy was found in the stock. All seals were found intact and there was no variation in the dispensing units. Since certain errors had occurred in one of the Dispensing Unit, as such again on 16.07.2020, a joint inspection was carried out by a team constituted by the Chief Divisional Retail Sales Manager in the presence of the dealers and the Inspectors from the Weight and Measurement Department, wherein no discrepancy was found in any of the Dispensing Units. The W&M seal and the totalizer seal of the pump were found intact and the delivery from the pump was also found to be correct. In the inspection analysis report, it was reported that no extra fittings were found during the inspection and there was need of upgrading the software. 7. The W&M seal and the totalizer seal of the pump were found intact and the delivery from the pump was also found to be correct. In the inspection analysis report, it was reported that no extra fittings were found during the inspection and there was need of upgrading the software. 7. On some suspicion and automation error reports, seals of the aforenoted dispensing unit were broken by the respondents and the CPU card was sent to the Gilbarco Veeder-Root India [GVR] for testing and analysis on the errors. Thereafter, the controller card was sent seeking authentication and reports over the E9 and E28 errors found in the DU Log. The concerned dispensing unit was sealed and the sales from the said dispensing unit were suspended. The respondent no. 4 had issued a letter on 23.9.2020 to witness the process of opening the sealed parcel of control card of GVR-DU and the dealers duly attended the video conferencing held on 20.9.2020. Thereafter the impugned show cause notice was issued to the petitioner on 04.01.2021 for termination of the retail outlet dealership and calling for an explanation within 15 days, alleging violation of clause 5.1.4 read with clause 8.2(iv) of the Marketing Discipline Guidelines-2013. The petitioner submitted a detailed reply on 19.01.2021 denying the allegations made in the show cause notice for using any external device by removing E-cal cable connection so as to manipulate the delivery. 8. After six months, the petitioner received a letter dated 14.07.2021 from the Corporation for personal hearing on 15.7.2021 and one of the partner of the petitioner firm attended the same but the hearing was adjourned on the said date. A letter was again issued by the respondent Corporation on 05.10.2021 informing the date and time of the next hearing through video conference on 06.10.2021 at 11.30 hrs. A reply/objection dated 05.10.2021 was filed by the petitioner on 06.10.2021 reiterating the earlier reply and specific objection was taken with regard to the procedural impropriety in issuing the show cause notice and the vague report submitted by the (OEM) GVR on the basis of which the Chief Divisional Retail Sales Manager, Kanpur Divisional Office, Kanpur (respondent no. 4) had formed reason to believe that the dispensing unit was deliberately tampered for manipulating the delivery. After receiving the letter dated 05.10.2021, the petitioner came to know about the termination proceedings as per Clause 8.6 of the MDG. 4) had formed reason to believe that the dispensing unit was deliberately tampered for manipulating the delivery. After receiving the letter dated 05.10.2021, the petitioner came to know about the termination proceedings as per Clause 8.6 of the MDG. Immediately, the petitioner filed a Writ Petition bearing Writ (C) No. 30089 of 2021 challenging the show-cause notice dated 04.01.2021. After filing the said writ petition, the petitioner firm was served with the impugned termination order dated 15.11.2021 on 16.11.2021. Since certain subsequent events had taken place after filing the said writ petition, the writ petition was dismissed as withdrawn with liberty to the petitioner to file a fresh petition with better particulars on 23.11.2021. Thereafter, the petitioner had filed leading writ petition challenging the order of termination, which was heard on the ground of maintainability on 07.01.2022 and the matter was reserved for orders. A detailed order was passed by this Court on 16.02.2022 admitting the writ petition to be maintainable and for exchange of pleadings. The order dated 16.02.2022 is reproduced hereunder: “A preliminary objection has been raised by counsel for the respondents regarding the maintainability of the writ petition. It has been submitted that challenge to a show cause notice is not tenable. In any case consequent to the show cause notice and after hearing the petitioner, the dealership of the petitioner has been terminated. Against the order of termination, an appeal lies which alternative remedy the petitioner has not availed. It is also submitted that under the dealership contract, there is a arbitration clause, which also can be invoked by the petitioner. On account of the aforesaid, the writ petition is liable to be dismissed as not maintainable. She has relied upon the judgment dated 20.11.2017 in Writ (C) No. 46927 of 2015, M/s Pravin Automobiles vs. Indian Oil Corporation and Others and Judgment Dated 25.02.2015 in Writ (C) No. 64114 of 2014, M/s Harish Filling Station vs. Union of India and Others in support of her objection. The show cause notice dated 04.01.2021 has been issued by the respondent no. 4 and the petitioner prays for quashing of this show cause notice and also the proceedings drawn in consequence thereof including the termination of the dealership on the ground that there was clear cut violation of the clauses 8.5.6 and 8.5.8 of the Marketing Discipline Guidelines. The show cause notice dated 04.01.2021 has been issued by the respondent no. 4 and the petitioner prays for quashing of this show cause notice and also the proceedings drawn in consequence thereof including the termination of the dealership on the ground that there was clear cut violation of the clauses 8.5.6 and 8.5.8 of the Marketing Discipline Guidelines. The afore-noted clauses of the marketing discipline guidelines read as follows: “8.5.6 In respect of all cases of irregularities, a show cause notice, within 30 days from the date of inspection will be issued to the dealer indicating all the irregularities. However, in case samples of MS/HSD were drawn during inspection then the show cause notice will be issued within 30 days of test results. The show cause notice should be issued along with all reports and other documents, etc. which forms the basis of the notice. 8.5.8 Upon receipt of the reply to the show cause notice, the authorized officer of the OMC will review the charges leveled and the reply received and pass a speaking order preferably within a period of 45 days from the receipt of the reply. The speaking order shall indicate complete details of the irregularities committed, the reply of the dealer and detailed reasons as to why the reply is acceptable/not acceptable to the official.” The relevant facts which are the basis of the argument raised by Shri Anurag Khanna are as follows: The petitioner is a partnership firm and a retail outlet of Indian Oil Corporation. A dealership agreement was executed between the petitioner and Indian Oil Corporation on 10.03.2004 and the petitioner continued to operate without any complaint. The Marketing Discipline Guidelines, 2012 have been issued by the Government of India w.e.f. 08.01.2013 and are applicable to all public sector oil marketing companies and are required to be strictly followed, before any action of suspension or termination of dealership is resorted to. The marketing guidelines also provide a detailed procedure for checking irregularities at retail outlets. It is also stated that a routine annual inspection was held on 10.06.2020 by the Weight and Measurement Department and no irregularities, discrepancies or tampering were reported after inspection. Another inspection was held on 10.07.2020 by the Sales Inspection Team, which also found no discrepancies. Again on 14.07.2020, an inspection was carried out by the fifth respondent and an inspection and analysis report was prepared. Another inspection was held on 10.07.2020 by the Sales Inspection Team, which also found no discrepancies. Again on 14.07.2020, an inspection was carried out by the fifth respondent and an inspection and analysis report was prepared. No discrepancy was found in the stock. The various seals were found intact and there was no variation in the dispensing units. Again on 16.07.2020, a joint inspection was carried out by a team constituted by the fourth respondent in the presence of the dealer and an Inspector from the Weight and Measurement Department. The petitioner received a letter dated 16.07.2020 pointing out certain errors as per the DU Log in one dispensing unit. It appears that on some suspicion and with the permission of the Inspector, seals of the afore-noted dispensing unit were broken and the CPU and DU were taken out. Thereafter, the controller card was sent seeking authentication and reports over the E9 and E28 errors found in the DU Log. On 04.01.2021 a show cause notice was issued to the petitioner for termination of the retail outlet calling for an explanation within 15 days alleging violation of clause 5.1.4 read with clause 8.2(iv) of the Marketing Discipline Guidelines. The subsequent facts alleged in the writ petition are not relevant for deciding the question of maintainability of this writ petition and are therefore not being alluded to. The contention of Shri Anurag Khanna, is that in case of an irregularity being discovered by the respondents, they were required to issue a show cause notice within 30 days. This has not been done. The inspection was made on 16.07.2020 while a notice has been issued on 04.01.2021 well after the period of 30 days had elapsed. Even the lab report from the original equipment manufacturer of the controller card was received by the respondents on 19.11.2020. Even if the limitation of 30 days is to be calculated from this date, there is clear violation of the Marketing Discipline