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2025 DIGILAW 1499 (TS)

Mohd. Muzaffar Hussain v. Indian Oil Corporation Limited

2025-11-14

NAGESH BHEEMAPAKA

body2025
ORDER : NAGESH BHEEMAPAKA, J. The case of the petitioners, precisely, as per the writ affidavit, is that they hold a Dealership Agreement with the 1 st respondent-Indian Oil Corporation, and are running a petroleum retail outlet under the name and style of M/s. Vimal Filling Station, on land measuring 1111.11 square yards in Survey Nos. 5A and 6/A of Dharur Village and Mandal, Vikarabad District. The Dealership was initially granted to the Smt. Parvathamma, who is the grandmother of the 2 nd petitioner, and later reconstituted on 27.01.2009, in favor ofSmt. Vimala Bai, who is the daughter of Smt. Parvathamma. Following the demise of Smt. Vimala Bai on 05.08.2020, the dealership was transferred to her son, the present petitioner, under a fresh Dealership Agreement executed on 22.12.2020, valid for fifteen years, i.e., until 21.12.2035. The retail outlethad functioned smoothly since its inception on 30.06.2012, with no complaints ever recorded by customers, the Weights and Measures Department, or IOCL regarding adulteration or short. 1.1 The petitioner alleges that from 2022 onwards, IOCL officials, particularly Mr. Abhishek Choudhary, then Chief Manager (now Deputy General Manager, RS, Secunderabad Division), and Mr. B. Erranna, Manager, began harassing him and attempted to force a reconstitution of the dealership with a third party. His father, Mr. Abid Hussain Agarwal, lodged a complaint against these officials with IOCL’s Vigilance Department (Southern Region), and a letter from the DGM (Vigilance) acknowledging the complaint was received. The petitioner asserts that Mr. Choudhary, motivated by vengeance over this complaint, later became part of the personal hearing committee and was instrumental in terminating the dealership out of bias. 1.2 The sequence of disputed events began on 16.11.2023, when the GVR service technicians—authorized agents of IOCL—visited the retail outlet to break the seals on Dispensing Unit (DU) Serial No. 01807001363 (Make:GVR) for calibration and annual stamping in the presence of the Assistant Legal Metrology Officer (ALMO), Vikarabad, and the retail outlet staff. A Panchanama was subsequently drawn up on 24.01.2024, recording that the Motor Spirit (MS) and High Speed Diesel (HSD) stock variation was within permissible limits and that the 5-liter measure test showed no deviation. The Panchanama further noted that samples of MS (two samples) and HSD (one sample) were collected and retained by the dealer for verification. A Panchanama was subsequently drawn up on 24.01.2024, recording that the Motor Spirit (MS) and High Speed Diesel (HSD) stock variation was within permissible limits and that the 5-liter measure test showed no deviation. The Panchanama further noted that samples of MS (two samples) and HSD (one sample) were collected and retained by the dealer for verification. The petitioner emphasizes that the Weights and Measures Department seals on the Metering and Totalizer Units were intact on 16.11.2023, and that the GVR technician himself broke the seals during calibration, thereby disproving any allegation of tampering by the dealer. 1.3 Despite these observations, IOCL issued a Show Cause Notice dated 28.08.2024, which, according to the petitioner, was invalid because it referred to the Dealership Agreement of 2012, long since replaced by the current agreement of 22.12.2020. The petitioner responded, denying any tampering or irregularity and asserting that he was not given a fair hearing. Nevertheless, IOCL proceeded to rely on an allegedly fabricated GVR TACC Laboratory Report dated 19.07.2024, which claimed that the CPU cards from the DU showed soldering rework on resistors R201 and R202, as well as on the JTAG connector pins 17 and 19, and on the FRAM IC and EEPROM 17th pin on the rear side of the card. The petitioner strongly contests these findings, asserting that he had no technical capability to perform such work and that any soldering could only have been done by GVR staff, who had exclusive access to the internal components of the dispensing units. He adds that if he or his staff had attempted such rework, the CPU cards would have been irreparably damaged. 1.4 The petitioner details a series of procedural lapses, i.e., the seized components were not sealed in his presence, that there was a five- month delay between seizure and laboratory analysis; and that the photographs and testing were conducted in his absence. He further contends that the Analysis Report dated 26.04.2024, which inspected multiple parts—E-Cal Card, Keypad Card, Display Card, SMPS, Printer Card, Relay Card, and Pulsar Units—found no rework, modification, or damage on any of them, confirming that the system was intact. Even the OEM report, while claiming tampering of the CPU card to manipulate dispensing operations, did not name the petitioner or provide evidence linking him to the act. 1.5 The petitioner highlights several inconsistencies in IOCL’s own termination order. Even the OEM report, while claiming tampering of the CPU card to manipulate dispensing operations, did not name the petitioner or provide evidence linking him to the act. 1.5 The petitioner highlights several inconsistencies in IOCL’s own termination order. Clauses (iii)(1) to (3) of the order itself record that the MS and HSD stock variations were within permissible limits and that the 5-liter measure test found no deviation. Clause V(c) acknowledges that the MDT inspection found variations within limits, and Clause V(h) confirms that prior inspections also showed permissible stock variation. Yet, in Clause 13, IOCL speculated that “there are people competent to tamper the parts of the DU,” an assertion that, according to the petitioner, is purely hypothetical and unsupported by evidence. The petitioner asserts that the respondents violated fundamental principles of natural justice by acting as judges in their own cause, not allowing him to be represented by counsel, and preventing him from presenting his case during the hearing. 