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Issues Involved:
1. Termination of dealership in an illegal and arbitrary manner. 2. Violation of mandatory procedural provisions of law during the raid and sampling. 3. Non-issuance of show-cause notice and denial of opportunity for hearing. 4. Mala fide intention and arbitrary action by the Respondent-Corporation. Summary: 1. Termination of Dealership: The main issue pertains to the termination of the dealership of the Appellant in an illegal and arbitrary manner. The Appellant had been operating the petrol pump for 30 years and had received 10 awards. Despite maintaining high standards, the Respondent-Corporation terminated the dealership clandestinely, violating principles of natural justice. 2. Violation of Procedural Provisions: The raid conducted on 15th May 2000 was by an unauthorized police officer below the rank of DSP, violating Clause 4 of the Motor Spirit and High Speed Diesel (Regulation of Supply and Distribution and Prevention of Malpractices) Order, 1999. Samples were collected in violation of Clause 5(2), which mandates taking six samples from each source and handing over two to the dealer. The Respondent admitted that only two samples were drawn from each tank, and none were given to the Appellant. Additionally, samples were taken in plastic containers, violating Clause 5(3). 3. Non-Issuance of Show-Cause Notice: The Appellant argued that no show-cause notice was issued, nor was an opportunity for a hearing provided before termination, violating Marketing Discipline Guidelines. The Respondent terminated the dealership on the same day the test reports were received, without giving the Appellant a chance to explain. The guidelines prescribe termination only in the second instance of adulteration, but this was the first alleged instance. 4. Mala Fide Intention and Arbitrary Action: The Appellant contended that the termination was mala fide, supported by internal emails from the Respondent indicating premeditated actions. The Delhi High Court had directed the Respondent to issue a show-cause notice and provide a hearing, which was not followed. The Respondent added new grounds for termination in 2004, which were known at the time of the original termination in 2000, indicating an afterthought to strengthen their case. Judgment: The Supreme Court found the termination of the dealership to be in violation of procedural laws and principles of natural justice. The haste in terminating a 30-year-old dealership without a show-cause notice or hearing indicated non-existent and irrelevant considerations. The Court quashed the termination order and directed the Respondent-Corporation to restore the dealership and hand over possession within three months. The appeal was allowed with costs of Rs. 1,00,000 to be paid by the Respondent-Corporation to the Appellant.
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