Guidelines, which provide that the show cause notice has to be issued within 30 days. Prima-facie we find that the submission of learned counsel for the petitioner has substance. The show-cause notice dated 04.01.2021 has not been issued within the time specified therefor under clause 8.5.6. Prima-facie we find that the submission of learned counsel for the petitioner has substance. The show-cause notice dated 04.01.2021 has not been issued within the time specified therefor under clause 8.5.6. Under the circumstances, it is difficult to hold that the petition is not maintainable inasmuch as the respondents have failed to follow the statutory guidelines issued by the Union of India having failed to proceed within the time prescribed. This is so especially in view of the decision of this Court in Writ (C) No. 25127 of 2018, M/s Kamal Kant Authorities and Another vs. Hindustan Petroleum Corporation Ltd. and Others, wherein it has been held that a writ petition is maintainable as relief for restoration of dealership can be granted by the writ court and not by the arbitrator or the civil court. It would be relevant to note that in M/s Kamal Kant (supra), it was also found that there was noncompliance of the Marketing Discipline Guidelines and the dealership was restored relying upon the decision of the Apex Court in Allied Motors Ltd. vs. Bharat Petroleum Ltd. (2012) 2 SCC 1 . The objection of counsel for the respondents is therefore, rejected, even though it has been submitted by counsel for the respondents that a show cause notice had been issued within days of the inspection in July, 2020. This plea is unacceptable as this alleged show cause notice does not mention the reasons on which the dealership has been terminated. Accordingly, the writ petition is held to be maintainable. The respondents may file a counter affidavit within three weeks. Petitioner will have a week thereafter to file rejoinder affidavit. List this petition for admission/final disposal on the expiry of the aforesaid period.” 9. The impugned notice/letter was received on the email ID of the petitioner firm on 26.03.2022 at 5:32 am for taking over and handing over of the retail outlet and immediately the possession of the petrol pump was taken over by the respondent authorities on the same day at 7 am. Consequently, the respondent no. 3 vide letter dated 15.01.2022 appointed the respondent no. 6 as an Ad-hoc Dealer for selling and handling petroleum products of the Corporation on temporary basis, subject to the outcome of Writ (C) No. 30089 of 2021 filed by the petitioner, which was already dismissed as withdrawn on 23.11.2021. Consequently, the respondent no. 3 vide letter dated 15.01.2022 appointed the respondent no. 6 as an Ad-hoc Dealer for selling and handling petroleum products of the Corporation on temporary basis, subject to the outcome of Writ (C) No. 30089 of 2021 filed by the petitioner, which was already dismissed as withdrawn on 23.11.2021. Thereafter, the petitioner was constrained to file the connected Writ (C) No. 11173 of 2022 challenging the ad-hoc appointment letter dated 15.01.2022 as well as the notice dated 26.03.2022. ARGUMENTS OF THE PETITIONER 10. Sri Krishna Dev Vyas, learned counsel for the petitioner while pressing the reliefs sought in the writ petitions submitted that the IOCL granted the retail outlet of petroleum products to the petitioner on 10.03.2004. The joint inspection was made at the retail outlet on 16.07.2020 and the inspection report was prepared, wherein it was reported that all the dispensing units were in working condition Subsequently, the show-cause notice dated 04.1.2021 was issued to the petitioner to which the petitioner submitted reply on 19.1.2021 denying the allegations made in the show cause notice. Finally, the Corporation had terminated the dealership of the petitioner on 15.11.2021. 11. Learned counsel for the petitioner submitted that the objection with regard to the procedural impropriety in issuing the show cause notice was duly taken by the petitioner in its reply dated 19.01.2021. At the time of inspection, testing of all the dispensing units were done and the same were found to be correct. There was no short delivery in supply and no stock variation was found. All the weight and measurement seals were found intact and no tampering, whatsoever, was found. In case of an irregularity being discovered by the respondents, they were required to issue a show cause notice within 30 days. The inspection was made on 16.07.2020, while a notice was issued on 04.01.2021, much after the period of 30 days. There was clear violation of the MDG, which provides that the show cause notice has to be issued within 30 days. 12. It was next submitted that the petitioner had not received any speaking order as per Clause 8.5.8 after filing reply dated 19.01.2021 in response to the show cause notice and thus, the respondents have exceeded its authority by issuing notices under Clause 8.6 of the MDG and finally passing of the termination order. 12. It was next submitted that the petitioner had not received any speaking order as per Clause 8.5.8 after filing reply dated 19.01.2021 in response to the show cause notice and thus, the respondents have exceeded its authority by issuing notices under Clause 8.6 of the MDG and finally passing of the termination order. As per Clause 8.6 of the MDG, in case of critical irregularities leading to termination, the Head of the State Office/Regional Office/Zonal Office of the concerned OMC or their nominee before recommending/ approving the termination of dealership will provide a personal hearing to the signatories of the dealership, the entire action was in fragrant violation of the said clause. In support of his submission, he had placed reliance on the judgments of this Court in M/s Chaudhary Filling Point, Kazipur vs. State of U.P. and Others, Misc. Bench No. 27043 of 2018 decided on 30.01.2019 and M/s Kamal Kant Automobiles and Another vs. State of U.P. and Others, Writ (C) No. 25127 of 2018 decided on 18.2.2019. 13. It was further submitted that GVR India gave its report on primary investigation of the hardware component level and secondary analysis, which specified that on both visual & functional inspection of Controller Card, there was no rework, modifications or damage and further there was no track cut, unauthorized fitting and rework found in any of the hardware peripherals. The GVR gave a clean chit to the retail outlet on the hardware part. The joint inspection analysis report confirms that no extra fittings were found during the inspection rather there was requirement of software upgradation. It was submitted that without using external device and without breaking the seals of the weight and measurement department, it was not possible to tamper the software of the dispensing unit. It was stated that the OEM report/opinion cannot be read in a piecemeal and the general rule of interpretation of a deed or document is to read the document itself as a whole and not in piecemeal. The reports are only an opinion of the OEM, which are not binding upon the respondents and the respondent authorities are required to take decision independently, according to its own evaluation as per Clause 8.5.2 of the MDG, which provides that all cases of irregularities need to be established before any action is taken against a dealer. The reports are only an opinion of the OEM, which are not binding upon the respondents and the respondent authorities are required to take decision independently, according to its own evaluation as per Clause 8.5.2 of the MDG, which provides that all cases of irregularities need to be established before any action is taken against a dealer. There is no finding of short delivery by the petitioner. He has placed reliance on the judgment of the Apex Court in Delhi Development Authority vs. Durga Chand Kaushish, (1973) 2 SCC 825 and Hindustan Petroleum Corporation Limited and Others vs. Super Highway Services and Another, (2010) 3 SCC 321 wherein it is held that the cancellation of dealership agreement of a party is a serious business/civil consequence, which cannot be taken lightly. In order to justify the action taken by the Corporation to terminate such an agreement, the concerned authority has to act fairly and in complete adherence to the rules/guidelines framed for the said purpose. ARGUMENTS OF THE RESPONDENTS 14. Per contra, Mrs. Archana Singh, learned counsel for the respondent Corporation vehemently argued that the petitioner had not taken any ground in his reply regarding the delay of service of the notice as per Clause 8.5.6 of MDG, which provides that in respect of all cases of irregularities, a show cause notice will be issued to the dealer within 30 days from the date of inspection indicating all the irregularities. Once the petitioner submitted his reply to the show cause notice and also participated in the proceedings of inquiry, then the petitioner has no right to challenge the legality of delay in service of the show cause notice. The statutory provision under Clause 8.9 of MDG is available to the petitioner to file an appeal against the termination order, and instead of filing the appeal, the petitioner has straightway filed the writ petitions, which are not maintainable, in view of the alternative forum. She submitted that on 14.07.2020 a mail on LEAD through Vishleshan for Exception (DU Logs-critical) for the aforesaid retail outlet was generated with analyst remarks as under: “AtDU#4-Pump#1, Nozzle#1-HSD total 171 events of DU Log for E-09 (Low Voltage Error) followed by E-28 (ECAL Card Connectivity Error) had occurred on across 67 days. The highest occurrence is between 7:00 to 8:30 Hrs.” 15. The highest occurrence is between 7:00 to 8:30 Hrs.” 15. She further stated that the GVR in its report dated 10.10.2020 has concluded that abnormal E-28 errors were observed in DU automation error. History report points out to non-standard DU declaration. However, in the secondary investigation, it was established that the observations in the report can lead to manipulation of delivery from the dispensing unit and vide e-mail dated 19.11.2021, GVR has mentioned that in various tamper modus operandi were seen in the field. HW analysis did not show anomaly but SW Logs did. Sometimes SW Log analysis is sufficient to ascertain, if tampering was active at specific dispensing unit. In case of the petitioner’s retail outlet, as per GVR (OEM) log analysis it was established a periodic non-standard operation by removing ECAL cable connection and using an external device for manipulation of delivery from dispensing unit. The SW analysis had shown abnormality in the functioning of dispensing unit. There was no illegality or irregularity in process on the part of the Corporation in passing the impugned order and therefore, the petitioner is not entitled to get any relief. She had placed reliance on the judgment of High court of Rajasthan at Jodhpur in M/s Shree Rajendra Agro Service Centre vs. IOCL and Others, S.B. Civil Writ Petition No. 4160 of 2023 decided on 09.05.2023. 