1.6 He further recounts that the GVR technicians, who routinely visited the retail outlet on IOCL’s instructions, bore animosity towards him because he had previously complained against them. They allegedly threatened to implicate him in a false case. The petitioner insists that the alleged tampering, if any, occurred due to the omissions and commissions of GVR staff, who alone had technical expertise and physical access to the dispensing units. He emphasizes that the CPU cards were under the control of the service provider and were sealed by the Weights and Measures Department, leaving him no opportunity or incentive to tamper with them, especially given his unblemished record since 2012. 1.7 In refuting IOCL’s claims, the petitioner underscores that there were no customer complaints, no variation in product quality or quantity, and no findings of short supply. The retention samples drawn on 13.01.2024 and 23.01.2024, also met all specifications. He cites judicial precedents—Chairman & M.D., IOCL, New Delhi v. Ramlal Agarwal ( 2024 (3) ALD 566 (T.S.) (DB)) and Darmasi Peraiah v. District Collector, Prakasam District ( 2015 (2) ALT 269 )—to argue that termination without proven manipulation or procedural fairness has been held illegal and arbitrary. 1.8 The petitioner thus maintains that the dealership termination was malicious, based on conjecture rather than evidence, and carried out in violation of the Dealership Agreement dated December 22, 2020, which contains no Clause 8(k) as alleged by IOCL. 1.8 The petitioner thus maintains that the dealership termination was malicious, based on conjecture rather than evidence, and carried out in violation of the Dealership Agreement dated December 22, 2020, which contains no Clause 8(k) as alleged by IOCL. He reiterates that he has never breached Clause 8(1) of the agreement, which prohibits unauthorized repairs or interference with equipment without prior written approval, and that all maintenance was conducted exclusively by GVR under IOCL supervision. He has consistently adhered to the Marketing Discipline Guidelines (MDG), made timely payments, including Rs.12,70,000 on May 5, 2025, and maintained operational integrity at M/s. Vimal Filling Station. 1.9 In conclusion, the petitioner alleges that IOCL officials, acting out of personal bias and vengeance, illegally terminated his dealership on 06.06.2025, and unlawfully stopped fuel supplies after 05.05.2025. He asserts that the entire process—from inspection to analysis and termination—was tainted by malice, procedural impropriety, and violation of natural justice. The petitioner therefore prays that this Hon’ble Court quash the impugned termination order, dated 06.06.2025. 2. The respondents filed counter-affidavit contending that the termination of the petitioner’s dealership was lawful, justified, and executed strictly in accordance with the provisions of the Dealership Agreement dated 22.12.2020, and the Marketing Discipline Guidelines (MDG) in vogue. They assert that the dealership was terminated on the basis of conclusive evidence contained in the GVR Technology Audit and Compliance Cell (TACC) Report dated 19.07.2024, which established manipulation and tampering of the dispensing unit at the petitioner’s retail outlet. The respondents seek dismissal of the writ petition in its entirety, contending that there has been no violation of the principles of natural justice, that the petitioner was given full opportunity to represent his case, and that all actions were taken transparently and within the framework of IOCL’s standard operating procedures. 2.1 According to the respondents’ version of events, the controversy stems from an inspection conducted on 16.11.2023, at M/s.Vimal Filling Station, where the GVR Dispensing Unit (DU) bearing Serial No. 201807001363 was opened for calibration and annual stamping. This was carried out in the presence of the GVR technician, the retail outlet staff, and the Assistant Legal Metrology Officer (ALMO), Vikarabad. During the inspection, GVR technicians noticed suspicious track cuts on the back of the CPU card. As per their Standard Operating Procedure (SOP), they took photographs of all internal electronic components and reported the suspicion to IOCL. This was carried out in the presence of the GVR technician, the retail outlet staff, and the Assistant Legal Metrology Officer (ALMO), Vikarabad. During the inspection, GVR technicians noticed suspicious track cuts on the back of the CPU card. As per their Standard Operating Procedure (SOP), they took photographs of all internal electronic components and reported the suspicion to IOCL. In response, a four- member committee—comprising three IOCL officials and one representative from GVR—was constituted to inspect the dispensing unit and seize components for analysis. 2.2 The committee visited the retail outlet on 24.01.2024, in the presence of the petitioner, Mr. Md. Muzaffar Hussain, and seized multiple components of the dispensing unit. These were duly sealed and dispatched to the GVR TACC Lab at Coimbatore. On 26.06.2024, the sealed box was opened at the lab in the presence of the petitioner’s brother, Mr. Shaik Aziz, who signed the Minutes of Meeting (MOM) confirming that all parts were intact and showed no transport damage. Following a detailed hardware inspection and internal assessment, the GVR TACC Team released its report on 19.07.2024, confirming that tampering had indeed occurred. The report concluded that there was soldering rework on resistors R201 and R202 on the front side of the CPU card, soldering rework on pins 17 and 19 of the JTAG connector on the back side, and track cuts and soldering rework on the FRAM IC and EEPROM 7th pin on the back side of the CPU card. The TACC report emphasized that these modifications were unauthorized, inconsistent with any standard repairs approved by GVR, and represented a known