16. We have considered the submissions of learned counsel for the parties and perused the record. REASONING AND CONCLUSION 17. Indian Oil Corporation Ltd. is a public sector undertaking of the Central Government engaged in the production and distribution of petrol, diesel and other petroleum products through its retail outlet dealership. The IOC has framed Marketing Discipline Guidelines initially in the year 1981-82 and thereafter, revised/amended from time to time. All the retail outlets/dealers selected and appointed by the IOC are bound to follow the “MDG” in order to maintain the discipline and ethics in the sale of oil products. The petitioner firm was given a license to own and run a retail outlet established at location Parwati Bangla Road, Kanpur and the agreement was executed on 10.03.2004. 18. All the retail outlets/dealers selected and appointed by the IOC are bound to follow the “MDG” in order to maintain the discipline and ethics in the sale of oil products. The petitioner firm was given a license to own and run a retail outlet established at location Parwati Bangla Road, Kanpur and the agreement was executed on 10.03.2004. 18. The aforesaid Marketing Discipline Guidelines-2012 promulgated by the Government of India for regulating the inspections of Retail Outlet and standards of maintenance of uniform standards of quality and dispensation of fuel are uniformly binding in respect of any raids/inspections conducted at the retail outlets/petrol pumps under the dealership of all the Oil Marketing Companies and are also to be strictly followed before taking any action of suspension or termination of sales/supplies or dealership. These guidelines contain the complete procedure for various aspects of functioning of a retail outlet/petrol pump. Relevant Clause 8 of the MDG is reproduced herein under: “8. Action to be taken by OMC under the Marketing Discipline Guidelines 8.1 All irregularities (mentioned in Chapter-5) are classified into three categories, i.e. Critical, Major and Minor. 8.2 Critical Iregulartities: The following irregularities are classified as criticial irregularities: (i) Adulteration of MS/HSD (5.1.1) (ii) Seals of the metering unit found tampered in the dispensing pumps [5.1.2 (b)] (iii) Totalizer seal of dispensing unit tampered or deliberately making the totalizer non-functional or not reporting to the company if totalizer is not working (5.1.3 read with 5.1.2) (iv) Additional/Unauthorized fittings/gears/electronic component found in dispensing units/tampering with dispensing unit [5.1.4 (a), (b), (c)] (v) Unauthorized storage facilities (5.1.5) (vi) Unauthorized purchase/sales of produces (5.1.6) (vii) Tank lorry carrying unauthorized product found under decantation at the RO (5.1.7) Action: Termination at the FIRST instance will be imposed for the above irregularities. 8.3 Major Irregularities: The following irregularities are classified as major irregularities: (i) Refusal by the dealer to allow drawl of samples/carry out inspections. (5.1.8) (ii) Non-availability of reference density at the time of inspection. (5.1.9) (iii) Selling of normal MS/HSD as branded fuels. (5.1.10) (iv) Stock variation beyond permissible limits but sample passing quality tests. (5.1.11) (v) Non-maintenance of records since last inspection. (5.1.12) (vi) Overcharging of MS/HSD/CNG/Auto LPG (5.1.13) (vii) Non provision of clean toilet facility. (5.1.8) (ii) Non-availability of reference density at the time of inspection. (5.1.9) (iii) Selling of normal MS/HSD as branded fuels. (5.1.10) (iv) Stock variation beyond permissible limits but sample passing quality tests. (5.1.11) (v) Non-maintenance of records since last inspection. (5.1.12) (vi) Overcharging of MS/HSD/CNG/Auto LPG (5.1.13) (vii) Non provision of clean toilet facility. (5.1.14.b) (viii) Automated Retail outlets: 5.1.16 (a), (b), (c) (ix) Non-payment of Salary, Wages and other benefits (as per clause 5.1.18) to the manpower employed at the ROs. (x) Short delivery of products with W&M seals intact: 5.1.2(a) Action: Except in case of (iii), (vii), (viii), (ix) and (x) above. First Instance: Suspension of sales and supplies for 15 days. Second Instance: Suspension of sales and supplies for 30 days. Third Instance: Termination of the dealership. Action in case of (iii) above would be as under: First Instance: Penalty of recovery of differential price since last inspection. Second Instance: Termination of the dealership. Action in case of (vii) above would be as under: First Instance: Penalty of Rs. 15000/- (Rupees fifteen thousand) Second Instance Penalty of Rs. 25000 (Rupees Twenty Five thousand) Third and subsequent instances: (a) Rs. 35,000/- or 45% of the monthly dealer margin (based on average of last 6 months) whichever is higher. (b) Suspension of sales and supplies for 7 days or rectification of the defect in toilet, whichever is later. Action in case of (viii) above would be as under: First instance: Penalty of Rs. 1,00,000/- (Rupees one lakh only). Second instance: Penalty of Rs. 2,00,000/- (Rupees two lakhs only) suspension of sales and supplies for 7 days. Third instance: Termination of the dealership. Action in case of (ix) above would be as under: First instance: Penalty of 20% of the monthly dealer margin (based on average of last 3 months). Second instance: Penalty of 30% of the monthly dealer margin (based on average of last 3 months). Third & subsequent instances: Penalty of 40% of the monthly dealer margin (based on average of last 3 months) and suspension of sales and supplies for 15 days. Action in case of (x) above would be as under: First instance: Rs. 25,000/- (Rupees twenty five thousand only) per nozzle found delivering short beyond permissible limit as specified in Legal Metrology Act/Rule. Second instances: (within one year of 1st instance): Rs. Action in case of (x) above would be as under: First instance: Rs. 25,000/- (Rupees twenty five thousand only) per nozzle found delivering short beyond permissible limit as specified in Legal Metrology Act/Rule. Second instances: (within one year of 1st instance): Rs. 50,000 (Rupees fifty thousand only) per nozzle found delivering short beyond permissible limit as specified in Legal Metrology Act/Rule & suspension of Sales and supplies for 15 days. Third instance (within one year of 1st instance): Termination of the dealership 8.4. Minor Irregularities: The following irregularities are classified as minor irregularities: (i) Non-maintenance of specified records where records from last inspection are maintained but prior records are not available (5.1.12) (ii) Non-provision of facilities like air, telephone and first aid box (5.1.14.1) (iii) Miscellaneous. (a) Non-display of authorized Retail Selling prices of MS/HSD/CNG/AUTO LPG (5.1.15) (b) Non-display of density, opening stock of the day, sticker ensuring Zero before delivery on dispensing unit, name of product on each nozzle of MDP, contact details of authorized persons to be contacted in case of Complaint/Grievance/Emergency. (5.1.17) (c) Non-maintenance of complaint book or not providing the same when demanded by the customer. (5.1.17) (d) Poor housekeeping. (5.1.17) (e) Driveway Salesmen at the ROs not in uniform/wearing badges. (5.1.17) (One or more irregularity under the above category a, b, c, d or e will be considered as one irregularity only for the purpose of taking action). Action: Warning-cum-guidance letter in the first instance, Rs. 10,000/- per irregularity on second instance and Rs. 25,000/- per irregularity on third instance onwards. 8.5.1. The above are general guidelines and the actions prescribed in MDG 2012 are minimum. The competent authority of the concerned Oil Company can however take appropriate higher action against the erring dealer, if deemed, necessary including termination in the first or any instance in line with the provisions of the Agreement. 8.5.2. All cases of irregularities needs to be established before any action is taken against a dealer. 8.5.3. In case, two or more irregularities are detected at the same time at the same RO: (a) Each of the irregularities should be accounted as an instance against the respective class of irregularity. (b) Suitable action will be taken for that specific irregularity and also for that specific instance. (c) Suitable action will be taken for each of the irregularity thereby giving a compounding effect. 8.5.4. (b) Suitable action will be taken for that specific irregularity and also for that specific instance. (c) Suitable action will be taken for each of the irregularity thereby giving a compounding effect. 8.5.4. In case of irregularities not specifically mentioned/covered above, the competent/appropriate authority of the concerned Oil Company will take suitable action after enquiry and in accordance with the principles of natural justice. 