mode of tampering designed to manipulate dispenser totalizer readings—commonly achieved by using external jumper cables connected to the exposed ports on the CPU card. 2.3 The respondents stress that the Marketing Discipline Guidelines , Clause 5.1.4, clearly classify such tampering or unauthorized modification of dispensing units as a critical irregularity warranting termination at the first instance. The clause states that any mechanism, fitting, or electronic modification likely to manipulate delivery—including unauthorized replacement of microprocessor chips or OEM software— constitutes tampering, and that the views of the original equipment manufacturer (GVR in this case) must be obtained before action is taken. In line with this procedure, IOCL relied on the independent OEM findings and decided to terminate the dealership after following due process. In line with this procedure, IOCL relied on the independent OEM findings and decided to terminate the dealership after following due process. 2.4 Accordingly, a Show Cause Notice dated 28.08.2024, was issued to the petitioner, seeking an explanation for the violations. The petitioner submitted his written reply on 30.08.2024, denying any involvement in tampering. Subsequently, IOCL granted him a personal hearing on 17.02.2025, at the Indian Oil Office, where he submitted a six- page representation titled “Personal Hearing against Show Cause Notice”. After reviewing his submissions, IOCL issued its proceedings dated 06.06.2025, reiterating the findings of the TACC report and rejecting the petitioner’s defense. The respondents emphasize that the entire process— from inspection to termination—was transparent, properly recorded, and conducted in the presence of the dealer or his representative, ensuring compliance with principles of natural justice. 2.5 The respondents also note that the retail outlet had suffered repeated operational interruptions and financial instability, remaining closed during multiple periods: September 2014 to May 2015, November 2020 to September 2021, November 2022 to October 2023, and August 2024 to November 2024. These gaps, they argue, reflect poor management and financial distress, undermining the petitioner’s claim of consistent and disciplined operation. They deny the petitioner’s allegations of harassment or bias, asserting that no written complaint was ever filed by the dealer or his father against any IOCL or GVR personnel, including Mr. Abhishek Choudhary or Mr. B. Erranna, as alleged in the writ petition. Furthermore, they emphasize that the Panchanama dated 24.01.2024, bears the petitioner’s signature, confirming his acknowledgment that the DU parts were removed and sealed in his presence. Similarly, the Minutes of Meeting dated 26.06.2024, signed by his brother, prove that the petitioner’s side was fully represented throughout the process. 2.6 Addressing the petitioner’s legal arguments, the respondents clarify that while the petitioner alleged the existence of a “non-existent Clause 8(k)” in the Dealership Agreement, the same provisions are actually contained within Clause 8(i) and Clause 8(1), which collectively impose the dealer’s duty to safeguard the outfit, avoid interference with the equipment, and report any need for repairs immediately to IOCL. 2.7 Regarding the petitioner’s claim that IOCL unlawfully withheld fuel supplies despite receiving Rs.12,70,000 on 05.05.2025, the respondents acknowledge receipt of the amount but clarify that the Corporation is in the process of refunding it and will do so promptly, as the supply stoppage was a necessary consequence of the dealership’s lawful termination under the MDG framework. 2.8 In response to the petitioner’s allegations of bias, vengeance, and fabricated evidence, the respondents categorically deny any malafide intention or procedural impropriety. They assert that the findings of the GVR TACC Lab—an independent and technically competent body— constitute conclusive proof of tampering. The petitioner’s attempt to attribute the tampering to GVR staff is an attempt to shirk his contractual responsibility, as under the Dealership Agreement, the dealer bears primary responsibility for all activities occurring within the premises of the retail outlet. Moreover, the dispensing units were in the dealer’s custody after installation, and tampering of this magnitude, involving intricate soldering and rewiring, could not have occurred without the dealer’s connivance or knowledge. 2.9 Finally, the respondents reiterate that the petitioner was duly served with notices, allowed to reply, and heard in person. They maintain that the termination was not arbitrary but mandated by the Marketing Discipline Guidelines , which stipulates termination at the first instance for confirmed cases of dispensing unit tampering. As no other irregularity was established, no other penalty was imposed. The respondents affirm that all steps—from inspection to report, hearing, and final order—were documented, transparent, and procedurally sound.The respondents therefore contend that the dealership termination dated 06.06.2025, was a lawful and proportionate response to proven tampering, based on the GVR TACC Report dated 19.07.2024, and after affording the petitioner ample opportunity to defend himself, and therefore contend that the writ petition is liable for dismissal. 3. Heard Mr. Manu, learned counsel for the petitioner; and learned Standing Counsel for the respondent-Indian Oil Corporation. Perused the record. 4. Learned counsel for the petitioners, at the outset, contended that the present writ petition is maintainable despite the existence of an appellate remedy under the Marketing Discipline Guidelines (MDG). 3. Heard Mr. Manu, learned counsel for the petitioner; and learned Standing Counsel for the respondent-Indian Oil Corporation. Perused the record. 