8.5.5. The cycle of calculating second and third instance shall be five years starting from the date of first irregularity. In other words if an irregularity is established as on date, records of previously 5 year period from this date will be examined to determine whether the present irregularity is the first, second or the third instance of irregularity. Irregularities under the previous MDG within the 5 years period will be counted as instances. 8.5.6. In respect of all cases of irregularities a show cause notice, within 30 days from the date of inspection will be issued to the dealer indicating all the irregularities. However, in case samples of MS/HSD were drawn during inspection then the show cause notice will be issued within 30 days of test results. The show cause notice should be issued alongwith all reports and other documents etc. which forms the basis of the notice. 8.5.7. The dealer would have a period of 10 days to reply from the date of issuance of show cause notice. 8.5.8 Upon receipt of the reply to the show cause notice, the authorized officer of the OMG will review the charges levelled and the reply received and pass a speaking order preference within a period of 45 days from the receipt of the reply. The speaking order shall indicate complete details of the irregularities committed, the reply of the dealer and detailed reasons as to why the reply is acceptable/not acceptable to the official. 8.6 In case of Critical irregularities leading to termination, the Head of the State office/Regional office/Zonal office of the concerned OMC or their nominee before recommending/approving the termination of dealership will provide a personal hearing to the signatories to the dealership or their nominees. However, if signatories to the dealership or their nominees fail to attend the hearing on an appointed date, one more chance will be given and after that the case may be processed ex-parte based on available facts. 8.7 Under existing laws, Control Orders, Acts/Rules, etc. However, if signatories to the dealership or their nominees fail to attend the hearing on an appointed date, one more chance will be given and after that the case may be processed ex-parte based on available facts. 8.7 Under existing laws, Control Orders, Acts/Rules, etc. various authorities of Central Government/State Government, 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 action would be taken by the Oil Company, on receipt of advice from such authority. In cases of action taken for some of Major/Minor irregularities where there is only fine and no suspension of sales and supplies involved, such fine should be paid by the concerned dealers within a period of 30 days from the date of notice by the company. If not paid within this period, the action of suspension of sales and supplies would be taken from the 31st day for a period of 15 days. The fine should be paid within this suspension period failing which the suspension would be extended for another 15 days. If fine is not paid within the extended suspension period, the dealership would be terminated. 8.8. Authority to take action: (i) The action of termination and all other critical irregularities will be approved by Regional head/State head/Zonal head of the concerned oil company (General Manager and above). However, in respect of SC/ST category dealerships termination will be approved by the Director (Marketing) HQ. (ii) In respect of major irregularities, the approving authority would be an auhtorized office not below the rank of Dy. General Manager at State/Region/Zonal level. (iii) In respect of minor irregularities the approving authority would be the head of Territory/Regional/Divisional office. 8.9. Appellate proceedings: 1. In case of termination arising out of invocation of MDG, the dealer will have the right to appeal within a period of 30 days from the date of receipt of order before the Appellate Authority through the concerned Divisional/Territory/Regional office of the Oil Marketing Company (OMC). 8.9. Appellate proceedings: 1. In case of termination arising out of invocation of MDG, the dealer will have the right to appeal within a period of 30 days from the date of receipt of order before the Appellate Authority through the concerned Divisional/Territory/Regional office of the Oil Marketing Company (OMC). The Appellate Authority is empowered to decide the matter and the appeal shall be disposed of preferably within 90 days from the date of filling the appeal in the Divisional/Territory/Regional office of the concerned Oil Marketing Company (OMC). 2. For all appeals in case of termination arising out of invocation of MDG, the Appellate Authority will be the Dispute Resolution Panel (DRP) nominated by the OMG. The Dispute Resolution Panel (DRP) will comprise of the following members: (i) A retired Judge of the High Court - Member-1. (ii) A retired Government servant who held post not below the rank of Joint Secretary in Govt. of India or equivalent rank - Member-2. (iii) A retired official of PSU Oil Marketing Companies who held the post not below the rank of Director - Member-3. The Retired Judge of the High Court in the Committee will be the Chairperson. 3. The terminated dealer preferring appeal would be required to deposit Nonrefundable Appeal fee of Rs. 5 lakhs alongwith their appeal to the concerned OMG. In case of SC/ST dealer, Rs. 2 lakhs non-refundable Appeal fee is required to be paid alongwith their appeal. However, if appeal results in verdict in restoration of the Dealership, 50% of Appeal fee amount shall be refunded.” (Emphasis supplied) 19. Chapter 5 of the MDG deals with the provisions relating to irregularities at retail outlets/petrol pumps, wherein a detailed procedure is prescribed for checking 'short delivery of products' when the tampering of seals are found by the department of W & M and also when unauthorized fittings in dispensing units are found during inspection. Chapter 8 of the MDG provides the actions, which can be taken by the Oil Marketing Companies under the MDG. In Clause 8.5.2, it has been provided that irregularities provided in the MDG need to be established 'before' any action is taken by the Oil Marketing Companies and similarly, it is provided in Clause 8.6 of the MDG that in case of critical irregularities like tampering in dispensing units etc., the Company may terminate the dealership. In Clause 8.5.2, it has been provided that irregularities provided in the MDG need to be established 'before' any action is taken by the Oil Marketing Companies and similarly, it is provided in Clause 8.6 of the MDG that in case of critical irregularities like tampering in dispensing units etc., the Company may terminate the dealership. However, before recommending termination of dealership, the Company will provide a pre-decisional personal hearing to the retail outlet/petrol pump owner and under Clause 8.5.2, it is provided that unless the critical irregularities are established by the Company after necessarily taking the opinion of the W&M department and the OEM under Clause 5.1.2 (b) and 5.1.4, no action would be taken against the dealer. Clause 8.9 of the MDG contains provision for appeal before the Executive Director (Retail) against the orders passed in cases of critical irregularities as defined in the MDG, which includes cases like tampering with the seals etc. The aforesaid appeal is required to be disposed off by the appellate authority, preferably within a period of 90 days from the date of filing of appeal. 20. A perusal of the record shows that on 16.7.2020 joint inspection was carried out by a team constituted by the Chief Divisional Retail Sales Manager of the IOCL (respondent no. 4) in presence of dealers and the Inspector of the Weight and Measure Department and after examining all the dispensing units, the team prepared an inspection report, which reads as under: Indian Oil Corporation Limited Retail Outlet Inspection and Analysis Report Date: 16-07-2020 Dealer’s Name M/s MK Fuel Centre Address Indian Oil Pump Petrol Type of RO RO A Site Category Open Dealership structure Patnership District Kanpur Urban Divisional Office Code Kanpur DO Date of previous visit 14.07.2020 Sales performance Trading Area Analysis Daily Sales Record Verification Stock Verification (A) Totaliser Reading (B) Physical Stock (Stock in Tank) Lubricant stock Details of subsidy availed Market Information on Competitor’s activities Upkeep and Maintenance of Equipments Dispensing Pump: All DUs in working condition? YES All nozzles are in working order? YES Correct Branding done on DU Panels? YES DU Painting not required as of now? YES DU adequate for peak hour demand? YES Is Built-In Printer working and print outs being handed over to customers? YES Message regarding zeroing of pump meter displayed on DUs? YES No Visual leak in DU observed? YES No replacements of DUs required? YES Correct Branding done on DU Panels? YES DU Painting not required as of now? YES DU adequate for peak hour demand? YES Is Built-In Printer working and print outs being handed over to customers? YES Message regarding zeroing of pump meter displayed on DUs? YES No Visual leak in DU observed? YES No replacements of DUs required? YES Monolith Signage Monolish (a) Visibility Not Updated during inspection (b) Condition Sales Room (a) Painting last done on 08-02-2017 (b) Painting not required Not updated during inspections (c) Repairs not required Yes (d) Display of Lubes (e) Cleanliness Lighting Sales Room GOOD Yard Lighting GOOD Pump Island GOOD Monolith GOOD High-Mast GOOD Under cannopy Lights GOOD Driveway Type of Driveway Drive Way Paver Condition of Driveway Good Repairs required NA Canopy Available Yes Pump Island Lube Display at pump is land N/A Pump Island General Appearance N/A Pump Island Tiling/Granite Condition N/A Tank Farm Camlock couplings available for unloading YES Tank farm area free from oil spillage & kept clean? YES Tank Farm free from dry grss? YES Chain-link fencing/kerb wall availability and condition for Tank Farm area? GOOD Copy of MDG available at RO, is understood and being followed by dealer procedure for handling product being followed by dealer? Prices (RSP) Displayed and charged correctly Product Price Correctly charged MS - BS VI 80.82 Yes HSD BS-VI - VAT PAID 72.83 Yes XTRA PREMIUM BS VI MS 83.32 Yes MS BS-VI-VAT PAID 80.82 Yes HSD - BS VI 72.83 Yes XTRAMILE Super Diesel BS-VI 76.21 Yes Inspection of other facilities Free Air-service provided? Yes Free Radiator water provided? Yes Working Hours Board displayed? Yes Tel Nos. of concerned IOC Officer displayed? Yes Poster for checking adulteration of MS displayed? Yes Complaint and suggestion Book available? Yes Density register maintained by dealer? Yes Water dip record maintained by dealer? Yes First-Aid Box available? Yes Filter paper available? Yes Calibrated 5-litre measure available? Yes Inspection file maintained? Yes Explosive Rules displayed? Yes CCE Approved lay-out drawings of RO available and displayed? Yes No Smoking board displayed? Yes Tel Nos. of Fire Brigade, Police, Ambulance displayed? Yes No unauthorised work being carried out at RO without proper approvals? Yes Explosive licence renewed? Yes All Customer Attendants in Uniform as per policy? Yes Any training on Product Handling/Customer Management imparted to Customer Attendants in last one year? Yes No Smoking board displayed? Yes Tel Nos. of Fire Brigade, Police, Ambulance displayed? Yes No unauthorised work being carried out at RO without proper approvals? Yes Explosive licence renewed? Yes All Customer Attendants in Uniform as per policy? Yes Any training on Product Handling/Customer Management imparted to Customer Attendants in last one year? Yes Training imparted to Customer Attendants on safety aspects during this visit? Yes Clean Drinking Water available? Yes Clean Toilet available? Yes General Housekeeping of the RO (Sales Room/Driveway/Pump Island) is Good Good Telephone facility available? Yes Inspection of Pump Delivery Product Weights and Measures Seal Intact Totaliser Seal intact Delivery Remarks MS DU-4 NZL-25 Yes Yes Correct Null MS DU-4 NZL-26 Yes Yes Correct Null MS DU-4 NZL-31 Yes Yes Correct Null MS DU-4 NZL-36 Yes Yes Correct Null MS DU-5 NZL-22 Yes Yes Correct Null MS DU-5 NZL-37 Yes Yes Correct Null MS DU-6 NZL-20 Yes Yes Correct Null MS DU-6 NZL-21 Yes Yes Correct Null XP DU-8 NZL-27 Yes Yes Correct Null XP DU-8 NZL-28 Yes Yes Correct Null HSD DU-8 NZL-29 Yes Yes Correct Null HSD DU-8 NZL-30 Yes Yes Correct Null 21. In the aforesaid report, no discrepancy was found in any of the Dispensing Units. Only on some suspicion and automation error reports, seals of the aforenoted dispensing unit were broken by the respondents and the CPU card was sent to the GVR for testing. The concerned dispensing unit was sealed and the sales from the said dispensing unit were suspended. On 04.01.2021 the impugned show cause notice was issued to the petitioner to which the petitioner submitted a detailed reply on 19.01.2021 denying all the allegations made in the show cause notice. A perusal of the termination order dated 15.11.2021 reveals that the termination of the petitioner's petrol pump has allegedly been done as per Clauses 16, 43 and 56 (k) of the dealership agreement dated 10.03.2004. Relevant clauses 16, 43 and 56 are reproduced hereinafter: “16. No repairs to the outfit shall be done by the Dealer unless previously authorised by the Corporation in writing. The Dealer shall not interfere with or attempt to adjust the outfit or any part thereof but shall notify the Corporation immediately of the necessity of any repair or adjustment and thereby ensure that the outfit is in proper working order and delivering full and proper measure at all times. The Dealer shall not interfere with or attempt to adjust the outfit or any part thereof but shall notify the Corporation immediately of the necessity of any repair or adjustment and thereby ensure that the outfit is in proper working order and delivering full and proper measure at all times. The Dealer shall not operate the outfit while it is out of order. 43. The Dealer undertakes faithfully and promptly to carry out, observe and perform all direction or rules given or made from time to time by the Corporation for the proper carrying on of the dealership of the Corporation. The Dealer shall scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/State Governments and of all authorities appointed by them or either of them including in particular the Chief Inspector of Explosives, Government of India, and/or Municipal and/or any other local authority with regard to the storage and sale of such petroleum products. 56. Notwithstanding anything to the contrary herein contained. The Corporation shall be at liberty to terminate this Agreement forthwith upon or at any time after the happening of any of the following events namely: (a) If the Dealer shall commit a breach of any of the covenants and stipulations contained in the Agreement, and fail to remedy such breach within four days of the receipt of a written notice from the Corporation in that regard. (b) Upon: (i) the death or adjudication as insolvent of the Dealer, if he an individual. (ii) the dissolution of the partnership of the Dealer’s firm or the death or adjudication as insolvent of any partner of the firm, if the Dealer be a firm. (iii) the liquidation, whether voluntary or otherwise or the passing of an effective resolution for winding up, if the Dealer be a Company or Co-operative Society. (c) If any attachment is levied and continued to be levied for a period of seven days upon the effects of the Dealer or any individual partner for the time being of the Dealer’s firm or any member of the Dealer Co-operative Society. (d) If the Dealer or any partner in the dealer’s firm or any member of the Co-operative Society appointed as dealer hereunder shall be convicted of a criminal, offence. (d) If the Dealer or any partner in the dealer’s firm or any member of the Co-operative Society appointed as dealer hereunder shall be convicted of a criminal, offence. (e) If a Receiver shall be appointed of any property or assets of the Dealer or of any partner in the Dealer’s firm of any member of the Dealer Co-operative Society. (f) If the licence issued to the Dealer by the relevant authorities for the storage of petroleum products supplied by the Corporation is called or revoked. (g) If the Dealer shall for any reason make default in payment to the Corporation in full or his outstanding as appearing in Corporation’s books of accounts beyond 4 days of demand by the Corporation. (h) If the Dealer does not adhere to the instructions issued from time to time by the Corporation in connection with safe practices to be followed by him in the supply storage of the Corporation’s products or otherwise. (i) If the Dealer shall deliberately contaminate of temper with the quality of any of the Corporation’s products. (j) If the Dealer shall sell the Corporation’s products at prices higher than those fixed by the Corporation. (k) If the Dealer shall either by himself or by his servants or agents commit or suffer to be committed any act which, in the opinion of the General Manager of the Corporation or the time being in U.P. State Office, Lucknow whose decision shall be final, prejudicial to the interest or good name of the Corporation or its products; the General Manager shall not be bound to give reasons for such decision. (l) If any information given by the Dealer in his application for appointment as a Dealer shall be found to untrue or incorrect in any material respect. The Corporation’s right to terminate this Agreement under the terms of this clause shall be without prejudice to any of its other rights and remedies against the Dealers. (l) If any information given by the Dealer in his application for appointment as a Dealer shall be found to untrue or incorrect in any material respect. The Corporation’s right to terminate this Agreement under the terms of this clause shall be without prejudice to any of its other rights and remedies against the Dealers. In the event of the Corporation Terminating this Agreement under the provisions of this clause, it shall not be liable to pay for any loss or compensation respect of such termination PROVIDED THAT the supply of any petroleum products by the Corporation to the Dealer, pending expiry of any notice of termination or after any act, contravention or omission by the Dealer entitling the Corporation to terminate this Agreement shall have been become known to the Corporation, shall not in any way prejudice or affect right of the Corporation to revoke and/or enforce the termination of this Agreement and the licence granted hereunder.” 22. A mere reading of Clauses 16, 43 and 56 (k) reveals that these clauses, in general, pertain to the requirements of the dealer taking care of the retail outlet as a prudent businessman and dealer is to be held responsible for all losses. Clause-16 of the dealership agreement stipulates that no repairs to the outfit can be done by dealer as he shall not interfere with or attempt to adjust any equipment and should only ensure that the outfit is working in a proper order and deliver full and proper measures at all times. Clause 43 stipulated that the dealer undertakes faithfully and promptly to carry out, observe and perform all direction or rules given or made from time to time by the Corporation for the proper carrying on of the dealership of the Corporation. The dealer shall scrupulously observe and comply with all laws, rules, regulations and requisitions of the Central/State Government and of all authorities appointed by them. The Clause 56 provides that the Corporation shall be at liberty to terminate the agreement forthwith upon or at any time after noticing any of the events mentioned in clause (a) to (l) of the said Clause. The Clause 56 provides that the Corporation shall be at liberty to terminate the agreement forthwith upon or at any time after noticing any of the events mentioned in clause (a) to (l) of the said Clause. Clause 56 (k) deals with the situation and provides that if the dealer shall either by himself or by his servants or agents commit any act which, in the opinion of the General Manager of the Corporation are prejudicial to the interest or good name of the Corporation or its products. In