4. Learned counsel for the petitioners, at the outset, contended that the present writ petition is maintainable despite the existence of an appellate remedy under the Marketing Discipline Guidelines (MDG). It was argued that the termination order dated 06.06.2025was passed by the Executive Director and State Head, Telangana and A.P. States, who himself holds the same rank as the designated appellate authority under Clause 8.9 of the MDG, which provides that the appellate authority shall be the Executive Director (Retail) at the Head Office or any other Executive Director–level officer nominated by Indian Oil Corporation Limited (IOCL). Consequently, any appeal would effectively lie before an authority of the same rank or even within the same institutional hierarchy that approved the impugned termination, rendering the appeal a mere ritual or, “an appeal from Caesar to Caesar’s wife.” The petitioners therefore submitted that such a process would be an empty formality and a futile attempt, and hence cannot be regarded as an efficacious or adequate alternative remedy. 4.1 The learned counsel relies upon the judgment of the Hon’ble Supreme Court in Union of India v. Tantia Construction Pvt. Ltd , (2011) 3 SCC 294] , wherein it was held that the availability of an alternative remedy is not an absolute bar to the exercise of writ jurisdiction, particularly where the impugned action is arbitrary or violative of the principles of natural justice. The Supreme Court, in paragraph 27 of the said judgment, emphasized that injustice, wherever it occurs, must be struck down as repugnant to the rule of law and the constitutional framework. Reference was also made to the decision of this Court in Ram Lal Agarwal v. Indian Oil Corporation Ltd , [2 2015 (2) ALT 269 ] where under analogous circumstances involving termination of an IOCL dealership based on alleged violations of the MDG, the writ petition was held to be maintainable despite the existence of an appellate provision. 4.2 Learned counsel contends that the action of IOCL in the instant case is violative of Article 14 of the Constitution of India. The decision to terminate the dealership was biased, a procedural irregularity, and mala fide conduct. 4.2 Learned counsel contends that the action of IOCL in the instant case is violative of Article 14 of the Constitution of India. The decision to terminate the dealership was biased, a procedural irregularity, and mala fide conduct. The petitioners pointed to the letter dated 21.02.2022, issued by IOCL to the father of the petitioner, which acknowledged a complaint against Shri Abhishek Choudhary, then Chief Manager (now Deputy General Manager, Secunderabad Division). Despite this, the same officer was present during the personal hearing conducted on 17.02.2025, and thus had every opportunity to influence the final decision taken by the Executive Director, as such participation constitutes a direct violation of the rule against bias, rendering the proceedings void. Reliance was placed on Justice P.D. Dinakaran v. Hon’ble Judges Enquiry Committee , [3 AIR 2011 SC 3711 ] , wherein the Supreme Court reiterated the principle that justice must not only be done but must also appear to be done, and that even a reasonable apprehension of bias is sufficient to vitiate quasi-judicial proceedings. 4.3 Learned counsel further asserted that the so-called personal hearing granted to the petitioner on 17.02.2025 was a mere formality, devoid of genuine consideration, and that the termination order dated 06.06.2025 was predetermined. The enquirywas neither held in good faith nor conducted fairly or impartially. The procedure adopted by the respondents was thus unjust, unreasonable, and arbitrary. It was further submitted that the respondents themselves, in the termination order at Page 6, Clause V(c), Page 159 of the writ material papers, admitted that the stock variation was within permissible limits, thereby negating any inference of fuel manipulation. Moreover, in Clause V(b) of the same order, the petitioner’s categorical assertion that he had no intention to manipulate the delivery of fuel went unchallenged, as IOCL merely recorded “No comments to offer” at Paragraph V(g), Page 160 of the termination order, and this constitutes an admission by silence and demonstrates that IOCL had no evidence of deliberate tampering. 4.4 Learned counsel drew attention to further admissions in Clause V(i) at Page 7, Page 160, where IOCL acknowledged that inspections carried out by the Field Officer revealed stock variations within permissible limits, and to the Panchanama dated 24.01.2024, which also recorded that the 5-liter measure test for both dispensing units showed no deviation. Thus, there was neither quantitative variation nor evidence of short delivery of fuel. Thus, there was neither quantitative variation nor evidence of short delivery of fuel. Relying on the Division Bench judgment in Hindustan Petroleum Corporation Ltd. v. Haji Abdul Rehman Haji Abdulla , [42009 (5) ALT 762] , learned counsel contends that in the absence of any fair procedure or credible evidence of wrongdoing, any termination order is arbitrary and violative of natural justice, and the burden lies squarely on the corporation to establish manipulation, and the Corporation failed to discharge that burden. 4.5 Learned counsel also invoked the binding precedent of this Hon’ble Court in Chairman & M.D., IOCL v. Ram Lal Agarwal , [5 2024 (3) ALD 566 (T.S.) (DB)] , wherein termination of dealership on the ground of the mere presence of a double gear in the dispensing unit was held to be illegal and arbitrary, particularly when no variation was noticed in the quantity of fuel delivered. In the present case too, since the respondents themselves admitted that stock variations were within permissible limits and no finding of deliberate insertion or actual manipulation was recorded, the impugned terminationmust be quashed on the same principle. 4.6 Reinforcing the maintainability of the writ petition, learned counsel cited the judgment of the Hon’ble Supreme Court in M/s. Baburam Prakash Chandra Maheshwari v. Antarim Zila Parishad , [6 AIR 1969 SC 556 ] , where the Court held that when there is a clear violation of statutory procedure or natural justice, the existence of an alternative remedy cannot bar writ jurisdiction. The Apex Court ruled that a High Court commits an error in dismissing a writ petition merely because a statutory appeal exists, if the impugned action itself is fundamentally flawed. Learned counsel therefore contends that in the present case, where bias, unfair procedure, and constitutional violations are evident, the writ petition is maintainable to exercise extraordinary jurisdiction under Article 226. 4.7 Finally, learned counsel for the petitioners contended that judicial discretion must be exercised legally, fairly, and without arbitrariness, emphasizing that the writ petition raises substantial questions of law and constitutional importance. Even the judgment relied upon by the respondent, Ankur Filling Station v. HPCL , [7 (2011) 12 SCC 749 ] , was distinguished, as it did not address the issue of maintainability in cases involving bias and violation of natural justice. Even the judgment relied upon by the respondent, Ankur Filling Station v. HPCL , [7 (2011) 12 SCC 749 ] , was distinguished, as it did not address the issue of maintainability in cases involving bias and violation of natural justice. Thus, given that the appeal mechanism is a futile attempt and the impugned order is tainted by bias, procedural impropriety, and constitutional infirmity, learned counsel contends that the writ petition is an efficacious remedy, and that the appellate remedy is futile. 5. Learned Standing Counsel, based on the counter affidavit, would essentially contend that the writ petition is wholly misconceived, devoid of merit, and not maintainable in view of the efficacious alternative remedy of appeal provided under Clause 8.9 of the Marketing Discipline Guidelines (MDG). It was argued that the termination order dated 06.06.2025 was passed by a competent authority after a transparent and procedurally sound enquiry, wherein the petitioner was issued a show cause notice on 28.08.2024, submitted a written reply on 30.08.2024, and was granted a personal hearing on 17.02.2025 before the Executive Director and State Head (Telangana & A.P. States), who independently approved the termination based on the GVR Technology Audit and Compliance Cell (TACC) report dated 19.07.2024. The said report, prepared by the OEM-authorized laboratory at Coimbatore, conclusively established unauthorized soldering, track cutting, and rework on the CPU card of the dispensing unit, clearly indicating tampering—a violation squarely attracting Clause 5.1.4 of the MDG, which mandates termination at the first instance. Learned Standing Counsel emphasized that no procedural irregularity or bias was shown, as the alleged involvement of one officer, Shri Abhishek Choudhary, was baseless and unsubstantiated, and the impugned order was taken independently on the strength of documentary and technical evidence. It was further submitted that the petitioner’s reliance on various decisions such as Union of India v. Tantia Construction Pvt. Ltd ., Ram Lal Agarwal v. IOCL, and Chairman & M.D., IOCL v. Ram Lal Agarwal is misplaced, as those cases dealt with absence of evidence or procedural violations, whereas the present case rests on conclusive proof of tampering. The contention that no stock variation was found was termed irrelevant since the offence lies in the manipulation of the dispensing mechanism itself, not in the quantum of variation. IOCL, being a public sector entity entrusted with maintaining the integrity of fuel distribution, acted within its contractual and statutory powers to protect consumer interest. The contention that no stock variation was found was termed irrelevant since the offence lies in the manipulation of the dispensing mechanism itself, not in the quantum of variation. IOCL, being a public sector entity entrusted with maintaining the integrity of fuel distribution, acted within its contractual and statutory powers to protect consumer interest. Hence, the termination was neither arbitrary nor malafide but a reasoned decision based on cogent evidence, and the petitioner, having failed to avail the appellate remedy, cannot invoke writ jurisdiction. Accordingly, the Standing Counsel prayed that the writ petition be dismissed as unsustainable both in law and on facts. 6. Having considered the respective contentions and perused the record, it may be noted that the controversy at hand arises from the termination of the petitioner’s petroleum dealership pursuant to proceedings dated 06.06.2025 issued by the Indian Oil Corporation Limited (IOCL). At the outset, it is relevant to note the settled law as to when a writ petition is maintainable. In this connection, it is relevant to refer to the judgment of Hon’ble Supreme Court in Sagar Thomas v. Union of India , [ (2003) 10 SCC 623 ] , wherein it was held as follows: “18. From the decisions referred to above, the position that emerges is that a writ petition under Article 226 of the Constitution of India may be maintainable against (i) the State (Government); (ii) an authority; (iii) a statutory body; (iv) an instrumentality or agency of the State; (v) a company which is financed and owned by the State; (vi) a private body run substantially on State funding; (vii) a private body discharging public duty or positive obligation of public nature; and (viii) a person or a body under liability to discharge any function under any statute, to compel it to perform such a statutory function. xxxxxxxxxxxxxxx 26. A company registered under the Companies Act for the purposes of carrying on any trade or business is a private enterprise to earn livelihood and to make profits out of such activities. Banking is also a kind of profession and a commercial activity, the primary motive behind it can well be said to earn returns and profits. Since time immemorial, such activities have been carried on by individuals generally. It is a private affair of the company though the case of nationalized banks stands on a different footing. Banking