such contingency, the General Manager of the Corporation is bound to give reasons for taking such harsh steps. However, the material and evidence, which were relied upon by the Corporation whatsoever, were not of such a nature, which could warrant at the initial stage to issue a show-cause notice dated 04.01.2021. Said notice was also in breach of Clause 5.1.4 and 8.5.2 of the MDG. 23. The order of termination has also been attacked with vehemence on the ground of not affording opportunity of oral hearing before passing the said order. There is no denial of the said fact by the IOCL. It is settled principle of law that any order, which entails civil consequences, must be in conformity with the principles of natural justice. The Hon’ble Supreme Court in D.K. Yadav vs. J.M.A. Industries Ltd. (1993) 3 SCC 259 has held that an order involving civil consequences must be made consistently with the rules of natural justice. Clause 8.6 of the MDG-2012 provides in clear words that in case of critical irregularities leading to termination, like that of seal tampering, the Head of the State Office/Regional Office/Zonal Office of the concerned Oil Manufacturing Company or their nominee before recommending/approving the termination of Dealership will provide personal hearing to the signatories of dealership or their nominee. Principles of natural justice require that a person must be allowed an adequate opportunity to present their case where certain interests and rights may be adversely affected by such a decision. 24. Thus, there is clear non-compliance of Clause 8.6 of the MDG by the respondent-authorities. Moreover, the respondents have failed to show any rule or regulation to demonstrate that when the dealership is terminated as per terms and conditions of the agreement, provisions of the MDG would not be applicable. 24. Thus, there is clear non-compliance of Clause 8.6 of the MDG by the respondent-authorities. Moreover, the respondents have failed to show any rule or regulation to demonstrate that when the dealership is terminated as per terms and conditions of the agreement, provisions of the MDG would not be applicable. The MDG has been enacted for such dealership agreements as the one involved in the instant case and therefore, we are of the view that these guidelines need to be strictly construed by both the parties. Further, any dealership agreement cancelled by the respondent Corporation cannot be effected on the basis of dealership agreement itself as the MDG have to be followed while taking recourse to such action. The respondent Corporation cannot act arbitrarily at its own sweet will like a private individual and deal with any person it pleases, but rather its action must be in conformity with standards or norms, which are not irrational or irrelevant. Therefore, respondents cannot be exempted from the application of MDG merely by following the dealership agreement. 25. It may be observed here that the respondent Corporation has departed from the standard norms laid down in the Marketing Discipline Guidelines and the standard norms of natural justice and fair play and such departure was clearly unreasonable and discriminatory. It may be noted that the manufacturer of the unit calibrates the equipment ensuring proper delivery of the product and the relevant part of the machinery is sealed by the concerned department after verification of the accuracy. The very purpose of sealing of the equipment by the department is to ensure that the dealer does not tamper with the same. As seen from the reading of the impugned order, the only reason assigned for being not satisfied with the explanation offered by the petitioner was that there was manipulation in the software of the dispensing unit at the RO with an intention to manipulate the delivery of the fuel. However, what was not considered by the competent authority was that at what point of time this unauthorized tampering/soldering was done in the dispensing unit and how the dealer is manipulating the distribution of fuel. No material, much less credible one has been brought on record by the respondents to disclose the unauthorized access to the equipment by the petitioner. 26. No material, much less credible one has been brought on record by the respondents to disclose the unauthorized access to the equipment by the petitioner. 26. It was specific stand of the petitioner that periodically the Weights and Measurements Department officials inspected the seals and they were found to be intact. Further more, what is the impact of tampering/manipulating the software of the dispensing unit is not disclosed by the respondent. How the dealer can manipulate delivery of fuel by inserting such unit is also not explained. The only objective of a dealer to tamper with dispensing unit is to manipulate delivery of fuel. In this case, the delivery of fuel was found to be accurate prior to checking of unit and after the checking. Merely on assumptions, that the tampering/manipulating the software of the dispensing unit was found, the petitioner dealer cannot be visited with severe consequence of termination of dealership. Thus, the action of the respondent-Corporation, in the facts of this case, in terminating the dealership of the petitioner on the sole ground that manipulation of the software was found in the Dispensing Unit is illegal, unreasonable and excessive. 27. Another point, which has been canvassed by the petitioner, is that a perusal of the show cause notice dated 04.01.2021 would indicate that the basis for the entire proceedings initiated against the petitioner is the inspection note dated 16.7.2020 and there was no other material before the competent authority to proceed against the petitioner. He had submitted that the inspection report dated 16.07.2020 has been made a sole basis of passing the impugned termination order, which was in fact no “actionable evidence” since the allegations contained therein were mere suspicions raised by the authorities and has not been verified by the Experts before the impugned termination order was passed. 28. A perusal of the show cause notice would indicate that the petitioner was asked to reply to the allegations regarding the tampering with the dispensing unit for manipulating the delivery. The inspection report itself could not be taken as to make any short selling of fuel by the petitioner. 28. A perusal of the show cause notice would indicate that the petitioner was asked to reply to the allegations regarding the tampering with the dispensing unit for manipulating the delivery. The inspection report itself could not be taken as to make any short selling of fuel by the petitioner. The inspection report could not have been made a basis for initiating proceedings against the petitioner, inasmuch as from the said report it could not have been concluded that the petitioner was involved in any action, which could be said to be infringement of the guidelines with regard to the tampering of the machines and short selling of the fuel. 29. Identical issue came up for consideration before High Court of Chhattisgarh in case of Mahamaya Service Centre vs. Indian Oil Corporation Ltd. and Others, Writ Petition (C) No. 1668/2009 decided on 09.09.2010 wherein Chhattisgarh High Court held that provisions of Clause 8 of the Order, 2005 read with MDG, 2005 have not been complied with, thus, the respondents cannot claim any sanctity in law and the Court is well within its jurisdiction to declare such an act illegal and invalid. Chhattisgarh High Court also observed as under: “26. It is a duty cast on the authorities of the State and the instrumentalities of the State that they should follow the proper procedure prescribed in the rules and regulations. The contravention of the same cannot be permitted. It is uncontroverted legal position that where a statute requires to do a certain thing in a certain way, the thing must be done in that way or not at all.” 30. The aforesaid matter was taken to the Division Bench of Chhattishgarh High Court, which was dismissed by order dated 03.01.2011 passed in W.A. No. 361 of 2010 and a Special Leave Petition against the same, being Special Leave to Appeal (Civil) No. 34817/2011, was also dismissed by the Apex Court on 04.11.2011. 31. Hon’ble Supreme Court, in M/s. Hindustan Petroleum Corporation Ltd. and Others vs. Super Highway Services and Another, (2010) 3 SCC 321 has considered the similar issue of termination of dealership in the similar set of facts and circumstances, wherein the Supreme Court has held as under: “16. 31. Hon’ble Supreme Court, in M/s. Hindustan Petroleum Corporation Ltd. and Others vs. Super Highway Services and Another, (2010) 3 SCC 321 has considered the similar issue of termination of dealership in the similar set of facts and circumstances, wherein the Supreme Court has held as under: “16. Having carefully considered the submissions made on behalf of the respective parties and also having considered the various decisions referred to by learned counsel, we are of the view that the case made out on behalf of the Respondent No. 1 is more probable. Although, the transporter's representative was present at the terminal at the stipulated time on 29th May, 2008, that by itself cannot give rise to a presumption that service had been effected also on the Respondent No. 1, in the absence of any proof in that regard. Except for the endorsement on the hand-written notice said to have been given by Mr. Dash, there is nothing else on record to even suggest that notice had been sent to the Respondent No. 1 and that the same had been refused. It is also rather difficult to accept that in respect of a test to be conducted on 29th May, 2008, at 3.00 p.m., an attempt was made to serve the said notice on the representative of the Respondent No. 1 on the date of the proposed test itself. Although, the notice is dated 28th May, 2008, the endorsement alleged to have been made by the representative of the Respondent No. 1 is dated 29th May, 2008, and we would be justified in assuming that the Respondent No. 1 could not have arranged for being represented at the laboratory in the Barauni Terminal of the petitioner Corporation on such short notice. Nothing has been shown by the petitioner to disprove the allegation made on behalf of the Respondent No. 1 that the notice alleged to have been tendered to the representative of the Respondent No. 1 was not in the manner and the form in which such notice is required to be given to a dealer. It is obvious that the same had been made out in haste to indicate that service had been attempted on the Respondent No. 1. 17. The cancellation of dealership agreement of a party is a serious business and cannot be taken lightly. It is obvious that the same had been made out in haste to indicate that service had been attempted on the Respondent No. 1. 17. The cancellation of dealership agreement of a party is a serious business and cannot be taken lightly. In order to justify the action taken to terminate such an agreement, the concerned authority has to act fairly and in complete adherence to the rules/guidelines framed for the said purpose. The non-service of notice to the aggrieved person before termination of his dealership agreement also offends the well-established principle that no person should be condemned unheard. It was the duty of the petitioner to ensure that the Respondent No. 1 was given a hearing or at least serious attempts were made to serve him with notice of the proceedings before terminating his agreement. 18. In the instant case, we are inclined to agree with Mr. Bhatt's submissions that the High Court did not commit any error in allowing the writ petition filed by the Respondent No. 1 herein, upon holding that notice of the Laboratory Test to be conducted at the Barauni Terminal had not been served upon the Respondent No. 1, which has caused severe prejudice to the said respondent since its dealership agreement was terminated on the basis of the findings of such Test. Admittedly the dealership agreement was terminated on the ground that the product supplied by the petitioner corporation was contaminated by the respondent. Such contamination was sought to be proved by testing the T.T. retention sample in the laboratory at Barauni Terminal. The Guidelines being followed by the Corporation require that the dealer should be given prior notice regarding the test so that he or his representative also can be present when the test is conducted. The said requirement is in accordance with the principles of natural justice and the need for fairness in the matter of terminating the dealership agreement and it cannot be made an empty formality. Notice should be served on the dealer sufficiently early so as to give him adequate time and opportunity to arrange for his presence during the test and there should be admissible evidence for such service of notice on the dealer. Strict adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer. Strict adherence to the above requirement is essential, in view of the possibility of manipulation in the conduct of the test, if it is conducted behind the back of the dealer. In the present case, there is no admissible evidence to prove service of notice on the respondent or refusal of notice by the respondent. Further, the notice dated 28.05.2008 which was allegedly refused by respondent, did not give him adequate time to arrange for the presence of himself or his representative during the test to be conducted at 3.00 PM on 29.05.2008. It is also to be noted that the endorsement regarding the alleged refusal is dated 29.05.2008 itself. Thus, the termination of the dealership agreement of the respondent was arbitrary, illegal and in violation of the principles of natural justice. 19. Although, Clause 68 of the Dealership Agreement refers to arbitration, it is unfortunate that the said question was not raised before the High Court. It is now too late in the day for the petitioner Corporation to contend that in view of Clause 68 of the Dealership Agreement, the Respondent No. 1 was not entitled to seek its remedy before the writ Court. In any event, by filing appeal against the order of the learned Single Judge, the Petitioner herein also submitted to the jurisdiction of the writ Court, without objecting to the same. 20. In the aforesaid circumstances, we are not inclined to admit the Special Leave Petition, which is, accordingly, dismissed, without, however, any order as to costs.” (Emphasis supplied) 32. The aforesaid judgment was followed by the Hon'ble Supreme Court in the case of Bharat Petroleum Corporation Limited vs. Jagannath and Company and Others, (2013) 12 SCC 278 wherein it was observed as under: “In view of the Dealership Agreement, particularly, Clause 10(k) referred above, the contention of learned senior counsel for the BPCL is liable to be rejected. In terms of Section 20 of the Petroleum Act, 1934 the contesting Respondents had a right to have fresh samples drawn and get the same re-tested within seven days of intimation of the test results. It is the assertion of the contesting Respondents that the test reports were intimated to them only upon filing of a suit before the trial Court. It is the assertion of the contesting Respondents that the test reports were intimated to them only upon filing of a suit before the trial Court. After getting the above reports, on 02.09.2005, the contesting Respondents moved an application before the trial Court in the said suit for fresh sampling/retest of the products. Though an objection was raised for filing counter statement in the said application, it is brought to our notice that in spite of several opportunities given by the Court, no such objection was ever filed. It was further pointed out by Learned Counsel for the contesting Respondents that they timely exercised their right available in law. In view of the application filed by the contesting Respondents on 02.09.2005 and in the light of Section 20 of the Petroleum Act, 1934 as well as the terms of Dealership Agreement, the objection raised by learned senior counsel for the BPCL is liable to be rejected. 14. It is also pointed out that it was Respondent No. 6 herein who made the inspection, collected the samples, issued show cause notice and passed an order of cancellation of the Dealership Agreement/Licence. By impleading him as one of the Respondents-Respondent No. 4 in the High Court -specific allegations were made against him that he acted mala fidely in cancelling the same and those assertions cannot be lightly ignored. 15. The High Court, after considering all the above specific claims of the contesting Respondents, rightly interfered with the order of termination of the dealership agreement/licence dated 18.01.2006 and quashed the same. We are in entire agreement with the said conclusion. In view of the same, the Appellants are directed to implement the directions given by the High Court in the impugned judgment dated 09.10.2009 within a period of four weeks from the date of receipt of this judgment. 16. In the light of the above discussion, the civil appeals are dismissed with no order as to costs.” 33. The Hon'ble Supreme Court in case of Allied Motors Limited vs. Bharat Petroleum Corporation Limited, (2012) 2 SCC 1 while dealing with a similar matter, wherein the Marketing Discipline Guidelines were not followed and termination was held to be illegal, held as under: “In the instant case, samples were taken on 15-5-2000. The Hon'ble Supreme Court in case of Allied Motors Limited vs. Bharat Petroleum Corporation Limited, (2012) 2 SCC 1 while dealing with a similar matter, wherein the Marketing Discipline Guidelines were not followed and termination was held to be illegal, held as under: “In the instant case, samples were taken on 15-5-2000. On the very next day i.e. on 16-5-2000, without even giving a show-cause notice and/or giving an opportunity of hearing, the respondent-Corporation terminated the dealership of the appellant. The appellant had been operating the petrol pump for the respondent for the last 30 years and was given 10 awards declaring its dealership as the best petrol pump in the entire State of NCT of Delhi. During this period, on a number of occasions, samples were tested by the respondent and were found to be as per specifications. In the instant case, the haste in which 30 years old dealership was terminated even without giving show-cause notice and/or giving an opportunity of hearing clearly indicates that the entire exercise was carried out by the respondent Corporation non-existent, irrelevant and on extraneous considerations. There has been a total violation of the provisions of law and the principles of natural justice. Samples were collected in complete violation of the procedural laws and in non-adherence of the guidelines of the respondent Corporation. On consideration of the totality of the facts and circumstances of this case, it becomes imperative in the interest of justice to quash and set aside the termination order of the dealership. We, accordingly, quash the same. Consequently, we direct the respondent-Corporation to handover the possession of the petrol pump and restore the dealership of petrol pump to the appellant within three months from the date of this judgment. The appeal is consequently allowed with costs which is quantified at Rs. 1,00,000/- (Rupees one Lakh only) to be paid by the respondent-Corporation to the appellant within four weeks from today.” 