is also a kind of profession and a commercial activity, the primary motive behind it can well be said to earn returns and profits. Since time immemorial, such activities have been carried on by individuals generally. It is a private affair of the company though the case of nationalized banks stands on a different footing. There may well be companies, in which majority of the share capital may be contributed out of the State funds and in that view of the matter there may be more participation or dominant participation of the State in managing the affairs of the company. But in the present case we are concerned with a banking company which has its own resources to raise its funds without any contribution or shareholding by the State. It has its own Board of Directors elected by its shareholders. It works like any other private company in the banking business having no monopoly status at all. Any company carrying on banking business with a capital of five lakhs will become a scheduled bank. All the same, banking activity as a whole carried on by various banks undoubtedly has an impact and effect on the economy of the country in general. Money of the shareholders and the depositors is with such companies, carrying on banking activity. The banks finance the borrowers on any given rate of interest at a particular time. They advance loans as against securities. Therefore, it is obviously necessary to have regulatory check over such activities in the interest of the company itself, the shareholders, the depositors as well as to maintain the proper financial equilibrium of the national economy. The banking companies have not been set up for the purposes of building the economy of the State; on the other hand such private companies have been voluntarily established for their own purposes and interest but their activities are kept under check so that their activities may not go wayward and harm the economy in general. A private banking company with all freedom that it has, has to act in a manner that it may not be in conflict with or against the fiscal policies of the State and for such purposes, guidelines are provided by Reserve Bank so that a proper fiscal discipline, to conduct its affairs in carrying on its business, is maintained. A private banking company with all freedom that it has, has to act in a manner that it may not be in conflict with or against the fiscal policies of the State and for such purposes, guidelines are provided by Reserve Bank so that a proper fiscal discipline, to conduct its affairs in carrying on its business, is maintained. So as to ensure adherence to such fiscal discipline, if need be, at times even the management of the company can be taken over. Nonetheless, as observed earlier, these are all regulatory measures to keep a check and provide guidelines and not a participatory dominance or control over the affairs of the company. For other companies in general carrying on other business activities, maybe manufacturing, other industries or any business, such checks are provided under the provisions of the Companies Act, as indicated earlier. There also, the main consideration is that the company itself may not sink because of its own mismanagement or the interest of the shareholders or people generally may not be jeopardized for that reason. Besides taking care of such interest as indicated above, there is no other interest of the State, to control the affairs and management of the private companies. Care is taken in regard to the industries covered under the Industries (Development and Regulation) Act, 1951 that their production, which is important for the economy, may not go down, yet the business activity 12 is carried on by such companies or corporations which only remains a private activity of the entrepreneurs/companies. 27. Such private companies would normally not be amenable to the writ jurisdiction under Article 226 of the Constitution. But in certain circumstances a writ may issue to such private bodies or persons as there may be statutes which need to be complied with by all concerned including the private companies. For example, there are certain legislations like the Industrial Disputes Act, the Minimum Wages Act, the Factories Act or for maintaining proper environment, say the Air (Prevention and Control of Pollution) Act, 1981 or the Water (Prevention and Control of Pollution) Act, 1974 etc. or statutes of the like nature which fasten certain duties and responsibilities statutorily upon such private bodies which they are bound to comply with. If they violate such a statutory provision a writ would certainly be issued for compliance with those provisions. or statutes of the like nature which fasten certain duties and responsibilities statutorily upon such private bodies which they are bound to comply with. If they violate such a statutory provision a writ would certainly be issued for compliance with those provisions. For instance, if a private employer dispenses with the service of its employee in violation of the provisions contained under the Industrial Disputes Act, in innumerable cases the High Court interfered and has issued the writ to the private bodies and the companies in that regard. But the difficulty in issuing a writ may arise where there may not be any non-compliance with or violation of any statutory provision by the private body. In that event a writ may not be issued at all. Other remedies, as may be available, may have to be resorted to.” 7. In view of the law laid down in Sagar Thomas (supra), the respondentIndian Oil Corporation Limited—being a public sector undertaking under the Companies Act, functioning under the aegis of the Ministry of Petroleum and engaged in public-related functions involving the supply and distribution of petroleum products across the country, is amenable to the writ jurisdiction of this Court.However, it must also be borne in mind that when the dispute arises purely out of contractual obligations governed by a dealership agreement, without any violation of statutory or public duty, the scope for judicial review under Article 226 remains limited to cases of patent illegality, violation of natural justice, or lack of jurisdiction. 8. In the instant case, the petitioner’s contentions with regard to alleged bias in the impugned termination order is largely built upon assumptions, personal grievances, and speculative allegations unsupported by any documentary proof. While the petitioner alleges that the impugned order was influenced by bias of one Mr. Abhishek Choudhary, no material has been placed to show that the said officer participated in the decision- making process or exercised any authority over the Executive Director who ultimately approved the termination. The petitioner relies upon a letter dated 21.02.2022 to suggest prior animosity; however, this letter, even if accepted, merely records the receipt of a complaint by his father and does not establish any nexus between that grievance and the subsequent technical findings leading to termination. The petitioner relies upon a letter dated 21.02.2022 to suggest prior animosity; however, this letter, even if accepted, merely records the receipt of a complaint by his father and does not establish any nexus between that grievance and the subsequent technical findings leading to termination. 8.1 On the contrary, it is to be noted that the chronology of events are supported by contemporaneous records—beginning with the inspection of the dispensing unit on 16.11.2023, the seizure and sealing of components on 24.01.2024 in the petitioner’s presence, the opening of the sealed box at the GVR TACC Lab in Coimbatore on 26.06.2024 in the presence of the petitioner’s brother, and the issuance of the analytical Report on 19.07.2024 identifying specific instances of unauthorized soldering and track cutting on critical parts of the CPU card. The petitioner has not offered any technical rebuttal or independent expert opinion to discredit these findings, nor has he denied that the seized parts originated from his own dispensing unit. 8.2 In this context, it is relevant to extract the GVR TACC Report dated 19.07.2024 which reads as follows: “1. Soldering Rework observed on the R201 and R202 resistors front side of the CPU card. 2. ‘Soldering Rework’ observed on JTAG connector 17th and 19th pin on the back side of the CPU card. 3. ‘Track cut and soldering rework’ observed on FRAM IC and EEPROM 7th pin on the back side of the CPU card. GVR TACC confirms that these are unauthorized and do not correspond to any known standard repair as per GVR SOP. The track cut and soldering rework on critical memory paths is substantiated evidence to confirm that the DU is tampered to manipulate dispensing operation... Based on the hardware analysis and investigation, it is established that the dispensing unit has been manipulated for delivery of fuel.” 9. The record further reveals that procedural fairness was observed throughout. A Show Cause notice dated 28.08.2024 was issued referring to the Dealership Agreement dated 22.12.2020, to which the petitioner submitted a written reply on 30.08.2024. A personal hearing was thereafter conducted on 17.02.2025, at which the petitioner submitted a detailed six- page representation, and the final Proceedings dated 06.06.2025, impugned herein,were passed after considering that representation. 10. A Show Cause notice dated 28.08.2024 was issued referring to the Dealership Agreement dated 22.12.2020, to which the petitioner submitted a written reply on 30.08.2024. A personal hearing was thereafter conducted on 17.02.2025, at which the petitioner submitted a detailed six- page representation, and the final Proceedings dated 06.06.2025, impugned herein,were passed after considering that representation. 10. The petitioners’ reliance on the cited judgments is distinguishable, as in Tantia Construction (supra), the Hon’ble Supreme Court held that a writ could lie despite an alternate remedy where there was patent arbitrariness or lack of jurisdiction. In the present case, no such foundational illegality is demonstrated.The authority issuing the impugned termination Order was of competent rank under the Marketing Discipline Guidelines (MDG), the decision was preceded by notice and hearing, and the conclusions were based on a specialized technical audit. Likewise, Ram Lal Agarwal (supra) is about termination without any evidence of manipulation, whereas here, the GVR TACC Report dated 19.07.2024 furnishes precise evidence of tampering through soldering rework and track cutting on the CPU card— findings that the petitioner has not refuted technically. The doctrine of precedent, therefore, cannot assist the petitioner when the factsare materially different. 10.1 Further, the issuance of a show cause notice, the opportunity for written and oral representation, and the reliance on an OEM- authenticated report fulfill the requirements of natural justice. The allegation that the same authority acted as both accuser and adjudicator is misconceived, for the termination order was approved by the Executive Director and State Head, who is statutorily competent under the corporation’s internal hierarchy to exercise such power. 10.2 The Marketing Disciplinary Guidelines, 2013 (as amended in 2022) specifically provides under Clause 5.1.4 that confirmed cases of tampering with dispensing units shall attract termination at the first instance, after obtaining an independent opinion from the original equipment manufacturer. The GVR TACC Lab, an independent OEM- authorized facility, provided precisely such an opinion, thereby satisfying the substantive precondition for invoking Clause 5.1.4. 10.3 For reference, it is relevant to extract Clause 5.1.4 of the MDG, 2013 (as amended in 2022), which reads as follows: “5.1.4 ADDITIONAL / UNAUTHORISED FITTINGS / GEARS FOUND IN DISPENSING UNITS / TAMPERING WITH DISPENSING UNIT Any mechanism / fittings / gear found fitted in the dispensing unit which is likely to manipulate the delivery. 