34. In Indian Oil Corporation Ltd. and Others vs. M/s R.M. Service Centre and Another, Civil Appeal No. 8257 of 2019 decided on 07.11.2019 the Apex Court held as under: “(13) The first issue required to be examined is whether the appellants were required to follow the procedure under the Control Order read with Section 100 of the Code. The Control Order has been issued under Section 3 of the Act. The Control Order has been issued under Section 3 of the Act. Such Act has been enacted for control of the production, supply and distribution and trade and commerce, of certain commodities. In respect of High Speed Diesel and Motor Spirit, the Control Order is issued for regulation of supply and distribution and prevention of the malpractices. Section 6A of the Act provides for confiscation of the essential commodity whereas, Section 7 of the Act makes any person who contravenes any order made under Section 3 liable for criminal prosecution. Therefore, we find that the effect of issuance of the Control Order is that in the event of violation of such Control Order, any person who contravenes any order made under Section 3 of the Act i.e. the Control Order, he is liable to be punished by a Court. Therefore, the violation of the Control Order has penal consequences leading to conviction. The provisions of search and seizure contained in Clause 7 read with Section 100 of the Code will come into play only in the event a person is sought to be prosecuted for violation of the provisions of the Control Order. Admittedly, in the present case, the dealer is not sought to be prosecuted for the violation of the Guidelines, therefore, the procedure for drawing of samples which 12 is a necessary pre-condition under the Control Order for prosecuting an offender does not arise for consideration. (14) The dealer has entered into an agreement on 20th December, 1995. It is not disputed that the dealer is bound by the Guidelines issued by the Public Sector Oil Marketing Companies. Clause 2.4.4 of the Guidelines provides for procedure for drawing of samples. Note 2 provides that the samples drawn should reach the laboratory for testing “preferably within ten days of the collection of the samples”. Similarly, sub-clause A of Clause 2.5 of the Guidelines provides that all samples should be suitably coded before sending them to the laboratory for testing ‘preferably’ within ten days of drawing the samples. Subclause I of Clause 2.5 of the Guidelines is that the purpose of mentioning time frame for various activities such as sending samples to the laboratory preferably within ten days is to streamline the system and is in no way related to quality/result of the product. Subclause I of Clause 2.5 of the Guidelines is that the purpose of mentioning time frame for various activities such as sending samples to the laboratory preferably within ten days is to streamline the system and is in no way related to quality/result of the product. In view of the language of the Guidelines, the findings recorded by the High Court that the time line is to be strictly adhered to cannot be sustained. (15) The Guidelines as mentioned in sub-clause I of Clause 2.5 of the Guidelines is to streamline the functioning i.e. the oil companies should not arbitrarily or without any justification send the sample for testing at their sweet will. The sample in this case was drawn on 6th May, 2013 and was sent for testing on 22nd May, 2013 i.e. 13 there was a delay of 5 days. Since the Guidelines use the time line as a preferred time line, it cannot be said that the time line mentioned has to be strictly adhered to and is mandatory. The language, the purport and the effect of testing do not warrant to read the word ‘preferably’ as mandatory time line. It is not the case of the dealer that the sample sent after five days will lose its efficacy as the umpire sample would be sent only after the first report is confronted to the dealer. Still further, the dealer has not raised any objections regarding delay in sending the sample in the two replies submitted by him on 17th July, 2013 and 2nd January, 2014. The argument that the umpire sample in the hands of the dealer could not be tested because of sludge and to doubt the other two samples is totally untenable. Such argument is based upon conjectures as the other two samples collected and sealed cannot be permitted to be disputed only because one sample was found with sludge. There is no material to doubt the correctness of the samples taken. (16) The first test report dated 29th May, 2013 was found deficient in the density as also in K.V. @ 40 degree celsius, sulphur and distillation recovery. Even the report dated 19th August, 2013 is found to be deficient in density, K.V., distillation recovery and sulphur. The result of the second report is almost the same as the sample tested on 29th May, 2013. Even the report dated 19th August, 2013 is found to be deficient in density, K.V., distillation recovery and sulphur. The result of the second report is almost the same as the sample tested on 29th May, 2013. Thus, the appellant has rightly terminated the dealership for adulteration of the High Speed Diesel. (17) There was variation in stock beyond permissible limits. In case of positive stock variation beyond permissible limits and on account of failure of sample, action in line with that of adulteration is to be initiated. The adulteration in these circumstances is a critical irregularity falling in Clause 8.2 of the Guidelines and the action required to be taken is termination of the dealership. However, in case of stock variation beyond permissible limits and the sample passing the quality test, it leads to suspension of sale and supply for fifteen days in the first instance, suspension of sale and supply for thirty days in the second instance and termination of dealership in the third instance. In this case, since the stock variation was beyond permissible limits and the sample failed, therefore, the action was rightly taken under Clause 5.1.11 of the Guidelines which is a critical irregularity when read with sub-clause (i) of Clause 8.2 and sub-clause (iv) of Clause 8.3 of the Guidelines. (18) The judgments referred to by the learned counsel for the dealer are not applicable to the facts of the present case as in both the cases, the action taken by the oil company was found to be in violation of the principle of natural justice as no notice was served upon the dealer but, in the present case, after failure of the first sample in the test report dated 29th May, 2013, the dealer was informed, who opted for testing of umpire sample in his possession. The said sample along with the sample in possession of the Field Survey Officer was sent for testing and in the report dated 19th August, 15 2013, the sample was found to have the same deviations as in the first sample tested on 29th May, 2013. The dealer was informed of the result of the second test and was also given a show cause notice as to why the dealership should not be terminated. Therefore, the action taken against the dealer is in terms of the Guidelines, as a consequence of contractual obligations by the dealer. The dealer was informed of the result of the second test and was also given a show cause notice as to why the dealership should not be terminated. Therefore, the action taken against the dealer is in terms of the Guidelines, as a consequence of contractual obligations by the dealer. 19) Consequently, we find that order passed by the High Court is not legal and sustainable and, thus, the same is set aside. The writ petition is dismissed and the termination of dealership is held to be valid and legal. Civil Appeal is allowed.” 35. In M/s Chaudhary Filling Point, Kazipur (supra) it has been held by this Court as under: “As regard the Arbitration, it has rightly been asserted that the Arbitrator has no power to restore the distributorship, in the event the termination is found unlawful. The Apex Court in the case of IOCL vs. Amritsar Gas Service, (1991) 1 SCC 533 , E. Venkat Krishna vs. IOCL and Another, (2000) 7 SCC 764 and Sanjana M. Wig vs. HPCL, (2005) 8 SCC 242 has held in explicit words that an arbitration forum does not have the jurisdiction for the restoration of dealership, which was earlier terminated. All that the arbitrator could do, if he found that the termination of the distributorship was unlawful, was to award damages, as any civil court would have done in a suit. In Civil Misc. Writ Petition No. 51972 of 2008 M/s Navin Filling Station vs. Indian Oil Corporation Ltd. and Others, this court observed as under: “The presence of the arbitration clause, is not to drive away a genuine grievance arising out of disproportionate action of the Corporation, to the arbitral tribunal which in any case will not have the authority to give an award to restore the dealership. In the present case the Indian Oil Corporation terminated the agreement relying upon the clauses, which were not attracted and on the Marketing Discipline Guidelines framed for facilitating the marketing of the petroleum products on the principles of good governance and excellent customary service. In the present case the Indian Oil Corporation terminated the agreement relying upon the clauses, which were not attracted and on the Marketing Discipline Guidelines framed for facilitating the marketing of the petroleum products on the principles of good governance and excellent customary service. The preamble to the guidelines itself provide that the guidelines need to be constantly updated to meet the customer satisfaction and to the discipline dealership network and for preventing malpractices in the sale of petroleum products.” In these circumstances, we find force in the arguments advanced by the learned Counsel for the petitioner that Arbitration between the parties is not an efficacious and proper remedy in such cases.” 36. The respondent authorities have not cared for the guidelines laid down by the Supreme Court in Hindustan Petroleum Corporation Limited and Others (supra) and also the provisions of the MDG and terminated the dealership in arbitrary manner. Applying the well settled principles of law as enunciated in the judgments mentioned above to the facts of the case, the impugned orders are not sustainable in the eyes of law. 37. For the aforesaid reasons, both the writ petitions are allowed and the impugned show cause notice dated 04.01.2021; order of termination dated 15.11.2021; impugned appointment letter dated 15.01.2022 as well as the notice/letter dated 26.03.2022 are hereby quashed. A mandamus is issued to the respondents to forthwith restore the agreement dated 10.03.2004 and to restore the supply of the petitioner's RO within two months from today.