10.3 For reference, it is relevant to extract Clause 5.1.4 of the MDG, 2013 (as amended in 2022), which reads as follows: “5.1.4 ADDITIONAL / UNAUTHORISED FITTINGS / GEARS FOUND IN DISPENSING UNITS / TAMPERING WITH DISPENSING UNIT Any mechanism / fittings / gear found fitted in the dispensing unit which is likely to manipulate the delivery. Addition, Removal, replacement, or manipulation of any part of the Dispensing Unit including any mechanism, gear, microprocessor chip / electronic parts / OEM software will be deemed as tampering of the dispensing unit. In such cases, views and independent opinion of the original equipment, manufacturer would be obtained and suitable decision taken. In case of this irregularity, sales from the concerned dispensing unit to be suspended, DU sealed. Samples to be drawn of all the products and sent to lab for testing.” 11. From a perusal of the above Clause 5.1.4 of the extant Marketing Discipline Guidelines , it is clear that the samples would be drawn in case of perceived irregularity or anomaly in the equipment and such samples would be sent to the laboratory for testing, analysis and report. Therefore, mala fides cannot be attributed to the technical team that has inspected and collected the samples, or the respondent-authorities who have considered the analysis report. 12. The contention that the alternative remedy of appeal is futile cannot be sustained. The MDG provides an appellate mechanism before two Executive Directors nominated by the corporation’s Head Office, and mere similarity in rank does not, by itself, vitiate the statutory hierarchy or render the remedy futile. The Supreme Court has repeatedly held that where a structured appellate process exists, the High Court must ordinarily refrain from exercising its writ jurisdiction unless exceptional circumstances are shown.Further, the irregularity on the part of the petitioners is a Critical Irregularity under Clause 8.2 of the MDG. 12.1 The petitioner, having failed to demonstrate any violation of jurisdiction, mala fide intent, or manifest injustice, cannot circumvent the prescribed remedy merely by asserting an apprehension of bias without substantiation. Further, the petitioners’ contentions are aimed at technical aspects of the equipment, which are questions of fact, which cannot be gone into by this Court in a writ petition. Suffice it to say, that this Court does not find any procedural irregularity or impropriety in the impugned order. 13. Further, the petitioners’ contentions are aimed at technical aspects of the equipment, which are questions of fact, which cannot be gone into by this Court in a writ petition. Suffice it to say, that this Court does not find any procedural irregularity or impropriety in the impugned order. 13. That being said, this Court is inclined to note that the Dealership Agreement dated 22.12.2020, has a Clause 61(a) relating to settlement of disputes arising out of the Agreement. The said Clause 61(a) reads as follows: “61(a). Any dispute or difference of any nature whatsoever, any claim, cross claim, counter-claim, or set-off or regarding any right, liability, act, omission, or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of the Director (Marketing) of the Corporation who may other himself act as the Arbitrator or nominate some other officer of the Corporation to act as the Arbitrator. The Dealer will not be entitled to raise any objection to any such Arbitrator on the ground that the Arbitrator is an officer of the Corporation.” 14. In the instant case, admittedly, the dispute is about the alleged tampering of petroleum dispensing equipment, tied with the allegations of omissions and commissions on the part of petitioner, and also on the part of the respondent-Corporation; and the dispute arises out of the contractual agreement entered into between by the parties. Admittedly, the petitioner as well as the respondent-Corporation are parties to the Dealership Agreement dated 22.12.2020. From a perusal of Clause 61(a) of the Dealership Agreement dated 22.12.2020, it is clear that in case of dispute arising out of the acts in relation to the Dealership Agreement, the Director (Marketing) may either himself act as an Arbitrator, or nominate some other officer of the Corporation to act as Arbitrator; and further the Dealer (i.e., the petitioner herein) cannot raise an objection to any such Arbitrator only the ground that the Arbitrator is an officer of the Corporation. 15. In the instant case, the grounds essentially raised by the petitioner are that the petitioner has no technical capability to tamper the equipment, and that the respondent-officials have been harassing him with false cases, and that the impugned order of termination of Agreement is beset with malafides, etc., are primarily allegations without any substance. Likewise, the allegation that the Deputy General Manager Mr. Likewise, the allegation that the Deputy General Manager Mr. Abhishek was a member of personal hearing committee, and therefore he “must have influenced” the decision in the impugned Order, and that the appellate remedy would be a futile exercise because the same officer would sit in appeal, is an unfounded apprehension. 15.1 The Dealership Agreement binds the respective parties to the terms of the Contract; and as per Clause 61(a) of the Agreement, the Dealer (the petitioner herein) cannot merely raise an objection that the Arbitrator is an officer of the respondent-Corporation. The apprehension of bias expressed by the petitioner in availing the remedial mechanism under the Dealership Agreement is baseless. This Court does not find any illegality or procedural impropriety in the impugned Order. In that view of the matter, the writ petition is liable to be dismissed; however, the petitioner is at liberty to avail the remedial mechanism provided under the Dealership Agreement. 16. Accordingly, the writ petition is dismissed, with liberty to the petitioner to avail the remedy provided under the Dealership Agreement. No costs. Miscellaneous petitions pending, if any, shall stand closed.